FARGO — Bell Bank, one of the largest banks in North Dakota and western Minnesota, announced Thursday, Feb. 11, that it has sold a portion of its health savings account assets of its HealthcareBank to WEX, Inc.
WEX acquired the accounts through an approximately $250 million purchase from Fargo-based Bell Bank, a news release stated. Additional funds could change hands based on any future increased to the Federal Funds rate. Pending regulatory approvals and "other customary closing conditions," the sale is expected to be completed in the second quarter of 2021, the release continued.
A division of Bell Bank, HealthcareBank has served as a custodian bank of health savings account assets "through partnerships with other banks and third-party HSA providers," the release read. HealthcareBank will still provide service and operational support.
Bell Bank created HealthcareBank in 2005 as a custodian for its health savings account deposits.
Bell Bank and WEX have a history of sales, with State Bankshares, the parent company of Bell Bank, selling Discovery Benefits, another health savings account provider, to WEX for $425 million in 2019.
At the time of the Discovery Benefits sale, WEX Health president Jeff Young indicated the firm was eyeing expansion into new markets to achieve economies of scale.
"We're looking to scale," Young said in 2019. "We'll scale in the markets they're serving today. And then there's some new markets that I think we'll be able to serve as we go forward. So, it's a great spot."
The sale of HealthcareBank to WEX will not impact Bell Bank's other deposits or assets, the family-owned bank's president and CEO Michael Solberg said via news release.
"This agreement will provide us even greater liquidity, which gives us flexibility as we continue to consider strategies for growth," Solberg said. "Most importantly, our HealthcareBank division will continue to provide service for HSA accounts and operational support for managing those deposits and investments."
“We are thankful for our continued partnership through our previous capital investment in WEX Health, and we know this transaction will benefit both WEX and our company moving forward," Solberg continued to state.
With assets of more than $9 billion, Bell Bank has more than 1,600 employees across North Dakota, Minnesota and Arizona.
Based in Portland, Maine, WEX is a publicly-traded financial technology service provider across sectors such as fleet, travel and health care. The firm operates in more than 10 countries and 20 different currencies.
Shares of WEX closed the week at $221.40, nearly approaching their pre-COVID-19 pandemic heights.