"Credit unions are as active, if not more active, in branch expansion as banks are," he said.

Stillwater, located on the banks of the placid St. Croix River across from Wisconsin, is known as the birthplace of Minnesota. The meeting that established the area as a U.S. territory was held there in 1848, moving it down a path that led to statehood in 1858. Stillwater was also one of Minnesota's earliest cities, incorporated on March 4, 1854 – the same day as nearby St. Paul and several years before Minneapolis. Yet, after Minnesota became a territory in 1849, St. Paul became the capital and Minneapolis received the University of Minnesota.

Stillwater? It got the state prison. And apparently no credit union – ever.

Ideal saw the opening as an opportunity to fill the void, and encourage young adults and others to become members, Alisha Johnson, SVP of marketing for Ideal, said.

"It's a very scenic town," she said. "There's a great deal of pride. People move there to start to raise their families."

That's precisely the group the credit union wants to attract, she said.

Stillwater came up on the radar 15 years ago when the credit union commissioned a detailed study that led to building a new headquarters office in Woodbury, a city east of St. Paul. Stillwater, the seat of Washington County, is 13 miles northeast of Woodbury, the county's largest town.

"Stillwater was one we were keeping an eye on pretty close," Ideal President/CEO Brian Sherrick said. "We were watching it develop and grow."

At the time, the credit union was on the verge of some of its biggest changes since it was founded in 1926 as St. Paul Postal Employees Credit Union. When the Woodbury office opened in September 2001, the credit union had $253 million in assets and 42,915 members, and had expanded membership eligibility well beyond postal employees. The following year, the credit union opened its doors to all residents of Washington, Ramsey and Dakota counties, and in 2006, residents of Anoka, Chisago and Hennepin counties became eligible. In May 2014, the name St. Paul Postal Employees Credit Union was officially abandoned.

"We found the name was a hindrance," Johnson said.

Ideal CU will open its Stillwater branch, pictured in the above rendering, later this year.

In early 2015, the site search process heated up. Stillwater's demographics were promising and the timing seemed right, as plans to open a new bridge over the St. Croix River leading to the town from Wisconsin on Highway 36 were under way.

The choice was guided by statistics gathered within a three-mile radius of prospective locations (three miles is considered the maximum distance consumers are willing to travel before choosing a closer destination). Ideal used Bancography software to assess the area and choose the location.

Reider said the first step in choosing a new branch location is conducting a submarket survey to determine if the general area will support a new branch. Institutions should look not only at demographics that indicate demand, but also data that indicate how well those households are already served by banks.

For example, an area with low household turnover is more likely to have entrenched relationships with existing branches than an area with high turnover. U.S. household turnover is projected to be 29% from 2014 to 2019, according to Bancography. Stillwater had high turnover: About 40% of Stillwater residents had moved to the area within the most recent five-year period measured, Johnson said.

Within Stillwater's three-mile radius, Ideal found 30,398 residents, 16,875 employees and 975 businesses. The median age of the head of household was 54.5, higher than the U.S. average of 51.4. Households headed by older adults tend to borrow less than those headed by younger ones. But favoring strong loan demand were findings that 72% of Stillwater's population was younger than 56, about 72% were homeowners and a rising proportion of households were families with children.

As for competition, the Stillwater site had 17 bank branches within the three-mile radius, and no credit unions.

Ideal enlisted a real estate company to help find the Stillwater site, which is on the westbound side of the frontage road to state Highway 36. The 3,000-square-foot branch will be a standalone location near a Target discount store.

"It's easy to get to and easy to get out of," Johnson said. "Banking is something people do on their way to do something else, and we want to make their trips as convenient as possible."

Ideal uses Target stores as guides for its locations because the Minneapolis-based chain's customers closely resemble members sought by the credit union; in addition, the chain's store location choice strategy is sophisticated, she said. Another Ideal branch, which was relocated by five miles to Inver Grove Heights, Minn., in May, is also by a Target.

Sherrick said the credit union generally expects to make even on its investments within three years. For new branches, the break-even point is usually signaled when it starts drawing 30 to 40 new members per month.

"I would anticipate Stillwater to hit 30 to 40 quicker than in three years," he said.

The credit union also plans to add a branch each time it gains about $100 million in assets. Sherrick said he expects to reach that milestone next by the end of 2017 or 2018.