Just talked to North Shore last month.  Unfortunately they sell almost all of their mortgages.  The only local institution that I've heard that will potentially hold on to your mortgage is Western Bank.  I share your desire to keep my money in the community but I think they must make more money originating them and then selling them off to the mega institutions we all dread.

I'll give you my take on the keep money local "thing." It is important that we try to promote local businesses and products with our patronage whenever we can. By doing this we can ensure our own future economic prosperity right here in Northern Minnesota. 

Nobody can deny the immensely negative effect of Wal-Mart type institutions on our local economies. Imagine if all we had were chain stores/restaurants and big-box retailers. 

I realize your immediate reaction will be what you mentioned previously. "You are aware that the large banks are employing local staff, right? They don't just ship them in from California every morning." True, but where do the priorities of these mega banks lie? Duluth MN? Where are these banks headquartered (yes, US Bank is headquartered in Mpls. - most are not).

Northshore Bank's President lives right here in Duluth's Kenwood neighborhood; Park State Bank started in the Morgan Park neighborhood nearly a hundred years ago, and in Spirit Valley nearly 80 years ago Western Bank was created, to name a few examples. 

An article in Time magazine is worth a read in regard to the benefit of buying local: http://www.time.com/time/business/article/0,8599,1903632,00.html  

And since you brought up US Bank, I'll remind readers of the $6.6-billion-dollar taxpayer TARP bailout it received because it was among the "too big to fail" institutions. (Yes, US Bank has since repaid that debt.) To each his own, but my priorities will remain with the belief and importance to "keeping it local."