Bank of North Dakota posts 12th year of record earnings

NICK SMITH Bismarck Tribune | Apr 20, 2016

Eric Hardmeyer, president of the Bank of North Dakota, presents the annual report to members of the state Industrial Commission at the state Capitol in Bismarck on Wednesday.

For the 12th consecutive year, the head of the Bank of North Dakota reported record net income to the nation’s only state-owned bank to state officials.

Eric Hardmeyer, president of Bank of North Dakota, provided the North Dakota Industrial Commission with the bank’s final 2015 annual report on Wednesday. For 2015, the bank reported about $130.7 million in net income, cruising past the $111 million reported for 2014.

“This was a record-setting year for the Bank of North Dakota,” Hardmeyer said. “A lot of growth over the past 10 years.”

In 2004, when the streak of consecutive years of record income began, income was at approximately $34.2 million.

Total bank assets for 2015 totaled about $7.41 billion, up slightly from the $7.22 billion reported in 2014.

Loans reached new heights in 2015 at $4.34 billion, up from nearly $3.9 billion the previous year. The largest chunk of the increase came from student and business loans.

Bank deposits were also up slightly in 2015 at $5.8 billion, up from $5.73 billion the previous year.

Agriculture Commissioner Doug Goehring, who sits on the three-member Industrial Commission, pointed out that in 2006 deposits were at $1.62 billion.

“It’s incredible what’s happened to our deposits,” Goehring said.

Hardmeyer told the commission 2016 is already off to a strong start, delivering the bank’s first quarter 2016 report after completing his presentation of the annual report.

“We’re on course for another record-setting year. They continue to look good,” Hardmeyer said of the numbers.

Net income for the first quarter of 2016 was at $37.5 million. This was compared to $34.5 million in the first quarter of 2015.

Hardmeyer also updated the commission on the Farm Financial Stability Loan Program.

The commission authorized the bank to begin offering the program beginning Dec. 1. Up to $300 million is available for farmers statewide who need to replenish their working capital or restructure existing debts in order to allow for cash flow relief.

The program will run through June 30 or until all the funds are lent. Eligible borrowers must be North Dakota farmers able to prove a cash flow shortage in 2014 or 2015. Borrowers also must prove they can repay and have an operating line of credit for the 2016 crop year approved.

Through the end of March there had been 276 loans approved totaling $124 million. Hardmeyer said he expects the program to top out at about $150 million.

“We overshot on that area,” Hardmeyer said.

The bank is authorized to participate in up to 75 percent in either loans for livestock and equipment or real estate loans. The loans are capped at $1.5 million for a real estate loan and $750,000 for livestock and equipment loans.

Under the program interest rates can be variable or fixed. For those choosing variable interest rates the interest rate would be set at 1 percent below the Bank of North Dakota’s base rate, which is 3.25 percent. For those choosing fixed rates they would be locked in at 3.75 percent for five years.

(Reach Nick Smith at 701-250-8255 or 701-223-8482 or at nick.smith@bismarcktribune.com.)