The Bank of North Dakota made $58.1 million in profits last year, its president reported Monday, setting an earnings record for a sixth straight year even though it fell short of its own expectations.
The state-owned bank, which is based in Bismarck, missed hitting its own $60 million profit target by cutting interest rates for one of its student loan programs and raising its allowance for soured loans from $8.4 million to $10.3 million, bank President Eric Hardmeyer said.
In a report to the state Industrial Commission, Hardmeyer said the bank's loan portfolio also grew less briskly than expected, increasing from $2.61 billion to $2.71 billion.
The bank had estimated its loan volume would grow to almost $2.8 billion last year, but demand for business loans has softened, Hardmeyer said.
"I would bet there aren't many banks around the country that will be able to say that they had a record-setting net income last year," he said. "While we're down from budget, we feel really good about where we ended up."
Gov. John Hoeven, Attorney General Wayne Stenehjem and Doug Goehring, the state agriculture commissioner, make up the Industrial Commission. It is the board of directors for the bank and North Dakota's state-owned flour mill in Grand Forks.
The Bank of North Dakota made just over $57 million in 2008.
The bank normally contributes most of its profits to North Dakota's general treasury for the Legislature to spend.
However, lawmakers slashed the bank's profit transfer from $60 million to $1 million during the 2009-2011 budget period to allow it to build up its capital reserves, which are now about $270 million.