Bank see nearly $28 million drop in profits in 2020
BISMARCK, N.D. (KFYR) - The Bank of North Dakota earned less money in 2020 for a variety of reasons.
Despite that, Bank President Eric Hardmeyer says performance overall was exceptional.
The Bank of North Dakota reported a profit of $141.2 million, which was down from the $169 million made in 2019.
Hardmeyer says several factors contributed to the nearly $28 million dip in profits, including the Federal Reserve driving interest rates down.
“That led to what we call in the business compression, meaning that our assets, we priced at a level much lower than our deposits in terms of the spread. And so that impacted earnings,” said Hardmeyer.
Hardmeyer also says it was because more money was put aside into the loan loss provision.
“A lot of problems in a couple of sectors impacted by COVID, particularly the service hospitality industries. So, we put more money aside in case we have losses on some of that portfolio,” said Hardmeyer.
This past year, the bank’s total loan portfolio increased slightly to $4.7 billion.
The agriculture loan portfolio increased by $116 million dollars due to the Ag Disaster Relief Program, and the business loan portfolio increased by $194 million dollars, due to growth stemming from COVID-PACE Recovery I loans.
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