Eric Hardmeyer

Eric Hardmeyer has been with the Bank of North Dakota for 34 years and its president since 2000. The bank is celebrating 100 years as a state-owned institution on Monday.

Eric Hardmeyer knows what makes the Bank of North Dakota unique.

"If you go back and look at the early years of the bank, the fact that we're still here is really amazing," the bank's longest-serving president and CEO said. "Just a lot of turmoil and other issues when they started."

The nation's only state-owned bank opened 100 years ago in an era of discord among farmers who felt taken advantage of by predatory Minneapolis grain traders and lenders.

The populist Nonpartisan League swept the state in the late 1910s, seizing the Legislature and striking the match for several state-owned institutions that continue to this day, including the bank in Bismarck and the North Dakota Mill and Elevator in Grand Forks.

The bank invokes different images for those who know it well. Sen. John Hoeven, R-N.D., who headed the bank before ascending to governor in 2000 and U.S. senator in 2010, views the institution as an economic development agency.

"To me, that was always the role," Hoeven said. "It wasn't there to compete with the banking system. It was there to work with the banks in North Dakota and be an economic development bank that would help the state gain jobs and economic growth. And I think it's really done it."

Hardmeyer extols the institution as a "banker's bank" and a prime example of a public-private partnership, with a unique economic development engine.

"We do it differently than any other state," he said. "They would issue bonds and use the proceeds of those bonds to invest in projects, whereas we just quite uniquely take the deposits from the state treasurer and use them directly and relend those deposits back out into the state. While ... every state has this authority, ours is a little bit more larger and more impactful, I think."

Some political observers see the roots of the bank and the mill and elevator and note a component of socialism, or state-run means of production.

"People fell in love with the institutions in spite of the fact that they're socialist," said former Democratic-NPL Lt. Gov. Lloyd Omdahl, who has taught political science at the University of North Dakota. "But it was only an opportunity of the time when there was great pressure from agriculture."

Former Grand Forks Herald Publisher Mike Jacobs, whom the bank commissioned for a centennial book, recognized the socialist themes of the NPL's platform but also noted the context of the times, when 56% of voters affirmed the bank on a 1919 referendum ballot.

"What North Dakota voters saw was not a socialist organization, but an organization that offered a practical solution to a problem that they were facing every day," Jacobs said. 

The bank has evolved over the last century beyond its agricultural roots, reaching into student loans, mortgage loans and economic development. Hardmeyer, president and CEO since 2000, noted its "nimble, flexible" processes owing to the bank's very nature.

The bank has always been based in Bismarck, moving in 2008 to its glass, ship-shaped building near the Missouri River after decades downtown in a former car factory.

The bank's total assets started at $2 million in 1919, grew to $4 billion in 2010 and then to $8 billion in 2015, the last jump owing to surging state tax collections during the Bakken oil boom era.

"Everything grew," Hardmeyer said. 

The bank had about $6.7 billion in total assets as of March 2019 and recorded 15 consecutive years of record profits in 2018, with $159 million in net earnings. The 2019 Legislature approved a $140 million transfer of bank profits to help balance the state's new two-year budget.

"Quite frankly, in North Dakota, if there's any state that needs to invest in itself and to create its own destiny, we are," Hardmeyer said. "We always had to work hard at it, and I think we need to continue to do that."

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Reach Jack Dura at 701-250-8225 or jack.dura@bismarcktribune.com.