2 ND bank companies share $15.8 million

BISMARCK, N.D. (AP) — Two North Dakota bank holding companies are taking part in the government's $700 billion rescue effort, getting a combined $15.8 million.

The North Dakota institutions are considered healthy and voluntarily applied for the taxpayer funds, said Timothy Karsky, commissioner of the state Department of Financial Institutions.

"It's not a gift or anything," Karsky said. "It's a loan that they're going to have to pay back."

The Hannaford-based Security State Bank Holding Co., parent company of Bank Forward, which has 12 branches in North Dakota and one in Minnesota, received $10.8 million on May 1. Bank Forward had about $459 million in assets to its $423 million in liabilities as of March 31, according to the Federal Deposit Insurance Corp.

"Our stimulus package is helping farmers, small businessmen and helping consumers with auto loans and home loans," said Tom Watson, president of Bank Forward. "And that's what we intend to use the money for."

The banks are expected to repay the money. For the first five years, the financial institutions will pay a 5 percent annual dividend back to the Treasury. In the sixth year, that rate increases to 9 percent.

Fargo-based Blackridge Financial Inc., a holding company for Blackridge Bank that has branches in Fargo and Bismarck, received $5 million on May 22, according to the U.S. Treasury.

As of March 31, Blackridge Bank had about $63 million in assets and $56 million in liabilities, according to the FDIC. Blackridge Financial Inc., has two subsidiary banks in Minnesota, the First State Bank of Alexandria and Lakewood Bank. The holding company has about $308 million in assets to $264 million in liabilities.

Sean Burian, the chief investment officer for Blackridge Bank, said the $5 million given to Blackridge could expand into $50 million worth of lending power.

Of the 94 banking institutions in North Dakota, so far only four have received funds from $700 billion Troubled Asset Relief Program passed by Congress in October to prevent a collapse of the financial system. Karsky said other North Dakota banks may have considered applying for the federal funds, but had to make a determination if they would be able to pay it back.

"The FDIC had told all of our banks in North Dakota to apply," Karsky said. "I would say quite a few of those banks withdrew from the program."

In January, the Bismarck-based parent company for the Phoenix-based BNC Bank received $20.1 million and the Fargo-based State Bank and Trust got $50 million by selling stock to the U.S. Treasury.