Native American Bancorp is betting that its new approach - which includes shelving its plans to open a new bank and buying a 14-year-old bank on a Montana reservation instead - will get more tribes to invest in the Denver company.

The bank holding company, formed in 1998 by more than a dozen tribes to bring more banking services to Native Americans nationwide, is acquiring $18.1 million-asset Blackfeet National Bank, in Browning, Mont., for an undisclosed sum. Blackfeet National, owned by the Blackfeet tribe, was the first start-up bank established by a tribe on a reservation.

John Beirise, president of Native American Bancorp, said the company's original plan was to start banks with $30 million of capital raised from individual tribes and other investors. But so far that effort has fallen short by about $10 million.

In purchasing Blackfeet, Native American Bancorp would also position itself it to start banks later.

"It became pretty clear to us that we really needed to have a presence on a reservation and to use that as a springboard to establishing more locations on reservations," Mr. Beirise said.

Under the deal, which was announced this month and is expected to close in the spring, Blackfeet National would become Native American National Bank and its capital base would increase from $1.1 million to more than $20 million.

"Leveraging a bank with a small amount of capital into a larger institution … will better meet the growing needs of our community," Leo M. Kennerly, chairman of the Blackfeet tribe's economic development committee, said in the news release announcing the deal.

Some banks not owned by tribes have emerged since the announcement to say that they would be good candidates for acquisition by Native American, said Mr. Beirise, a former executive of Mercantile Bank in St. Louis who joined Native American in 1999.

"We've heard from banks in rural communities throughout the Northern Plains where there's a mix of Indians and non-Indians," he said. "While our primary objective is to bring financial services to reservations that have been underserved, if it makes sense for us to acquire a bank outside of the boundaries of a reservation to leverage the company's resources, we would look at it."

Native American Bancorp would initially work through Native American National Bank to make loans to Native American businesses throughout the country, Mr. Beirise said. He said some loans will be made in partnership with other banks owned by tribes, such as the Viejas Band of Kumeyaay Indians' Borrego Springs Bank in San Diego County.

"We want to work with those banks that are serving Native American reservations to help finance larger projects," Mr. Beirise said.

But Native American Bancorp will also focus on aiding entrepreneurial activity on reservations where casinos or other major business ventures are not suitable, he said. Of the 551 federally registered tribes in the nation, only 160 operate casinos, according to the North American Native Bankers Association.

"There are many reservations in remote parts of the country that just don't have the market to support casinos," Mr. Beirise said. "We want to bring financial services to them, too."


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