A North Dakota banker wants to become the state's governor - even if it means beating out one of his bosses for the job.

John Hoeven, president of Bank of North Dakota in Bismarck, the state capital, is one of two candidates for the Republican gubernatorial nomination in the nation's fourth-least-populous state. If he wins nomination this spring, he would go up against a member of his bank's board in the general election.

"It should be interesting," said Mr. Hoeven, 42. "It hasn't been an issue so far, but Step 1 is getting the Republican nomination. We'll have to deal with any issues that arise after that as they come."

Bank of North Dakota, the nation's only state-owned bank, is overseen by a three-member board called the Industrial Commission. Two members are the governor, who is not seeking reelection, and the agriculture commissioner. The third is Attorney General Heidi Heitkamp, the sole Democratic candidate for governor.

Mr. Hoeven said he likes his chances.

He savors his status as an outsider who has never run for public office - as Gov. Edward Schafer, a Republican, had not done until his 1992, when he won a landslide victory. Gov. Schaefer racked up another landslide in 1996 and plans to retire when his current term expires.

Mr. Hoeven's Republican rival, state Senate Majority Leader Gary Nelson, has been in public office for much of his adult life, as has Ms. Heitkamp.

Mr. Hoeven said he is also hoping voters will look at his banking record as evidence of the job he would do as governor.

Since joining Bank of North Dakota in 1993 he has encouraged business development and expansion by offering commercial loans to start-up and established companies. He also has moved the bank's portfolio toward lending rather than concentrating its assets in investments such as municipal bonds.

The results: Assets have doubled, to $1.6 billion, and the loan portfolio has increased fivefold, to more than $1 billion.

Mr. Hoeven said he would employ a similar strategy as governor.

North Dakota has been especially hard hit by the two-year agricultural downturn. If elected, Mr. Hoeven said, he would focus on improving the state's business climate to attract companies, especially those in technology.

"He might not be as knowledgeable of all the social programs in the state as the other candidates, but he's very well informed and articulate from an economic development standpoint," said Randy Newman, president and chief executive officer of $422 million-asset First National Bank North Dakota in Grand Forks. "That's what the state needs - to diversify outside of agriculture."

Jim Schlosser, executive vice president of the North Dakota Bankers Association, observed, "It's a tough sell to attract businesses in a rural state like this, but he understands how important it is and the role that banks have to play in economic development."

As a state-owned institution, Bank of North Dakota primarily serves other banks. One of Mr. Hoeven's chief responsibilities is making business loans through participations with other banks.

Yet until Mr. Hoeven joined it, Bank of North Dakota was derisively known as the "Bank of No Decision" for its notoriously lengthy loan reviews and sluggish bureaucracy. Mr. Hoeven experienced these problems firsthand when he worked with the bank on loan participations during the 12 years he spent at his family's bank, First Western Bank and Trust in Minot.

"As a customer of the Bank of North Dakota, I saw things from the other side and had ideas of what the bank needed to do," he said. "It was sometimes frustrating because the bank wasn't making enough loans and doing what it should have been doing."

Bankers say they hope Mr. Hoeven would be as responsive in the governor's office as he has been at the state-owned bank.

Bill Lee, president and CEO at Community National Bank in Grand Forks, said Bank of North Dakota came to the rescue after the Red River flooded Grand Forks in 1997. It offered reduced-interest-rate loans in participation with Community National to stores, factories, and restaurants that had been damaged.

"These people needed to get back on their feet," Mr. Lee said. "This area was devastated, and the bank helped us out a great deal."

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