LANB President Steve Wells
LANB Signs Agreement With Regulators
By Carol A. Clark
Los Alamos National Bank officials signed an agreement Nov. 30 with the U.S. Office of the Comptroller of the Currency, (OCC), resulting in changes to credit underwriting and administration.
LANB President Steve Wells explained during an interview this morning with the Los Alamos Daily Post that this is a regulatory matter having no effect on bank customers.
“We are well capitalized, we have strong liquidity and this agreement should have no impact on our customers,” Wells said. “This is related to how we recognize risks and losses with borrowers who are having difficulty in this economy … as a community bank we are committed to doing everything possible we can within regulations and guidelines to assist our customers.”
This OCC agreement stems from an annual safety and soundness examination conducted last July, Wells said.
According to the OCC report, the agreement indicated that the bank needs to strengthen several areas related to its lending function. It was established to rectify potential unsound banking practices relating to management and board supervision, credit underwriting, credit administration and any deficiencies in internal controls.
Two recent commercial loan issues in which LANB is a creditor involve the bankruptcy filing of the former Central Avenue Grill Restaurant and the financial trouble at the Hilltop House Hotel.
LANB is owed about $500,000 by the restaurant and recently filed papers to foreclose on the hotel.
“As a community bank focused on helping its customers through difficult times, we were not recognizing some of those risks as timely as we should have,” Wells said. “We always want to be in good standing with our regulators and we will address and correct these areas of concern.”
LANB signed an earlier agreement with the OCC in January 2010, calling for the bank to review and revise its commercial real estate loan procedures.
LANB is New Mexico’s largest locally-owned community bank with $1.6 billion in assets, according to the Federal Deposit Insurance Corporation, and has a capital ratio over 10 percent.