LANB CEO and TCC President John Gulas presents details on the bank during Thursday’s shareholders meeting at Duane Smith Auditorium. Photo by Carol A. Clark/ladailypost.com
TCC Chairman Jerry Kindsfather addresses shareholders Thursday at Smith Auditorium. Photo by Carol A. Clark/ladailypost.com
UPDATE: Note corrected information depicted by asterisks.
The four-year fog surrounding Los Alamos National Bank and Trinity Capital Corporation (TCC), which owns the bank, seemed to lift during Thursday’s shareholders meeting at Duane Smith Auditorium.
It is the first shareholders meeting since 2012 and afforded the more than 60 percent of shareholders present an opportunity to find answers to their questions.
The bank’s troubles came to light in 2010. The bank’s regulator, the Federal Comptroller of the Currency expressed concern about the bank’s loan portfolio. After looking over the Bank’s records for 2010 and 2011, the regulators and the Bank reached an agreement to issue a restatement of financial statements for 2010 and 2011, which made the Bank unable to file timely statements for 2012 and 2013. The Bank is currently under a Consent Order with the Federal Comptroller of Currency.
* “The amount of $25 million in loan related losses were reflected in the Bank’s financial report filed Dec. 12, 2014,” TCC Chairman Jerry Kindsfather said.
The resulting confusion over the incorrect records and concern over the Bank’s loan policies has led to a fall in stock prices to $3 per share at present as compared to $12 per share in 2009. The bank has been unable to issue dividends to its stockholders since the crisis began.
Longtime CEO Bill Enloe retired from the LANB Feb. 1, 2013. Several other top managers also retired or resigned from the bank during 2013 and 2014.
In spite of the obvious concern of shareholders over these developments, the Shareholder meeting was surprisingly upbeat, with many shareholders expressing confidence in the bank. Many shareholders met LANB’s new CEO John Gulas for the first time at the meeting. Gulas joined the bank seven months ago.
Chairman of the TCC Board Jerry Kindsfather expressed optimism for the bank’s future.
“After an extensive search, the Board chose John Gulas as our new CEO,” Kindsfather said. “During his short tenure he has shown himself to be effective and innovative. John always says the Bank has good bones. Our employees and management are going to take those bones and put some meat on them.”
* Gulas outlined the hurdles the Bank has faced in the past few years. Although things seem to be improving, the recession, which began in 2008 has impacted the Bank significantly, he said. In addition, the Dodd-Frank Wall Street Reform Act signed into law in 2010 has made complying with Federal regulations much more difficult and complicated. The 2,300 page act makes many changes that all community banks must allocate additional resources to address.
Gulas expressed his commitment to remaining a community bank. “The bank was started by a bunch of scientists who felt the community was not being well served,” he said. “We share that vision of service.”
The service nature of the Bank may have caused some of its difficulties. As banking has changed over the past 50 years, the practice of good faith and a handshake may have led the bank to bypass regulations and to make some unsound loans, Gulas indicated. The Bank is making a myriad of changes to its structure and practices, including the hiring of a Risk Management Officer who will report directly to the Board of Directors.
Kindsfather defended the Board’s oversight when questioned by shareholder George Chandler. “The Board is not management. If you have individuals who don’t play by the rules, the Board can’t control it. We had faith in the previous management and we were let down,” Kindsfather said.
Once the irregularities came to light, the Board “stepped up,” Gulas said. They began meeting weekly and delving into the issues facing the bank.
During Thursday’s meeting, Shareholders complained about an ongoing lack of communication and Gulas promised quarterly newsletters will now be sent to shareholders.
Gulas said the Bank is looking to grow its operations in Albuquerque, where it sees the most potential for growth of the three communities it serves, which also include Los Alamos and Santa Fe.
Gulas said he is very optimistic about the Bank’s future. The Bank’s five year strategic plan will guide the Bank’s forward movement. “We’re getting past the past and teed up for the future,” he said. “By mid-2015 we should hit full stride again.”
The shareholder’s confidence in the Board and management team was reflected in their proxy votes. They confirmed the Board’s recommendations to elect John Gulas and current Board member Charles Slocomb as Class 1 Directors, and current Board members Jerry Kindsfather and Robert Worcester as Class 2 Directors. Gulas is the sole LANB employee on the Board.
The shareholders also followed the Board’s recommendations to vote for the say-on-pay proposal, the every year option of the frequency of future say-on-pay proposals and for the 2015 Long-Term Incentive Plan, as well as for the ratification of Crowe Horwath LLP as the Bank’s overseeing accounting firm.
Gulas invited the audience to “talk to me personally” if they encounter problems with loans or other issues, which drew hearty applause as the meeting came to an end.
Shareholders gather in Smith Auditorium for Thursday’s meeting. Photo by Carol A. Clark/ladailypost.com
LANB CEO John Gulas. Photo by Carol A. Clark/ladailypost.com
LANB’s Vice President of Human Resources spoke at Thursday’s event. Photo by Carol A. Clark/ladailypost.comHide shortcuts
LANB CEO John Gulas, left, and TCC Chairman Jerry Kindsfather. Photo by Carol A. Clark/ladailypost.com
George Chandler speaks during the public question period at the meeting. Photo by Carol A. Clark/ladailypost.com
Local pediatrician Michael W. Nichols. Photo by Carol A. Clark/ladailypost.com
Shareholders study the annual report. Photo by Carol A. Clark/ladailypost.com
Former LANB Senior Vice President Jill Cook, right, attended Thursday’s shareholders meeting, sitting next to shareholder Chris Ortega and his wife Kristy. Photo by Carol A. Clark/ladailypost.com
This young man was introduced during the meeting. He owns 25 shares of stock. Photo by Carol A. Clark/ladailypost.com
LANB CEO John Gulas speaks with shareholders following Thursday’s meeting. Photo by Carol A. Clark/ladailypost.com