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The communities serviced by Los Alamos National Bank (LANB) are in for some exciting news. The bank has just been chosen to receive $35.5 million to increase lending to businesses and consumers and stimulate job growth in the area.
The money arrived this morning.
The U.S. Treasury Department offered Trinity Capitol Corporation (TCC), LANB’s one-bank holding company, the opportunity to participate in its Capital Purchase Program (CPP), established under TARP legislation.
Only fiscally healthy financial institutions are being offered these funds.
LANB through TCC is the first New Mexico home-based bank to be selected for this program.
“I am pleased that a New Mexico bank was provided the opportunity to participate in this program,” TCC President Bill Enloe said. “TCC’s board of directors carefully reviewed the terms of this offering and has elected to participate.”
Enloe, who also is the longtime chief executive officer of LANB, said the bank is fortunate to fall in the category of financially strong community banks that qualify for this investment requiring no government ownership.
TCC and LANB have exceeded the highest regulatory capitol classification, 10 percent of total assets, since the federal capital guidelines were established, he said.
“TCC will infuse the entire $35.5 million from the CPP into LANB as capital, bringing the bank’s total capital available for loans, investments and business expansion to more than $158 million,” Enloe said.
Explaining that the focus at LANB has always been to provide loans that create economic value and jobs in New Mexico, he said the bank’s projections indicate that it can leverage the new funds and forge a potential impact of more than $300 million in new loans to qualified businesses and consumers.
“These proceeds will increase LANB’s capital to 14.35 percent of total assets – one of the highest ratios in New Mexico and will benefit our company by augmenting our market leadership in lending, local investments and other community support,” Enloe said. “This extra strong capital position will allow LANB to take advantage of the many opportunities that are occurring in our market without being constrained by regulatory capital restrictions.”
The bank also will look at making investments in local municipalities and schools through purchasing bond issues that meet LANB’s investment standards, he said.
Although there are restrictions on the use of the money, Enloe said the bank is confident it can easily meet those restrictions.
LANB President Steve Wells agreed.
"Investing in local bonds is good for the bank, the community and the futures of our kids,” he said.
Enloe said the bank is on task.
“We will use this capital infusion to create economic benefits for our region – exactly what the program is designed to accomplish,” he said.
Under CPP terms, the U.S. Treasury becomes the holder, with no ownership or voting rights, of $37.3 million of preferred stock in TCC, he said, which has no dilutive implications for current TCC stockholders.
TCC plans to repay the CPP funds with interest to the U.S. Treasury within 10 years and may repay sooner without penalty, he said.
With a net income of some $8 million in 2008, TCC marked its 33rd consecutive year of profitability.
Despite the weak economy, the company is showing strong earnings for the first two months of 2009, with unaudited net income of $3.7 million.
“Given our country’s current economic difficulties, having the ability to access more than $35 million in capital funding is an opportunity that LANB carefully analyzed and determined was in the best interests of our bank, our current customers and our communities. Now we will put this money to work helping New Mexico grow,” he said.
LANB is one of the largest independent banks in New Mexico with assets of some $1.4 billion.
Established in 1963 by a group of local investors, LANB continues to be locally owned and operated by TCC. TCC provides banking, trust and investment services and title company services to northern New Mexico.
It employs some 280 people in its offices in Los Alamos, White Rock and Santa Fe.
Detailed information about the Capital Purchase Program is posted on LANB’s website at www.lanb.com.