The Los Alamos National Bank is once again under regulatory restrictions by the Office of the Comptroller of the Currency, the federal agency that regulates the federal banking system.
The bank had just came out of a similar regulatory agreement this spring, which was entered in 2010.
“The Comptroller has found unsafe or unsound banking practices relating to management and board supervision, credit underwriting, credit administration and deficiencies in internal controls,” according to the agreement
According to bank President Steve Wells, the OCC was concerned that LANB overextended itself on $5.5 million in loans that were spread out amongst seven customers. The bank extended the loans into 2012. The OCC’s opinion was that the bank should have called in the loans in 2011. Wells said the bank has about $1.2 billion in total loans.
“They have requested us to recognize our risks in the time that it should be recognized and we don’t disagree with that,” Wells said. “We understand the intricacies of the regulations and that we weren’t in alignment.”
Wells also noted that the OCC “is one of the toughest regulators out there” and that part of the problem was the two entities have two different viewpoints when it comes to community banking.