FLAGGED BY FEDS
Jan 04, 2013 (Albuquerque Journal - McClatchy-Tribune Information Services via COMTEX) --
Los Alamos National Bank, which last spring was released from a regulatory agreement imposed by the federal Comptroller of the Currency in 2010, is again under regulatory restrictions.
Bank President Steve Wells said the total value of the loans regulators flagged as problematic was $5.5 million.
While that's not a trivial sum, he said, it's a small fraction of the bank's $1.2 billion in total loans.
The new agreement, signed at the end of November, will not affect bank customers, he said.
During the comptroller's regularly scheduled annual examination in July, regulators "found unsafe or unsound banking practices relating to management and board supervision, credit underwriting, credit administration and deficiencies in internal controls," the agreement says.
Wells said that regulators found seven bank-customer "relationships" that "in their eyes, we were not evaluating the risks properly."
Wells declined to specify the nature of the "relationships" between the bank and the customers in question. But, he said, federal regulators "thought we were not being realistic about (certain) loans."
He described the difference in viewpoint between the bank and federal regulators as "partly due to our desire to work with borrowers in this economic environment."
As a community bank, Wells said, "we have a natural propensity" to do everything possible to help loan customers who may run into trouble.
The agreement with the comptroller was mainly designed to get the attention of the bank's board and managers, Wells added.
After the regulators' visit, LANB, with a third party, conducted its own review of the bank's loan portfolio and found no additional concerns beyond those the comptroller had singled out, Wells said.
As a result of the new agreement with the Comptroller of the Currency, the bank will make changes in its accounting and loan information procedures, as well as set up stricter oversight for loan modifications and other efforts to work with creditors.
Banktracker, a website maintained by the Investigative Reporting Workshop at the American University School of Communications, continues to show LANB as having a higher "troubled assets" ratio than some other local banks.
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