Since the Fono did not approve $5.9 million from the government’s supplemental budget for Fiscal Year 2022 for the Territorial Bank of American Samoa (TBAS), to up ASG’s capitalization, is it safe to bank at the territory’s only commercial bank?
During a conference committee of the House and Senate on the bill last week, the Chairman of the TBAS Board, Sen. Togiola Tulafono had cautioned that TBAS may face problems if nothing is done to increase the government’s investment in its bank.
KHJ News asked TBAS CEO and President, David Buehler, about the impact of the bank not having the level of capitalization required by the Federal Reserve Bank and what assurance he, as CEO, can give customers about the security of their funds with TBAS.
He said, “Deposits continue to be safe at Territorial Bank with online and mobile banking conveniences to check account balances anytime.”
According to Buehler, “With the substantial buildup of assets/deposits resulting from the ANZ Amerika Samoa Bank closing, tangible capitalization remains adequate.
“We are in contact with the Federal Reserve Bank of San Francisco regularly, which includes all financial reporting. The Office of Financial Institutions (OFI) is also in close contact with the bank.”
The TBAS President and CEO told KHJ News, “With increased liquidity, fully secured investments are bringing significant income to the bank.” The bank had a surplus of about $1 Million for the year which just ended 9/30/2022, and is projected to increase its surplus for FY2023. Deposits continue to be safe at Territorial Bank.
KHJ News sought comments from the Commissioner of the Office of Financial Institution, John Marsh, however he has not responded in two days.
We are asking the Commissioner what action is being taken to address the undercapitalization issue for TBAS.
If capital is dangerously low, the bank may lose its banking license.
TBAS Board Chairman Sen Togiola reported that according to the Federal Reserve Bank (FRB), TBAS should should have at least $15 million of capital. However, because TBAS does not have FDIC insurance, its internal guidelines require it to have $27 million.
TBAS’s 2021 financial audit reported that it had $7.7 million of capital. Consequently, the bank’s capital level is short between $8.3 and $19.3 million. It should be noted that the $5.9 million that was included in the surplus bill, would have helped but not eliminated the bank’s shortfall.
