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Rep. Sanitoa wants Territorial Bank of American Samoa financial reports

Tualauta Rep. Larry Sanitoa
ausage@samoanews.com

Pago Pago, AMERICAN SAMOA — Tualauta Rep. Larry Sanitoa is urgently requesting Legislative Financial Officer (LFO) Talalemotu Mauga to acquire several financial reports from the Territorial Bank of American Samoa (TBAS).

In a letter to Mauga, Sanitoa said that pursuant to ASCA 28.0209 “Reporting Requirements” the Bank shall prepare and file annually with the Governor, the Legislature of American Samoa, and the Office of Financial Institutions, within 120 days after close of its fiscal year, a report of its condition sworn to by the CEO and the Chairman of the Board.

The report must include the name of the Bank; and the audited financial and Profit and Loss statement required by Section 28.0208.

“This report shall also be made available to the general public by publication or otherwise,” said the letter.

Sanitoa added that the Bank shall prepare and file quarterly with the Office of Financial Institutions, within 30 days of the end of each calendar quarter, a report substantially in the form of the Consolidated Report of Conditions and Income, and required by the Federal Financial Institutions Examinations Council.

“As you recall, TBAS was funded with proceeds from the 2016 Series B Bonds in the amount of $15 million, and of that amount, $5 million was to start up the banking operations and to establish the Office of Financial Institution,” Rep. Sanitoa wrote to Mauga.

The remaining $10 million was for the initial capital for the Bank which shall be no less than the said amount as required by law.

“The recent balance sheet reports from TBAS as of Oct. 2018 revealed an alarming and disturbing trend on the profit and loss statement. TBAS has an accumulative loss of $3,705,874 since its inception from Oct. 2016 through Sept. 30, 2018. Currently, TBAS has projected or budgeted a monthly loss of $178,000 with a total loss of $2.1 million at the end of the fiscal year,” the letter continues.

In order for faipule to understand the financial conditions of TBAS, Sanitoa is asking for the FY 2016/ 17 and 2018 Audited Financial and Profit and Loss Statement from the Fono LFO.

Senators wanted an update on TBAS and a hearing was scheduled last week Wednesday by the Senate Budget and Appropriations Committee. However, it was later cancelled because witnesses were off island for meetings.

The committee plans to schedule a new hearing date when the Fono reconvenes next month following a four-week recess.

Among the issues that some senators want to learn from the bank is its financial status, an update of operations, how the bank is doing in serving the public, and plans for TBAS to get insured by the Federal Deposit Insurance Corporation (FDIC).

In his report to the Fono last month, Gov. Lolo Matalasi Moliga cited TBAS as a positive financial outcome for American Samoa, saying his Administration’s priority in the TBAS investment is to ensure future plans include FDIC insurance, while in the interim, the government-chartered bank will operate and act as any US bank.

“As with all endeavors, risk is a factor; however, with oversight by both regulator Office of Financial Institutions Commissioner and Federal Reserve with coordinated monthly and quarterly meetings to ensure our local bank remains and operates as any small bank in the United States,” the governor explained.

According to the governor, TBAS is progressing well and the future looks bright with the steady increase in deposits and loans to businesses and individuals. Additionally, top leadership positions have been filled, thus ensuring positive forward progress for TBAS.

He also confirmed that collaborative and correspondent arrangements have been established with Utah-based  Zions Bank, which also expands TBAS’s operating environment.

“As TBAS continues its growth trend, the economic and business infrastructural landscape will also improve proportionately,” said Lolo, adding that TBAS received a routing number earlier in the year.

He said Bank of Hawaii, as part of their exit strategy, gifted their local assets to TBAS (around $1.5 million to $2 million) which further strengthens capital.

“The bank is trending well towards strong profitability over the next year,” he declared.