Faipule probe the financial health of TBAS in House hearing with CEO & Commissioner

Pago Pago, AMERICAN SAMOA — With the governor lifting the temporary suspension of government directors, agency heads and all Administration employees on testifying at House hearings, faipule resumed committee hearings on Wednesday, April 12, and summoned the Territorial Bank of American Samoa (TBAS) Chief Executive Officer David Buehler, and Commissioner Tuasivi John Marsh.

The two men appeared before the House committee on banking, without TBAS fiscal reports being available to the House, which lead to Faipule Larry S. Sanitoa stating his concerns about issues that have plagued TBAS in the past months, but they are blind without the reports.

And while he understands the reasoning behind why fiscal reports for 2022 were not provided, he needs to remind CEO Buehler “that by law the fiscal reports of TBAS were due to be turned into [sic] the possession of the Fono in the first week of February, 128 days after the close of the fiscal year.” 

 Sanitoa said that given the bank is under-capitalized, has no insurance, it would behoove the CEO to try and find a way to get the fiscal reports done in a timely manner so that at least the Fono members have something to consider.

The faipule expressed his “disappointment” that when they have committee hearings on the bank, they have nothing to go on — “no numbers, no documents, and nothing to clarify the performance of the bank besides what the CEO and Commissioner are verbally sharing and stating, especially considering that our bank is not FDIC insured.

 “It is a huge concern when we don’t have these reports on hand in a timely manner — It’s been 3 months now.

“I understand that things happen but it comes back to you, as being the CEO on when to have these reports done at least in a reasonable time so that Fono and government members, and the people of American Samoa…  because the people are entitled to have a look at them and review the fiscal reports.

“So now if anybody has questions about how the bank is doing, we have nothing to go with. But in any event, this is something that we will have to deal with — with the Board.

Sanitoa pointed out to Buehler that it is his fiduciary responsibility as CEO to have these reports presented in a timely manner.

He also asked CEO Buehler, what the value of the bank was in fiscal year 2022.

Buehler stated that the “book value of TBAS is currently $8 million, while the number for the market value is unknown.”

Sanitoa then brought up the joint 2022 Supplemental Budget hearing where Senator Togiola Tulafono, Chairman of the TBAS board of directors, advocated for $5 million in funding to go to TBAS.

Togiola had said at the time that if “ASG does not increase its investment [in TBAS], the Federal Reserve would step in and close the bank.”

He then mentioned that they had asked Senator Togiola if there was any communication with Commissioner Tuasivi because the Fono would like to see that on paper, especially if the Federal Reserve is concerned over the local bank being under-capitalized and uninsured.

Sanitoa asked, “Is there a timeline that the Federal Reserve is requiring TBAS to put in more money … to avoid being closed and is there communication with the Federal Reserve bank in terms of being under capitalized?”

Commissioner Tuasivi replied, “I work directly with the Federal Reserve bank and am in constant communication with them and they realize that American Samoa has to have a bank. They’re not going to automatically close the bank, which would leave American Samoa hanging out to dry.

“It is necessary that the bank continues to operate — and only if there are drastic actions taken by the bank [TBAS] that warrants such an action by the Federal Reserve would they close down the bank.

“The only thing they’ve done is increase the depositary requirements.

“So far they have not closed the account and I don't think that will happen because TBAS is finally turning the corner; it is profitable and it is beginning to make money,” he said.

Commissioner Tuasivi also noted that he “had CEO Buehler perform a liquidity test, and it shows that the bank is in a strong situation.

“TBAS is not like the banks in the mainland, who unlike TBAS, over invested in long term bonds.” [Tuasivi is referring to the recent demise of Silicon Valley Bank, where FDIC closed its doors and took control of its deposits last month.]

Tuasivi also stated that the cash stays in American Samoa and doesn’t flow out to the mainland.

 “Our population is basically stagnant, which [means it] doesn’t shrink or grow much, so the money basically stays here in American Samoa, it rotates out some but it also comes back.”

As far as concerns about TBAS, “there is none except acquiring auditory financial statements but other than that, it is in a satisfactory position right now”, concluded Commissioner Tuasivi.