New Mexico Administrative Code
Title 2 - PUBLIC FINANCE
Chapter 60 - INVESTMENT AND DEPOSIT OF PUBLIC FUNDS
Part 17 - COLLATERAL POLICY FOR NEW MEXICO BANKS GOVERNING CERTIFICATES OF DEPOSIT CREATED AFTER MAY 25, 1988
Section 2.60.17.7 - DEFINITIONS

Universal Citation: 2 NM Admin Code 2.60.17.7

Current through Register Vol. 35, No. 18, September 24, 2024

A. "Securities" shall be defined as those securities eligible as collateral for severance tax permanent funds under Section 6-10-16 and 7-27-5.2 [repealed], as amended, and effective May 21, 1986, Art. IV, Section 23, N.M. Constitution.

B. "Mortgages", shall be defined as eligible mortgage collateral under Section 7-27-5.2 NMSA 1978 [repealed] and the council's guidelines promulgated under Section 7-27-5.2 [repealed], as those guidelines may be amended from time to time by the council.

C. Risk classifications:

(1) "CLASS A" means a bank which meets all of the following conditions:
(a) a primary capital to asset ratio (as defined by the FDIC) of 6 percent or greater;

(b) a net income (current quarter plus previous three quarters after taxes) to average asset ratio of .61 percent or greater.

(c) a ratio of non-performing loans (defined as loans which are at least 90 days past due) to primary capital ratio of 34.9 percent or less.

(d) Failure of a bank to meet any one of these ratios automatically results in reclassification into the next lower financial class.

(2) "CLASS B" means a bank with all of the following financial conditions:
(a) a primary capital to asset ratio (as defined by the FDIC) of at least 5 percent;

(b) a net income (current quarter plus previous three quarters after taxes) to average asset ratio of at least .51 percent;

(c) A ratio of non-performing loans (defined as loans which are at least 90 days past due) to the bank's primary capital of no more than 49.9 percent.

(d) Failure of a bank to meet any one of these ratios automatically results in reclassification into the next lower financial class.

(3) "CLASS C" means a bank with any one of the following financial conditions:
(a) a primary capital to asset ratio (as defined by the FDIC) of less than 5 percent.

(b) a net income (current quarter plus previous three quarters after taxes) to average asset ratio less than .51 percent.

(c) A ratio of non-performing loans (defined as loans which are at least 90 days past due) to the bank's primary capital of greater than 49.9 percent.

(4) "CLASS D" means a bank with any two of the following financial conditions:
(a) a primary capital to asset ratio (as defined by the FDIC) of less than 2 1/2 percent.

(b) a net income (current quarter plus previous three quarters after taxes) to average asset ratio of less than .10 percent.

(c) a ratio of non-performing loans to the bank's primary capital of greater than 67 percent, two quarters in a row during the past 12 months.

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