A District of Columbia bank held its annual meeting 10 days ago -- in Albuquerque.
No, it wasn't a ploy to escape questions from professional annual-meeting gadfly Evelyn Y. Davis.
Rather, for officers and directors of the American Indian National Bank of Washington, it was an opportunity to visit the institution's representative office in former Indian territory, at the Indian Pueblo Cultural Center, and to help promote a business that is owned by Indians and tribes.
The story that bank officers told in New Mexico reflects one of the most successful minority financial institution ventures in the United States today, particularly when one considers that as recently as 1978 the bank was not making it, because of weak loan supervision that since has been corrected.
Moreover, American Indian National quietly has become one of the more aggressive institutions in the D.C. area, even though its name properly emphasizes, a broader mandate.
Last year, when average D.C. bank deposits rose about 9 percent, American Indian was up 39 percent to $457,957 from $421,541 in 1979 (and from a steep net loss in 1978 of $885,435). The bank earned 35 percent on average equity (stockholders' investment). Only one problem loan was on the books.
All of this was accomplished in a year during which American Indian National kept a lid of 12 1/2 percent on its prime rate for top corporate customers compared with 20 percent for most banks last spring and 21 percent last fall. The bank itself paid as high as 18 percent to get money.
Not bad, says Chief Executive Officer Conley Ricker, "even though the bank is located 2,000 to 3,000 miles from our primary market and also is located on the third floor of a downtown Washington office building, making the bank generally inaccessible to street traffic."
American Indian National was started here in 1973, with a charter to serve the diverse tribes across the country. It was promoted by retired Army general George Olmsted, who is board chairman of International Bank of Washington, a financial services holding company.
Washington was selected as the site of the bank's headquarters for two main reasons -- it is neutral territory for all of the Indian tribes, and the federal government is a major source of money for tribal economic development.
At the annual meeting, bank director-organizer and Navajo Tribal Council Chairman Peter MacDonald challenged his audience to utilize more fully the services of American Indian National in order to achieve more economic self-sufficiency and less federal dependency.
In light of pending budget cuts planned by the Reagan administration, the bank assumes a more important role, he added. Proposed cuts in employment programs, elimination of the Commerce Department's Economic Development Administration (a source for several important Indian projects) and reduction of school lunch programs would have an "adverse impact on every Indian family," according to MacDonald.
But by pooling resources and supporting the bank, Indians may assist in their economic independence, he said. Among MacDonald's suggestions: all Indian tribes should open accounts and establish banking relationships with the D.C. institution, helping build a source of capital for future Indian enterprises, such as shopping centers, stores, amusement centers and other commercial ventures.
If even a small portion of all tribal budgets were placed in American Indian National, that would mean that the bank could lend up to $1 million to virtually any tribe for a worthwhile purpose.
Currently, the Washington bank's capitalization is more than $2 million and that permits the bank to lend up to $200,000 per customer.
That level was reached last week in another significant milestone for the bank, as Minbanc Capital Corp. approved the first subordinated capital investment for a Washington minority-owned bank. Minbanc is a management investment company registered under federal statue to provide capital funds to minority banks that have been in operation for at least two years. Minbanc has been in business since 1971 and also has a headquarters in Washington.
In the case of American Indian National, the bank issued a $250,000 note and Minbanc purchased it. The 10 1/2 note and Minbanc purchased it. The 10 1/2 percent subordinated role will be paid back quarterly over the next decade. The proceeds were used to increase total capitalization.
The bank also increased its capital last year by selling 5,000 shares of common stock to Arctic Slope Regional Corp. of Barrow, Alaska. As of year's end, the bank had 378 stockholders with a majority of shares owned by the Arctic Slope group; the Yakima nation in Washington state; Utes of Utah; Colville confederated tribes in Washington state; Koniah Inc. of Kodiak, Alaska; Colorado River tribes in Arizona; Seminole tribes of Florida; Afognak Native Corp. of Kodiak; the Crow tribe of Montana; Miccosukee tribe of Florida; the St. Croix tribal council of Wisconsin; the Shoshone and Bannock tribes of Idaho and the Tule River tribal council of California.
Officers of the bank attributed their substantial deposit gains last year success in attracting new tribal money and -- Washington bankers take note -- to specialized depository, lending and investment services for nonprofit and other "underserved" groups in this region.
For Indians, special services include loans for tribes and tribal enterprises, letters of credit and higher interest rates paid to tribles on certificates of deposit and other investments. The bank also organized, as the lead institution, a consortium of minority-owned banks to provide a line of credit to Mobil Oil Credit Corp. last year.
In the Washington area, Ricker and marketing officer-director Barbara Lynch Hughes have launched an aggressive push for business under a new metropolitan division. American Indian National is going after trade association, small business and nonprofit sector accounts as well as "other traditionally underserved groups," such as Hispanics and blacks.
Although bank officials hope one day to be opening branches near to their customers in various states, mainly in the West, current federal laws prohibit interestate branching. The office in Albuquerque today is a loan production office, which processes business and personal loan applications but cannot accept deposits.
Until the laws are changed, American Indian wants to keep on growing as a Washington institution, building capital to lend for tribal business. Or, as the bank's annual report says, doing more business in the D.C. area has the objective of "building a stronger foundation of earnings and capital on which the bank can expand eventually into the western U.S."