Las Cruces’ Citizens Bank steps up big on PPP

Citizens Bank of Las Cruces has approved about 10 percent of all the Paycheck Protection Program (PPP) loans made in New Mexico, a top bank official said. And, “the money is going to small businesses which is where it needs to go.”

As of Tuesday, June 2, Citizens had awarded approximately 850 PPP loans totaling about $76 million, said Citizens Executive Vice President and Chief Credit Officer Tim Hargrove, and those numbers are increasing daily.

“The total number of jobs that have been retained in our community as a result of these PPP loans is 11,000+,” Hargrove said.

The loans are funded by the bank and are 100 percent guaranteed by the Small Business Administration (SBA), said Hargrove, who has been a banker for 32 years. The loans have gone to businesses of all kinds in Las Cruces and throughout New Mexico, El Paso and Colorado.

And, Hargrove said, Citizens has welcomed both bank customers and non-customers who need the money to apply for it, including people who are self-employed.

In addition to PPP loans, Hargrove said the bank has also been proactive in reaching out to its customers to determine if they need payment deferrals on loans or other modifications as they deal with COVID-19.

“We understand if you can’t open your business, if you can’t get a paycheck, how are you supposed to pay your bills?” Hargrove said. “I don’t want people to have to worry about their loans right now. We want to do everything we can to help our customers get through this unprecedented pandemic. Not only does this help businesses, it has also been instrumental in allowing numerous individuals in our community keep their jobs.”

The PPP was created by the U.S. Treasury Department as part of the federal CARES Act, Hargrove said, with the SBA handling approval processing through their ETRAN system. Funds authorized by the U.S. Treasury and Congress total $670 billion for this loan program. And even though there have been several problems with the SBA processes and guidance, Hargrove said he has “never seen the SBA move like this” in facilitating the program. He said the FDIC and other bank regulators have also been extremely supportive.

“Early in the process, I reached out to our chief regulators and had conversations with them about what we wanted to do, and they have been very accommodating,” Hargrove said.

The FDIC told him “’Do whatever you have to do to take care of your customers. We’re going to work with you,’” he said. “It has been so encouraging to see the amount of support we have received from our regulators.”

Under PPP, a business takes its average monthly payroll and multiplies by 2.5 to determine the amount of the loan it should apply for. He said the SBA is requiring that 75 percent of the loan proceeds be spent on payroll, with the remaining 25 percent being used for utility bills, mortgage interest payments and rent. He said the Independent Community Bankers Association is advocating for the removal of the restriction on these requirements.

“We are still waiting on guidance from the SBA regarding documentation necessary for the forgiveness process,” Hargrove said. He said he is hopeful the majority of the loans will be 100 percent forgiven.

Hargrove said he also will not be surprised if there is another round of PPP loans at some point in the future.