By Gerardo R. Partido
Variety News Staff

FITCH Ratings has affirmed the ratings for the Bank of Guam at “BBB/F2” which means a stable rating.
According to the bond rating agency, Bank of Guam’s earnings advanced nicely in 2006, due primarily to a stronger net interest margin and asset quality improvement.
While the Guam economy continues to face challenges, Fitch pointed out that there has been notable improvement in the economic environment during the past few years.
Tourism activity has been rising modestly since 2003 and the increasing U.S. military presence in Guam has helped the real estate market in particular, as well as the broader economy.
Adding to Bank of Guam’s bright prospects is further military expansion anticipated over the intermediate term involving the relocation to Guam of thousands of Marines from Okinawa.
Moreover, Fitch said rising short-term interest rates continue to have a positive effect on Bank of Guam’s net interest margin, as adjustable rate commercial loans have repriced upward.
In addition, Bank of Guam’s level of non-performing assets has shown notable improvement, declining 27 percent in 2006.
According to Fitch, capital remains a key strength of Bank of Guam and a critical factor in the bank’s ratings.
“This gives Bank of Guam the necessary resiliency to manage through very difficult economic conditions when they occur, as demonstrated over the past several years,” Fitch said.
Bank of Guam, the first locally chartered commercial bank in Guam, was founded on March 13, 1972 by a group of local businessmen led by Jesus Sablan Leon Guerrero whose objective was to provide a ready source of credit and comprehensive range of services for local residents.
Dubbed “the people’s bank,” Bank of Guam has consistently been one of Guam’s largest employers, with approximately 380 staffing its network.
Over the years, the company has provided supporting financial infrastructure to the community, allowing for wide-ranging commercial development and broad-based home ownership, which has resulted in the success of hundreds of new and expanding small businesses and thousands of new homes.
Bank of Guam is currently led by former Senator Lou Leon Guerrero, who serves as president, CEO, and chairwoman of the bank.