Minutes of the Regular Meeting of NMSBIC, June 20, 2025

A meeting of the New Mexico Small Business Investment Corporation was called to order on this date at 9:04 a.m. at WESST Enterprise Center, 609 Broadway Blvd NE, Albuquerque, NM 87102. A quorum was established.

Members Present:
Ms. Anne Beckett, Vice Chair
Hon. Laura M. Montoya, NM State Treasurer
Ms. Sayuri Yamada (via Zoom)
Ms. Kristina Alley (via Zoom)
Mr. Joshua Grassham (via Zoom)

Members Excused:
Mr. Joshua Smith, Chair
Mr. Robert Valdiviez, Secretary/Treasurer

Executive Director/Financial Adviser to Board: Mr. Russell Cummins

Board Legal Counsel: Mr. Randall McDonald

Guests Present: Holly Bradshaw Eakes, Owner, Holly Company Strategies

REVIEW AND ACCEPTANCE OF AGENDA

Ms. Alley moved to accept the agenda, as published. Ms. Yamada seconded the motion, which passed unanimously.

BOARD MINUTES FOR APRIL 18, 2025

Mr. Grassham moved to approve of the Board Minutes for April 18, 2025, as presented. Ms. Alley seconded the motion, which passed by roll call vote with all directors voting yes except for Treasurer Montoya who abstained.

FINANCIAL REPORTS AS OF APRIL 30, 2025, AND MAY 31, 2025

Mr. Cummins provided the following highlights:

• LGIP (Local Government Investment Pool) increased from $51.7 million to $52.4 million primarily due to a $450,000 transfer from the RBC federal money market account.
• Overall interest income exceeds budget primarily due to higher than budgeted rates on short-term investments.
• Loan interest income is below budget due to:
  • Homewise’ balance is $4.5 million under budget but is planning a $3.8 million draw this month.
  • NM Mortgage Finance Authority balance is $3.5 million under budget but expects to draw the full $3.5 million draw in coming months.
  • RBC Pools are $3.5 million under budget and there is an action item on today’s agenda that RBC believes will boost production.
  • Ventana Fund is ahead of budget.
  • Clearinghouse CDFI is on track with budget. The NMSBIC board approved a $10 million increase at the last meeting and Clearinghouse CDFI expects to draw about $5 million in the next few months.
• Funds available for investment and operations were $20 million. This includes $3.8 million in estimated net excess funds to be paid to the severance tax permanent fund. Estimated net excess funds have been reduced by $688,800 in proposed other than temporary impairment for the New Mexico Mezzanine Partners Limited Partnership, one of the NMSBIC’s remaining equity investments.

Treasurer Montoya moved to accept the financial reports as of April 30, 2025, and May 31, 2025, as presented. Ms. Yamada seconded the motion, which passed unanimously by roll call vote.

NMSBIC PURPOSE FROM THE SMALL BUSINESS INVESTMENT ACT

Mr. Cummins said this information is provided for reference in the board package.

NEW MEXICO COMMUNITY DEVELOPMENT LOAN FUND, PROPOSED CHANGES TO LINE OF CREDIT

Mr. Cummins said the NMSBIC board has been approving waivers of the liabilities-to-net assets ratio for The Loan Fund since April 2024. The NMSBIC has a requirement that The Loan Fund maintain a liabilities-to-net assets ratio of no more than 24-to-1. The Loan Fund has exceeded this ratio and has been working to bring the ratio into compliance. The Loan Fund was successful in acquiring a $1 million Equity Equivalent (EQ2) investment from US Bank. EQ2 investments are long-term subordinated debt with preferential rates and terms.

The Loan Fund has had a $500,000 EQ2 investment from PNC Bank for several years. In April last year, NMSBIC approved for The Loan Fund to include the PNC EQ2 investment in its net assets for calculating its liabilities-to-net assets ratio.

Mr. Cummins added that The Loan Fund has also been working with Enterprise Bank on acquiring $500,000 in new EQ2 funding and also renewing a $2.5 million line of credit. Mr. Cummins reported the Enterprise Bank EQ2 investment has not closed. The Enterprise Bank $2.5 million line of credit was renewed and increased to $3 million.

Mr. Cummins recommended NMSBIC approval for The Loan Fund to include the $1 million US Bank EQ2 investment in its net assets for calculating its liabilities-to-net assets ratio. Based on The Loan Fund’s most recent financial statements, if the $1 million US Bank EQ2 investment is included in net assets, The Loan Fund’s liabilities-to-net assets ratio would drop to about 19-to-1 and be in compliance with the NMSBIC’s liabilities-to-net assets ratio requirement.

Mr. Grassham said the NMSBIC should continue to closely monitor The Loan Fund’s performance rather than move on and say it’s all good. Mr. Cummins responded that he plans to continue to closely monitor The Loan Fund’s performance.

Chair Beckett noted that The Loan Fund had a major change in leadership and there are several things going on. She said it’s her understanding The Loan Fund’s liabilities-to-net assets ratio was increased to 24-to-1 during the COVID-19 pandemic and it’s the only lending partner with a 24-to-1 ratio. She asked if the NMSBIC should continue with the 24-to-1 ratio.

Mr. Cummins replied that The Loan Fund is indeed going through several changes. He noted that Conchie Searle has been named interim CEO, and David Hicks has been named director of lending. For now, The Loan Fund is holding off on originating new loans while it reviews its existing loan portfolio and evaluates its lending policy. It has reduced its maximum loan size from $1 million to $350,000 and is focusing attention on its delinquent loans.

Mr. Cummins said that Chair Beckett was correct that The Loan Fund is the only lending partner with a 24-to-1 liabilities-to-net assets ratio, and that NMSBIC approved an increase in the ratio during the COVID-19 pandemic to make funds available to small businesses in need of loans during the pandemic. A key consideration in NMSBIC’s approval of a higher liabilities-to-net assets ratio was The Loan Fund’s long history of low loan charge-offs. Mr. Cummins noted there are other lending partners doing small business lending with historical charge-offs ranging from 4% to 10%, whereas The Loan Fund has a long history of charge-offs of less than 1%. Mr. Cummins noted that after the pandemic, The Loan Fund’s charge-offs have increased and have been running between 1% and 2%. While still lower than some other lending partners, he believes it’s a valid point to think about increasing The Loan Fund’s leverage ratio as we move forward. He added if the ratio were changed, it would likely take time for The Loan Fund to adjust to a different liabilities-to-net assets ratio.

Mr. Cummins said he is also recommending an extension for The Loan Fund to deliver its December 31, 2024, audited financial statements, from June 30, 2025, to August 31, 2025. He said he attended The Loan Fund’s board meeting in May where The Loan Fund reported that it had delivered all required information to its external auditors. There appears to be a delay with the external auditors completing the audit. He noted there was a similar delay with The Loan Fund’s external audit last year.

Treasurer Montoya moved that the NMSBIC board of directors approve a modification of the line of credit with the New Mexico Community Development Loan Fund to:

• Modify the liabilities-to-net assets ratio so that (1) deferred grants, (2) $500,000 PNC Bank equity equivalent loan, and (3) $1 million US Bank equity equivalent loan shall be treated as net assets and not as liabilities for calculation of the Liabilities-to-Net Assets Ratio; and
• Extend the date for delivery of 2024 audited financial statements to August 31, 2025, and
• That the NMSBIC’s board chair and president, or vice chair and vice president, be authorized to sign any all documents related to this change, subject to review and approval by the NMSBIC’s legal counsel and the NMSBIC’s executive director/investment advisor; and
• That the NMSBIC’s executive director/investment advisor report back to the board when the changes have been completed.

Ms. Yamada seconded the motion which passed by unanimous roll call vote.

Ms. Alley left the meeting at 9:35 am.

NEW MEXICO MEZZANINE PARTNERS LP, PROPOSED OTHER THAN TEMPORARY IMPAIRMENT OF INVESTMENT

Mr. Cummins said that one of NMSBIC’s remaining equity investments is New Mexico Mezzanine Partners Limited Partnership (NMMP). For some time, Mr. Cummins has been reporting on NMMP’s two remaining investments. The two companies have had significant downturns in revenues. Both companies have made several efforts to pivot and turnaround their operations, but the efforts have been unsuccessful. The NMMP partnership ended in 2019, and the partnership is in a winding up period. Most winding up periods last one or two years, whereas NMMP has been in a winding up period for five years.

Mr. Cummins reviewed NMMP’s collateral for the two companies, and said it appears unlikely the collateral would produce any significant value. Mr. Cummins recommended NMSBIC record $688,800 in other than temporary impairment, which is the full amount of NMSBIC’s remaining investment in NMMP.

Mr. Grassham asked if we will continue to monitor investment. Mr. Cummins said it’s unlikely any significate value will be recovered from NMMP. However, he plans to continue to work with NMMP to recover as much value as possible. He will continue to monitor the NMMP investment and report to the board so long as the partnership is in a winding up period. Mr. Grassham said that if we are not pushing on this, it might take another five years to unwind. He added that Mr. Cummins knows the situation and is the right person to apply whatever pressure might be needed.

Chair Beckett asked how forthcoming NMMP’s managing member, Michael Doolittle, is about NMMP’s remaining investments. Mr. Cummins said he believes Mr. Doolittle has been transparent and is communicating in good faith about NMMP’s investments. He believes Mr. Doolittle has a good relationship with owners of the two companies, which might make foreclosure or recovery of assets difficult. However, Mr. Doolittle has indicated he understands his responsibility to NMMP’s limited partners.

Mr. Grassham moved that the NMSBIC board of directors approve:

• Recording $688,800 in other than temporary impairment for its investment in New Mexico Mezzanine Partners, Limited Partnership (NMMP), and that
• NMSBIC shall continue to monitor the status of NMMP and work with NMMP to recover any value from NMSBIC’s investment in NMMP, and
• That the Executive Director/Investment Advisor report back to the board when recording of other than temporary impairment for NMMP has been completed.

Ms. Yamada seconded the motion which passed by unanimous roll call vote.

Treasurer Montoya left the meeting at 9:50 am.

RBC GLOBAL ASSET MANAGEMENT (RBC GAM), PROPOSED CHANGE TO INVESTMENT ADVISORY AGREEMENT

Mr. Cummins said RBC GAM made a presentation at the NMSBIC board meeting in February about increasing deployment of funds into SBA pools. He provided the following update:

• RBC GAM verified there are no restrictions on loans being added to the NMSBIC’s portfolio, other than restrictions under the Small Business Administration (SBA) loan program.
• RBC GAM and Randy McDonald reviewed Qualified Institutional Buyer (QIB) requirements. It was confirmed that NMSBIC does not meet QIB requirements. It was previously determined that SBA pools are not subject to QIB requirements. RBC GAM’s compliance department has reviewed and determined that SBA certificates, and United States Department of Agriculture (USDA) certificates, are also not subject to QIB requirements.

RBC GAM has recommended NMSBIC add SBA and USDA certificates as eligible NMSBIC investments. Certificates are investments in individual loans rather than pools of loan and are also 100% guaranteed by SBA or USDA. Adding SBA and USDA certificates as eligible investments would provide the following benefits:

• Allow NMSBIC to invest in loans sooner. Currently, SBA loans sit on RBC’s balance sheet until there are enough to be pooled. Individual loans could be sold as certificates to NMSBIC right away.
• Make larger SBA loans eligible for sale to NMSBIC. There is an SBA rule that no one loan can be more than 10% of an SBA pool. Given we are creating New Mexico-only pools, the pools are smaller, and the 10% limit can be an obstacle. This obstacle would be removed.
• Make New Mexico USDA loans available to include in the NMSBIC portfolio. USDA loans are exclusively in rural areas, which is attractive to NMSBIC. RBC GAM indicates many USDA guaranteed loans are sold via certificates.

Mr. Cummins said USDA loans can be made to businesses and municipalities. Under NMSBIC legislative requirements, business loans are eligible NMSBIC investments, but loans to municipalities are not.

Mr. Grassham said he believes adding SBA and USDA certificates is great. He said the only risk is the premium we are buying loans at. We need to know that risk and the potential loss but it’s a really good idea to increase the portfolio.

Mr. Cummins said that regarding the premium, RBC GAM is aware of the market value when purchasing loans. He agreed there is prepayment risk related to the premium paid. He added that if ten certificates are purchased, it would be no different than having a pool with ten loans in it. While there is no difference in the overall portfolio, the optics are different related to a single loan if the full premium is written off with prepayment. Mr. Grassham agreed and said we are just making our own pool.

Mr. Cummins said RBC GAM believes there is more trading activity in certificates than in pools. Investing in certificates should expand the availability to acquire loans for NMSBIC. Mr. Grassham agreed. He said his bank probably has about $100 million in SBA and USDA pools and certificates, and the investment has worked well.

Ms. Yamada asked if the only risk is with the premium. Mr. Cummins said SBA pools and certificates, and USDA certificates are backed by the full faith and credit of the U.S. government. He said there is risk related to early amortization of the premium with early loan payoffs. He referred to a report in the board package showing yields for NMSBIC’s existing portfolio of SBA pools. He noted over the past year the market yield for the SBA pools has been about 6.0% and has been reduced to about 3.5% due to the impact of prepayment on premiums. He added that over the past year, the 3.5% yield has been better than the yield of about 2.0% received from most lending partners.

Chair Beckett asked if the certificates have the same life as the pools. Mr. Cummins responded that loan life should be about the same. The life of SBA loans varies from loan to loan, but certificates are the same type of loans that go into pools.

Ms. Yamada moved that the NMSBIC board of directors approve a modification of the Investment Advisory Agreement with RBC Global Asset Management to:

• Allow Small Business Administration (SBA) and United States Department of Agriculture (USDA) Certificates to be included as acceptable NMSBIC investments, provided that such Certificates are eligible investments under the Small Business Investment Act, and
• That the NMSBIC’s board chair and president, or vice chair and vice president, be authorized to sign any all documents related to this change, subject to review and approval by the NMSBIC’s legal counsel and the NMSBIC’s executive director/investment advisor; and
• That the NMSBIC’s executive director/investment advisor report back to the board when the changes have been completed.

Mr. Grassham seconded the motion which passed unanimously by roll call vote.

Treasurer Montoya rejoined the meeting at 10:18 am.

FINANCE NEW MEXICO ANNUAL REPORT

Ms. Bradshaw Eakes joined the meeting via zoom for the Finance New Mexico annual report. She said the Finance New Mexico project started in 2007 and is focused increasing awareness and directing traffic to NMSBIC’s lending partners. She referred to metrics provided in the board package about Finance New Mexico’s email and website activity. She highlighted that the Finance New Mexico newsletter is sent to about 2,400 email addresses each month. Over the past year, website visitors have ranged from about 21,000 to 37,000, and unique visitors have ranged from about 8,000 to 15,000. She added that people tend to spend a lot of time on the website and are reading what is there.

Ms. Bradshaw Eakes said a transition is taking place from search engine optimization (SEO) to answer engine optimization (AEO). She said most people have probably experienced how there is now an artificial intelligence (AI) generated summary at the top of most search results. She said that Finance New Mexico’s search engine results are still in a pretty good place, but it clearly needs to be watched.

Ms. Yamada asked what the difference is between visitors and unique visitors. Ms. Bradshaw Eakes responded that visitors include bots, and unique visitors are real people.

Chair Beckett said she believes Google is the big driver for internet searches. She asked if there is any effort to break the stranglehold of Google. Ms. Bradshaw Eakes said she believes there are discussions about possibly breaking up Google or changing how searches are done. That’s something out of our control. However, getting into the top tier of search results is under our control, and she believes Finance New Mexico is appearing in the top tier of search results.

Mr. McDonald said he just ran an AI search for information on small business loans in New Mexico. He said the results had SBA first, Small Business Development Center second, and Finance New Mexico third. Mr. Grassham said everyone is having to deal with the change to AEO. He said he did several different searches with Finance New Mexico in the top five, and in his opinion Ms. Bradshaw Eakes is doing a good job.

Ms. Bradshaw Eakes also reported that The Loan Fund and WESST send information to her regularly and she is pleased with what they provide. She said available information from some of the other lending partners is more limited. Mr. Cummins said he would follow up with Ms. Bradshaw Eakes to see if there is a need to reach out to any of the lending partners regarding participation in Finance New Mexico.

Chair Beckett said it’s interesting to learn about the things necessary to stay on top of internet searches, and thanked Ms. Bradshaw Eakes for her report.

NMSBIC PROPOSED BUDGET FOR THE YEAR ENDING JUNE 30, 2026

Mr. Cummins referred to the proposed NMSBIC budget included in the board package. He highlighted the following:

• Total assets are projected to increase to over $200 million.
• Outstanding loans are projected to increase by $29 million, to a total of $132 million outstanding.
• Michelle Corley, who has been providing financial analysis support to NMSBIC, has resigned effective June 30, 2025. He said Ms. Corley has taken a full-time position with Ventana Fund as director of finance and he is pleased he will continue to work with Ms. Corely in her new role. Mr. Cummins said he has budgeted for the addition of a deputy director in the budget starting January 2026. He said he will bring the addition of this new position to be board for approval at a later date and is only budgeting for the change at this time.

Treasurer Montoya noted that at the beginning of the year there was discussion about evaluating the Executive Director’s compensation. She said she has missed some meetings and asked for an update. Mr. Cummins said the board evaluated his compensation at the April board meeting. He said that under his agreement as an independent contractor, he is responsible for paying New Mexico gross receipt taxes, employer Social Security and Medicare taxes, and all other benefits including health insurance and retirement. At the April board meeting, he provided an apples-to-apples comparison of his compensation with an estimated salary equivalent, and the salary equivalent was in-line with the compensation level Treasurer Montoya said she believed was appropriate. Treasurer Montoya said she appreciated the update and wanted to make sure this was addressed before the budget was approved.

Mr. Cummins said the budget includes renewal amounts for memberships in the New Mexico Impact Investing Collaborative, the New Mexico Independent Community Bankers Association, and a subscription to the Bureau of Business and Economic Research quarterly Economic Snapshot. Approval of the budget would include approval to renew these items.

Mr. Cummins referred to a history of NMSBIC results that showed:

• Total revenue has grown from $293,000 in 2014 to $4.7 million in the proposed budget.
• Net income has grown from $54,000 in 2014 to $4.2 million in the proposed budget.
• Loan interest income has grown from $216,000 in 2014 to $1.9 million in the proposed budget, which shows the success of NMSBIC’s efforts to expand its lending program.

Chair Beckett asked Mr. Cummins to bring a description of duties for the proposed deputy director to an upcoming board meeting. Mr. Cummins said he was planning to do so. He said NMSBIC has grown to a level where he believes adding a deputy director makes sense.

Chair Beckett moved the NMSBIC board of directors approve the 2025-2026 budget as presented in the board package, and that renewal of annual dues, subscriptions, and memberships included in the budget be approved, including New Mexico Impact Investing Collaborative partner membership at $2,500, Bureau of Business and Economic Research Economic Snapshot at $1,000, and Independent Community Bankers Association associate membership at $500. Treasurer Montoya seconded the motion which passed unanimously by roll call vote.

NMSBIC INVESTMENT POLICY ANNUAL REVIEW

Mr. Cummins said NMSBIC reviews its investment policy annually, and provides a copy to the New Mexico State Investment Council (SIC) as required by the Joint Powers Agreement between NMSBIC and SIC. He said proposed investment policy changes include:

• Adding the State Treasurer Office’s Local Government Investment Pool (LGIP) and the Invesco Federal Money Market Fund, to investments not subject to a limit of 5% of currently available funds; and
• Deleting the Use of Leverage section.

Mr. Cummins said the Use of Leverage section was added related to investments in venture capital equity funds and is no longer used. He recommended deleting this section.

Treasurer Montoya said no limit on LGIP is a great idea because of the liquidity, diversification and safety, plus a better rate of return. Regarding the federal money market fund, Treasurer Montoya suggested crossing out Invesco and just referring to federal money market fund because if there is a better federal money market fund, there would be the option to use any federal money market fund. Mr. Cummins agreed to cross out Invesco.

Treasurer Montoya moved to approve the recommended changes to NMSBIC’s investment policy, with a change to strike the word Invesco before Federal Money Market fund. Mr. Grassham seconded the motion which passed unanimously by roll call vote.

RENEWAL OF PROFESSIONAL SEVICE CONTRACTS

Mr. Cummins recommended renewal of three professional service contracts for one year for Randall McDonald, Dee Brescia, and Holly Company Strategies for Finance New Mexico. All proposed renewals are with the same terms and pricing, except Mr. Brescia has proposed a price increase from $147 per hour, to $155 per hour, plus New Mexico Gross Receipts Tax. Ms. Brescia’s pricing has not changed for three years. The proposed price increase is an increase of about 5.4%, or about 1.8% annually when divided by three years.

Treasurer Montoya moved to approve renewal of the Professional Service Contracts for one year from July 1, 2025, to June 30, 2026, for:

• Randall McDonald with no changes to terms or pricing, at $235 per hour, plus New Mexico Gross Receipt Tax; and
• Dee Brescia with no changes to terms, and a price increase from $147 per hour to $155 per hour plus New Mexico Gross Receipt Tax; and
• Holly Company Strategies to manage and maintain the Finance New Mexico project, with no change to terms or pricing, at $29,000 per year plus New Mexico Gross Receipt Tax; and
• The NMSBIC’s president and board chair or vice president and vice chair be authorized to execute any and all documents related to renewal of the contracts, subject to review and approval by the NMSBIC’s Executive Director/Investment Advisor and the NMSBIC’s legal counsel; and
• The executive director/investment advisor will report back to the board when the contracts have been executed.

Mr. Grassham seconded the motion which passed unanimously by roll call vote.

DIRECTORS AND OFFICERS INSURANCE POLICY RENEWAL

Mr. Cummins recommended renewal of NMSBIC’s directors’ and officers’ insurance policy that expires on June 23, 2025. The policy coverage is $1 million and is provided by Admiral Insurance Company. HUB International is the agent. The deductible is $10,000.

Mr. Cummins said HUB International re-markets the policy from time to time and re-marketed the policy last year. Admiral Insurance provided the best quote and has an AM Best rating of A+ (superior). Last year we also received quotes for deductibles of $10,000 and $20,000. The savings for a $20,000 deductible were minimal, and we chose to keep the $10,000 deductible. Admiral Insurance’s quote increased by 6.3% this year. The premium is impacted by NMSBIC’s asset growth. NMSBIC’s assets have grown from $155 million to $185 million over the past year.

Treasurer Montoya moved to approve renewal of the $1 million directors’ and officers’ insurance policy with Admiral Insurance Company, from June 23, 2025, to June 23, 2026, with a deductible of $10,000, and annual premium of $4,867.92. The executive director/investment advisor will report back to the board after the policy has been issued. Mr. Grassham seconded the motion which passed unanimously by roll call vote.

NMSBIC USE OF ELECTRONIC SIGNATURES

Mr. Cummins recommended adoption of a new Policy for Use and Acceptance of Digital Signatures, and approval of a subscription for the Docusign electronic signature system. He said Mr. McDonald helped him develop the policy. Pricing for the Docusign system is $25 per month per user, and he anticipates one to two users.

Based on discussions with Mr. McDonald, the recommendation is to authorize use of electronic signatures for all documents except for NMSBIC promissory notes, which would still require wet signatures.

Mr. Grassham said his bank uses Docusign and it makes things more efficient. He agreed with the recommendation and said he appreciated the homework and policy.

Treasurer Montoya moved to approve:

• The NMSBIC Electronic Signature Policy provided in the board package; and
• A subscription for the Docusign electronic signature system, with current pricing of $25 per month per user; and
• The executive director/investment advisor will report back to the board after the Docusign system has been implemented.

Ms. Yamada seconded the motion which passed unanimously by roll call vote.

EXECUTIVE DIRECTOR/INVESTMENT ADVISOR REPORT

Mr. Cummins reviewed highlights from the report as follows:

• The NMSBIC board approved an increase in the Clearinghouse CDFI line of credit from $20 million to $30 million. The modification documents were completed and signed.
• Mr. Cummins attended a farewell bus tour in honor of Anne Haines’ retirement as CEO of DreamSpring. The tour was well attended, with visits to several small businesses supported by loans from DreamSpring.
• Homewise indicated it will draw $3.8 million next month and plans to use the full $16 million commitment in the next 12 months.
• New Mexico Mortgage Finance Authority (MFA) has two projects where it plans to use NMSBIC funds. Both projects have been delayed, but it is planning to deploy the full $3.5 million commitment from NMSBIC. Mr. Cummins and Chair Smith have a meeting scheduled with Isidoro Hernandez, MFA’s executive director, about possible opportunities to expand the relationship between MFA and NMSBIC.
• For Ventana Fund, Keith Flynn, director of finance, has resigned and will be replaced by Michelle Corley. Mr. Flynn has taken a position with the New Mexico State Investment Council.
• WESST plans to expand its lending program, and Mr. Cummins is having discussions about its expansion plans.
• Mr. Cummins met recently with Tom Stephenson. Mr. Stephenson said Verge Management is planning to terminate the Verge I II Combined Limited Partnership at the end of this year and distribute shares of stock in remaining companies to limited partners. He is considering doing the termination about 30 days before December 31st, to allow things like purchase/sale of shares between limited partners to occur before year-end. Mr. Stephenson said Pajarito Powder is considering making a proposal to create a voting trust for former Verge I II Combined limited partners.
• Mr. McDonald has suggested creating an NMSBIC subsidiary to hold direct ownership interests in assets distributed to NMSBIC and the end of limited partnerships. A subsidiary would protect NMSBIC assets from claims and also allow discussion about direct investments that might be confidential to occur outside of meetings that are open to the public. Mr. McDonald said it’s a preliminary suggestion. There may be pros and cons, and we would obviously bring those to the board.
• New Mexico Impact Investing Collaborative (NMIIC) is comprised of about ten foundations looking for opportunities to invest funds to make an impact in New Mexico. Mr. Cummins suggested NMIIC consider making Equity Equivalent (EQ2) investment in New Mexico Certified Development Financial Institutions (CDFIs). NMIIC is considering the suggestion.
• Mr. Cummins and Chair Smith are continuing discussions with Raza Development Fund (RDF), a CDFI based in Arizona, that is lending in New Mexico. RDF provides funding for small businesses, charter schools, and medical facilities. Development of medical facilities in rural areas of New Mexico might address a funding gap in New Mexico.

Chair Beckett asked about lending partners with NMSBIC committed funds that have not been deployed. Mr. Cummins responded that in recent years, NMSBIC has added a provision to its loan agreement that allows NMSBIC to reduce or terminate lines of credit to lending partners when funds are not being deployed. The new language provides better ability for NMSBIC to manage relationships where funds are not being utilized.

Treasurer Montoya said recently hosted a meeting with leaders of MFA, New Mexico Finance Authority, New Mexico State Investment Council, and NMSBIC. The focus was on how we can learn more and be partnering rather than replicating efforts. She said she believed it was a good first start and plans for the conversations to continue. She said she is glad to hear about the follow-up meeting scheduled with Mr. Hernandez at MFA.

Mr. Cummins thanked Treasurer Montoya for bringing this up and for arranging the meeting.

BUREAU OF BUSINESS AND ECONOMIC RESEARCH IMPACT STUDY

An update was provided in the board package noted that work has started and in in progress.

NMSBIC BUSINESS CONTINUITY PLAN UPDATE AND TEST

Mr. Cummins referred to the updated business continuity plan and testing documentation included in the board package. He said testing is done every six months, and there are a fair number of changes to the plan each time it is reviewed and updated.

BOARD CONTINUING EDUCATION

Mr. Cummins referenced the Bureau of Business and Economic Research (BBER) New Mexico Economic Snapshot, which was included in the board package.

CHAIR’S COMMENTS

Chair Beckett thanked everyone for attending.

ADJOURNMENT

Chair Beckett moved to adjourn at 11:25 a.m. Mr. Grassham seconded the motion, which passed unanimously by roll call vote.

ADJOURNMENT: 11:25 a.m.