Business & Finance
Business and Finance
Business and Finance
Tue, March 29, 2011
Mon, March 28, 2011 Alaska Pacific Bancshares, Inc. Reports Fourth Quarter and Annual Earnings for 2010
JUNEAU, Alaska--([ BUSINESS WIRE ])--Alaska Pacific Bancshares, Inc. (OTCBB:AKPB) (aCompanya), the parent company of Alaska Pacific Bank (aBanka), today reported net income available to common shareholders of $624,000, or $0.89 per diluted common share, for the fourth quarter ended December 31, 2010, as compared to a net loss available to common shareholders of $1.2 million, or $(1.84) per diluted common share for the fourth quarter of 2009.
"The board and management have focused on the resolution of the specific problem loans that have hampered the Banka™s performance for the past three years and are pleased that we believe that we are bringing this chapter of the banka™s history to a close"
Net income available to common shareholders for the year ended December 31, 2010, was $539,000, or $0.76 per diluted common share, compared to a net loss of $2.5 million, or $(3.76) per diluted common share for 2009.
aThe board and management have focused on the resolution of the specific problem loans that have hampered the Banka™s performance for the past three years and are pleased that we believe that we are bringing this chapter of the banka™s history to a close,a stated Craig Dahl, President & CEO. aWea™re confident in the Banka™s direction and looking forward to steady progress as we continue to provide all types of loan and deposit services to the people and communities of southeast Alaska as wea™ve done for more than seventy-five years.a
Net income in the quarter ended December 31, 2010 was primarily attributable to a reduction in non-interest expense of $372,000 compared to the quarter ended December 31, 2009. Additionally net income for the quarter ended December 31, 2010 improved as a result of lower loan loss provision and income tax benefit of $255,000 compared to provision for income tax expense of $687,000 in the comparable quarter of 2009.
The allowance for loan losses at December 31, 2010 was $1.6 million, representing 1.12% of total loans outstanding. Total non-accrual loans were $448,000 at December 31, 2010 compared with $1.9 million at September 30, 2010 and $2.9 million at December 31, 2009. In addition, the Banka™s other real estate owned and repossessed assets were $1.8 million at December 31, 2010 compared with $2.7 million at September 30, 2010 and $2.6 million at December 31, 2009. There was $447,000 in net loan charge offs for the quarter ended December 31, 2010 compared with $56,000 for the quarter ended September 30, 2010 and $24,000 for the quarter ended December 31, 2009. Net charge-offs for 2010 were $1.1 million compared to $3.8 million for 2009.
Net interest margin on average interest-earning assets for the fourth quarter of 2010 was 5.66% compared with 5.12% in the fourth quarter of 2009. Net interest income increased $160,000 (1.9%) to $8.5 million in 2010 compared to $8.3 million for 2009. The net interest margin on average interest earning assets was 5.34% for 2010 compared with 4.86% in 2009.
Loans (excluding loans held for sale) were $141.9million at December 31, 2010, a decrease of $10.2 million, or 6.7% from September 30, 2010, and a decrease of $16.2 million, or 10.2% from December 31, 2009. Deposits at December 31, 2010, were $147.5million, a $4.3million (2.8%) decrease from September 30, 2010 and a $670,000 (0.5%) decrease from December 31, 2009.
Noninterest expense for the fourth quarter of 2010 decreased $19,000 (0.8%) from September30, 2010 and decreased $372,000 (14.0%) from the quarter ended December 31, 2009. Noninterest expense for 2010 decreased $651,000 (6.9%) compared to 2009. The net decrease in expense in 2010 is due to lower real estate owned and repossessed property expense, net and lower compensation and benefit expense offset with higher professional and consulting fees.
Forward-Looking Statements
Certain matters in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets in our loan portfolio, result in our allowance for loan losses not being adequate to cover actual losses, and require us to materially increase our reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long term interest rates, deposit interest rates, our net interest margin and funding sources; deposit flows; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; adverse changes in the securities markets; results of examinations by our banking regulators including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses, write-down assets; change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; the possibility that we will be unable to comply with the conditions imposed upon us in the Cease and Desist Orders we entered into with the Office of Thrift Supervision, computer systems on which we depend could fail or experience a security breach, or the implementation of new technologies may not be successful; our ability to retain key members of our senior management team; legislative or regulatory changes such as the Dodd-Frank Wall Street Reform and Consumer Protection Act that adversely affect our business including changes in regulatory policies and principles, including the interpretation of regulatory capital or other rules; time to lease excess space in Company-owned buildings; future legislative changes in the United States Department of Treasury Troubled Asset Relief Program Capital Purchase Program; and other risks detailed in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. We undertake no responsibility to update or revise any forward-looking statements.
| Alaska Pacific Bancshares, Inc. | ||||||||
Financial Highlights (Unaudited) | ||||||||
Year and Fourth Quarter 2010 | ||||||||
(dollars in thousands, except per-share amounts) | ||||||||
| Year Ended December 31, | ||||||||
| 2010 | 2009 | |||||||
| Condensed Statement of Operations: | ||||||||
| Interest income | $ | 9,589 | $ | 10,184 | ||||
| Interest expense | 1,107 | 1,862 | ||||||
| Net interest income | 8,482 | 8,322 | ||||||
| Provision for loan losses | 899 | 2,947 | ||||||
| Gain on sale of loans | 524 | 712 | ||||||
| Other noninterest income | 1,262 | 1,172 | ||||||
| Other noninterest expense | 8,781 | 9,432 | ||||||
| Net income (loss) before income tax | 588 | (2,173 | ) | |||||
| Income tax expense (benefit) | (255 | ) | 18 | |||||
| Net income (loss) | 843 | (2,191 | ) | |||||
| Preferred stock dividend and discount accretion | ||||||||
| Preferred stock dividend | 239 | 216 | ||||||
| Preferred stock discount accretion | 65 | 55 | ||||||
| Net income (loss) available to common shareholders | $ | 539 | $ | (2,462 | ) | |||
| Earnings (loss) per share: | ||||||||
| Basic | $ | 0.82 | $ | (3.76 | ) | |||
| Diluted | $ | 0.76 | $ | (3.76 | ) | |||
| Performance Ratios: | ||||||||
| Return on average equity | 4.43 | % | (11.26 | )% | ||||
| Return on average assets | 0.49 | (1.19 | ) | |||||
| Yield on average earning assets | 6.03 | 5.94 | ||||||
| Cost of average interest-bearing liabilities | 0.88 | 1.40 | ||||||
| Interest rate spread | 5.15 | 4.54 | ||||||
| Net interest margin on: | ||||||||
| Average earning assets | 5.34 | 4.86 | ||||||
| Average total assets | 4.92 | 4.51 | ||||||
| Efficiency ratio (a) | 90.12 | 99.35 | ||||||
| Average balances: | ||||||||
| Loans | $ | 153,736 | $ | 165,807 | ||||
| Earning assets | 158,919 | 171,346 | ||||||
| Assets | 172,284 | 184,630 | ||||||
| Interest-bearing deposits | 116,298 | 120,632 | ||||||
| Total deposits | 145,371 | 148,352 | ||||||
| Interest-bearing liabilities | 125,319 | 132,788 | ||||||
| Shareholders' equity | 19,029 | 19,465 | ||||||
| Average shares outstanding: | ||||||||
| Basic | 654,486 | 654,486 | ||||||
| Diluted | 707,897 | 654,486 | ||||||
| Three Months Ended | ||||||||||||
| December 31, 2010 | September 30, 2010 | December 31, 2009 | ||||||||||
| Condensed Statement of Operations: | ||||||||||||
| Interest income | $ | 2,387 | $ | 2,393 | $ | 2,459 | ||||||
| Interest expense | 229 | 265 | 360 | |||||||||
| Net interest income | 2,158 | 2,128 | 2,099 | |||||||||
| Provision for loan losses | (113 | ) | (1 | ) | 342 | |||||||
| Gain on sale of loans | 120 | 204 | 180 | |||||||||
| Other noninterest income | 345 | 318 | 283 | |||||||||
| Other noninterest expense | 2,290 | 2,309 | 2,662 | |||||||||
| Net income (loss) before income tax | 446 | 342 | (442 | ) | ||||||||
| Income tax expense (benefit) | (255 | ) | - | 687 | ||||||||
| Net income (loss) | 701 | 342 | $ | (1,129 | ) | |||||||
| Preferred stock dividend and discount accretion | ||||||||||||
| Preferred stock dividend | 60 | 60 | 59 | |||||||||
| Preferred stock discount accretion | 17 | 16 | 15 | |||||||||
| Net income (loss) available to common shareholders | $ | 624 | $ | 266 | $ | (1,203 | ) | |||||
| Earnings (loss) per share: | ||||||||||||
| Basic | $ | 0.95 | $ | 0.41 | $ | (1.84 | ) | |||||
| Diluted | $ | 0.89 | $ | 0.37 | $ | (1.84 | ) | |||||
| Performance Ratios: | ||||||||||||
| Return on average equity | 14.39 | % | 7.19 | % | (23.44 | %) | ||||||
| Return on average assets | 1.72 | 0.77 | (2.51 | ) | ||||||||
| Yield on average interest-earning assets | 6.26 | 5.96 | 6.00 | |||||||||
| Cost of average interest-bearing liabilities | 0.74 | 0.86 | 1.13 | |||||||||
| Interest rate spread | 5.52 | 5.10 | 4.87 | |||||||||
| Net interest margin on: | ||||||||||||
| Average interest-earning assets | 5.66 | 5.30 | 5.12 | |||||||||
| Average total assets | 5.30 | 4.79 | 4.67 | |||||||||
| Efficiency ratio (a) | 91.49 | 94.40 | 111.75 | |||||||||
| Average balances: | ||||||||||||
| Loans | $ | 146,175 | $ | 155,974 | $ | 158,778 | ||||||
| Interest-earning assets | 152,538 | 160,711 | 163,923 | |||||||||
| Assets | 162,953 | 177,820 | 179,897 | |||||||||
| Interest-bearing deposits | 118,920 | 117,767 | 119,090 | |||||||||
| Total deposits | 149,551 | 149,941 | 148,819 | |||||||||
| Interest-bearing liabilities | 123,922 | 123,667 | 127,742 | |||||||||
| Shareholders' equity | 19,483 | 19,015 | 19,265 | |||||||||
| Average shares outstanding: | ||||||||||||
| Basic | 654,486 | 654,486 | 654,486 | |||||||||
| Diluted | 698,574 | 654,486 | 654,486 | |||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2010 | 2010 | 2009 | ||||||||||
| Balance sheet data: | ||||||||||||
| Total assets | $ | 174,369 | $ | 177,465 | $ | 178,308 | ||||||
| Loans, before allowance | 141,938 | 152,099 | 158,108 | |||||||||
| Loans held for sale | 450 | 1,063 | 55 | |||||||||
| Investment securities | 2,219 | 2,300 | 2,606 | |||||||||
| Total deposits | 147,548 | 151,847 | 148,217 | |||||||||
| Federal Home Loan Bank advances | 5,000 | 5,000 | 9,834 | |||||||||
| Shareholders' equity | 19,779 | 19,189 | 18,680 | |||||||||
| Shares outstanding (b) | 654,486 | 654,486 | 654,486 | |||||||||
| Book value per share | $ | 22.92 | $ | 22.01 | $ | 21.24 | ||||||
| Asset quality: | ||||||||||||
| Allowance for loan losses | $ | 1,583 | $ | 2,144 | $ | 1,786 | ||||||
| Allowance as a percent of loans | 1.12 | % | 1.41 | % | 1.13 | % | ||||||
| Nonaccrual loans | $ | 448 | $ | 1,863 | $ | 2,855 | ||||||
| Total nonperforming assets | 2,239 | 4,538 | 5,453 | |||||||||
| Impaired loans | 9,601 | 11,764 | 5,342 | |||||||||
| Estimated specific reserves for impairment | 310 | 774 | 514 | |||||||||
| Net charge offs for quarter | 447 | 56 | 24 | |||||||||
| Net charge offs YTD | 1,101 | 654 | 3,849 | |||||||||
| Other real estate owned and repossessed assets | 1,791 | 2,675 | 2,598 | |||||||||
(a) Noninterest expense, divided by the sum of net interest income and noninterest income, excluding gains on sale of loans or securities. | ||||||||||||
| (b) Excludes treasury stock. | ||||||||||||
