Alaska Pacific Announces Second Quarter Results.Business Editors JUNEAU Juneau (j  `nō), city (1990 pop. 26,751), state capital, SE Alaska, in the Alaska Panhandle; settled by gold miners 1880, inc. 1900. , Alaska--(BUSINESS WIRE)--July 25, 2003Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States Pacific Bancshares, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AKPB), the parent company of Alaska Pacific Bank, announced net income of $106,000 ($.17 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), for the second quarter of 2003. This follows net income of $85,000 ($.14 per diluted share) for the first quarter and $165,000 ($.28 per diluted share) for the second quarter of 2002. Comparability with prior quarters was affected by (1) a nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. loss on the sale of an office building in the first quarter of 2003 of $85,000 ($51,000 after tax) and (2) a "normal" income tax provision in 2003 following recognition in the fourth quarter of 2002 of the full benefit of remaining tax net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. ("NOLs"). For several years prior to the fourth quarter of 2002, the Company recorded no income tax expense, thereby recognizing the benefit of the NOLs only to the extent of current income in each period. Pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income before nonrecurring items was $176,000 for the second quarter of 2003, compared with $227,000 for the first quarter and $165,000 for the second quarter of 2002. While pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. showed a net increase from a year ago, the second quarter of 2002 included an unusually high $160,000 provision for loan losses, compared with a relatively low $30,000 for the second quarter of 2003. The lower provision in 2003 reflects improvements in asset quality as well as a decline in loan balances. As anticipated, net interest income declined in the second quarter to $1.53 million, compared with $1.65 million in the first quarter and $1.73 million in the second quarter of 2002. The drop is largely the result of rapid loan prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. , particularly in mortgages, during this period of extremely low interest rates. Until recently, management chose to sell new mortgages rather than keep the low-yielding fixed-rate loans Fixed-rate loan A loan whose rate is fixed for the life of the loan. in the portfolio. As a result, growth in net interest income has slowed and is not able to keep up with the growth in expenses necessary to continue with the Company's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic plan. Beginning in May 2003 and through the rest of the year, the Company plans to retain a greater portion of new mortgage production in the portfolio, funded at least in part by fixed-rate borrowings and certificates of deposit to help control interest-rate risk. Gains on sale of mortgage loans for the second quarter of 2003 were $113,000, compared with just $23,000 for the same quarter a year ago, but were down $69,000 from $182,000 in the first quarter. This highly-variable component of income is anticipated to decrease further as more new mortgage loans are retained in the portfolio. Other noninterest income continued strong at $278,000 for the second quarter, up 14% from $244,000 in the first quarter, and up 24% from $224,000 in the second quarter last year. The continued improvement in service charges and other noninterest income is due primarily to increased emphasis on deposit and other services to small business customers. Noninterest expense for the second quarter of 2003 was $1.72 million, a 3.4% decrease from the first quarter (excluding the nonrecurring loss on sale of building in that quarter), but a 4.2% increase over the second quarter of 2002. Noninterest expense is expected to continue to rise moderately as the Company continues to implement plans for improvements in staff, systems and facilities. During the third quarter, Alaska Pacific Bank is planning to open a new facility adjacent to its headquarters in Juneau for Alaska Pacific Mortgage, the Bank's mortgage lending division. In addition, the Sitka Sitka (sĭt`kə), city (1990 pop. 8,588), Sitka census div., SE Alaska, in the Alexander Archipelago, on Baranof Island; inc. 1971. Fishing, its first industry, remains important; salmon, halibut, red snapper, crab, herring, abalone, and clams office is scheduled to move to a newly constructed office building in Sitka. Both facilities will be leased. As previously announced, the Company declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a regular quarterly dividend of $.07 per share, payable August 15, 2003, to shareholders of record as of August 4, 2003. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain matters in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. opportunities in the market, potential future credit experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, interest rates, the economy in Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Please [ improve this article] or discuss the issue on the talk page. providers, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission.
Alaska Pacific Bancshares, Inc.
Financial Highlights (Unaudited)
Second Quarter 2003
(dollars in thousands, except per-share amounts)
Three Months Ended
------------------------------
June 30, March 31, June 30,
2003 2003 2002
------------------------------
Condensed Income Statement:
Interest income $2,068 $2,175 $2,334
Interest expense (536) (521) (608)
------------------------------
Net interest income 1,532 1,654 1,726
Provision for loan losses (30) (75) (160)
Gain on sale of mortgage loans 113 182 23
Other noninterest income 278 244 224
Nonrecurring loss on sale of building - (85) -
Other noninterest expense (1,717) (1,778) (1,648)
------------------------------
Income before income tax 176 142 165
Income tax (expense) or benefit (70) (57) -
------------------------------
Net income $ 106 $ 85 $ 165
==============================
Earnings per share:
Basic $.18 $.15 $.29
Diluted .17 .14 .28
Performance Ratios:
Return on average equity 2.84% 2.28% 4.92%
Return on average assets 0.27 0.22 0.46
Yield on average earning assets 5.60 6.06 6.95
Cost of average interest-bearing
liabilities 1.73 1.72 2.12
Interest rate spread 3.87 4.34 4.84
Net interest margin on:
Average earning assets 4.15 4.61 5.14
Average total assets 3.92 4.32 4.82
Efficiency ratio (a) 94.86 98.16 84.51
Average balances:
Loans $102,076 $107,096 $116,246
Earning assets 147,695 143,527 134,310
Assets 156,256 153,227 143,276
Deposits 130,430 127,383 122,330
Interest-bearing liabilities 123,829 121,290 114,960
Shareholders' equity 14,934 14,926 13,416
Average shares outstanding:
Basic 583,565 581,454 571,689
Diluted 618,154 615,613 596,990
Balance sheet data:
Total assets $159,456 $156,660 $146,666
Loans, net 103,410 102,411 115,822
Total deposits 131,927 129,753 125,028
Federal Home Loan Bank advances 9,662 9,883 5,000
Shareholders' equity 14,983 14,885 13,559
Shares outstanding (b) 624,732 623,132 623,132
Book value per share $23.98 $23.89 $21.76
Asset quality:
Allowance for loan losses $1,157 $1,200 $1,024
Nonaccrual loans 1,466 1,599 1,770
Total nonperforming assets 1,772 1,889 1,883
Net chargeoffs for quarter 73 27 135
(a) Noninterest expense divided by the sum of net interest income
and noninterest income, excluding gains on sale of loans or
securities.
(b) Excludes only treasury stock.
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