Alaska Pacific Bancshares, Inc. Reports First Quarter Earnings for 2009.

JUNEAU, Alaska -- In the second financial table, the entries under the column "March 31, 2009" for "Net charge offs (recoveries) for quarter" and "Net charge offs YTD" should be (5) and (5) (sted (5,100) and (5,100)).

The corrected release reads:

ALASKA PACIFIC BANCSHARES, INC. REPORTS FIRST QUARTER EARNINGS FOR 2009

Alaska Pacific Bancshares, Inc. (OTCBB: AKPB) ("Company"), the parent company of Alaska Pacific Bank ("Bank"), today announced its first quarter results for the period ended March 31, 2009. Net income not including preferred stock dividend and discount accretion for the first quarter of 2009 was $209,000. After preferred stock dividend and discount accretion of $46,000, net income available to common shareholders for the first quarter of 2009 was $163,000, or $0.25 per diluted share. Net income for the first quarter ended March 31, 2008 was $154,000, or $0.23 per diluted share. "We are pleased to see our net income, not including preferred stock dividend and discount accretion, for 2009 at 138% of first quarter last year, with our mortgage banking activities benefiting from the current interest rate environment," stated Craig E. Dahl, President & Chief Executive Officer. "While we are carefully watching overall market conditions, it is important to demonstrate that the core business of the Bank remains sound."

Mortgage banking income increased $190,000 (475.0%) for the first quarter of 2009 compared to the quarter ended December 31, 2008 and increased $149,000 (184.0%) from the quarter ended March 31, 2008. The increase in mortgage banking income during the first quarter of 2009 was associated with lower interest rates. Other noninterest income for the first quarter of 2009 increased $32,000 (13.7%) from December 31, 2008 and increased $10,000 (3.9%) from the quarter ended March 31, 2008. Noninterest expense for the first quarter of 2009 increased $19,000 (0.9%) from December 31, 2008 and increased $107,000 (5.1%) from the quarter ended March 31, 2008. The increase in expense in the first quarter of 2009 is primarily related to an increase in professional service fees associated with impaired loans, an increase in repossessed assets expense, and an increase in FDIC assessments.

Provision for loan losses decreased $1.8 million for the quarter ended March 31, 2009 compared to the quarter ended December 31, 2008 and decreased $110,000 compared to the quarter ended March 31, 2008. The allowance for loan losses at March 31, 2009 was $2.8 million, representing 1.64% of total loans outstanding. Total non accrual loans were $5.8 million at March 31, 2009 compared with $6.1 million at December 31, 2008 and $3.4 million at March 31, 2008. In addition, the Bank's real estate owned and repossessed assets were $408,000 at March 31, 2009 and December 31, 2008 compared to zero at March 31, 2008. There was a $5,100 net loan recovery for the quarter ended March 31, 2009 compared to a $3.9 million net loan charge off for the quarter ended December 31, 2008 and $1,000 net loan recovery for the quarter ended March 31, 2008.

Interest income decreased $485,000 (15.3%) to $2.7 million for the first quarter of 2009 compared to the first quarter of 2008, reflecting a 1.0% increase in average loans offset with a declining yield on loans and other earning assets. The net interest margin on average earning assets for the first quarter was 4.83% in 2009 compared with 5.00% in the first quarter of 2008.

Loans (excluding loans held for sale) were $168.0 million at March 31, 2009, a decrease of $1.0 million, or 0.6% from December 31, 2008, and a decrease of $1.0 million, or 0.6% from March 31, 2008. Deposits at March 31, 2009, were $139.4 million, a $23.0 million (14.1%) decrease from December 31, 2008 and a $17.1 million (10.9%) decrease from March 31, 2008. The decline in certificates of deposit (CDs) in the first quarter of 2009 is attributable to a decline in deposits from a public entity under a CD program for qualified Alaskan financial institutions. The decline in deposits under this program was due to a change in the index rate required under the program guidelines.

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 others, expectations of the business environment in which the Company operates, projections of future performance, perceived 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 by forward-looking statements as a result of a wide variety or range of factors including, but not limited to, the credit risk of lending activities, including changes in the level and trend of loan delinquencies and write-offs; 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 or write-down assets; interest rate fluctuations; economic conditions in the Company's primary market area and other market areas where the collateral for our loans is located; demand for residential, commercial real estate, consumer, and other types of loans; success of new products; competitive conditions between banks and non-bank financial service providers; regulatory and accounting changes; technological factors affecting operations; pricing of products and services; and other risks detailed in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Accordingly, these factors should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. The Company undertakes no responsibility to update or revise any forward-looking statement.

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