ANCHORAGE, Ala., Oct. 30, 2023 (GLOBE NEWSWIRE) -- First National Bank Alaska's (OTCQX:FBAK) net income for the third quarter of 2023 was $15.5 million, or $4.90 per share. This compares to a net income of $15.7 million, or $4.94 per share, for the same period in 2022. Year-to-date net income was $43.4 million, or $13.71 per share, compared to $43.9 million, or $13.85 per share for the same period in 2022.
"First National's steady, consistent performance in the third quarter highlights the bank's strength and resilience as we head toward year-end," said Betsy Lawer, First National Board Chair and CEO/President. "With more than a century of experience and resources to bring into play, our dedicated employees are ready to answer our customers' call as they continue to meet challenges and opportunities in Alaska - and beyond."
Assets totaled $5.6 billion as of September 30, 2023, increasing $222.1 million since December 31, 2022. Return on assets for the year was 1.04%, 1 basis point lower compared to the same period last year when total assets were lower by $56.9 million. Growth in assets in 2023 was provided by borrowing under the Federal Reserve Bank Term Funding Program outlined below.
Total loans increased $148.8 million year-over-year. On September 30, 2023, delinquent loans from 30 to 89 days were $2.2 million, 0.10% of outstanding loans compared to 0.03% on September 30, 2022. Nonperforming loans were $5.1 million, 0.22% of outstanding loans, a decrease of $0.7 million from September 30, 2022. The allowance for credit losses on September 30, 2023, was $18.5 million, 0.80% of total loans.
Deposits and repurchase agreements totaled $4.5 billion as of September 30, 2023, compared to $5.1 billion as of September 30, 2022 and $4.9 billion as of December 31, 2022. Third quarter deposits grew $20.1 million compared to outflow of $378.7 million during the first half of the year for a year-to-date net outflow of $358.7 million. More than 70% of the pandemic period deposit growth continues to remain at the bank.
Interest and fees on loans increased $22.4 million, and interest and dividends on investment securities increased $4.5 million. Interest on cash increased $13.9 million year-over-year, driven by the higher interest rate environment and volume growth in average loans and cash balances during the period. The year-to-date net interest margin increased to 2.78% compared to 2.63% for the nine months ending September 30, 2022. The blended yield on interest-earning assets increased to 3.78% from 2.80% for the year-to-date periods ending September 30, 2023 and 2022, respectively. Interest expense increased $34.5 million year-over-year due to the cost of interest-bearing deposits as a percentage of earning assets increasing to 0.92% from 0.13% compared to the same period last year. The Federal Open Market Committee raised interest rates by 225 basis points to 5.50% during the twelve months ended September 30, 2023.
Year-to-date noninterest income totaled $18.9 million compared with $18.7 million as of September 30, 2022. The increase in noninterest income is attributed to services charges on deposit accounts, bankcard fees, and income from fiduciary activities, partially offset by a reduced demand for mortgage loans and realized losses on available-for-sale securities. Noninterest expenses through September 30, 2023 increased 7.92% compared to the same period last year. Salaries and employee benefits increased year-over-year because of market wage adjustments delivered to employees during the second half of 2022. Other noninterest expenses are higher due to increased operating expenses in deposit insurance premiums and increased losses on check fraud affecting customer accounts.
The bank continues to hold $530 million drawn under the Federal Reserve Bank Term Funding Program from the first half of the year. All borrowing under this program was matched in volume to maturing securities over the borrowing term to provide repayment in March and May of 2024. The borrowed funds remained in cash balances as of September 30 and benefited net interest margin through the spread in cash yield over the borrowing cost. The bank continues to maintain ample liquidity for operations and future growth through the combination of cash, unpledged securities, and borrowing facilities with the Federal Reserve and the Federal Home Loan Bank of Des Moines.
Shareholders' equity was $423.3 million as of September 30, 2023, compared to $407.6 million as of December 31, 2022, an increase of $15.8 million resulting from a decrease in the unrealized loss position of the securities portfolio. Return on equity as of September 30, 2023, increased to 13.76% compared to 12.56% for the same period last year. Book value per share as of September 30, 2023 was $133.68, compared to $128.69 as of December 31, 2022. The bank's September 30, 2023 Tier 1 leverage capital ratio of 9.98% remains above well-capitalized standards.
ABOUT FIRST NATIONAL BANK ALASKA
First National Bank Alaska files a quarterly financial report with the Federal Financial Institution Examination Council. The bank's latest Consolidated Report of Condition and Income (Call Report) is filed by the 30th of the month following quarter-end and is subsequently posted at FNBAlaska.com and at OTCMarkets.com.
Alaska's community bank since 1922, First National proudly meets the financial needs of Alaskans with ATMs and 28 locations in 19 communities throughout the state, and by providing banking services to meet their needs across the nation and around the world.
In 2023, Alaska Business readers voted the bank the "Best of Alaska Business" in the Best Place to Work category for the eighth year in a row, Best Bank/Credit Union for the third time running, and Best Corporate Citizen for a fourth time. In the same year, Anchorage Daily News readers voted the bank the state's top financial institution in the ADN "Best of Alaska" Awards. American Banker recognized First National in 2022 as a "Best Bank to Work For" for the fifth year running.
First National Bank Alaska is a Member FDIC and Equal Housing Lender.
| Financial Overview (Unaudited) | Quarter Ended ($ in thousands) | ||||||||||||||||||
| 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | |||||||||||||||
| Balance Sheet | |||||||||||||||||||
| Total Assets | $ | 5,559,883 | $ | 5,505,931 | $ | 5,473,245 | $ | 5,337,737 | $ | 5,502,968 | |||||||||
| Total Securities | $ | 2,331,129 | $ | 2,413,791 | $ | 2,606,018 | $ | 2,815,357 | $ | 2,863,905 | |||||||||
| Total Loans | $ | 2,318,454 | $ | 2,294,558 | $ | 2,283,553 | $ | 2,227,047 | $ | 2,169,670 | |||||||||
| Total Deposits | $ | 3,911,091 | $ | 3,874,988 | $ | 3,989,843 | $ | 4,224,857 | $ | 4,383,798 | |||||||||
| Repurchase Agreements | $ | 626,082 | $ | 642,114 | $ | 671,532 | $ | 670,974 | $ | 696,779 | |||||||||
| Total Deposits and Repurchase Agreements | $ | 4,537,173 | $ | 4,517,102 | $ | 4,661,375 | $ | 4,895,831 | $ | 5,080,577 | |||||||||
| Total Borrowing | $ | 530,000 | $ | 530,000 | $ | 350,000 | $ | - | $ | - | |||||||||
| Unrealized gain (loss) on marketable securities, net of tax | $ | (143,514 | ) | $ | (137,198 | ) | $ | (128,594 | ) | $ | (146,279 | ) | $ | (170,608 | ) | ||||
| Total Shareholders' Equity | $ | 423,343 | $ | 424,274 | $ | 428,555 | $ | 407,550 | $ | 389,118 | |||||||||
| Income Statement | |||||||||||||||||||
| Net Interest and Loan Fee Income | $ | 38,739 | $ | 37,011 | $ | 37,771 | $ | 38,194 | $ | 36,987 | |||||||||
| Provision for Loan losses | $ | (387 | ) | $ | (574 | ) | $ | 375 | $ | (276 | ) | $ | (1,129 | ) | |||||
| Total Noninterest Income | $ | 6,774 | $ | 6,646 | $ | 5,484 | $ | 5,916 | $ | 6,335 | |||||||||
| Total Noninterest Expense | $ | 24,465 | $ | 24,435 | $ | 24,617 | $ | 24,952 | $ | 23,306 | |||||||||
| Provision for Income Taxes | $ | 5,916 | $ | 5,339 | $ | 4,809 | $ | 5,063 | $ | 5,490 | |||||||||
| Net Income | $ | 15,519 | $ | 14,457 | $ | 13,454 | $ | 14,371 | $ | 15,655 | |||||||||
| Earnings per common share | $ | 4.90 | $ | 4.57 | $ | 4.25 | $ | 4.54 | $ | 4.94 | |||||||||
| Dividend per common share | $ | 3.20 | $ | 3.20 | $ | 3.20 | $ | 6.40 | $ | 3.20 | |||||||||
| Financial Measures | |||||||||||||||||||
| Return on Assets | 1.04 | % | 1.01 | % | 0.98 | % | 1.04 | % | 1.05 | % | |||||||||
| Return on Equity | 13.76 | % | 13.29 | % | 12.87 | % | 12.83 | % | 12.56 | % | |||||||||
| Net Interest Margin | 2.78 | % | 2.77 | % | 2.84 | % | 2.66 | % | 2.63 | % | |||||||||
| Yield on Loans | 6.08 | % | 5.95 | % | 5.81 | % | 5.22 | % | 5.09 | % | |||||||||
| Yield on Securities | 1.65 | % | 1.67 | % | 1.72 | % | 1.40 | % | 1.33 | % | |||||||||
| Cost of Interest Bearing Deposits | 0.92 | % | 0.79 | % | 0.65 | % | 0.21 | % | 0.13 | % | |||||||||
| Efficiency Ratio | 55.16 | % | 55.45 | % | 55.66 | % | 54.34 | % | 53.76 | % | |||||||||
| Capital | |||||||||||||||||||
| Shareholders' Equity/Total Assets | 7.61 | % | 7.71 | % | 7.83 | % | 7.64 | % | 7.07 | % | |||||||||
| Tier 1 Leverage Ratio | 9.98 | % | 10.01 | % | 10.20 | % | 9.64 | % | 9.83 | % | |||||||||
| Regulatory Well Capitalized Minimum Ratio - Tier 1 Leverage Ratio | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | |||||||||
| Tier 1 (Core) Capital | $ | 566,857 | $ | 561,472 | $ | 557,149 | $ | 553,829 | $ | 559,726 | |||||||||
| Credit Quality | |||||||||||||||||||
| Noncurrent Loans and OREO | $ | 5,227 | $ | 4,843 | $ | 4,984 | $ | 5,899 | $ | 5,864 | |||||||||
| Noncurrent Loans and OREO/Total Assets | 0.09 | % | 0.09 | % | 0.09 | % | 0.11 | % | 0.11 | % | |||||||||
| Noncurrent Loans and OREO/Tier 1 Capital | 0.92 | % | 0.86 | % | 0.89 | % | 1.07 | % | 1.05 | % | |||||||||
| Allowance for Loan Losses | $ | 18,475 | $ | 18,850 | $ | 19,050 | $ | 18,800 | $ | 19,000 | |||||||||
| Allowance for Loan Losses/Total Loans | 0.80 | % | 0.82 | % | 0.83 | % | 0.84 | % | 0.88 | % | |||||||||
| Net interest margin, yields, and efficiency ratios are tax effected. | |||||||||||||||||||
| Financial measures are year-to-date. | |||||||||||||||||||
| Per common share amounts are not in thousands. | |||||||||||||||||||
| CONTACT: | Cheri Gillian |
| 907-777-3409 | |
| www.FNBAlaska.com |
