ANCHORAGE, Alaska, Feb. 01, 2024 (GLOBE NEWSWIRE) -- First National Bank Alaska's (OTCQX:FBAK) net income for the fourth quarter of 2023 was $16.6 million, or $5.24 per share. This compares to a net income of $14.4 million, or $4.54 per share, for the same period in 2022. Year-to-date net income was $60.0 million, or $18.95 per share, compared to $58.2 million, or $18.39 per share for the same period in 2022.
"Resilience was the watchword for First National in 2023, as the bank responded several times to a rapidly changing environment for our industry and our customers," said First National Board Chair and CEO/President Betsy Lawer. "This ability of our leadership and employees to adapt and react efficiently and effectively while continuing to provide exceptional service to our customers resulted in a strong year-end performance, including a record-high net income."
Assets totaled $5.7 billion as of December 31, 2023, increasing $393.1 million since December 31, 2022. Return on assets was 1.07%, 3 basis points higher compared to the same period in 2022. Growth in assets in 2023 was a result of borrowing under the Federal Reserve Bank Term Funding Program. Total loans increased $46.3 million year-over-year. On December 31, 2023, delinquent loans from 30 to 89 days were $1.2 million, 0.05% of outstanding loans, compared to 0.16% on December 31, 2022. Nonperforming loans were $4.6 million, 0.20% of outstanding loans, a decrease of $1.1 million from December 31, 2022. The allowance for credit losses on December 31, 2023, was $17.8 million, 0.78% of total loans.
Deposits and repurchase agreements totaled $4.4 billion as of December 31, 2023, compared to $4.9 billion as of December 31, 2022. Despite the deposit outflow of $486.5 million year-to-date, more than 65% of the pandemic period deposit growth remains at the bank. First National's market share was 25% statewide, and totaled 28% in communities where the bank has branches, as of the last measurement date of June 30, 2023. Both figures grew 0.4% during the 12-month period. Statewide market share increased 5% across the pandemic period when measured against 2019.
Interest and fees on loans increased $30.5 million, and interest and dividends on investment securities increased $2.4 million over the prior year. Interest on cash increased $21.6 million year-over-year, driven by the higher interest rate environment and cash balances. The year-to-date net interest margin increased to 2.82% compared to 2.66% for the full year 2022. The blended yield on interest-earning assets increased to 3.91% from 2.93% year-over-year. Interest expense increased $45.4 million year-over-year due to $29.2 million on the cost of interest-bearing deposits as a percentage of earning assets increasing to 1.09% from 0.27% compared to the same period last year, and $16.2 million for the interest due on borrowings due to the Federal Reserve Bank Term Funding Program payable in 2024. The Federal Open Market Committee raised interest rates by 100 basis points to 5.50% during the twelve months ended December 31, 2023.
Year-to-date noninterest income totaled $25.4 million compared with $24.6 million as of December 31, 2022. The increase in noninterest income was driven by increased fiduciary and bankcard activities, and partially offset by reduced demand for mortgage loans and realized losses on available-for-sale securities. Noninterest expenses for full year 2023 increased 5.47% 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, software licensing, occupancy costs, and increased losses on check fraud affecting customer accounts.
The bank borrowed $250 million under the Federal Reserve Bank Term Funding Program in December, bringing the total borrowing to $780 million as of year-end 2023. All borrowing under this program was matched in volume to maturing securities over the borrowing term to provide repayment in March, May and December of 2024. The borrowed funds remained in cash and equivalents 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 $464.8 million as of December 31, 2023, compared to $407.6 million as of December 31, 2022, an increase of $57.2 million primarily due to a decrease in the unrealized loss position of the securities portfolio. Return on equity as of December 31, 2023, increased to 13.97% compared to 12.83% for the same period last year. Book value per share as of December 31, 2023 was $146.77, compared to $128.69 as of December 31, 2022. The bank's December 31, 2023 Tier 1 leverage capital ratio of 9.85% 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) | |||||||||||||||
| Three months ended | Year ended | ||||||||||||||
| Dec. 31, | Sep.30, | Dec. 31, | December 31, | ||||||||||||
| 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Income Statement | |||||||||||||||
| Net Interest and Loan Fee Income | $ | 40,958 | $ | 38,739 | $ | 38,194 | $ | 154,479 | $ | 145,370 | |||||
| Provision for Loan losses | $ | (344 | ) | $ | (387 | ) | $ | (276 | ) | $ | (930 | ) | $ | (1,249 | ) |
| Total Noninterest Income | $ | 6,522 | $ | 6,774 | $ | 5,916 | $ | 25,426 | $ | 24,607 | |||||
| Total Noninterest Expense | $ | 24,651 | $ | 24,465 | $ | 24,952 | $ | 98,168 | $ | 93,074 | |||||
| Provision for Income Taxes | $ | 6,593 | $ | 5,916 | $ | 5,063 | $ | 22,657 | $ | 19,917 | |||||
| Net Income | $ | 16,580 | $ | 15,519 | $ | 14,371 | $ | 60,010 | $ | 58,235 | |||||
| Earnings per common share | $ | 5.23 | $ | 4.90 | $ | 4.54 | $ | 18.95 | $ | 18.39 | |||||
| Dividend per common share | $ | 6.40 | $ | 3.20 | $ | 6.40 | $ | 16.00 | $ | 16.00 | |||||
| Financial Overview (Unaudited) | Quarter Ended | ||||||||||||||
| 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | 12/31/2022 | |||||||||||
| Balance Sheet | |||||||||||||||
| Total Assets | $ | 5,730,835 | $ | 5,559,883 | $ | 5,505,931 | $ | 5,473,245 | $ | 5,337,737 | |||||
| Total Securities | $ | 2,384,951 | $ | 2,331,129 | $ | 2,413,791 | $ | 2,606,018 | $ | 2,815,357 | |||||
| Total Loans | $ | 2,273,311 | $ | 2,318,454 | $ | 2,294,558 | $ | 2,283,553 | $ | 2,227,047 | |||||
| Total Deposits | $ | 3,780,018 | $ | 3,911,091 | $ | 3,874,988 | $ | 3,989,843 | $ | 4,224,857 | |||||
| Repurchase Agreements | $ | 629,280 | $ | 626,082 | $ | 642,114 | $ | 671,532 | $ | 670,974 | |||||
| Total Deposits and Repurchase Agreements | $ | 4,409,298 | $ | 4,537,173 | $ | 4,517,102 | $ | 4,661,375 | $ | 4,895,831 | |||||
| Total Borrowing under the Federal Reserve Bank Term Funding Program | $ | 780,000 | $ | 530,000 | $ | 530,000 | $ | 350,000 | $ | - | |||||
| Unrealized gain (loss) on marketable securities, net of tax | $ | (98,378 | ) | $ | (143,514 | ) | $ | (137,198 | ) | $ | (128,594 | ) | $ | (146,279 | ) |
| Total Shareholders' Equity | $ | 464,791 | $ | 423,343 | $ | 424,274 | $ | 428,555 | $ | 407,550 | |||||
| Financial Measures | |||||||||||||||
| Return on Assets | 1.07 | % | 1.04 | % | 1.01 | % | 0.98 | % | 1.04 | % | |||||
| Return on Equity | 13.97 | % | 13.76 | % | 13.29 | % | 12.87 | % | 12.83 | % | |||||
| Net Interest Margin | 2.82 | % | 2.78 | % | 2.77 | % | 2.84 | % | 2.66 | % | |||||
| Yield on Loans | 6.25 | % | 6.08 | % | 5.95 | % | 5.81 | % | 5.22 | % | |||||
| Yield on Securities | 1.66 | % | 1.65 | % | 1.67 | % | 1.72 | % | 1.40 | % | |||||
| Cost of Interest Bearing Deposits | 1.02 | % | 0.92 | % | 0.79 | % | 0.65 | % | 0.21 | % | |||||
| Efficiency Ratio | 54.28 | % | 55.16 | % | 55.45 | % | 55.66 | % | 54.34 | % | |||||
| Capital | |||||||||||||||
| Shareholders' Equity/Total Assets | 8.11 | % | 7.61 | % | 7.71 | % | 7.83 | % | 7.64 | % | |||||
| Tier 1 Leverage Ratio | 9.85 | % | 9.98 | % | 10.01 | % | 10.20 | % | 9.64 | % | |||||
| Regulatory Well Capitalized Minimum Ratio - Tier 1 Leverage Ratio | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | |||||
| Tier 1 (Core) Capital | $ | 563,169 | $ | 566,857 | $ | 561,472 | $ | 557,149 | $ | 553,829 | |||||
| Credit Quality | |||||||||||||||
| Noncurrent Loans and OREO | $ | 4,659 | $ | 5,227 | $ | 4,843 | $ | 4,984 | $ | 5,899 | |||||
| Noncurrent Loans and OREO/Total Assets | 0.08 | % | 0.09 | % | 0.09 | % | 0.09 | % | 0.11 | % | |||||
| Noncurrent Loans and OREO/Tier 1 Capital | 0.83 | % | 0.92 | % | 0.86 | % | 0.89 | % | 1.07 | % | |||||
| Allowance for Loan Losses | $ | 17,750 | $ | 18,475 | $ | 18,850 | $ | 19,050 | $ | 18,800 | |||||
| Allowance for Loan Losses/Total Loans | 0.78 | % | 0.80 | % | 0.82 | % | 0.83 | % | 0.84 | % | |||||
| Net interest margin, yields, and efficiency ratios are tax effected. | |||||||||||||||
| Financial measures are year-to-date. | |||||||||||||||
| Per common share amounts are not in thousands. | |||||||||||||||
