As filed with the Securities and Exchange Commission on March 18, 1999.
Securities Act Registration No. 333 - 72049
- -------------------------------------------------------------------------------
Securities and Exchange Commission
Washington, D.C. 20549
Form S-4
Amendment No. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NEWCO ALASKA, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 6022 92-0166346
- ------------------------------ ---------------------------- -----------------------------------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
331 Dock St., P.O. Box 7920
Ketchikan, Alaska 99901 907-228-4474
--------------------------------------------------------------------------
(Address and telephone number of registrant's principal executive offices)
William G. Moran, Jr., President and Chief Executive Officer
331 Dock St., P.O. Box 7920
Ketchikan, Alaska 99901 907-228-4474
--------------------------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies of all communications to:
Gordon E. Crim, Esq.
Foster Pepper & Shefelman PLLC
101 S.W. Main St., 15th Floor
Portland, Oregon 97204
Telephone: 503-221-1512
Facsimile: 800-600-1964
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| __________
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_| __________
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Explanatory Note:
The registrant is currently in organization, and therefore has not yet
issued shares of capital stock, and has no operations or assets. Accordingly, no
financial information for the registrant is included in this registration
statement. All disclosures for the company to be acquired (First Bancorp) are
provided in accordance with General Instruction D.4(c) to Form S-4, disclosures
for transitional small business issuers.
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 1998 and 1997
<TABLE>
<CAPTION>
Assets 1998 1997
--------------- ---------------
<S> <C> <C> <C>
Cash and due from banks (note 2) $ 9,783,427 9,851,577
Federal funds sold 9,391,000 3,935,000
Investment securities available for sale (note 3) 100,960,973 112,162,100
Investment in Federal Home Loan Bank stock 2,896,900 2,683,000
Loans (note 4) 123,122,057 106,928,905
Less allowance for possible loan losses (note 5) 1,421,352 1,293,512
--------------- ---------------
Net loans 121,700,705 105,635,393
--------------- ---------------
Premises and equipment, net (note 6) 5,796,522 5,687,411
Accrued interest receivable 1,756,967 1,938,811
Other assets (note 8) 2,508,378 1,911,094
--------------- ---------------
Total assets $ 254,794,872 243,804,386
=============== ===============
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Demand $ 68,133,335 64,669,469
Savings 48,846,681 50,727,050
Time deposits of $100,000 or more (note 7) 60,814,472 53,554,698
Other time deposits 51,733,617 50,720,931
--------------- ---------------
Total deposits 229,528,105 219,672,148
Federal Home Loan Bank advances (note 11) -- 1,000,000
Accrued interest payable 516,779 476,715
Other liabilities 1,557,627 1,050,977
--------------- ---------------
Total liabilities 231,602,511 222,199,840
--------------- ---------------
Stockholders' equity:
Common stock of $5 par value. Authorized 1,000,000
shares; issued and outstanding 214,040 shares in
1998 and 1997 1,070,200 1,070,200
Surplus 6,414,704 6,414,704
Undivided profits 16,051,970 14,774,999
Accumulated other comprehensive income - net
unrealized gain on securities available for sale 184,012 (179,617)
Treasury stock, at cost (5,765 shares in 1998 and
5,306 shares in 1997) (528,525) (475,740)
--------------- ---------------
Total stockholders' equity 23,192,361 21,604,546
Commitments and contingencies (notes 10, 11 and 15)
--------------- ---------------
Total liabilities and stockholders' equity $ 254,794,872 243,804,386
=============== ===============
See accompanying notes to consolidated financial statements.
</TABLE>
F-3
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Income
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------ ------------
Interest income:
<S> <C> <C> <C>
Interest on loans $ 11,383,100 10,284,722 8,730,271
Interest on federal funds sold 550,272 478,661 533,819
Interest-bearing deposits in other banks 69,617 68,611 62,957
Interest on securities available for sale:
Taxable (note 3) 6,146,080 6,510,753 6,699,638
Exempt from federal income taxes 106,482 66,936 117,335
------------- ------------ ------------
Total interest income 18,255,551 17,409,683 16,144,020
------------- ------------ ------------
Interest expense:
Interest on deposits:
Time deposits of $100,000 or more 2,780,460 2,445,427 2,181,080
Other 5,689,568 5,612,024 5,264,338
Interest on federal funds purchased 12,969 40,288 59,835
Other interest 36,734 135,926 158,029
------------- ------------ ------------
Total interest expense 8,519,731 8,233,665 7,663,282
------------- ------------ ------------
Net interest income 9,735,820 9,176,018 8,480,738
Provision for loan losses (note 5) 252,000 232,000 215,750
------------- ------------ ------------
Net interest income after provision
for loan loss 9,483,820 8,944,018 8,264,988
------------- ------------ ------------
Other operating income:
Net realized gains on sales of securities
available for sale (note 3) 73,149 225,240 17,422
Service charges on deposit accounts 645,722 637,960 676,087
Loan placement fees 1,704,721 1,181,208 1,108,479
Other 1,131,122 848,627 855,653
------------- ------------ ------------
Total other operating income 3,554,714 2,893,035 2,657,641
------------- ------------ ------------
Other operating expenses
Salaries and employee benefits 5,558,140 5,174,585 5,025,104
Occupancy, net 618,077 640,190 669,492
Equipment 1,061,888 960,273 921,256
Federal Deposit Insurance Corporation assessments 15,610 25,365 8,264
Other 2,033,840 1,781,384 1,757,492
------------- ------------ ------------
Total other operating expenses 9,287,555 8,581,797 8,381,608
------------- ------------ ------------
Income before income taxes 3,750,979 3,255,256 2,541,021
Provision for income taxes (note 8) 1,432,235 1,065,956 790,311
------------- ------------ ------------
Net income $ 2,318,744 2,189,300 1,750,710
============= ============ ============
Per share amounts - net income $ 11.12 $ 10.48 $ 8.29
============= ============ ============
Weighted average shares outstanding $ 208,460 208,980 209,986
============= ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders' Equity
and Comprehensive Income
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Accumulated
other
Common Undivided Treasury comprehensive
stock Surplus profits stock income Total
------------- ------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 1,058,300 6,316,648 12,917,381 (313,400) 249,388 20,228,317
Comprehensive income:
Net income -- -- 1,750,710 -- -- 1,750,710
Change in unrealized holding loss on
securities available for sale, net
of taxes of $297,543 -- -- -- -- (446,314) (446,314)
-------------
Total comprehensive income 1,304,396
-------------
Cash dividends ($5 per share) -- -- (1,037,909) -- -- (1,037,909)
Purchase of treasury stock, at cost -- -- -- (56,240) -- (56,240)
------------- ------------ ------------ ------------- ------------- -------------
Balance at December 31, 1996 1,058,300 6,316,648 13,630,182 (369,640) (196,926) 20,438,564
Comprehensive income:
Net income -- -- 2,189,300 -- -- 2,189,300
Change in unrealized holding loss on
securities available for sale, net
of taxes of $11,538 -- -- -- -- 17,309 17,309
-------------
Total comprehensive income 2,206,609
-------------
Cash dividends ($5 per share) -- -- (1,044,483) -- -- (1,044,483)
Purchase of 1,125 shares of
treasury stock, at cost -- -- -- (106,100) -- (106,100)
Exercise 2,380 shares of stock
options (note 10) 11,900 98,056 -- -- -- 109,956
------------- ------------ ------------ ------------- ------------- -------------
Balance at December 31, 1997 1,070,200 6,414,704 14,774,999 (475,740) (179,617) 21,604,546
Comprehensive income:
Net income -- -- 2,318,744 -- -- 2,318,744
Change in unrealized holding loss on
securities available for sale, net
of taxes of $243,447 -- -- -- -- 363,629 363,629
-------------
Total comprehensive income 2,682,373
-------------
Cash dividends ($5 per share) -- -- (1,041,773) -- -- (1,041,773)
Purchase of 459 shares of treasury
stock, at cost -- -- -- (52,785) -- (52,785)
------------- ------------ ------------ ------------- ------------- -------------
Balance at December 31, 1998 $ 1,070,200 6,414,704 16,051,970 (528,525) 184,012 23,192,361
============= ============ ============ ============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
1998 1997 1996
---------------- --------------- ----------------
Operating activities:
<S> <C> <C> <C>
Net income $ 2,318,744 2,189,300 1,750,710
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 252,000 232,000 215,750
Provision for losses on other real estate 37,542 3,128 --
Depreciation and amortization 752,609 699,611 687,104
Gain on sale of other real estate -- -- (30,141)
Amortization of investment security premiums 103,822 143,462 196,185
Accretion of investment security discounts (159,566) (171,364) (248,693)
Net investment securities gains (73,149) (225,240) (17,422)
Gain from sale of bank premises and equipment (21,239) -- --
(Increase) decrease in interest receivable 181,844 33,569 110,768
Increase (decrease) in interest payable 40,064 (5,506) 88,948
(Increase) decrease in deferred income taxes 324,701 (34,348) (233,793)
(Increase) decrease in other assets (959,526) (317,178) 550,335
Increase (decrease) in other liabilities 506,650 378,898 (186,306)
---------------- --------------- ----------------
Net cash provided by operating activities 3,304,496 2,926,332 2,883,445
---------------- --------------- ----------------
Investing activities:
Proceeds from sale of securities available for sale 35,011,052 21,993,955 11,498,023
Proceeds from maturity of securities available for sale 67,728,216 57,633,806 75,233,012
Purchase of securities available for sale (91,259,519) (81,689,001) (78,280,496)
Net increase in loans (16,317,313) (15,988,430) (16,601,961)
Purchase of bank premises and equipment (816,481) (639,234) (596,428)
Proceeds from sale of bank premises and equipment (24,000) -- --
Proceeds from sale of other real estate -- -- 30,141
---------------- --------------- ----------------
Net cash used in investing activities (5,678,045) (18,688,904) (8,717,709)
---------------- --------------- ----------------
Financing activities:
Net increase (decrease) in demand deposit and savings accounts 1,583,497 4,127,941 (802,593)
Net increase in time deposits 8,272,460 7,639,208 12,560,246
Net (increase) decrease in federal funds sold (5,456,000) 6,742,000 (1,894,000)
Net decrease in Federal Home Loan Bank advances (1,000,000) (1,000,000) (3,000,000)
Net increase in treasury stock (52,785) (106,100) (56,240)
Proceeds from sale of stock options -- 109,956 --
Cash dividends paid (1,041,773) (1,044,483) (1,037,909)
---------------- --------------- ----------------
Net cash provided by financing activities 2,305,399 16,468,522 5,769,504
---------------- --------------- ----------------
Net increase (decrease) in cash and due from banks (68,150) 705,950 (64,760)
Cash and due from banks at beginning of year 9,851,577 9,145,627 9,210,387
---------------- --------------- ----------------
Cash and due from banks at end of year $ 9,783,427 9,851,577 9,145,627
================ =============== ================
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 8,479,667 8,239,171 7,574,333
================ =============== ================
Cash paid during the year for income taxes $ 1,267,000 909,500 784,500
================ =============== ================
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(1) Summary of Significant Accounting Policies
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities disclosure of contingent assets and
liabilities as of the date of the balance sheet, and revenue and
expenses for the period. Actual results could differ from those
estimates. The significant policies and estimates applied in the
preparation of these consolidated financial statements are discussed
below.
(a) Consolidation
The consolidated financial statements include the accounts of First
Bancorp, Inc. and its wholly-owned subsidiary, First Bank, and its
wholly-owned subsidiaries, Dock Street Building Corporation and Dock
Street Title Agency, Incorporated (Company). All significant
intercompany accounts and transactions have been eliminated. The
Company's primary market area is Southeast Alaska where the majority
of its activities has been with Alaska businesses and individuals.
(b) Reclassifications
Certain prior year balances have been changed to conform to the
present year presentation.
(c) Investments
Securities available for sale are stated at fair value with
unrealized holding gains and losses excluded from earnings and
reported as a net amount in a separate component of other
comprehensive income. Securities are classified as available for
sale when management intends to hold the securities for an
indefinite period of time or when the securities may be utilized for
tactical asset/liability purposes and may be sold from time to time
to effectively manage interest rate exposure and resultant
prepayment risk and liquidity needs.
Federal Home Loan Bank stock is carried at cost which is its
redeemable (fair) value since the market for this stock is limited.
Premiums are amortized (deducted) and discounts are accreted (added)
to interest income on investment securities using methods that
approximate the level-yield method. Gains and losses on sales of
securities are computed using the specific-identification method of
determining the cost of securities sold.
F-7
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(d) Loans
Loans are stated at the principal amount outstanding. Interest on
loans is taken into income when earned. Loan origination fees
received in excess of direct origination costs are deferred and
amortized to income by a method approximating the level-yield method
over the estimated loan term.
Interest income on loans is recorded on an accrual basis until an
interest or principal payment is more than 90 days past due and in
the opinion of management the collectibility of such income becomes
doubtful. The deferral or nonrecognition of interest does not
constitute forgiveness of the borrower's obligation.
(e) Allowance for Loan Losses
The allowance for loan losses is a general reserve established by
management to absorb unidentified losses in the Company's loan
portfolio. In determining the adequacy of the allowance, management
evaluates prevailing economic conditions, results of regular
examinations and evaluations of the quality of the loan portfolio by
external parties, actual loan loss experience, the extent of
existing risks in the loan portfolio and other pertinent factors.
The allowance for impaired loans is based on discounted cash flows
using the loans' initial interest rates or, if the loan is secured,
the fair value of the collateral.
Future additions to the allowance may be necessary based on changes
in economic conditions and other factors used in evaluating the loan
portfolio. Additionally, various regulatory agencies, as an
integral part of their examination process, periodically review the
allowance. Such agencies may require the recognition of additions
to the allowance based on their judgment of information available to
them at the time of their examination.
(f) Loan Servicing
The cost of mortgage servicing rights is amortized in proportion to,
and over the period of, estimated net servicing revenues.
Impairment of mortgage servicing rights is assessed based on the
fair value of those rights. Fair values are estimated using
discounted cash flows based on a current market interest rate. The
amount of impairment recognized is the amount by which the
capitalized mortgage servicing rights exceed their fair value.
(g) Other Real Estate
Other real estate represents properties acquired through foreclosure
or its equivalent. Prior to foreclosure, the carrying value is
adjusted to the lower of cost or fair market value of the real
estate to be acquired by a charge to the allowance for loan losses.
Any subsequent reduction in carrying value is charged against
operating expenses.
F-8
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(h) Premises and Equipment
Premises and equipment are stated at cost, less amortization and
accumulated depreciation. Depreciation expense on leasehold
improvements is computed by use of the straight-line method over the
shorter of the estimated useful lives of the assets or leasehold
improvements. Expenditures for remodeling, improvements and
construction are capitalized, while expenditures for maintenance and
repairs are charged to expense.
(i) Income Taxes
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which the temporary differences
are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date.
(j) Net Income Per Share
Per share amounts are calculated based on the weighted average
number of shares and common share equivalents outstanding during
each year. Outstanding stock options are common stock equivalents
and therefore are included in the calculation of the weighted
average number of shares outstanding, if dilutive.
(k) Comprehensive Income
On January 1, 1998, the Company adopted Statement of Financial
Accounting Standard (SFAS) No. 130, Reporting Comprehensive Income.
SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of financial
statements. Comprehensive income consists of net income and net
unrealized gains (losses) on securities and is presented in the
consolidated statements of stockholders' equity and comprehensive
income. The statement requires only additional disclosures in the
consolidated financial statements; it does not affect the Company's
financial position or results of operations. Prior year financial
statements have been reclassified to conform to the requirements of
SFAS No. 130.
(2) Cash and Due from Banks
The Company is required to maintain a $200,000 minimum average daily
balance with the Federal Reserve Bank (FRB) for purposes of settling
financial transactions and charges for FRB services. The Company is
also required to maintain sufficient cash balances or deposits with the
FRB to meet its statutory reserve requirements. The reserve requirement
for the two-week maintenance period, which included December 31, 1998
was satisfied by cash on hand in the Company's vault and on deposit with
the FRB.
F-9
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(3) Investment Securities
The following is a comparative summary of investment securities
available for sale at December 31:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Market
cost gains losses value
------------------ -------------- --------------- -----------------
1998:
<S> <C> <C> <C> <C>
U.S. Government and federal agencies $ 54,763,462 438,739 (24,211) 55,177,990
States and political subdivisions 1,707,699 85,846 -- 1,793,545
Corporate securities 8,963,078 80,739 (338) 9,043,479
Mortgage-backed securities 33,796,314 110,906 (496,797) 33,410,423
Other debt securities 1,414,450 1,973 -- 1,416,423
Federal National Mortgage
Association stock 8,257 110,856 -- 119,113
------------------ -------------- --------------- -----------------
$ 100,653,260 829,059 (521,346) 100,960,973
================== ============== =============== =================
1997:
U.S. Government and federal agencies 77,447,591 379,646 (6,562) 77,820,675
States and political subdivisions 1,846,350 23,220 -- 1,869,570
Corporate securities 5,607,261 53,236 (2,819) 5,657,678
Mortgage-backed securities 27,053,534 128,857 (951,460) 26,230,931
Other debt securities 500,000 -- -- 500,000
Federal National Mortgage
Association stock 6,727 76,519 -- 83,246
------------------ -------------- --------------- -----------------
$ 112,461,463 661,478 (960,841) 112,162,100
================== ============== =============== =================
</TABLE>
The amortized cost and market value of available for sale debt securities at
December 31, 1998, are distributed by contractual maturity as shown below.
Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.
F-10
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
<TABLE>
<CAPTION>
Securities Within One to Five to Due after Amortized Market
available for sale one year five years ten years ten years cost value
---------------- ---------------- --------------- ----------------- ------------------ --------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government and
federal agencies $ 11,994,028 31,817,815 2,611,247 8,340,372 54,763,462 55,177,990
State and political
subdivisions 293,871 191,779 1,222,049 -- 1,707,699 1,793,545
Corporate securities 3,057,268 4,028,225 -- 1,877,585 8,963,078 9,043,479
Mortgage-backed
securities 154,541 2,823,875 5,544,331 25,273,567 33,796,314 33,410,423
Other debt securities 500,000 -- -- 914,450 1,414,450 1,416,423
---------------- ---------------- --------------- ----------------- ------------------ -----------------
$ 15,999,708 38,861,694 9,377,627 36,405,974 100,645,003 100,841,860
================ ================ =============== ================= ================== =================
</TABLE>
Proceeds from sales of available for sale securities during 1998, 1997 and 1996
were $35,011,052, $21,993,955, and $11,498,023, respectively. Gross gains of
$94,602, $241,917, and $37,437 and gross losses of $21,453, $16,677, and $20,015
were realized on those sales for the years ended December 31, 1998, 1997 and
1996, respectively.
Market value of investment securities of approximately $45,753,000 and
$49,630,000 are pledged to secure public deposits at December 31, 1998 and 1997,
respectively.
A summary of taxable interest on securities available for sale for the year
ended December 31 follows:
<TABLE>
<CAPTION>
1998 1997 1996
--------------- ---------------- ----------------
<S> <C> <C> <C>
U.S. Treasury securities $ 1,534,168 1,288,127 1,321,549
Obligations of U.S. Government
agencies and corporations 3,943,459 4,674,469 4,738,098
Other 668,453 548,157 639,991
--------------- ---------------- ----------------
$ 6,146,080 6,510,753 6,699,638
=============== ================ ================
</TABLE>
F-11
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(4) Loans
The Company's primary market area is Southeast Alaska, where the majority
of its lending is with Alaska businesses and individuals. Approximately
66% of the Company's loans at December 31, 1998, are for general
commercial uses, including timber, tourism, retail and small businesses.
Substantially all of these loans are collateralized and repayment is
expected from the borrowers' cash flow or, secondarily, the collateral.
The Company's exposure to credit loss, if any, is the outstanding amount
of the loan if the collateral is proved to be of no value.
The carrying amount of the loan portfolio is as follows at December 31:
1998 1997
------------ ------------
Mortgage $ 8,653,771 3,592,629
Commercial 82,214,463 73,870,604
Consumer 32,906,260 30,102,197
------------ ------------
123,774,494 107,565,430
Less unamortized loan origination fees 652,437 636,525
------------ ------------
$ 123,122,057 106,928,905
============ ============
The following table sets forth the maturity distribution and sensitivity
to changes in interest rates of the Company's loan portfolio at December
31, 1998.
Within One to After
one year five years five years Total
------------ ------------ ------------ --------------
Mortgage $ 308,425 239,647 8,105,699 8,653,771
Commercial 12,741,996 36,676,253 32,796,214 82,214,463
Consumer 6,306,945 25,247,132 1,352,183 32,906,260
------------ ------------ ------------ --------------
$ 19,357,366 62,163,032 42,254,096 123,774,494
============ ============ ============ ==============
Loans at fixed
interest rates 12,175,411 51,905,009 10,510,198 74,590,618
Loans at variable
interest rates 7,181,955 10,258,023 31,743,898 49,183,876
------------ ------------ ------------ --------------
$ 19,357,366 62,163,032 42,254,096 123,774,494
============ ============ ============ ==============
F-12
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
The Company has and will continue to have banking transactions with its
directors, officers, principal shareholders and its associates in the ordinary
course of business. It is Company policy that all such loan transactions be on
the same terms, including interest rates and collateral, as those prevailing at
the same time for comparable transactions with others. An analysis of these loan
transactions at December 31 follows:
1998 1997
----------- -----------
Balance at beginning of year $ 2,646,307 1,968,729
Net additions (deletions) 113,032 677,578
----------- -----------
Balance at end of year $ 2,759,339 2,646,307
=========== ===========
Mortgage loans serviced for others are not included in the accompanying
consolidated balance sheets. The unpaid principal balances of mortgage loans
serviced for others was $100,712,256 and $86,690,480 at December 31, 1998 and
1997, respectively.
Custodial escrow balances maintained in connection with the foregoing loan
servicing, and included in demand deposits, were approximately $461,236 and
$522,896 at December 31, 1998 and 1997, respectively.
Mortgage servicing rights of $379,422, $153,286, and $152,203 were capitalized
during 1998, 1997, and 1996, respectively. The carrying value of unamortized
mortgage servicing rights of $576,021 and $277,281 approximates its fair value
as of December 31, 1998 and 1997, respectively. Amortization of mortgage
servicing rights was $80,682, $19,029, and $9,179 in 1998, 1997, and 1996,
respectively.
(5) Allowance for Loan Losses
A summary of the allowance for loan losses as of December 31 follows:
1998 1997 1996
----------- ------------ ------------
Balance at beginning of year $ 1,293,512 1,103,414 1,383,814
Recoveries on loans previously
charged off 16,225 49,524 18,353
Provision charged to expense 252,000 232,000 215,750
Loans charged off (140,385) (91,426) (514,503)
----------- ------------ ------------
Balance at end of year $ 1,421,352 1,293,512 1,103,414
=========== ============ ============
The amount of any impaired loans is insignificant at December 31, 1998 and 1997.
The Company had no loans on nonaccrual status at December 31, 1998 and 1997.
F-13
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(6) Premises and Equipment
A summary of premises and equipment at December 31 follows:
1998 1997
----------- -----------
Company premises $ 4,742,278 4,703,952
Land 1,542,083 1,451,608
Equipment 4,869,636 4,279,667
----------- -----------
11,153,997 10,435,227
Less accumulated depreciation (5,357,475) (4,747,816)
----------- -----------
$ 5,796,522 5,687,411
=========== ===========
(7) Deposits
Time deposits in amounts of $100,000 or more and their remaining
maturities at December 31 are as follows:
1998 1997
Three months or less $ 27,611,027 26,496,631
Three through twelve months 28,056,872 22,251,443
Over twelve months 5,146,573 4,806,624
----------- ------------
$ 60,814,472 53,554,698
=========== ============
F-14
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(8) Income Taxes
Components of income tax expense (benefit) are as follows:
Current Deferred Total
----------- ---------- ------------
1998:
Federal $ 1,084,889 78,004 1,162,893
State 266,092 3,250 269,342
----------- ---------- ------------
$ 1,350,981 81,254 1,432,235
=========== ========== ============
1997:
Federal 1,010,936 (44,073) 966,863
State 100,906 (1,813) 99,093
----------- ---------- ------------
$ 1,111,842 (45,886) 1,065,956
=========== ========== ============
1996:
Federal 687,354 54,000 741,354
State 39,207 9,750 48,957
----------- ---------- ------------
$ 726,561 63,750 790,311
=========== ========== ============
The actual tax expense for 1998, 1997 and 1996 differs from the "expected" tax
expense for those years (computed by applying the U.S. Federal statutory tax
rate of 34% to earnings before income taxes) as follows:
1998 1997 1996
----------- ---------- ----------
Computed "expected" income taxes $ 1,275,333 1,106,787 863,947
State income taxes 177,767 65,401 32,300
Tax-exempt interest (69,838) (49,834) (37,867)
Other 48,973 (56,398) (68,069)
----------- ---------- ----------
$ 1,432,235 1,065,956 790,311
=========== ========== ==========
F-15
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
The components of and changes in the net deferred tax asset (liability) are as
follows:
<TABLE>
<CAPTION>
(Deferred (Deferred
expense) expense)
Dec.31,1996 benefit Dec.31,1997 benefit Dec.31,1998
------------- ------------- -------------- -------------- ----------------
Deferred tax assets:
<S> <C> <C> <C> <C> <C>
Bad debt deduction $ 266,104 76,018 342,122 51,392 393,514
Loan fees 249,259 6,624 255,883 6,397 262,280
Depreciation 17,633 150,973 168,606 19,292 187,898
Other real estate owned 41,879 (22,489) 19,390 15,092 34,482
Unrealized loss (gain) on
available sale
investment securities 131,284 (11,538) 119,746 (243,447) (123,701)
Other 37,109 (12,351) 24,758 14,886 39,644
------------- ------------- -------------- -------------- ----------------
Total gross deferred
tax assets 743,268 187,237 930,505 (136,388) 794,117
------------- ------------- -------------- -------------- ----------------
Deferred tax liabilities:
Federal Home Loan
Bank stock dividends (424,994) (78,993) (503,987) (85,988) (589,975)
Accretion on bonds (6,774) (19,925) (26,699) 17,768 (8,931)
Loan servicing rights (57,496) (53,971) (111,467) (120,093) (231,560)
------------- ------------- -------------- -------------- ----------------
Total deferred
tax liabilities (489,264) (152,889) (642,153) (188,313) (830,466)
------------- ------------- -------------- -------------- ----------------
Valuation allowance -- -- -- -- --
------------- ------------- -------------- -------------- ----------------
Net deferred
tax asset $ 254,004 34,348 288,352 (324,701) (36,349)
============= ============== ================
Amounts attributed to gain (loss)
on available for sale investment
securities and recorded as a
reduction to unrealized
holding gain or loss 11,538 243,447
------------- --------------
$ 45,886 (81,254)
============= ==============
</TABLE>
A valuation allowance on a deferred tax asset is provided when it is more likely
than not that some portion of the deferred tax asset will not be realized. The
Company has available tax planning strategies, anticipates future taxable income
and historically has had taxable income; accordingly, a valuation allowance was
not established in the current year. The net deferred tax asset is included in
other assets.
F-16
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(9) Comprehensive Income
At December 31, 1998, the related tax effects allocated to each component
of other comprehensive income follows:
<TABLE>
<CAPTION>
Before Tax Net of
tax amount (expense) benefit tax amount
------------------ ------------------- -------------------
<S> <C> <C> <C>
Unrealized holding gains on securities
available for sale arising during 1998 $ 680,225 272,781 407,444
Less: reclassification adjustment for
gains and losses realized in net income 73,149 29,334 43,815
------------------ ------------------- -------------------
Net unrealized gains 607,076 243,447 363,629
================== =================== ===================
</TABLE>
(10) Employee Benefit Plans
On January 1, 1992, the Company merged approximately 60% of its profit
sharing plan into the existing noncontributory defined contribution 401(k)
retirement plan. Contributions made to the 401(k) plan and charged to
expense amounted to $100,000, $75,000 and $60,000 in 1998, 1997 and 1996,
respectively.
Concurrently, the Company established an employee stock ownership plan
(ESOP) with the remaining 40% of the profit sharing plan's assets.
Contributions made to the ESOP and charged to expense amounted to $75,000,
$50,000 and $40,000 in 1998, 1997 and 1996, respectively.
Participation in the plans is available to employees who have completed
six months of service with the Company.
(11) Commitments and Contingencies
General
The Company from time to time may be a defendant in legal proceedings
related to the conduct of its banking business. In the opinion of
management, the Company's financial position and results of operations
will not be affected materially by the final outcome of any present legal
proceedings.
F-17
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
Lease
The Company is obligated under noncancelable operating leases for premises, some
of which have renewal options. Net future minimum rental payments required under
the lease are as follows:
Year ending
December 31 Amount
------------- ----------
1999 $ 220,596
2000 197,801
2001 159,156
2002 159,156
2003 142,068
Thereafter 134,845
----------
$ 1,013,622
==========
Rental expense amounted to $198,385, $196,950, and $191,739 in 1998,
1997 and 1996, respectively.
Off-Balance Sheet Financial Instruments
In the ordinary course of business, the Company enters into various types
of transactions which involve financial instruments with off-balance sheet
risk. These instruments include commitments to extend credit and standby
and commercial letters of credit and are not reflected in the accompanying
balance sheets. These transactions may involve, to varying degrees, credit
and interest rate risk in excess of the amount, if any, recognized in the
balance sheets. The Company applies the same credit standards to these
contracts as it uses in its lending process. Management does not
anticipate any loss to result from these commitments.
As of December 31, the Company's off-balance sheet credit risk exposure is
the contractual amount of commitments to extend credit and letters of
credit, is as follows:
1998 1997
---------- -----------
Off-balance sheet commitments:
Commitments to extend credit $ 8,741,433 10,240,000
Standby and commercial
letters of credit 395,120 575,785
Line of Credit
The Company has a line of credit up to 20% of assets or approximately
$51,000,000 at December 31, 1998 with the Federal Home Loan Bank (FHLB).
There is no outstanding balance on the credit line at December 31, 1998.
The Company has pledged its FHLB stock and other assets as collateral on
the line of credit.
(12) Regulatory Matters
The Federal Deposit Insurance Corporation has established risk-based
standards for evaluating a bank's capital adequacy. These standards
require the Company to maintain minimum ratio of qualifying total capital
to risk weighted assets of 8% of which at least 4% must be in the form of
F-18
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
core capital (TIER 1). Management believes as of December 31, 1998 and
1997, that the Bank meets all capital adequacy requirements. TIER 1
capital includes the bank's stockholders' equity, minus all intangible
assets. The Bank's actual capital amounts at December 31 are as follows:
1998 1997
-------- ---------
Total risk-based capital ratio 17.6% 17.7%
TIER 1 risk-based capital ratio 16.5% 17.8%
Leverage capital ratio 8.8% 8.9%
(13) Fair Value of Financial Instruments
The following methods and assumptions were used to estimate fair value
disclosures as defined under SFAS No. 107, Disclosures About Fair Value of
Financial Instruments:
Cash and due from banks and federal funds sold - the carrying
amounts reported in the balance sheet represent their fair values.
Investment securities - fair values for investment securities are
based on quoted market prices, where available. If quoted market
prices are not available, fair values are based on quoted market
prices of comparable instruments. Investments in the Federal Reserve
Bank (FRB) and FHLB are recorded at cost, which also represents fair
market value.
Loans - for variable-rate loans that reprice frequently, fair values
are based on carrying amounts. Fair values of residential mortgages
with commitments to sell within 90 days are based on the amounts
receivable under the commitments. An estimate of the fair value of
the remaining portfolio is based on discounted cash flow analyses
applied to pools of similar loans, using weighted average coupon
rate, weighted average maturity, and interest rates currently being
offered for similar loans. The carrying amount of accrued interest
receivable approximates its fair value.
Deposit liabilities - the fair values of demand and savings deposits
are equal to the carrying amount at the reporting date. The carrying
amount for variable rate time deposits approximate their fair value.
Fair values for fixed rate time deposits are estimated using a
discounted cash flow calculation that applies currently offered
interest rates to a schedule of aggregate expected monthly
maturities of time deposits. The carrying amount of accrued interest
payable approximates its fair value.
Short-term borrowings - for FHLB advances and Federal funds
purchased with maturities less than 90 days, the carrying amount
represents their fair value. For FHLB advances and federal funds
purchased with maturities longer than 90 days, fair values are
estimated using a discounted cash flow calculation using current
interest rates for similar borrowings.
Commitments to Extend Credit and Standby Letters of Credit - The
fair value of commitments is estimated using the fees currently
charged to enter into similar agreements, taking into account the
remaining terms of the agreements and the present creditworthiness
of the counterparties. For fixed-rate loan commitments, fair value
also considers the difference between current levels of interest
F-19
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
rates and the committed rates. The fair value of letters of credit
is based on fees currently charged for similar agreements or on the
estimated cost to terminate them or otherwise settle the obligation
with the counterparties at the reporting date.
Limitations - Fair value estimates are made at a specific point in
time, based on relevant market information and information about the
financial instrument. These estimates do not reflect any premium or
discount that could result from offering for sale at one time the
Company's entire holdings of a particular financial instrument.
Because no market exists for a significant portion of the Company's
financial instruments, fair value estimates are based on judgments
regarding future expected loss experience, current economic
conditions, risk characteristics of various financial instruments
and other factors. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and
therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
Fair value of financial instruments is as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------------ -------------------------------
Carrying Fair Carrying Fair
amount value amount value
--------------- -------------- --------------- ---------------
Financial assets:
<S> <C> <C> <C> <C>
Cash and due from banks $ 9,783,427 9,783,427 9,851,577 9,851,577
Federal funds sold 9,391,000 9,391,000 3,935,000 3,935,008
Investment securities 100,960,973 100,960,973 112,162,100 112,162,100
Loans 123,744,494 125,101,850 107,565,430 107,762,461
Accrued interest receivables 1,756,967 1,756,967 1,938,811 1,938,811
Financial liabilities:
Deposits 229,528,105 229,929,659 219,672,148 220,007,410
Accrued interest payable 516,779 516,779 476,715 476,715
Short-term borrowings -- -- 1,000,000 1,000,000
Unrecognized financial instruments:
Commitments to extend credit 8,741,433 87,414 10,240,000 102,400
Standby and commercial letters
of credit 395,120 3,951 575,785 5,856
</TABLE>
F-20
<PAGE>
FIRST BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements
December 31, 1998 and 1997
(14) Quarterly Results of Operations
(in thousands except per share data. Unaudited.)
<TABLE>
<CAPTION>
Quarter ended
---------------------------------------------------------------
1998 Dec. 31 Sept. 30 June 30 Mar. 31
-------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Total interest income $ 4,657 4,659 4,511 4,429
Total interest expense 2,136 2,189 2,130 2,065
-------------- -------------- ------------- --------------
Net interest income 2,521 2,470 2,381 2,364
Provision for loan losses 48 72 60 72
Other operating income 915 909 882 776
Other operating expense 2,485 2,233 2,273 2,297
Securities gains 13 16 44 --
-------------- -------------- ------------- --------------
Income before income taxes 916 1,090 974 771
Income taxes 523 387 247 275
-------------- -------------- ------------- --------------
Net income $ 393 703 727 496
============== ============== ============= ==============
Earnings per share $ 1.88 3.37 3.49 2.38
============== ============== ============= ==============
Quarter ended
---------------------------------------------------------------
1997 Dec. 31 Sept. 30 June 30 Mar. 31
-------------- -------------- ------------- --------------
Total interest income $ 4,576 4,483 4,301 4,050
Total interest expense 2,209 2,097 2,006 1,922
-------------- -------------- ------------- --------------
Net interest income 2,367 2,386 2,295 2,128
Provision for loan losses 48 72 56 56
Other operating income 254 971 813 630
Other operating expense 1,635 2,407 2,293 2,247
Securities gains -- 135 87 3
-------------- -------------- ------------- --------------
Income before income taxes 938 1,013 846 458
Income taxes 383 341 158 184
-------------- -------------- ------------- --------------
Net income $ 555 672 688 274
============== ============== ============= ==============
Earnings per share $ 2.65 3.22 3.29 1.31
============== ============== ============= ==============
</TABLE>
(15) Subsequent Event
In January 1999, the Board of Directors approved a reorganization plan for
First Bancorp, Inc. This plan is intended to convert the Company into a
Subchapter S under the Internal Revenue Code. Additionally, this plan
would require that the Company re-purchase a portion of their stock with a
value ranging from $4 to 6 million. This plan is to be voted on by the
Company's stockholders in March 1999.
F-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Ketchikan, State of
Alaska, on March 18, 1999.
Newco Alaska, Inc.
By: /s/ William G. Moran, Jr.
--------------------------------------
William G. Moran, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement and Power of Attorney has been signed by the following
persons in the capacities indicated on March 18, 1999:
/s/ James C. Sarvela
- -------------------------------------
James C. Sarvela, Vice President and
Chief Financial Officer
(Principal accounting officer)
/s/ William G. Moran, Jr.
- ------------------------------------- ---------------------------------------
William G. Moran, Sr., Director William G. Moran, Jr., Director
/s/ Ernest J. Anderes* /s/ Michael J. Cessnun*
- ------------------------------------- ---------------------------------------
Ernest J. Anderes, Director Michael J. Cessnun, Director
/s/ Joseph M. Moran* /s/ Michael J. Elerding*
- ------------------------------------- ---------------------------------------
Joseph M. Moran, Director Michael J. Elerding, Director
/s/ Lisa A. Murkowski*
- ------------------------------------- ---------------------------------------
Lisa A. Murkowski, Director Alec W. Brindle, Jr., Director
*by: /s/ William G. Moran, Jr.
-------------------------------
William G. Moran, Jr.,
Attorney-in-Fact
