U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
--- Act of 1934
For the quarterly period ended June 30, 1999
Transition report under Section 13 or 15(d) of the Exchange Act
--- For the transition period from to
------------- -----------
Commission file number 0-26003
ALASKA PACIFIC BANCSHARES, INC.
- ------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Alaska 92-0167101
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2094 Jordan Avenue, Juneau, Alaska 99801
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(907) 789-4844
- ------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
NA
- ------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No*
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
-0- shares outstanding on June 30, 1999
-----
Transitional Small Business Disclosure Format (check one):
Yes X No
--- ---
*The small business issuer's Registration Statement on Form SB-2 was declared
effective on May 13, 1999. The small business issuer has conducted no business
except the offering of the shares in connection with the conversion of Alaska
Pacific Bank from the mutual to stock form of organization. The financial
information contained in this 10-QSB is provided, therefore, for Alaska
Pacific Bank.
<PAGE>
Alaska Pacific Bancshares, Inc. and Subsidiary
Juneau, Alaska
INDEX
PART I. Page(s)
- -------
FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Balance Sheets - (Unaudited) as of December 31,
1998 and June 30, 1999............................................. 1
Consolidated Statements of Income (Unaudited) for the three- and
six-month periods ended June 30, 1998 and 1999..................... 2
Consolidated Statements of Cash Flows - (Unaudited) for the three-
and six-months ended June 30, 1998 and 1999........................ 3
Notes to (Unaudited) Consolidated Financial Statements ............ 4
Item 2.
Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. 6
PART II.
- --------
OTHER INFORMATION
Item 1. Legal Proceedings.......................................... 11
Item 2. Changes in Securities and Use of Proceeds.................. 11
Item 3. Defaults Upon Senior Securities............................ 11
Item 4. Submission of Matters to a Vote of Security Holders........ 11
Item 5. Other Information.......................................... 11
Item 6. Exhibits and Reports on Form 8-K........................... 11
Signatures......................................................... 12
<PAGE>
ITEM 1. Financial Statements
Alaska Pacific Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
(Unaudited)
(in thousands)
June 30, December 31,
1999 1998
- ------------------------------------------------------------------------------
Assets
Cash and due from banks $ 4,342 $ 3,201
Interest-earning deposits in banks 9,340 11,383
- ------------------------------------------------------------------------------
Total cash and cash equivalents 13,682 14,584
Investment securities available for sale,
at fair value (amortized cost: 1999 - $15,522;
1998 - $18,474) 15,073 18,176
Federal Home Loan Bank stock 1,313 1,265
Loans held for sale 437 899
Loans 81,727 71,510
Less allowance for loan losses 670 674
- ------------------------------------------------------------------------------
Loans, net 81,057 70,836
Accrued interest receivable 601 593
Premises and equipment 3,575 3,306
Foreclosed properties 155 311
Other assets 1,144 836
- ------------------------------------------------------------------------------
Total Assets $ 117,037 $ 110,806
==============================================================================
Liabilities and Equity Capital
Deposits:
Noninterest-bearing demand $ 4,908 $ 5,046
Interest-bearing demand 25,889 25,570
Money market 15,716 15,872
Savings 22,775 18,674
Certificates of deposit 37,525 36,783
- ------------------------------------------------------------------------------
Total deposits 106,813 101,945
Federal Home Loan Bank advances - -
Advances from borrowers for taxes and insurance 1,880 866
Accounts payable and accrued expenses 249 240
Accrued interest payable 436 389
Other liabilities 448 116
- ------------------------------------------------------------------------------
Total liabilities 109,826 103,556
Equity capital:
Retained earnings 7,660 7,548
Accumulated other comprehensive income (loss) (449) (298)
- ------------------------------------------------------------------------------
Total equity capital 7,211 7,250
- ------------------------------------------------------------------------------
Total Liabilities and Equity Capital $ 117,037 $ 110,806
==============================================================================
See notes to unaudited interim financial statements.
1
<PAGE>
Alaska Pacific Bancshares, Inc. and Subsidiary
Consolidated Statements of Income
(Unaudited)
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------
1999 1998 1999 1998
- ------------------------------------------------------------------------------
Interest Income
Loans $ 1,713 $ 1,686 $ 3,347 $ 3,403
Investment securities 230 306 479 616
Interest-earning deposits in
banks 80 65 185 189
- ------------------------------------------------------------------------------
Total interest income 2,023 2,057 4,011 4,208
Interest Expense
Deposits 871 894 1,734 1,822
Federal Home Loan Bank advances 16 33 20 165
- ------------------------------------------------------------------------------
Total interest expense 887 927 1,754 1,987
- ------------------------------------------------------------------------------
Net Interest Income 1,136 1,130 2,257 2,221
Provision for loan losses - 15 15 30
- ------------------------------------------------------------------------------
Net interest income after
provision for loan losses 1,136 1,115 2,242 2,191
Noninterest Income
Mortgage servicing income 50 57 102 116
Service charges on deposit
accounts 83 28 159 89
Other service charges and fees 46 36 73 66
Gain on sale of mortgage loans 25 136 31 212
- ------------------------------------------------------------------------------
Total noninterest income 204 257 365 483
Noninterest Expense
Compensation and benefits 659 628 1,300 1,256
Occupancy 261 249 520 509
Data processing 96 79 178 158
Professional and consulting fees 31 39 65 81
Marketing and public relations 34 43 67 79
Cost of operations of foreclosed
properties 1 - 1 -
Other 199 178 364 331
- ------------------------------------------------------------------------------
Total noninterest expense 1,281 1,216 2,495 2,414
- ------------------------------------------------------------------------------
Income before income tax 59 156 112 260
Income tax - - - -
- ------------------------------------------------------------------------------
Net Income $ 59 $ 156 $ 112 $ 260
==============================================================================
See notes to unaudited interim financial statements.
2
<PAGE>
Alaska Pacific Bancshares. Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------
1999 1998 1999 1998
- ------------------------------------------------------------------------------
Operating Activities
Net income $ 59 $ 156 $ 112 $ 260
Adjustments to reconcile net
income to net cash provided
by operating activities:
Provision for loan losses - 15 15 30
Gain on sale of foreclosed
properties - - (9) -
Depreciation and amortization 94 93 183 185
Federal Home Loan Bank stock
dividends (24) (23) (48) (45)
Amortization of fees, discounts,
and premiums, net (12) (13) (13) (8)
Cash provided by changes in
operating assets and
liabilities:
Accrued interest receivable 34 48 (8) 48
Loans held for sale 502 229 462 (94)
Other assets (221) (182) (308) (280)
Advances from borrowers for
taxes and insurance 392 589 1,014 1,297
Accrued interest payable (94) (182) 47 194
Accounts payable and accrued
expenses (77) 56 9 98
Other liabilities 139 58 332 272
- ------------------------------------------------------------------------------
Net cash provided by
operating activities 792 844 1,788 1,957
Investing Activities
Purchase of investment
securities available for sale - - (3,000) -
Maturities and principal
repayments of:
Investment securities
available for sale 2,069 630 5,890 1,104
Investment securities held
to maturity - 192 - 304
Proceeds from sale of
foreclosed properties - - 165 -
Loan originations, net of
principal repayments (5,305) 3,039 (10,161) 6,977
Purchase of premises and
equipment (130) (39) (452) (138)
- ------------------------------------------------------------------------------
Net cash provided by (used
in) investing activities (3,366) (3,822) (7,558) 8,247
Financing Activities
Net decrease in Federal
Home Loan Bank advances (2,100) (5,000) - (9,000)
Net increase (decrease) in
demand and savings deposits 5,525 (1,997) 4,126 (1,247)
Net increase (decrease) in
certificates of deposit 1,559 (451) 742 (745)
- ------------------------------------------------------------------------------
Net cash provided by (used
in) financing activities 4,984 7,448 4,868 (10,992)
- ------------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents 2,410 (2,782) (902) (788)
Cash and cash equivalents
at beginning of year 11,272 12,124 14,584 10,130
- ------------------------------------------------------------------------------
Cash and cash equivalents
at end of year $13,682 $ 9,342 $ 13,682 $ 9,342
==============================================================================
Supplemental information:
Cash paid for interest $ 4,125 $ 4,213 $ 3,613 $ 3,837
Loans foreclosed and
transferred to
foreclosed properties - - 311 -
Net change in unrealized
loss on securities
available for sale (159) (22) (147) 22
See notes to unaudited interim financial statements.
3
<PAGE>
Alaska Pacific Bancshares, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Conversion to Stock Ownership
On July 1, 1999, Alaska Federal Savings Bank consummated its conversion from a
federally chartered mutual savings bank to a federally chartered stock savings
bank pursuant to a Plan of Conversion. The conversion was approved by the
membership of Alaska Federal on June 21, 1999. Concurrent with the
conversion, Alaska Federal changed its name to Alaska Pacific Bank. Alaska
Pacific Bancshares, Inc. was formed for the purpose of becoming the holding
company of the Bank upon its conversion. The Company sold 655,415 shares in a
subscription and community offering during June of 1999, which, after giving
effect to offering expenses of approximately $687,000, resulted in net
proceeds of $5,867,000 ($5,343,000 excluding purchases by the Employee Stock
Ownership Plan). The Company transferred approximately $4.6 million to the
Bank in exchange for all of its stock.
Note 2 - Basis of Presentation
While the accompanying financial statements of the Company are presented on a
consolidated basis with those of Alaska Pacific Bank (formerly Alaska Federal
Savings Bank), the Company did not yet own any shares of the Bank and had no
assets, liabilities, equity or operations as of June 30, 1999. Therefore, the
financial statements presented include only the accounts and operations of
Alaska Pacific Bank. Because the Company had no shares outstanding prior to
July 1, 1999, earnings per share information is not presented.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. They should be read in conjunction with
the audited financial statements of Alaska Federal Savings Bank for the year
ended December 31, 1998 filed as part of the registration statement on Form
SB-2 for Alaska Pacific Bancshares, Inc. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
fair presentation have been included. The results of operations for the
interim periods ended June 30, 1999 and 1998 are not necessarily indicative of
the results which may be expected for an entire year or any other period.
4
<PAGE>
Note 3 - Capital Compliance
At June 30, 1999, the Bank exceeded each of the three current minimum
regulatory capital requirements. The following table summarizes the Bank's
regulatory capital position and requirements at June 30, 1999:
(dollars in thousands)
- ------------------------------------------------------------------------------
Tangible Capital:
Actual $7,660 6.59%
Required 1,745 1.50
- ------------------------------------------------------------------------------
Excess $5,915 5.09%
==============================================================================
Core Capital:
Actual $7,660 6.59%
Required 3,489 3.00
- ------------------------------------------------------------------------------
Excess $4,171 3.59%
==============================================================================
Total Risk-Based Capital:
Actual $8,330 11.59%
Required 5,748 8.00
- ------------------------------------------------------------------------------
Excess $2,582 3.59%
==============================================================================
Note 4 - Comprehensive Income
The Company's only item of comprehensive income other than net income is net
unrealized gains or losses on securities available for sale. Following is a
summary of accumulated other comprehensive income:
Year Ended
Six Months Ended June 30, December 31,
(in thousands) 1999 1998 1998
- ------------------------------------------------------------------------------
Balance at beginning of period $(298) $ (72) $ (72)
Change in net unrealized gains
and losses on securities
available for sale (151) 22 (68)
Cumulative effect of
reclassification from
securities held to maturity
to securities available for sale - - (158)
- ------------------------------------------------------------------------------
Balance at end of period $(449) $ (50) $ (298)
==============================================================================
5
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Comparison of Financial Condition at June 30, 1999 and December 31, 1998
Total assets were $117.0 million at June 30, 1999 compared to $110.8
million at December 31, 1998, a 5.6% increase. This increase resulted
primarily from an increase in loans, funded by increased deposits and
reductions in short-term investments and interest-earning deposits in banks.
Cash and cash equivalents were $13.7 million at June 30, 1999, compared
to $14.6 million at December 31, 1998. Investment securities available for
sale were $15.1 million at June 30, 1999, compared to $18.2 million at
December 31, 1998. These decreases primarily reflect the decrease in
liquidity as a result of increased loans, net of increased deposits.
The Office of Thrift Supervision requires a savings institution to
maintain an average daily balance of liquid assets, which are cash and
eligible investments, equal to at least 4.0% of the average daily balance of
its net withdrawable deposits and short-term borrowings. The Bank's actual
liquidity ratios were 27.1% and 32.6% at June 30, 1999 and December 31, 1998,
respectively. The Company has consistently maintained liquidity levels in
excess of regulatory requirements.
Loans, net, were $81.1 million at June 30, 1999 compared to $70.8 million
at December 31, 1998, a significant 14.4% increase. This $10.2 million
increase resulted primarily from increased originations of both mortgage and
nonmortgage loans, as well as retaining the majority of mortgage loans
originated during the period, rather than selling them in the secondary
market.
Deposits were $106.8 million at June 30, 1999 compared to $101.9 million
at December 31, 1998, a 4.8% increase. This $4.9 million increase resulted
primarily from the Company's subscription and community stock offering in June
of 1999. The proceeds were held in deposit accounts through June 30, pending
closing of the transaction.
Retained net income of $112,000 and an increase in unrealized losses on
securities of $159,000 for the six months ended June 30, 1999 resulted in
total equity of $7.2 million at June 30, 1999.
Comparison of Operating Results for the Six Months Ended June 30, 1999 and
1998
General. During the first half of 1999, the Company began to reverse a
decline in total loans by increasing loan originations and by retaining a
substantial portion of mortgage loan production. By adding a balance of
mortgage and nonmortgage loans to the portfolio, it is management's intention
to build a base for enhanced net interest income, while maintaining interest-
rate risk at acceptable levels.
6
<PAGE>
Net Income. Net income for the first half of 1999 was $112,000 compared
to $260,000 for the same period in 1998, a decrease of $148,000. The decrease
resulted primarily from a $181,000 decrease in gains on sale of mortgage
loans.
Net Interest Income. Net interest income increased a moderate 1.6% to
$2.26 million for the first half of 1999, compared with $2.22 million for the
same period in 1998. In comparing the two periods, both interest income and
interest expense were lower in 1999 due to a lower interest rate level in
general, but moderately higher long-term rates tended to reduce deposit rates
to a relatively greater extent than loan and investment rates.
Provision for Loan Losses. The provision for loan losses was reduced to
$15,000 in the first half of 1999 from $30,000 in the first half of 1998.
This reduction was considered appropriate in order for the allowance for loan
losses to reflect management's best estimate of losses inherent in the loan
portfolio.
Noninterest Income. Noninterest income declined 24.4% to $365,000 in the
first half of 1999 compared with $483,000 for the first half of 1998. The
decline resulted primarily from a $181,000 decrease in gain on sale of
mortgage loans. The majority of mortgage loans originated during the first
half of 1999 were retained in the loan portfolio, rather than being sold in
the secondary market, as was the case during the same period in 1998. Despite
selling mortgage loans, and retaining the related servicing rights, during
much of 1998, mortgage servicing income has declined gradually due to rapid
prepayments in the servicing portfolio in 1998, as well as rising amortization
expense on capitalized mortgage servicing rights. As a result, mortgage
servicing income declined to $102,000 for the first half of 1999 compared with
$116,000 in the half quarter of 1998.
Offsetting the declines in mortgage-related income was a significant
49.7% increase in service charges on deposit accounts and other service
charges and fees, which amounted to $232,000 in the first half of 1999,
compared to $155,000 in the first half of 1998. This increase resulted from
increases in both the number of accounts and the rates charged.
Noninterest Expense. In total, noninterest expense increased 3.4% to
$2.5 million for the first half of 1999 compared with $2.4 million for the
same period in 1998. Compensation and benefits increased 3.5% and other
expenses increased 3.2%. In addition to moderately higher salaries and prices,
the increases are due to gradual additions to facilities, technology, and
personnel to enable capacity for higher asset levels in the future.
Income Taxes. No income tax expense was recognized for each of the six
month periods ended June 30, 1999 or 1998 due to net operating loss
carryforwards, which expire in various years beginning in 2002 and through
2012.
7
<PAGE>
Comparison of Operating Results for the Three Months Ended June 30, 1999 and
1998
Net Income. Net income for the second quarter of 1999 was $59,000
compared to $156,000 for same period in 1998, a decrease of $97,000. The
decrease resulted primarily from a $111,000 decrease in gains on sale of
mortgage loans.
Net Interest Income. Net interest income was approximately unchanged at
$1.13 million for each of the three month periods ended June 30, 1999. In
comparing the two periods, both interest income and interest expense were
lower in 1999 due to a lower interest rate level in general.
Provision for Loan Losses. There was no provision for loan losses in the
second quarter of 1999, compared with $15,000 for the same period in 1998. A
reduction in the provision was considered appropriate in order for the
allowance for loan losses to reflect management's best estimate of losses
inherent in the loan portfolio.
Noninterest Income. Noninterest income declined 20.6% to $204,000 in the
second quarter of 1999 compared with $257,000 for the second quarter of 1998.
The decline resulted primarily from a $111,000 decrease in gain on sale of
mortgage loans. The majority of mortgage loans originated during the quarter
were retained in the loan portfolio, rather than being sold in the secondary
market, as was the case in 1998. Despite selling mortgage loans, and
retaining the related servicing rights, during much of 1998, mortgage
servicing income has declined gradually due to rapid prepayments in the
servicing portfolio in 1998, as well as rising amortization expense on
capitalized mortgage servicing rights. As a result, mortgage servicing income
declined to $50,000 for the second quarter of 1999 compared with $57,000 for
the same period in 1998.
Offsetting the declines in mortgage-related income was a significant
101.6% increase in service charges on deposit accounts and other service
charges and fees, which amounted to $129,000 in the second quarter of 1999,
compared to $64,000 in the second quarter of 1998. This increase resulted
from increases in both the number of accounts and the rates charged.
Noninterest Expense. In total, noninterest expense increased 5.3% to
$1.28 million for the second quarter of 1999 compared with $1.22 million for
the same period in 1998. Compensation and benefits increased 4.9% and other
expenses increased 5.8%. In addition to moderately higher salaries and
prices, the increases are due to gradual additions to facilities, technology,
and personnel to enable capacity for higher asset levels in the future.
Income Taxes. No income tax expense was recognized for each of the three
month periods ended June 30, 1999 or 1998 due to net operating loss
carryforwards, which expire in various years beginning in 2002 and through
2012.
8
<PAGE>
Nonperforming Assets
At June 30, 1999, the Company had one nonaccrual consumer loan for
$23,000, and no nonaccrual loans at December 31, 1998. At June 30, 1999 and
December 31, 1998, the Company had no troubled debt restructurings or accruing
loans 90 days or more past due. Foreclosed properties at June 30, 1999
consisted of one single family residential property for $155,000, a reduction
from two properties at December 31, 1998 totaling $311,000.
Liquidity and Capital Resources
The Company's primary sources of funds are deposits and proceeds from
principal and interest payments on loans. While maturities and scheduled
amortization of loans are a predictable source of funds, deposit flows and
mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition. The Company's primary investing activity
is loan originations. The Company maintains liquidity levels adequate to fund
loan commitments, investment opportunities, deposit withdrawals and other
financial commitments. The Office of Thrift Supervision requires a savings
institution to maintain an average daily balance of liquid assets, which are
cash and eligible investments, equal to at least 4.0% of the average daily
balance of its net withdrawable deposits and short-term borrowings. The
Bank's actual liquidity ratios were 27.1% and 32.6% at June 30, 1999 and
December 31, 1998, respectively. The Bank has consistently maintained
liquidity levels in excess of regulatory requirements. At June 30, 1999,
management had no knowledge of any trends, events or uncertainties that will
have or are reasonably likely to have material effects on the liquidity,
capital resources or operations of the Company. Further, at June 30, 1999,
management was not aware of any current recommendations by the regulatory
authorities which, if implemented, would have such an effect.
The Company is not subject to any separate regulatory capital
requirements. The Bank exceeded all of its regulatory capital requirements at
June 30, 1999. See Note 3 of the Notes to Consolidated Financial Statements
contained herein for information regarding the Bank's regulatory capital
position at June 30, 1999.
Year 2000 Readiness
The Audit Committee of the Company's Board of Directors oversees the work
of the Y2K Task Force, which is chaired by a member of senior management. The
Task Force has developed and implemented a board-approved Y2K Plan designed to
ensure the Y2K readiness of all critical systems and the uninterrupted flow of
all core business processes through and beyond the century date change.
The Company has completed or substantially completed all phases of the
Y2K Plan as of June 30, 1999, as prescribed by the Federal Financial
Institutions Examination Council (FFIEC) guidelines. Following is a progress
report on the six major phases of the Y2K Plan.
1. Awareness - This educational phase was complete as of June 30, 1998.
9
<PAGE>
2. Assessment - Plan development as well as identification and evaluation of
all critical systems was complete as of December 31, 1998.
3. Renovation - All critical systems were upgraded, renovated or replaced as
necessary to meet Y2K readiness standards. This phase was substantially
complete as of December 31, 1998 and complete prior to March 31, 1999.
The only major renovation required was the replacement of the aging teller
system with a state-of-the-art teller and sales platform that runs over a
Y2K-certified wide area network. Any necessary renovation of non-critical
systems that do not provide primary support to core business processes
will be evaluated and accomplished on a priority basis as time permits.
4. Validation - Testing of all critical systems and third party vendors for
Y2K compliance was substantially complete prior to March 31, 1999 and
complete as of June 30, 1999. The second round of live testing on the
mainframe applications was successfully completed during April 1999.
Where it was not possible to test directly with third parties, the
Company has reviewed and accepted the results of proxy testing conducted
on its behalf. Testing methods and results have been reviewed by an
independent third party and accepted by the Board of Directors. Testing
of non-critical systems that do not provide primary support to core
business processes will be evaluated and accomplished on a priority basis
as time permits.
5. Implementation - All critical systems have been renovated and tested and
are operating in an on-line environment. This phase was substantially
complete as of June 30, 1999. Ongoing vigilance will ensure that any
routine upgrades to critical systems prior to December 31, 1999 are
properly implemented and do not negatively impact Y2K readiness.
6. Contingency Planning - The Company has developed a comprehensive Y2K
Contingency Plan to minimize disruption of normal service levels, and risk
of loss from safety and soundness, profitability and customer confidence
concerns. The Y2K Contingency Master Plan is further defined in two
specific contingency plans: the Business Resumption Contingency Plan and
the Remediation Contingency Plan. The contingency plan includes strategies
for meeting increased cash and liquidity needs through the first few
months of the Year 2000. The Company's Board of Directors has reviewed
and approved the entire Contingency Plan and the contingency planning
phase is considered substantially complete as of June 30,1999. The
Contingency Plan will be reviewed frequently to ensure that new
information is incorporated into the plan.
Management will continue efforts to promote customer confidence and
public education on Y2K issues. The Company's Y2K readiness effort is on
track and management is confident that the Company will complete a smooth
transition into the next century.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time, the Company and any subsidiaries may be a party to various
legal proceedings incident to its or their business. At June 30, 1999, there
were no legal proceedings to which the Company or any subsidiary was a party,
or to which of any of their property was subject, which were expected by
management to result in a material loss.
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Exhibits
3.1 Articles of Incorporation of Alaska Pacific Bancshares, Inc.*
3.2 Bylaws of Alaska Pacific Bancshares, Inc.*
10.1 Alaska Pacific Bank 401(k) Savings Plan*
27 Financial Data Schedule
No reports on Form 8-K were filed during the quarter ended June 30,
1999.
- -----------------
* Incorporated by reference to Registrant's Registration Statement on Form
SB-2, as amended (File No. 333-74827)
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Alaska Pacific Bancshares, Inc.
Date: August 13, 1999 /s/ Craig E. Dahl
----------------------------------------
Craig E. Dahl
President and Chief Executive Officer
Alaska Pacific Bancshares, Inc.
Date: August 13, 1999 /s/ Roger K. White
----------------------------------------
Roger K. White
Senior Vice President and
Chief Financial Officer
12
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 4342
<INT-BEARING-DEPOSITS> 9340
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 15073
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 81727
<ALLOWANCE> 670
<TOTAL-ASSETS> 117037
<DEPOSITS> 106813
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3013
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> 7211
<TOTAL-LIABILITIES-AND-EQUITY> 117037
<INTEREST-LOAN> 1713
<INTEREST-INVEST> 230
<INTEREST-OTHER> 80
<INTEREST-TOTAL> 2023
<INTEREST-DEPOSIT> 871
<INTEREST-EXPENSE> 887
<INTEREST-INCOME-NET> 1136
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1281
<INCOME-PRETAX> 59
<INCOME-PRE-EXTRAORDINARY> 59
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.33
<LOANS-NON> 23
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 939
<ALLOWANCE-OPEN> 688
<CHARGE-OFFS> 20
<RECOVERIES> 2
<ALLOWANCE-CLOSE> 670
<ALLOWANCE-DOMESTIC> 670
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
