<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-10769
National Bancorp of Alaska, Inc.
(Exact name of registrant as specified in its charter)
Delaware 92-0087646
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Northern Lights Boulevard and C Street, Anchorage, AK 99503
(Address of principal executive offices) (Zip Code)
(907) 276-1132
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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___
The registrant has one class of Common Stock, $10 par value.
Number of shares outstanding as of August 9, 1995: 7,968,800
<PAGE> 2
Table of Contents
Page
PART I
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II
Item 1 Legal Proceedings 9
Item 2 Changes in Securities 9
Item 3 Defaults Upon Senior Securities 9
Item 4 Submission of Matters to a Vote of Security Holders 9
Item 5 Other Information 9
Item 6 Exhibits and Reports on Form 8-K 9
<PAGE> 3
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
THREE MONTHS SIX MONTHS
(In Thousands Except Statistics) ENDED JUNE 30 ENDED JUNE 30
1995 1994 1994
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans & Lease Financing Including Fee $33,120 $29,367 $63,806 $57,644
Balances with Banks 10 26 19 47
Federal Funds Sold and Securities Purchased
Under Agreement to Resell 39 239 56 462
Investment Securities Including Dividends
U.S. Treasury Securities 3,436 2,411 7,039 4,430
Obligations of Other U. S. Government
Agencies and Corporation 5,971 4,113 11,562 8,100
Obligations of States & Political
Subdivisions 220 67 441 135
Mortgage and Asset Backed Securities 2,674 2,003 5,394 4,333
Other Securities 2,217 798 4,023 2,100
_______________________________________
TOTAL INTEREST INCOME 47,687 39,024 92,340 77,251
INTEREST EXPENSE:
Deposits 12,559 8,912 25,142 17,135
Federal Funds Purchased & Securities Sold
Under Agreement to Repurchase 5,445 2,262 9,695 4,314
Other Purchased Funds 5 3 10 7
_______________________________________
TOTAL INTEREST EXPENSE 18,009 11,177 34,847 21,456
_______________________________________
NET INTEREST INCOME 29,678 27,847 57,493 55,795
Provision for Loan Losses 600 600 (2,700) 1,200
_______________________________________
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 29,078 27,247 60,193 54,595
OTHER INCOME:
Trust Department Income 580 494 1,084 962
Service Charges on Deposit Accounts 3,045 2,682 5,942 5,186
Mortgage Loan Servicing Fees 2,001 1,914 3,952 3,715
Securities Transactions -- (664) (3,947) 513
Credit Card Service Fees 1,578 1,431 2,742 2,522
Other 2,185 2,846 4,363 5,355
_______________________________________
TOTAL OTHER INCOME 9,389 8,703 14,136 18,253
OTHER EXPENSE:
Salaries 9,222 9,309 18,320 18,796
Profit Sharing & Other Employee Benefits 2,655 2,592 5,179 5,283
Net Occupancy Expense of Bank Premises 1,852 1,698 3,771 3,383
Furniture & Equipment Expense 2,140 1,927 4,143 3,935
Other 7,655 6,826 14,972 13,419
_______________________________________
TOTAL OTHER EXPENSE 23,524 22,352 46,385 44,816
Income Before Income Taxes 14,943 13,598 27,944 28,032
Applicable Income Taxes 5,041 4,708 9,399 9,827
_______________________________________
NET INCOME $ 9,902 $ 8,890 $18,545 18,205
=======================================
Per Share Statistics
Net Income $1.24 $1.11 $2.33 $2.28
Average Number of Shares Outstanding 7,968,800 7,968,800 7,968,800 7,968,800
(See note to consolidated statements.)
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CONDITION (Unaudited)
June 30 December 31
(In Thousands Except Statistics) 1995 1994 1994
<S> <C> <C> <C>
ASSETS:
Cash and Due from Banks $ 195,692 $ 124,854 $ 134,379
Interest-Bearing Balances with Banks 633 50,646 195
Federal Funds Sold and Securities Purchases under
agreement to resell 30,000 65,000 10,000
Investment Securities:
Obligations of Other U. S. Government
Agencies and Corporations 322,520 270,214 345,319
Obligations of States and Political Subdivisions 20,345 7,978 20,239
Mortgage and Asset-Backed Securities 144,656 122,364 157,781
Other Securities 102,302 16,516 55,393
_____________________________________
Total Investment Securities 589,823 417,072 578,732
(Market Value $591,275 in 1995)
Securities Available for Sale 261,179 230,620 273,723
Net Loans and Lease Financing 1,319,876 1,242,946 1,226,164
Less Reserve for Possible Loan Losses (20,206) (18,940) (19,226)
_____________________________________
Net loans and Lease Financing Less Reserves 1,299,670 1,224,006 1,206,938
Loans Held For Sale 26,919 45,246 19,627
Premises and Equipment 61,510 57,037 58,241
Other Assets 69,297 56,382 62,843
_____________________________________
Total Assets $2,534,723 $2,270,863 $2,344,678
=====================================
LIABILITIES AND SHAREHOLDERS EQUITY:
Demand Deposits $ 596,339 $ 532,114 $ 522,285
Interest-Bearing Deposits:
NOW 141,406 147,319 163,088
Savings 287,089 299,609 304,164
Money Market Savings 283,684 288,269 326,386
Time 456,443 392,971 431,698
_____________________________________
Total Interest-Bearing Deposits 1,168,622 1,128,168 1,225,336
_____________________________________
Total Deposits 1,764,961 1,660,282 1,747,621
Federal Funds Purchased 74,380 3,242 1,757
Securities Sold Under Agreement to Repurchase 333,295 279,555 258,226
Other Purchased Funds 1,114 871 1,703
Other Liabilities 27,044 21,986 22,599
_____________________________________
Total Liabilities 2,200,794 1,965,936 2,031,906
Shareholders Equity
Common Stock-$10 Par Value 1995 1994 80,000 80,000 80,000
Shares Authorized 10,500,000 10,500,000
Shares Outstanding 8,000,000 8,000,000
Capital Surplus 63,000 63,000 63,000
Retained Earnings 188,139 164,622 175,969
Net Unrealized Holding Losses on
Available-For-Sale Securities 3,216 (2,269) (5,771)
Less Treasury Stock at Cost
31,200 Shares on June 30, 1995 (426) (426) (426)
and June 30, 1994
_____________________________________
Total Shareholders Equity 333,929 304,927 312,772
_____________________________________
Total Liabilities and
Shareholders Equity $2,534,723 $2,270,863 $2,344,678
=====================================
Per Share Statistics
Net Book Value $41.90 $38.27 $39.25
(See note to consolidated statements.)
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands) Six Months Ended June 30 1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 18,545 $ 18,205
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Provision for Loan Losses (2,700) 1,200
Deferred Taxes (531) 633
Depreciation and Amortization 3,338 3,132
Net Amortization on Securities 553 2,152
Investment Security Transactions 3,947 (513)
Gain on Loan Sales (113) (1,354)
Gain on Disposal of Premises and Equipment (13) (15)
Gain on Disposal of Other Assets (27) (222)
Net Decrease (Increase) in Loans Held for Sale (7,134) 120,289
Increase in Interest Receivable, Prepaid Expense,
and Other Assets (2,659) (2,674)
Increase in Interest Payable, Accrued
Expenses and Other Liabilities 1,927 1,264
___________________
Net cash Provided by Operating Activities 15,133 142,097
INVESTING ACTIVITIES:
Net Increase in Federal Funds Sold and Interest
Bearing Deposits with Other Banks (20,438) (94,861)
Proceeds from Maturities of Securities Held to Maturity 39,407 133,476
Proceeds from Maturities of Securities Available for Sale -- --
Proceeds from Sales of Securities Available for Sale 183,626 51,151
Purchases of Securities (50,830) (62,491)
Purchase of Securities Available for Sale (160,146) (84,803)
Net Increase in Lending Activities (93,127) (116,967)
Proceeds from Sale of Premises and Equipment 22 31
Proceeds from Sale of Other Assets 2,189 1,714
Purchases of Premises, Equipment, and Other Assets (13,786) (5,276)
Acquisition of Banks (100) (198)
___________________
Net Cash Used in Investing Activities (113,183) (178,224)
FINANCING ACTIVITIES:
Net Increase in Total Deposit 17,440 54,333
Net Increase (Decrease) in Short-Term Borrowings 147,103 (1,017)
Cash Dividends (5,180) (3,984)
___________________
Net Cash Provided by Financing Activities 159,363 49,332
___________________
Increase in Cash and Cash Equivalents 61,313 13,205
Cash and Cash Equivalents at Beginning of Year 134,379 111,649
___________________
Cash and Cash Equivalents at End of June $195,692 $124,854
===================
</TABLE>
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National Bancorp of Alaska
Notes to the Consolidated Financial Statements
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statement have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions and regulations for filing Form 10-Q. Operating
results for the six-month period ended June 30, 1995, are not
necessarily indicative of the results that may be expected for
the year ending December 31, 1995.
The statements should be read in conjunction with the summary of
accounting policies and notes to the financial statements
included in the Registrant's annual report for the year ended
December 31, 1994. In the opinion of management, all adjustments
(consisting of normal recurring accruals necessary for a fair
presentation) have been included.
<PAGE> 7
Item 2. Management Discussion and Analysis of Financial Condition
and Results of Operations
National Bancorp of Alaska (the Corporation) recorded earnings of
$9.9 million in the second quarter of 1995 compared to $8.9
million for the second quarter of 1994. Earnings per share were
$1.24 as of June 30, 1995, up 11.7% from the $1.11 earned through
June 30, 1994.
Return on average assets using annualized income from operations
plus year-to-date net security gains and nonrecurring loan loss
recoveries was 1.57% for the six-month period ended June 30,
1995, compared to 1.68% for the six-month period ended June 30,
1994. The annualized return on average stockholders' equity was
11.50% for the first six months of 1995.
Net interest income increased $5,598,000 after the provision for
loan loss recoveries during the first six months of 1995 compared
to the same period during the previous year. The increase is due
to a recovery of loan loss of $3.9 million, which was taken to
income providing a net recovery for loan loss of $2.7 million.
Interest on earning assets increased $8.7 million from the second
quarter of 1994 to the second quarter of 1995, while interest
expense increased $6.8 million as rates rose and funds shifted
from core deposit categories to time certificates of deposits.
Lending income and fees from mortgage activity were down compared
to prior year as higher interest rates curtailed refinancing.
The provision for loan loss recoveries was $2,700,000 at June 30,
1995, compared to a provision for loan loss of $1,200,000 at June
30, 1994. The reserve for loan loss was 1.53% of outstanding
loans at June 30, 1995 and 1.52% at June 30, 1994 and 1.57% at
December 31, 1994. Nonperforming assets, defined as other real
estate owned, nonaccrual loans, restructured loans, and loans
past due 90 days and still accruing, as a percentage of total
loans and other real estate owned decreased to 0.83% at June 30,
1995 from 1.25% at June 30, 1994, and decreased from 1.22% at
December 31, 1994.
Non-interest income increased $686,000 for the second quarter
from the same period in 1994. This increase is primarily due to
reductions in security losses compared to the second quarter of
1994 and increases in income from deposit fees and credit card
servicing related to higher activity levels. Non-interest
expense increased by $1,172,000 over the second quarter one year
ago. Travel expense increased $398,000 due to the acquisition of
a corporate jet, and professional services increased $224,000 due
to litigation. Expenses for occupancy and furniture and
equipment increased a total $367,000 over the second quarter of
1994.
<PAGE> 8
Material Changes in Financial Condition
Total assets at June 30, 1995, were $2,534,723,000 an increase of
11.6% or $263,860,000 from the same period one year earlier, and
an increase of $190,045,000 or 8.1% from December 31, 1994.
Investment securities have increased by $173 million over the
second quarter of 1994. Loans and leases and loans held for sale
have increased $59 million over the same period in 1994.
Total deposits have increased by $104,679,000 from June 30, 1994
and $17,340,000 from December 31, 1994. As interest rates
increased, time certificates of deposit balances have increased
as compared to balances in other interest bearing accounts
composed of negotiable orders of withdrawal, savings, and money
market savings. These accounts have decreased by $23,018,000, as
compared to an increase in time deposits of $63,472,000 at June
30, 1995 over June 30, 1994.
Liquidity
The Corporation maintains sufficient excess liquidity to satisfy
contractual liabilities, meet withdrawal requirements of
depositors, fund operations, and provide for customers' credit
needs. Management knows of no demand, commitments, or events
that would result in liquidity changing in a material amount.
Capital Resources
Shareholders' equity increased by $21 million from December 31,
1994, to $333.9 million at June 30, 1995. Federal regulatory
agencies have established capital adequacy guidelines setting a
minimum for leverage and risk based capital ratios. These
minimum and the Corporation's ratios are as follows:
<TABLE>
<CAPTION>
June 30 December
31
Minimum 1995 1994 1994
<S> <C> <C> <C> <C>
Tier 1 Risk Based 4% 17.64% 18.47% 18.57%
Capital Ratio
Total Risk Based 8 18.73 19.62 19.70
Capital Ratio
Leverage Ratio 4 13.55 13.93 13.20
</TABLE>
<PAGE> 9
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
Not applicable.
Item 2: Changes in Securities
Not applicable.
Item 3: Defaults Upon Senior Securities
Not applicable.
Item 4: Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5: Other Information
Not applicable.
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27: Financial Data Schedule
(b) Not applicable
<PAGE> 10
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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.
NATIONAL BANCORP OF ALASKA, INC.
August 14, 1995 /s/Edward B. Rasmuson
___________________ ________________________________
Date Edward B. Rasmuson, Chairman
of the Board
August 14, 1995 /s/Richard Strutz
___________________ ________________________________
Date Richard Strutz, President
August 14, 1995 /s/Gary Dalton
___________________ ________________________________
Date Gary Dalton, Executive Vice
President and Controller
(Principal Accounting Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<CASH> 195,692
<INT-BEARING-DEPOSITS> 633
<FED-FUNDS-SOLD> 30,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 261,179
<INVESTMENTS-CARRYING> 589,823
<INVESTMENTS-MARKET> 591,275
<LOANS> 1,319,876
<ALLOWANCE> 20,206
<TOTAL-ASSETS> 2,534,723
<DEPOSITS> 1,764,961
<SHORT-TERM> 409,419
<LIABILITIES-OTHER> 27,044
<LONG-TERM> 0
<COMMON> 333,929
0
0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 2,534,723
<INTEREST-LOAN> 63,806
<INTEREST-INVEST> 28,459
<INTEREST-OTHER> 75
<INTEREST-TOTAL> 92,340
<INTEREST-DEPOSIT> 25,142
<INTEREST-EXPENSE> 34,847
<INTEREST-INCOME-NET> 57,493
<LOAN-LOSSES> (2,700)
<SECURITIES-GAINS> (3,947)
<EXPENSE-OTHER> 46,385
<INCOME-PRETAX> 27,944
<INCOME-PRE-EXTRAORDINARY> 18,545
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,545
<EPS-PRIMARY> 2.33
<EPS-DILUTED> 2.33
<YIELD-ACTUAL>
<LOANS-NON> 2,902
<LOANS-PAST> 4,228
<LOANS-TROUBLED> 1,855
<LOANS-PROBLEM>
<ALLOWANCE-OPEN> 19,226
<CHARGE-OFFS> 1,448
<RECOVERIES> 5,128
<ALLOWANCE-CLOSE> 20,206
<ALLOWANCE-DOMESTIC>
<ALLOWANCE-FOREIGN>
<ALLOWANCE-UNALLOCATED>
</TABLE>
