<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 March 31, 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 May 9, 1995: 7,968,800
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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 Proceeding.........................................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)
(In Thousands Except Statistics) Three Months Ended March 31
1995 1994
<S> <C> <C>
INTEREST INCOME:
Loans & Lease Financing Including Fee $30,686 $28,277
Balances with Banks 9 21
Federal Funds Sold 17 223
Investment Securities Including Dividends
U.S. Treasury Securities 3,603 2,019
Obligations of Other U. S. Government
Agencies and Corporation 5,591 3,987
Obligations of States & Political
Subdivisions 221 68
Mortgage and Asset-Backed Securities 2,720 2,330
Other Securities 1,806 1,302
____________________
TOTAL INTEREST INCOME 44,653 38,227
INTEREST EXPENSE:
Deposits 12,583 8,223
Federal Funds Purchased & Securities Sold
Under Agreement to Repurchase 4,250 2,052
Other Purchased Funds 5 4
____________________
TOTAL INTEREST EXPENSE 16,838 10,279
____________________
NET INTEREST INCOME 27,815 27,948
Provision for Loan Losses (3,300) 600
NET INTEREST INCOME AFTER ____________________
PROVISION FOR LOAN LOSSES 31,115 27,348
OTHER INCOME:
Trust Department Income 504 468
Service Charges on Deposit Accounts 2,897 2,504
Mortgage Loan Servicing Fees 1,951 1,801
Securities Transactions (3,947) 1,177
Credit Card Service Fees 1,164 1,091
Other 2,178 2,509
____________________
TOTAL OTHER INCOME 4,747 9,550
OTHER EXPENSE:
Salaries 9,098 9,487
Profit Sharing & Other Employee Benefits 2,524 2,691
Net Occupancy Expense of Bank Premises 1,919 1,685
Furniture & Equipment Expense 2,003 2,008
Other 7,317 6,593
____________________
TOTAL OTHER EXPENSE 22,861 22,464
Income Before Income Taxes 13,001 14,434
Applicable Income Taxes 4,358 5,119
____________________
NET INCOME $ 8,643 $ 9,315
====================
Per Share Statistics
Net Income $ 1.08 $ 1.17
Average Number of Shares Outstanding 7,968,800 7,968,800
(See note to consolidated statements.)
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CONDITION (Unaudited)
March 31 December 31
(In Thousands Except Statistics) 1995 1994 1994
<S> <C> <C> <C>
ASSETS:
Cash and Due from Banks $ 128,374 $ 138,204 $ 134,379
Interest-Bearing Balances with Banks 826 4,211 195
Federal Funds Sold -- 60,000 10,000
Investment Securities:
Obligations of Other U. S. Government
Agencies and Corporations 335,414 276,421 345,319
Obligations of States and Political
Subdivisions 19,759 6,760 20,239
Mortgage and Asset-Backed Securities 155,016 128,944 157,781
Other Securities 102,192 29,390 55,393
__________________________________
Total Investment Securities 612,381 441,515 578,732
(Market Value $601,611 in 1995)
Securities Available for Sale 255,232 177,875 273,723
Net Loans and Lease Financing 1,270,900 1,129,019 1,226,164
Less Reserve for Possible Loan Losses (19,476) (17,870) (19,226)
__________________________________
Net Loans and Lease Financing Less Reserves 1,251,424 1,111,149 1,206,938
Loans Held for Sale 26,369 119,377 19,627
Premises and Equipment 60,526 56,371 58,241
Other Assets 64,059 57,729 62,843
__________________________________
Total Assets $2,399,191 $2,166,431 $2,344,678
==================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Demand Deposits $ 476,883 $ 472,309 $ 522,285
Interest-Bearing Deposits:
NOW 143,522 143,359 163,088
Savings 294,725 295,915 304,164
Money Market Savings 294,649 279,667 326,386
Time 461,597 393,123 431,698
__________________________________
Total Interest-Bearing Deposits 1,194,493 1,112,064 1,225,336
__________________________________
Total Deposits 1,671,376 1,584,373 1,747,621
Federal Funds Purchased 46,049 4,768 1,757
Securities Sold Under Agreement to Repurchase 327,903 256,765 258,226
Other Purchased Funds 1,540 523 1,703
Other Liabilities 28,576 20,740 22,599
__________________________________
Total Liabilities 2,075,444 1,867,169 2,031,906
Shareholders' Equity
Common Stock - $10 Par Value 80,000 80,000 80,000
1995 1994
Shares Authorized 10,500,000 10,500,000
Shares Outstanding 8,000,000 8,000,000
Surplus 63,000 63,000 63,000
Undivided Profits 181,425 157,724 175,969
Net Unrealized Holding Gains(Losses) on
Available-for-Sale Securities (252) (1,036) (5,771)
Less Treasury Stock at Cost
31,200 Shares on March 31, 1995
and on March 31, 1994 (426) (426) (426)
__________________________________
Total Shareholders' Equity 323,747 299,262 312,772
__________________________________
Total Liabilities and ShareholdersEquity $2,399,191 $2,166,431 $2,344,678
==================================
Per Share Statistics
Net Book Value $40.63 $37.55 $39.25
(See note to consolidated statements.)
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands) Three Months Ended March 31 1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 8,643 $ 9,315
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Provision for Loan Losses (3,300) 600
Deferred Taxes (92) 1,498
Depreciation and Amortization 1,627 1,577
Net amortization on Securities 576 1,169
Investment Security Transactions 3,947 (1,177)
Gain on Loan Sales (23) (641)
Loss (Gain) on Disposal of Premises and Equipment (4) (15)
Gain on Sale of Other Assets (34) (10)
Net Decrease (Increase) in Loans Held for Sale (6,674) 45,445
Decrease (Increase) in Interest Receivable,
Prepaid Expense, and Other Assets 732 (69)
Increase in Interest Payable, Accrued
Expenses and Other Liabilities 3,645 59
____________________
Net Cash Provided by Operating Activities 9,043 57,751
INVESTING ACTIVITIES:
Net Decrease in Federal Funds Sold, and Interest
Bearing Deposits with Other Banks 9,369 (43,426)
Proceeds from Maturities of Securities Held to Maturity 16,220 82,616
Proceeds from Maturities of Securities Available for Sale -- --
Proceeds from Sales of Securities Available for Sale 183,626 38,556
Purchases of Securities Held to Maturity (50,106) (38,953)
Purchases of Securities Available for Sale (160,146) (12,864)
Net Decrease (Increase) in Lending Activities (42,155) (9,446)
Proceeds from Sales of Premises and Equipment 5 31
Proceeds from Sale of Other Assets 1,103 851
Purchases of Premises, Equipment, and Other Assets (9,670) (2,167)
_____________________
Net Cash Provided (Used) by Investing Activities (51,754) 15,198
FINANCING ACTIVITIES:
Net Decrease in Total Deposit (75,108) (21,774)
Net Increase (Decrease) in Short-Term Borrowings 113,806 (22,628)
Cash Dividends (1,992) (1,992)
_____________________
Net Cash Provided (Used) by Financing Activities 36,706 (46,394)
Increase (Decrease) in Cash and Cash Equivalents (6,005) 26,555
Cash and Cash Equivalents at Beginning of Year 134,379 111,649
_____________________
Cash and Cash Equivalents at End of March $128,374 $138,204
=====================
</TABLE>
<PAGE> 6
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 three-month period ended March 31, 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 $8.6 million in the first quarter of 1995
compared to $9.3 million for the first quarter of 1994.
Earnings per share were $1.08 as of March 31, 1995 down 7.7%
from the $1.17 earned through March 31, 1994.
Return on average assets using annualized income from
operations plus year-to-date net security gains and
nonrecurring loan loss recoveries was 1.49% for the three-
month period ended March 31, 1995, compared to 1.64% for the
three-month period ended March 31, 1994. The annualized
return on average stockholders' equity was 10.90% for the
first three months of 1995.
Net interest income increased $3,767,000 after the provision
for loan loss recoveries during the first three 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 $3.3 million for the quarter. Interest on
earning assets increased $6.4 million from the first quarter
of 1994 to the first quarter of 1995, while interest expense
increased $6.6 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 $3,300,000 at
March 31, 1995, compared to a provision for loan loss of
$600,000 at March 31, 1994. The reserve for loan loss was
1.53% of outstanding loans at March 31, 1995 and 1.58% at
March 31, 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 1.14% at March 31,
1995 from 1.65% at March 31, 1994, and decreased from 1.22%
at December 31, 1994.
Non-interest income decreased $4,803,000 for the first
quarter from the same period in 1994. This decrease is
primarily due to reductions in security gains, specifically
$3.9 million in losses taken on securities held for sale.
Non-interest expense increased by $397,000 over the first
quarter one year ago. Increases of $958,000 in occupancy
and other expenses offset a reduction in personnel and
benefits expense of $556,000.
Material Changes in Financial Condition
Effective January 1, 1995, the Corporation prospectively
adopted Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan", as
amended by SFAS 118, which modified income recognition and
disclosure for impaired loans. These statements address the
accounting and measurement of the impairment of certain
loans when it is probable that a creditor will be unable to
collect all amounts due under the contractual terms of the
loan agreements. Impairment is measured using the fair
value of collateral or the present value of future cash
flows. Impairment is recognized when the value is less
than the recorded investment in the loan by establishing an
allowance for impaired loan
<PAGE> 8
losses with a charge to the provision for loan losses. SFAS
114 applies to loans restructured after the effective date
of the statement at rates below those offered to other
customers. The statement does not apply to large groups of
homogenous loans such as credit card or consumer loans,
loans held for sale, or leases.
At March 31, 1995, the Corporation identified loans with a
recorded investment of $4,731,000 as being impaired. These
loans did not require a specific allowance for loan loss as
provided in SFAS 114. Income from impaired loans is
recorded only when interest payments are received. The
classification of payments received is based on an estimate
of future cash flows.
Total assets at March 31, 1995, were $2,399,191,000 an
increase of 10.7% or $232,760,000 from the same period one
year earlier, and an increase of $54,513,000 or 2.33% from
December 31, 1994. Investment securities have increased by
$248 million over the first quarter of 1994. Loans and
leases and loans held for sale have increased $49 million
over the same period in 1994.
Total deposits have increased by $87,003,000 from March 31,
1994, and decreased by $76,245,000 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 increased by $13,955,000, as compared to an
increase in time deposits of $68,474,000 at March 31, 1995
over March 31, 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 $11 million from December
31, 1994, to $323.7 million at March 31, 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>
March 31 December 31
Minimun 1995 1994 1994
<S> <C> <C> <C> <C>
Tier 1 Risk Based Capital Ratio 4% 17.75% 18.34% 18.57%
Total Risk Based Capital Ratio 8 18.83 19.45 19.70
Leverage Ratio 4 13.57 13.69 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
The Annual Meeting of Shareholders was held in
Anchorage on March 21, 1995. At that time
shareholders elected 23 Directors to the Board. All
Directors stand for election annually.
<TABLE>
<CAPTION>
Votes for Votes Withheld
Director Director from Director
<S> <C> <C>
Donald B. Abel, Jr. 7,553,774 11,672
Gary M. Baugh 7,554,284 11,162
Carl F. Brady, Jr. 7,554,304 11,142
Alec W. Brindle 7,554,304 11,142
Sharon Burrell 7,554,284 11,162
James O. Campbell 7,554,204 11,242
Jeffry J. Cook 7,554,304 11,142
Patrick S. Cowan 7,554,284 11,162
Roy Huhndorf 7,554,304 11,142
James H. Jansen 7,554,304 11,142
Donald L. Mellish 7,554,304 11,142
Emil R. Notti 7,553,584 11,862
Tennys B. Owens 7,554,284 11,162
Eugene A. Parrish, Jr. 7,554,304 11,142
J. Michael Pate 7,554,304 11,142
Martin R. Pihl 7,554,304 11,142
Edward F. Randolph 7,554,304 11,142
Edward B. Rasmuson 7,551,104 14,342
Maj. Gen. John Schaeffer(Ret.) 7,554,304 11,142
Michael K. Snowden 7,554,304 11,142
Richard J. Strutz 7,551,104 14,342
George S. Suddock 7,554,304 11,142
Richard A. Wien 7,554,304 11,142
A total of 7,565,446 votes were presented in proxy
and in person. Absent or no proxy votes amounted to
403,354.
</TABLE>
Item 5: Other Information
Not applicable.
Item 6: Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27: Financial Data Schedule
b. Form 8-K
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.
May 12, 1995 /s/Edward B. Rasmuson
___________________ ____________________________
Date Edward B. Rasmuson, Chairman
of the Board
May 12, 1995 /s/Richard Strutz
___________________ ____________________________
Date Richard Strutz, President
May 12, 1995 /s/Gary Dalton
___________________ ____________________________
Date Gary Dalton, Executive Vice
President and Controller
(Principal Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1994
<CASH> 128,374
<INT-BEARING-DEPOSITS> 826
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 255,232
<INVESTMENTS-CARRYING> 612,381
<INVESTMENTS-MARKET> 601,611
<LOANS> 1,270,900
<ALLOWANCE> 19,476
<TOTAL-ASSETS> 2,399,191
<DEPOSITS> 1,671,376
<SHORT-TERM> 375,492
<LIABILITIES-OTHER> 28,576
<LONG-TERM> 0
<COMMON> 323,747
0
0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 2,399,191
<INTEREST-LOAN> 30,686
<INTEREST-INVEST> 13,941
<INTEREST-OTHER> 26
<INTEREST-TOTAL> 44,653
<INTEREST-DEPOSIT> 12,583
<INTEREST-EXPENSE> 16,838
<INTEREST-INCOME-NET> 27,815
<LOAN-LOSSES> (3,300)
<SECURITIES-GAINS> (3,947)
<EXPENSE-OTHER> 22,861
<INCOME-PRETAX> 13,001
<INCOME-PRE-EXTRAORDINARY> 8,643
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,643
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.08
<YIELD-ACTUAL> 0
<LOANS-NON> 4,731
<LOANS-PAST> 3,617
<LOANS-TROUBLED> 1,857
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 19,226
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 19,476
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
