<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, 1996
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 10, 1996: 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 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
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ITEM 1. FINANCIAL STATEMENTS.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In Thousands Except Statistics) Three Months Ended March 31
1996 1995
INTEREST INCOME:
Loans & Lease Financing Including Fee $33,579 $30,686
Balances with Banks 10 9
Federal Funds Sold - 17
Investment Securities Including Dividends
U.S. Treasury Securities 3,253 3,603
Obligations of Other U. S. Government
Agencies and Corporation 5,584 5,591
Obligations of States & Political
Subdivisions 93 221
Mortgage and Asset-Backed Securities 2,407 2,720
Other Securities 2,036 1,806
------- -------
TOTAL INTEREST INCOME 46,962 44,653
INTEREST EXPENSE:
Deposits 11,690 12,583
Federal Funds Purchased & Securities Sold
Under Agreement to Repurchase 4,235 4,250
Other Purchased Funds 5 5
------- -------
TOTAL INTEREST EXPENSE 15,930 16,838
------- -------
NET INTEREST INCOME 31,032 27,815
Provision for Loan Losses 750 (3,300)
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 30,282 31,115
OTHER INCOME:
Trust Department Income 501 504
Service Charges on Deposit Accounts 3,039 2,897
Mortgage Loan Servicing Fees 2,016 1,951
Securities Transactions - (3,947)
Credit Card Service Fees 1,314 1,164
Other 2,378 2,178
------- -------
TOTAL OTHER INCOME 9,248 4,747
OTHER EXPENSE:
Salaries 9,468 9,098
Profit Sharing & Other Employee Benefits 2,891 2,524
Net Occupancy Expense of Bank Premises 1,872 1,919
Furniture & Equipment Expense 2,058 2,003
Other 6,815 7,317
------- -------
TOTAL OTHER EXPENSE 23,104 22,861
Income Before Income Taxes 16,426 13,001
Applicable Income Taxes 5,801 4,358
------- ------
NET INCOME $10,625 $ 8,643
======= =======
Per Share Statistics
Net Income $ 1.33 $ 1.08
====== ======
Average Number of Shares Outstanding 7,968,800 7,968,800
(See note to consolidated statements.)
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CONDITION (Unaudited)
March 31 December 31
(In Thousands Except Statistics) 1996 1995 1995
ASSETS: ---- ---- ----
<S> <C> <C> <C>
Cash and Due from Banks $ 130,096 $ 128,374 $ 149,307
Interest-Bearing Balances with Banks 1,080 826 1,293
Federal Funds Sold -- -- --
Investment Securities:
Obligations of Other U. S. Government
Agencies and Corporations 289,376 335,414 303,304
Obligations of States and Political Subdivisions 8,365 19,759 9,008
Mortgage and Asset-Backed Securities 130,072 155,016 138,498
Other Securities 102,798 102,192 102,591
--------- --------- ---------
Total Investment Securities 530,611 612,381 553,401
(Market Value $601,611 in 1995)
Securities Available for Sale 250,933 255,232 273,391
Net Loans and Lease Financing 1,356,451 1,270,900 1,326,840
Less Reserve for Possible Loan Losses (21,389) (19,476) (21,529)
--------- --------- ---------
Net Loans and Lease Financing Less Reserves 1,335,062 1,251,424 1,305,311
Loans Held for Sale 72,652 26,369 33,099
Premises and Equipment 65,843 60,526 62,217
Other Assets 78,063 64,059 72,902
--------- --------- ---------
Total Assets $2,464,340 $2,399,191 $2,450,921
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Demand Deposits $ 511,378 $ 476,883 $ 539,714
Interest-Bearing Deposits:
NOW 143,180 143,522 148,896
Savings 296,129 294,725 303,432
Money Market Savings 293,012 294,649 291,325
Time 459,766 461,597 457,114
--------- --------- ---------
Total Interest-Bearing Deposits 1,192,087 1,194,493 1,200,767
--------- --------- ---------
Total Deposits 1,703,465 1,671,376 1,740,481
Federal Funds Purchased 65,452 46,049 42,812
Securities Sold Under Agreement to Repurchase 303,826 327,903 283,047
Other Purchased Funds 1,480 1,540 1,681
Other Liabilities 34,703 28,576 32,580
--------- --------- ---------
Total Liabilities 2,108,926 2,075,444 2,100,601
Shareholders' Equity
Common Stock - $10 Par Value 1996 1995 80,000 80,000 80,000
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 210,343 181,425 203,702
Net Unrealized Holding Gains(Losses) on
Available-for-Sale Securitie s 2,497 (252) 4,044
Less Treasury Stock at Cost
31,200 Shares on March 31, 1996
and on March 31, 1995 (426) (426) (426)
--------- --------- ---------
Total Shareholders' Equity 355,414 323,747 350,320
--------- --------- ---------
Total Liabilities and Shareholders Equity $2,464,340 $2,399,191 $2,450,921
========= ========= =========
Per Share Statistics
Net Book Value $44.60 $40.63 $43.96
===== =====
(See note to consolidated statements.)
</TABLE>
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands) Three Months Ended March 31 1996 1995
OPERATING ACTIVITIES:
Net Income $ 10,625 $ 8,643
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Provision for Loan Losses 750 (3,300)
Deferred Taxes (499) (92)
Depreciation and Amortization 1,804 1,627
Net amortization on Securities (366) 576
Investment Security Transactions -- 3,947
Gain on Loan Sales (116) (23)
Gain on Disposal of Premises and Equipment (12) (4)
Loss (Gain) on Sale of Other Assets 119 (34)
Net Increase in Loans Held for Sale (39,436) (6,674)
Decrease in Interest Receivable, Prepaid Expense,
and Other Assets 1,547 732
Increase in Interest Payable, Accrued
Expenses and Other Liabilities 2,012 3,645
------- ------
Net Cash Provided by (Used in) Operating Activities (26,666) 9,043
INVESTING ACTIVITIES:
Net Decrease in Federal Funds Sold, and Interest
Bearing Deposits with Other Banks 213 9,369
Proceeds from Maturities of Securities Held to Maturity 28,226 16,220
Proceeds from Maturities of Securities Available for Sale 20,000 --
Proceeds from Sales of Securities Available for Sale -- 183,626
Purchases of Securities Held to Maturity (5,212) (50,106)
Purchases of Securities Available for Sale -- (160,146)
Net Decrease (Increase) in Lending Activities (30,502) (42,155)
Proceeds from Sales of Premises and Equipment 13 5
Proceeds from Sale of Other Assets 532 1,103
Purchases of Premises, Equipment, and Other Assets (8,033) (9,670)
------- -------
Net Cash Provided by (Used in) Investing Activities 5,237 (51,754)
FINANCING ACTIVITIES:
Net Decrease in Total Deposit (37,016) (75,108)
Net Increase in Short-Term Borrowings 42,218 113,806
Cash Dividends (3,984) (1,992)
------- -------
Net Cash Provided by Financing Activities 2,218 36,706
------- -------
Decrease in Cash and Cash Equivalents (19,211) (6,005)
Cash and Cash Equivalents at Beginning of Year 149,307 134,379
------- -------
Cash and Cash Equivalents at End of March $130,096 $128,374
======= =======
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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 three-month period ended
March 31, 1996, are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996.
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, 1995. In the
opinion of management, all adjustments (consisting of normal recurring
accruals necessary for a fair presentation) have been included.
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Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
National Bancorp of Alaska (the Corporation) recorded earnings of $10.6 million
in the first quarter of 1996 compared to $8.63 million for the first quarter of
1995. Earnings per share were $1.33 as of March 31, 1996 up 23% from the $1.08
earned through March 31, 1995.
Return on average assets using annualized income from operations plus year-to-
date net security gains and nonrecurring loan loss recoveries was 1.77% for the
three-month period ended March 31, 1996, compared to 1.49% for the three-month
period ended March 31, 1995. The annualized return on average stockholders'
equity was 12.17% for the first three months of 1996.
Net interest income decreased $833,000 after the provision for loan loss
recoveries during the first three months of 1996 compared to the same period
during the previous year. The decrease is due to a recovery of loan loss of
$3.9 million in 1995, which was taken to income providing a net recovery for
loan loss of $3.3 million for that quarter. Interest on earning assets
increased $2.3 million from the first quarter of 1995 to the first quarter of
1996, while interest expense decreased $0.9 million.
The provision for loan loss was $750,000 at March 31, 1996, compared to a
provision for loan loss recoveries of $3,300,000 at March 31, 1995. The
reserve for loan loss was 1.58% of outstanding loans at March 31, 1996 and
1.53% at March 31, 1995 and 1.62% at December 31, 1995. 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 increased to 1.27% at March 31, 1996 from 1.14% at
March 31, 1995, and increased from 0.83% at December 31, 1995.
Non-interest income increased $4,501,000 for the first quarter from the same
period in 1995. This increase is primarily due to $3.9 million in losses taken
on securities held for sale in the first quarter of 1995. Non-interest expense
increased by $243,000 over the first quarter one year ago. Increases of
$737,000 in personnel and benefits expenses offset a reduction in other expense
of $502,000.
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Material Changes in Financial Condition
Effective January 1, 1996, the Bank has adopted Statement of Financial
Accounting standards No. 122, "Accounting for Mortgage Servicing Rights". This
statement eliminates the distinction between purchased mortgage servicing
rights and retained servicing rights associated with mortgage loans originated
and sold. Originated mortgage servicing rights are capitalized based on the
relative fair values of the servicing rights and the loans without the
servicing rights. The adoption of this statement has not had a material effect
on the financial statements.
Total assets at March 31, 1996, were $2,464,340,000 an increase of 2.7% or
$65,149,000 from the same period one year earlier, and an increase of
$13,419,000 or 0.5% from December 31, 1995. Investment securities have
decreased by $82 million over the first quarter of 1995. Loans and leases and
loans held for sale have increased $132 million over the same period in 1995.
Total deposits have increased by $32,089,000 from March 31, 1995, and decreased
by $37,016,000 from December 31, 1995.
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 $5 million from December 31, 1995, to $355.4
million at March 31, 1996. 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:
March 31 December 31
Minimun 1996 1995 1996
Tier 1 Risk Based Capital Ratio 4% 18.40% 17.75% 18.40%
Total Risk Based Capital Ratio 8 19.52 18.83 19.55
Leverage Ratio 4 14.54 13.57 13.90
-8-
<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.
Director Votes for Votes Withheld
Director from Director
Donald B. Abel, Jr. 7,724,820 1,432
Gary M. Baugh 7,724,570 1,682
Carl F. Brady, Jr. 7,724,302 1,950
Alec W. Brindle 7,716,020 10,232
Sharon Burrell 7,724,311 1,941
James O. Campbell 7,724,283 1,969
Jeffry J. Cook 7,724,554 1,698
Patrick S. Cowan 7,724,720 1,532
Roy Huhndorf 7,724,477 1,775
James H. Jansen 7,724,812 1,440
Donald L. Mellish 7,724,820 1,432
Emil R. Notti 7,724,554 1,698
Tennys B. Owens 7,724,820 1,432
Eugene A. Parrish, Jr. 7,724,820 1,432
J. Michael Pate 7,724,820 1,432
Martin R. Pihl 7,724,820 1,432
Edward F. Randolph 7,724,312 1,940
Edward B. Rasmuson 7,724,654 1,598
Maj. Gen. John Schaeffer (Ret.) 7,724,041 2,211
Michael K. Snowden 7,724,820 1,432
Richard J. Strutz 7,724,554 1,698
George S. Suddock 7,723,875 2,377
Richard A. Wien 7,724,720 1,532
A total of 7,726,252 votes were presented in proxy and in person.
Absent or no proxy votes amounted to 242,548.
Item 5:Other Information
Not applicable.
Item 6:Exhibits and Reports on Form 8-K
Not applicable.
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<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 13, 1996 /s/Edward B. Rasmuson
- ------------------ ----------------------------
Date Edward B. Rasmuson, Chairman
0f the Board
May 13, 1996 /s/Richard Strutz
- ------------------ ----------------------------
Date Richard Strutz, President
May 13, 1996 /s/Gary Dalton
- ------------------ -----------------------------
Date Gary Dalton, Executive Vice
President and Controller
(Principal Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 130,096
<INT-BEARING-DEPOSITS> 1,080
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 250,933
<INVESTMENTS-CARRYING> 530,611
<INVESTMENTS-MARKET> 533,288
<LOANS> 1,356,451
<ALLOWANCE> 21,389
<TOTAL-ASSETS> 2,464,340
<DEPOSITS> 1,703,465
<SHORT-TERM> 370,869
<LIABILITIES-OTHER> 34,703
<LONG-TERM> 0
<COMMON> 355,414
0
0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 2,464,340
<INTEREST-LOAN> 33,579
<INTEREST-INVEST> 13,373
<INTEREST-OTHER> 10
<INTEREST-TOTAL> 46,962
<INTEREST-DEPOSIT> 11,690
<INTEREST-EXPENSE> 15,930
<INTEREST-INCOME-NET> 31,032
<LOAN-LOSSES> 750
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 9,248
<INCOME-PRETAX> 16,426
<INCOME-PRE-EXTRAORDINARY> 10,625
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,625
<EPS-PRIMARY> 1.33
<EPS-DILUTED> 1.33
<YIELD-ACTUAL> 0
<LOANS-NON> 8,143
<LOANS-PAST> 6,385
<LOANS-TROUBLED> 333
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 21,529
<CHARGE-OFFS> 1,535
<RECOVERIES> 645
<ALLOWANCE-CLOSE> 21,389
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
