<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, 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 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 Resultsof 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>
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
THREE MONTHS SIX MONTHS
(In Thousands Except Statistics) ENDED JUNE 30 ENDED JUNE 30
INTEREST INCOME: 1996 1995 1996 1995
<S> <C> <C> <C> <C>
Loans & Lease Financing Including Fee $35,910 $33,120 $69,489 $63,806
Balances with Banks 14 10 24 19
Federal Funds Sold and Securities Purchased
Under Agreement to Resell 33 39 33 56
Investment Securities Including Dividends
U.S. Treasury Securities 2,885 3,436 6,138 7,039
Obligations of Other U. S. Government
Agencies and Corporation 5,788 5,971 11,372 11,562
Obligations of States & Political
Subdivisions 92 220 185 441
Mortgage and Asset Backed Securities 2,362 2,674 4,769 5,394
Other Securities 2,372 2,217 4,408 4,023
------------------------------------
TOTAL INTEREST INCOME 49,456 47,687 96,418 92,340
INTEREST EXPENSE:
Deposits 12,262 12,559 23,952 25,142
Federal Funds Purchased & Securities Sold
Under Agreement to Repurchase 4,411 5,445 8,646 9,695
Other Purchased Funds 4 5 9 10
------------------------------------
TOTAL INTEREST EXPENSE 16,677 18,009 32,607 34,847
------------------------------------
NET INTEREST INCOME 32,779 29,678 63,811 57,493
Provision for Loan Losses 750 600 1,500 (2,700)
------------------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 32,029 29,078 62,311 60,193
OTHER INCOME:
Trust Department Income 527 580 1,028 1,084
Service Charges on Deposit Accounts 3,196 3,045 6,235 5,942
Mortgage Loan Servicing Fees 2,001 2,001 4,017 3,952
Securities Transactions -- -- -- (3,947)
Credit Card Service Fees 1,487 1,578 2,801 2,742
Other 2,143 2,185 4,521 4,363
------------------------------------
TOTAL OTHER INCOME 9,354 9,389 18,602 14,136
OTHER EXPENSE:
Salaries 9,606 9,222 19,074 18,320
Profit Sharing & Other Employee Benefits 2,837 2,655 5,728 5,179
Net Occupancy Expense of Bank Premises 1,790 1,852 3,662 3,771
Furniture & Equipment Expense 2,392 2,140 4,450 4,143
Other 6,900 7,655 13,715 14,972
------------------------------------
TOTAL OTHER EXPENSE 23,525 23,524 46,629 46,385
Income Before Income Taxes 17,858 14,943 34,284 27,944
Applicable Income Taxes 6,413 5,041 12,214 9,399
------------------------------------
NET INCOME $11,445 $ 9,902 $22,070 $18,545
====================================
Per Share Statistics
Net Income $1.44 $1.24 $2.77 $2.33
====================================
Average Number of Shares Outstanding 7,968,800 7,968,800 7,968,800 7,968,800
(See note to consolidated statements.)
</TABLE>
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENT OF CONDITION (Unaudited)
<CAPTION>
June 30 December 31
(In Thousands Except Statistics) 1996 1995 1995
ASSETS:
<S> <C> <C> <C>
Cash and Due from Banks $ 141,293 $ 195,692 $ 149,307
Interest-Bearing Balances with Banks 136 633 1,293
Federal Funds Sold and Securities Purchases under
agreement to resell -- 30,000 --
Investment Securities:
Obligations of Other U. S. Government
Agencies and Corporations 306,049 322,520 303,304
Obligations of States and Political Subdivisions 7,314 20,345 9,008
Mortgage and Asset-Backed Securities 132,811 144,656 138,498
Other Securities 118,020 102,302 102,591
----------------------------------
Total Investment Securities 564,194 589,823 553,401
(Market Value $565,279 in 1996)
Securities Available for Sale 238,634 261,179 273,391
Net Loans and Lease Financing 1,437,646 1,319,876 1,326,840
Less Reserve for Possible Loan Losses (20,887) (20,206) (21,529)
----------------------------------
Net loans and Lease Financing Less Reserves 1,416,759 1,299,670 1,305,311
Loans Held For Sale 28,560 26,919 33,099
Premises and Equipment 69,719 61,510 62,217
Other Assets 85,342 69,297 72,902
----------------------------------
Total Assets $2,544,637 $2,534,723 $2,450,921
==================================
LIABILITIES AND SHAREHOLDERS EQUITY:
Demand Deposits $ 527,552 $ 596,339 $ 539,714
Interest-Bearing Deposits:
NOW 149,913 141,406 148,896
Savings 289,029 287,089 303,432
Money Market Savings 286,084 283,684 291,325
Time 528,170 456,443 457,114
----------------------------------
Total Interest-Bearing Deposits 1,253,196 1,168,622 1,200,767
----------------------------------
Total Deposits 1,780,748 1,764,961 1,740,481
Federal Funds Purchased 30,615 74,380 42,812
Securities Sold Under Agreement to Repurchase 334,396 333,295 283,047
Other Purchased Funds 1,094 1,114 1,681
Other Liabilities 35,754 27,044 32,580
----------------------------------
Total Liabilities 2,182,607 2,200,794 2,100,601
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 217,803 188,139 203,702
Net Unrealized Holding Losses on
Available-For-Sale Securities 1,653 3,216 4,044
Less Treasury Stock at Cost 31,200 Shares
on June 30, 1996 and June 30, 1995 (426) (426) (426)
----------------------------------
Total Shareholders Equity 362,030 333,929 350,320
----------------------------------
Total Liabilities and Shareholders Equity $2,544,637 $2,534,723 $2,450,921
==================================
Per Share Statistics
Net Book Value $45.43 $41.90 $43.96
==================================
(See note to consolidated statements.)
</TABLE>
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<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<CAPTION>
(In Thousands) Six Months Ended June 30 1996 1995
OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 22,070 $ 18,545
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Provision for Loan Losses 1,500 (2,700)
Deferred Taxes 235 (531)
Depreciation and Amortization 3,751 3,338
Net Amortization on Securities (1,308) 553
Investment Security Transactions -- 3,947
Gain on Loan Sales (969) (113)
Gain on Disposal of Premises and Equipment (9) (13)
Gain on Disposal of Other Assets 149 (27)
Net Decrease (Increase) in Loans Held for Sale 5,509 (7,134)
Decrease in Interest Receivable, Prepaid Expense,
and Other Assets (2,989) (2,659)
Increase (Decrease) in Interest Payable, Accrued
Expenses and Other Liabilities (1,744) 1,927
--------------------
Net cash Provided by Operating Activities 26,195 15,133
INVESTING ACTIVITIES:
Net Decrease (Increase) in Federal Funds Sold and Interest
Bearing Deposits with Other Banks 1,157 (20,438)
Proceeds from Maturities of Securities Held to Maturity 68,822 39,407
Proceeds from Maturities of Securities Available for Sale 35,000 --
Proceeds from Sales of Securities Available for Sale -- 183,626
Purchases of Securities Held to Maturity (78,656) (50,830)
Purchase of Securities Available for Sale (3,911) (160,146)
Net Increase in Lending Activities (114,583) (93,127)
Proceeds from Sale of Premises and Equipment 13 22
Proceeds from Sale of Other Assets 830 2,189
Purchases of Premises, Equipment, and Other Assets (15,419) (13,786)
Acquisition of Banks -- (100)
---------------------
Net Cash Used in Investing Activities (106,747) (113,183)
FINANCING ACTIVITIES:
Net Increase in Total Deposit 41,942 17,440
Net Increase in Short-Term Borrowings 38,565 147,103
Cash Dividends (7,969) (5,180)
--------------------
Net Cash Provided by Financing Activities 72,538 159,363
--------------------
Increase (Decrease) in Cash and Cash Equivalents (8,014) 61,313
Cash and Cash Equivalents at Beginning of Year 149,307 134,379
--------------------
Cash and Cash Equivalents at End of June $141,293 $195,692
====================
</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 six-month period ended June 30, 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.
<PAGE> 7
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations
National Bancorp of Alaska (the Corporation) recorded earnings of $11.4 million
in the second quarter of 1996 compared to $9.9 million for the second quarter
of 1995. Earnings per share were $1.44 as of June 30, 1996 up 16% from the
$1.24 earned through June 30, 1995.
Return on average assets using annualized income from operations plus year-to-
date net security gains and nonrecurring loan loss recoveries was 1.79% for the
six-month period ended June 30, 1996, compared to 1.57% for the three-month
period ended June 30, 1995. The annualized return on average stockholders'
equity was 12.52% for the first six months of 1996.
Net interest income increased $2,118,000 after the provision for loan loss
recoveries during the first six months of 1996 compared to the same period
during the previous year. Interest on earning assets increased $1.7 million
from the second quarter of 1995 to the second quarter of 1996, while interest
expense decreased $1.3 million.
The provision for loan loss was $1,500,000 through June 30, 1996, compared to a
provision for loan loss recoveries of $2,700,000 at June 30, 1995. The reserve
for loan loss was 1.45% of outstanding loans at June 30, 1996 and 1.53% at June
30, 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 1.24% at June 30, 1996 from 0.83 at June 30, 1995,
and increased from 0.83% at December 31, 1995.
Non-interest income increased $4,466,000 for the first six months of 1996 over
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 $244,000 over the first six months of 1995.
Increases of $1,303,000 in personnel and benefits expenses offset a reduction
in other expense of $1,257,000.
<PAGE> 8
Material Changes in Financial Condition
Total assets at June 30, 1996, were $2,544,637,000 an increase of 0.4% or
$9,914,000 from the same period one year earlier, and an increase of
$93,716,000 or 3.8% from December 31, 1995. Investment securities have
decreased by $25 million over the second quarter of 1995. Loans, leases and
loans held for sale have increased $119 million over the same period in 1995.
Total deposits have increased by $15,787,000 from June 30, 1995, and increased
by $40,267,000 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 $12 million from December 31, 1995, to $362
million at June 30, 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:
June 30 December 31
Minimum 1996 1995 1995
Tier 1 Risk Based Capital Ratio 4% 18.22% 17.64% 18.40%
Total Risk Based Capital Ratio 8 19.28 18.73 19.55
Leverage Ratio 4 14.29 13.55 13.90
<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 12, 1996 /s/Edward B. Rasmuson
Date Edward B. Rasmuson, Chairman
of the Board
August 12, 1996 /s/Richard Strutz
Date Richard Strutz, President
August 12, 1996 /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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 141,293
<INT-BEARING-DEPOSITS> 136
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 238,634
<INVESTMENTS-CARRYING> 564,194
<INVESTMENTS-MARKET> 565,279
<LOANS> 1,437,646
<ALLOWANCE> 20,887
<TOTAL-ASSETS> 2,544,637
<DEPOSITS> 1,780,748
<SHORT-TERM> 366,105
<LIABILITIES-OTHER> 35,754
<LONG-TERM> 0
<COMMON> 362,030
0
0
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 2,544,637
<INTEREST-LOAN> 69,489
<INTEREST-INVEST> 26,872
<INTEREST-OTHER> 57
<INTEREST-TOTAL> 96,418
<INTEREST-DEPOSIT> 23,952
<INTEREST-EXPENSE> 32,607
<INTEREST-INCOME-NET> 63,811
<LOAN-LOSSES> 1,500
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 46,629
<INCOME-PRETAX> 34,284
<INCOME-PRE-EXTRAORDINARY> 22,070
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,070
<EPS-PRIMARY> 2.77
<EPS-DILUTED> 2.77
<YIELD-ACTUAL> 0
<LOANS-NON> 7,433
<LOANS-PAST> 7,821
<LOANS-TROUBLED> 330
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 21,529
<CHARGE-OFFS> 3,458
<RECOVERIES> 1,316
<ALLOWANCE-CLOSE> 20,887
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
