First National Bank Alaska announces unaudited results for second quarter 2024

Rhea-AI Summary

First National Bank Alaska (OTCQX:FBAK) reported strong Q2 2024 results, with net income of $15.6 million ($4.94 per share), up from $14.5 million in Q2 2023. The bank saw improved interest margins, strong loan growth, and enhanced earning asset mix. Total loans increased by $97.0 million year-over-year, while nonperforming loans decreased slightly. The bank's net interest margin rose to 2.98% from 2.77% in Q2 2023. Noninterest income grew by 11.2%, and the efficiency ratio remained strong at 54.94%. Despite a decrease in total assets due to BTFP repayments, the bank's Tier 1 leverage capital ratio stood at 11.12%, well above regulatory requirements. Book value per share increased to $153.20 from $133.97 year-over-year.

Positive

• Net income increased to $15.6 million ($4.94 per share) in Q2 2024, up from $14.5 million in Q2 2023
• Total loans grew by $97.0 million compared to June 30, 2023
• Net interest margin improved to 2.98% from 2.77% year-over-year
• Noninterest income increased by 11.2% compared to Q2 2023
• Book value per share rose to $153.20 from $133.97 year-over-year
• Tier 1 leverage capital ratio of 11.12% remains well above regulatory requirements

Negative

• Total assets decreased by $389.9 million since June 30, 2023, primarily due to BTFP repayments
• Deposits and repurchase agreements decreased by $203.4 million since June 30, 2023
• Interest expense increased due to rising cost of interest-bearing deposits
• Noninterest expenses increased by 4.9% compared to the same period last year
• Return on equity decreased to 12.30% from 13.29% year-over-year

ANCHORAGE, Alaska, Aug. 06, 2024 (GLOBE NEWSWIRE) -- First National Bank Alaska’s (OTCQX:FBAK) net income for the second quarter of 2024 was $15.6 million, or $4.94 per share. This compares to a net income of $14.5 million, or $4.57 per share, for the same period in 2023.

“I am pleased to report quarterly performance demonstrating improved net income, expanding interest margins, and strong loan growth with enhanced earning asset mix,” said First National Board Chair and CEO/President Betsy Lawer. “On top of these strong community bank performance fundamentals, loan quality remains high, noninterest income is growing and operating expenses are well-managed. First National’s balance sheet reflects a state economy putting resources back to work and forging a path to the future. The bank’s continued success is a direct result of the efforts taken every day by more than 600 bank employees across Alaska. These employees are committed to the success of their fellow Alaskans.”

Total loans increased $97.0 million compared to June 30, 2023. On June 30, 2024, delinquent loans from 30 to 89 days were $3.5 million, 0.15% of outstanding loans compared to $3.9 million and 0.17% on lower loan balances as of June 30, 2023. Nonperforming loans were $4.7 million, 0.20% of outstanding loans, a decrease of $0.1 million from June 30, 2023. The year-to-date provision for credit losses totaled $1.3 million as of June 30, 2024, compared to a $0.2 million benefit as of June 30, 2023, due to loan growth. The allowance for credit losses on June 30, 2024, was $19.0 million, 0.79% of total loans.

Total interest and loan fee income quarter-to-date was $56.8 million, a 9.3% increase from $51.9 million as of June 30, 2023. The blended yield on interest-earning assets increased to 4.40% compared to 3.66% as of June 30, 2023. Interest and fees on loans increased $4.5 million and interest and dividends on investment securities increased $2.7 million for the quarter, driven by the higher interest rate environment. Interest on cash decreased $2.3 million since June 30, 2023, resulting from lower cash balances from the repayment of BTFP borrowings.

Assets totaled $5.1 billion as of June 30, 2024, decreasing $389.9 million since June 30, 2023. The decrease in assets was primarily due to the scheduled repayments of $530.0 million on the Federal Reserve Bank Term Funding Program (BTFP) offset by loan growth. One remaining repayment under BTFP is scheduled for December 2024. Return on assets as of June 30, 2024, was 1.08%, seven basis points higher compared to the same period last year.

Deposits and repurchase agreements totaled $4.3 billion as of June 30, 2024, decreasing $203.4 million since June 30, 2023 as our customers continue to deploy pandemic funds into the economy. Following this anticipated seasonal outflow, 50% of the 2021-2022 pandemic period deposit growth remains in the bank.

Interest expense increased $1.6 million compared to June 30, 2023, due to the rising cost of interest-bearing deposits. Interest expense as a percentage of average assets increased to 1.42% as of June 30, 2024, from 0.89% as of June 30, 2023.

Net interest margin on June 30, 2024 was 2.98% compared to 2.77% on June 30, 2023.

Noninterest income for the second quarter of 2024 was $7.4 million, an increase of 11.2% compared to June 30, 2023. This increase in noninterest income resulted from diversified income streams, including, income from fiduciary activities, mortgage loan servicing, and gains on the sale of securities. Noninterest expenses for the second quarter of 2024 increased 4.9% compared to the same period last year, primarily due to an increase in salaries and benefits driven by the tight labor market and the rising cost of healthcare The efficiency ratio for June 30, 2024 was 54.94% and remains better than First National’s Alaska and national peer groups.

Shareholders’ equity was $485.2 million as of June 30, 2024, compared to $424.3 million as of June 30, 2023. This $60.9 million increase resulted from a decrease in the net unrealized loss position of the securities portfolio and net income retained in excess of dividends. Return on equity as of June 30, 2024 was 12.30% compared to 13.29% for the same period last year, calculated on average equity for the first half of each year. Book value per share as of June 30, 2024, was $153.20, compared to $133.97 as of June 30, 2023. The bank’s June 30, 2024, Tier 1 leverage capital ratio of 11.12% remains above well-capitalized standards.

ABOUT FIRST NATIONAL BANK ALASKA

First National Bank Alaska files a quarterly financial report with the Federal Financial Institution Examination Council. The bank’s latest Consolidated Report of Condition and Income (Call Report) is filed by the 30th of the month following quarter-end and is subsequently posted at FNBAlaska.com and at OTCMarkets.com.

Alaska’s community bank since 1922, First National proudly meets the financial needs of Alaskans with ATMs and 28 locations in 19 communities throughout the state, and by providing banking services to meet their needs across the nation and around the world.

In 2024, Alaska Business readers voted First National “Best of Alaska Business” in the Best Place to Work category for the ninth year in a row, Best Bank/Credit Union for the fourth time running, and Best Customer Service. In 2023, American Banker recognized First National as a “Best Bank to Work For” for the sixth consecutive year. The bank was also voted “Best of Alaska” in 2023 in the Anchorage Daily News awards for the fifth year in a row, earning the top spot, the Platinum Award in the Bank/Financial category.

First National Bank Alaska is a Member FDIC, Equal Housing Lender, and recognized as a Minority Depository Institution by the Office of the Comptroller of the Currency, as it is majority-owned by women.

CONTACT: Marketing, 907-777-3409

		Quarter Ended ($ in thousands)
	Financial Overview (Unaudited)
		6/30/2024			3/31/2024			12/31/2023			9/30/2023			6/30/2023
	Balance Sheet
	Total Assets	$	5,116,066		$	5,212,976		$	5,730,835		$	5,559,883		$	5,505,931
	Total Securities	$	2,197,788		$	2,404,078		$	2,384,951		$	2,331,129		$	2,413,791
	Total Loans	$	2,391,593		$	2,369,282		$	2,273,311		$	2,318,454		$	2,294,558
	Total Deposits	$	3,698,631		$	3,665,066		$	3,780,018		$	3,911,091		$	3,874,988
	Repurchase Agreements	$	615,096		$	571,463		$	629,280		$	626,082		$	642,114
	Total Deposits and Repurchase Agreements	$	4,313,727		$	4,236,529		$	4,409,298		$	4,537,173		$	4,517,102
	Total Borrowing under the Federal Reserve Bank Term Funding Program	$	249,868		$	430,000		$	780,000		$	530,000		$	530,000
	Unrealized gain (loss) on marketable securities, net of tax	$	(86,857	)	$	(95,809	)	$	(98,378	)	$	(143,514	)	$	(137,198	)
	Total Shareholders' Equity	$	485,167		$	470,702		$	464,791		$	423,343		$	424,274
	Income Statement
	Net Interest and Loan Fee Income	$	40,252		$	38,325		$	40,958		$	38,739		$	37,011
	Provision for Loan losses	$	318		$	953		$	(344	)	$	(387	)	$	(574	)
	Total Noninterest Income	$	7,389		$	6,540		$	6,522		$	6,774		$	6,646
	Total Noninterest Expense	$	25,637		$	25,085		$	24,651		$	24,465		$	24,435
	Provision for Income Taxes	$	6,039		$	5,351		$	6,593		$	5,916		$	5,339
	Net Income	$	15,647		$	13,476		$	16,580		$	15,519		$	14,457
	Earnings per common share	$	4.94		$	4.26		$	5.23		$	4.90		$	4.57
	Dividend per common share	$	3.20		$	3.20		$	6.40		$	3.20		$	3.20
	Financial Measures
	Return on Assets		1.08	%		0.95	%		1.07	%		1.04	%		1.01	%
	Return on Equity		12.30	%		11.52	%		13.97	%		13.76	%		13.29	%
	Net Interest Margin		2.98	%		2.76	%		2.82	%		2.78	%		2.77	%
	Yield on Loans		6.55	%		6.40	%		6.25	%		6.08	%		5.95	%
	Yield on Securities		2.33	%		2.36	%		1.66	%		1.65	%		1.67	%
	Cost of Interest Bearing Deposits		1.60	%		1.55	%		1.02	%		0.92	%		0.79	%
	Efficiency Ratio		54.94	%		56.00	%		54.28	%		55.16	%		55.45	%
	Capital
	Shareholders' Equity/Total Assets		9.48	%		9.03	%		8.11	%		7.61	%		7.71	%
	Tier 1 Leverage Ratio		11.12	%		9.96	%		9.85	%		9.98	%		10.01	%
	Regulatory Well Capitalized Minimum Ratio - Tier 1 Leverage Ratio		5.00	%		5.00	%		5.00	%		5.00	%		5.00	%
	Tier 1 (Core) Capital	$	572,024		$	566,511		$	563,169		$	566,857		$	561,472
	Credit Quality
	Noncurrent Loans and OREO	$	4,731		$	28,634		$	4,659		$	5,227		$	4,843
	Noncurrent Loans and OREO/Total Assets		0.09	%		0.55	%		0.08	%		0.09	%		0.09	%
	Noncurrent Loans and OREO/Tier 1 Capital		0.83	%		5.05	%		0.83	%		0.92	%		0.86	%
	Allowance for Loan Losses	$	19,000		$	18,800		$	17,750		$	18,475		$	18,850
	Allowance for Loan Losses/Total Loans		0.79	%		0.79	%		0.78	%		0.80	%		0.82	%
	Net interest margin, yields, and efficiency ratios are tax effected.
	Financial measures are year-to-date.
	Per common share amounts are not in thousands.

FAQ

What was First National Bank Alaska's (FBAK) net income for Q2 2024?

First National Bank Alaska's net income for Q2 2024 was $15.6 million, or $4.94 per share.

How did FBAK's loan portfolio change in Q2 2024 compared to the previous year?

FBAK's total loans increased by $97.0 million compared to June 30, 2023.

What was First National Bank Alaska's (FBAK) net interest margin in Q2 2024?

FBAK's net interest margin as of June 30, 2024, was 2.98%, compared to 2.77% on June 30, 2023.

How did FBAK's noninterest income perform in Q2 2024?

FBAK's noninterest income for Q2 2024 was $7.4 million, an increase of 11.2% compared to June 30, 2023.

What was First National Bank Alaska's (FBAK) book value per share as of June 30, 2024?

FBAK's book value per share as of June 30, 2024, was $153.20, compared to $133.97 as of June 30, 2023.