Rebounding after a couple of difficult years, Alaska Pacific Bank has turned things around in 2010 and had a profit for the year.
“We’re pretty much back to business as usual,” said Craig Dahl, President and CEO of Alaska Pacific Bank.
Alaska Pacific Bank, a subsidiary of Alaska Pacific Bancshares, made a profit of $536,000 in 2010, following a loss of $2.5 million in 2009.
The bank got into trouble several years ago when it began expanding its loan portfolio into the Lower 48. It joined with other small banks in “loan participations” funding loans larger than any of those individual banks could have handled on their own.
When the recent recession hit, it hit hardest in the real estate sector and many of those developments failed.
“Almost all of the problems were directly related to the handful of large loans and they’ve been resolved one by one,” Dahl said.
That was a long and difficult process for the bank, which included getting hit with a “cease and desist” order by its chief regulator, the Office of Thrift Supervision, requiring it to improve its practices.
Dahl said the relatively strong economy in Southeast, the home territory for Alaska Pacific, helped the bank rebound while others faltered.
“It’s been good that the Alaska economy, at least in Southeast, has been relatively stable,” Dahl said.
“Although we’re concerned about the tourism industry we’re feeling confident that that’ll see a leveling too,” he said.
While the bank increased profitability in 2010, one downside to the years numbers released this week was a decrease in loans and interest income.
That’s due to a combination of ending the problem loans and other loans being paid off at a time when the tentative economy meant few new loans were being sought.
Dahl said he hopes that will turn around, as the economy continues to strengthen.
“There’s no lack of funds to be loaned out,” Dahl said.
We’re anxious to be lending to the small business community,” he said.
Alaska Pacific Bancshares is the only publicly traded company located in Juneau. It has offices in Juneau and around Southeast.
The bank’s shares closed Wednesday on the NASDAQ at $7.80, near its 52-week high.
• Contact reporter Pat Forgey at 586-4816 or Patrick.email@example.com.