Alaska Pacific Bank has ended its second year in a row with a loss.
Bad loans resulted in a loss of $2.2 million last year, according to its 2009 annual report, filed with the Securities and Exchange Commission. Its 2008 loss was $2.3 million.
Shares of the Juneau-based bank closed Tuesday at $6.00 a share, up from a low of under $3 a share about a year ago, but down markedly from its high of more than $22.
"There is no doubt we're very disappointed with the results for 2009," said bank President and CEO Craig Dahl, in a statement issued with the results.
The bank, a subsidiary of the publicly traded Alaska Pacific Bancshares, had not previously had a loss in Dahl's 18 years with the company.
Bank officials say the losses stem from an ongoing problem with several troubled loans, especially with some "participation" loans in which Alaska Pacific joined with other small banks to fund larger development projects in the Pacific Northwest and elsewhere.
The bank continues to struggle with the same small group of loans, Dahl said.
The bank's core Southeast markets, where it makes residential and commercial business loans, remains much less affected by the national recession than elsewhere, Dahl said.
"We continue to have exceptionally low delinquency in the remainder of the portfolio and continue to have acceptable performance in the core business of the Bank, but we have to get past these loans and the related expenses," he said.
During the fourth quarter of 2009, the bank lost $1.1 million, slightly worse than its $1.0 million loss in the fourth quarter of 2008.
Alaska Pacific's troubles have earned it the attention of federal regulators, which have imposed new conditions on it to ensure the safety of its Federal Deposit Insurance Corporation-protected deposits.
The U.S. Department of the Treasury's Capital Purchase Program was used to buy a $4.8 million share of the bank, providing it with additional resources.
Alaska Pacific's balance sheet showed evidence of its attempts to deal with the recent years' problems. Over the last year, average loans declined by $11 million, to $158 million, in 2009.
During the year, interest income declined to $10 million, from $12 million in 2008.
Net charge-offs for 2009 were $3.8 million, compared to $4.1 million in 2008.
Contact reporter Pat Forgey at 586-4816 or by e-mail at email@example.com.
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