Alaska Pacific Bank has reported a profit for the first quarter of 2009, after a series of losses in 2008.
The bank's stock closed Friday at $4.15 a share, up $0.15. It peaked at more than $26 a share last year.
The subsidiary of Juneau-based Alaska Pacific Bancshares, Inc. reported a profit of $163,000 for the quarter ended March 31, compared to a loss of $1.04 million the previous quarter and a profit of $154,000 in the same quarter last year.
"We were pleased to post a profit for the first quarter, said Craig Dahl, the bank's president and chief executive officer.
"The core business of the bank, just as it has been, remains sound," he said.
The bank has been the most troubled in Alaska recently, and has come under scrutiny of bank regulators.
It posted a loss last year for the first time since it went public in 1999, and was a recipient of the federal bank bailout effort, the only bank in Alaska needing one.
The Troubled Asset Relief Program provided Alaska Pacific with $4.8 million in a deal finalized in the first quarter of 2009.
The bank's results were a combination of positive and negative indicators.
While it returned to profitability and made more on its loans during the quarter, the total amount of money loaned out declined. That will likely hamper future earnings.
Dahl said the decline has been mostly in business loans. The bank still has plenty of money available to lend but demand is low.
"All banks are being careful with their underwriting, but we have not stopped lending in any of our portfolio types," he said. "We expect borrowers to have a good business plan."
The decrease comes from fewer businesses seeking loans because of the current economy. "It's just the nature of the market," Dahl said.
At the same time, Alaska Pacific's mortgage banking income has shot up, from $40,000 during the last quarter of 2008 to $230,000 the first quarter of 2009.
Dahl said people who had been holding off refinancing or moving to a new house began doing so when mortgage loan rates fell below 5 percent.
"I think everyone has been waiting a bit to see what was going to happen with the rates and the economy," he said. "We're pleased that the purchase activity is going up."
At the same time, Alaska Pacific is benefiting from aggressively moving to write off bad loans.
"We did charge off some fairly large amounts in the last year to get them off our books," he said. "The portfolio now is holding its own."
Dahl said the Southeast Alaska economy remains stable, but it was a series of troubled real estate loans elsewhere that got the bank in trouble. In what are known as "participation loans," Alaska Pacific joined with a number of other small banks to finance some large development projects in Oregon, Washington, Idaho, Utah and California.
Some of those developments are now in trouble, while a few have been written off entirely.
Alaska Pacific had $168 million in outstanding loans at the end of the quarter. About $13 million of that is considered "impaired" by bank regulators. The bank is still performing as expected, Dahl said, despite being watched closely.
As part of an agreement with the bank's regulator, the Office of Thrift Supervision, Alaska Pacific brought in a consultant to review all of its impaired loans.
Contact reporter Pat Forgey at 523-2250 or email@example.com.