Juneau's troubled Alaska Pacific Bank has squeaked out a slim profit in the quarter that ended June 30, despite falling loan revenue and some other difficulties.
The bank, a subsidiary of the locally based Alaska Pacific Bancshares, turned a profit of $66,000 in the quarter, compared to a $716,000 loss in the same quarter last year.
In a press release, bank CEO Craig Dahl described the profits as "not at the level we'd like them to be," but said he was still pleased with the results.
Alaska Pacific has been battered more than most financial institutions in the state by the national recession, largely because of several failed investments outside the state.
Its stock was at $4.02 a share Tuesday, down from $26.40 earlier in the year. Much of that came from investments in what were known as "participation loans," with which Alaska Pacific joined with other small banks and invested in projects larger than any one could bankroll by themselves.
Investments in Oregon, Washington and Utah, though, faltered and left Alaska Pacific and other investors with big losses.
Under the Troubled Asset Relief Program, the federal government purchased a $4.8 million interest in Alaska Pacific Bank earlier this year, the only institution in the state needing such help.
Dahl said at the time said the federal investment in the bank would strengthen its finances and boost its ability to lend, but wasn't necessary to ensure its survival.
In the last quarter, total non-accrual loans - loans for which payments were not being made in a timely manner - were $7.2 million, compared to $5.8 million on March 31, 2009 and $5.6 million on June 30, 2008.
Impaired loans - loans for which there was doubt about repayment - totaled $15.5 million at the end of June, compared to $13.8 million at the end of March and $6.2 million at the end of June last year.
Dahl said problem loans will hurt profits in future years.
"The core business of the bank remains sound and continues to perform as expected, but there will continue to be downward pressure on earnings as we work through these loans," he said.
Total loans at the bank were $167.7 at the end of the quarter, down $8.1 million from the same quarter last year.
Contact reporter Pat Forgey at 523-2250 or firstname.lastname@example.org.