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Alaska Pacific Bancshares turned a small profit in the quarter ended Sept. 30, but remains down somewhat for the year as it continues to struggle with problem loans.
Alaska Pacific Bancshares is the parent of Alaska Pacific Bank, the Juneau-headquartered bank with branches throughout Southeast Alaska. It is the only publicly traded business based in Juneau
The earnings report comes following some difficult years for Alaska Pacific following an attempt to begin investing in larger projects in the Lower 48. Many of those projects failed during the recent years' real estate decline.
The bank's chief regulator, the Office of Thrift Supervision, determined the bank's management had operated with "unsafe and unsound banking practices," and issued a cease and desist order imposing conditions on how Alaska Pacific conducts business.
Bank President and CEO Craig Dahl didn't challenge the order, and has said Alaska Pacific has already begun to implement the required changes.
Attempts to contact Dahl on Wednesday were not successful.
The latest financial reports filed with the Securities and Exchange Commission show the bank made a profit of $266,000 in the last quarter, compared to a $1.5 million loss the same quarter last year. For the year so far, however, Alaska Pacific has a loss of $85,000. Still, that remains better than the loss of $1.3 million for the same period in 2009.
Alaska Pacific Bank was the only Alaska bank needing federal help under the Troubled Asset Relief Program, known as TARP.
Under TARP's Capital Purchase Program, the federal government shored up the bank with an investment of $4.8 million, money the bank used to bolster its financial strength to meet minimums imposed by the OTS.
However, the OTS order forced the bank to suspend required dividend payments to the CPP program. That debt continues to accrue and will have to be paid in the future.
As Alaska Pacific announced its results for the quarter and the quarterly profit, it also revealed in a filing with the SEC that its "impaired loans," those for which there is some doubt about repayment, have increased over the last year.
Impaired loans were at $5.3 million at the end of 2009, the bank said. At the end of October they stood at $11.8 million. And while the bank's problem loans had first became an issue with investments in Lower 48 deals in which it participated with other small banks to join together to finance large projects, the new filing shows that $7.1 million of the impaired loans are located in Alaska, including the largest newly impaired loan, a $2.4 commercial real estate loan.
The bank also reports some bright spots, including a rebound in its mortgage banking business and the profitability of its basic loan portfolio. The bank also showed small declines in assets, loans and interest revenue, which it attributed to the steps it has taken to improves its operations.
Contact reporter Pat Forgey at 523-2250 or email@example.com.