First National Bank Alaska Announced Unaudited Results for Fourth Quarter and Year-to-Date 2020

First National Bank Alaska’s (OTCQX:FBAK) unaudited net income for fourth quarter 2020 was $13.3 million, or $4.19 per share. This compares to a net income of $14.2 million, or $4.49 per share, for the same period in 2019. Unaudited year-to-date net income was $57.5 million, or $18.17 per share, compared to net income of $55.6 million, or $17.56 per share for the same period in 2019.

Total interest and loan fee income for fourth quarter 2020 was $36.2 million, a decrease of 6.2% from fourth quarter 2019 on lower annual yields on earning assets. The blended yield on interest-earning assets decreased to 3.54% from 4.15% for the 12-month periods ending December 31, 2020 and 2019, respectively. Lower yields on earning assets resulted from variable loan repricing, the addition of Small Business Administration Paycheck Protection Program (SBA PPP) loans, and significant cash and short-term investments. With decreasing cost of funds, the net interest margin year-to-date moved to 3.45% compared to 3.74% in 2019.

Noninterest income for fourth quarter 2020, excluding realized net investment gains, increased 17.7% from fourth quarter 2019 due to improved mortgage loan origination income, as record-low mortgage interest rates drove elevated home purchase and refinance activity. Noninterest expenses for fourth quarter 2020 increased 8.6% as compared to fourth quarter 2019. The efficiency ratio remained nearly unchanged at 53.28% compared to 53.26% in 2019.

Total assets increased $887.1 million during 2020 to reach $4.70 billion on December 31, 2020. Total loans increased $199.7 million to reach $2.21 billion by year-end. Return on assets for the 12 months ended December 31, 2020 decreased from 1.47% in 2019 to 1.33% due to strong growth in total assets.

“The bank’s strong performance during a challenging year is a tribute to every single member of the First National team,” said Betsy Lawer, First National Board Chair and CEO. “From leadership that was able to pivot quickly with strategies to meet rapidly changing economic and social conditions to the amazing efforts of employees who moved mountains to implement tactics to support those strategies, First National was able to provide financial services when Alaskans needed them most. All while protecting the health and safety of our customers and employees. As we enter our 100^th year of operations in 2021, I’m proud of our team and what the bank accomplished in 2020.”

Return on equity in 2020 decreased to 9.97% from 10.48% in 2019 on the increase in total shareholders’ equity to $586.6 million; a $38.9 million increase. Book value per share as of December 31, 2020 was $185.23, compared to $172.91 as of December 31, 2019. The bank’s December 31, 2020 Tier 1 leverage capital ratio of 11.52% remains above well-capitalized standards.

As it has for nearly 100 years, First National demonstrated support for Alaskans during the COVID-19 pandemic by the bank’s continued participation in the Small Business Administration Paycheck Protection Program. During 2020, the bank originated 2,464 SBA PPP loans, totaling $344.7 million. As of December 31, 2020, 774 SBA PPP borrowers filed for $146.2 million in forgiveness from the SBA, of which 424 borrowers received forgiveness payments totaling $67.2 million.

Deposits and repurchase agreements increased $835.7 million year-to-date to $4.08 billion. This increase was attributed to additional PPP and CARES Act stimulus to governmental entities and Native tribes, increased savings rates of businesses and individuals and continued growth from organic business development efforts.

First National proactively met the financial challenges of Alaskans during the pandemic through modifications of existing loan terms. Loan modifications as of December 31, 2020 totaled $319.3 million, or 16.46% of total loans, excluding SBA PPP loans. Modification to interest-only payments accounted for more than 89% of the modifications, with interest-only periods ranging from three to fourteen months. Modifications remain concentrated in commercial real estate loans to customers in the rental and leasing and hotel and food service industries.

At December 31, 2020 delinquent loans from 30 to 89 days were $2.7 million, 0.14% of outstanding loans excluding SBA PPP loans, a decrease of $1.2 million from September 30, 2020. Nonperforming loans were $13.6 million, 0.70% of outstanding loans excluding SBA PPP loans, an increase of $0.6 million from September 30, 2020. The allowance for loan losses at December 31, 2020 was $21.6 million, 0.97% of total loans (1.11% of loans excluding SBA PPP).

First National Bank Alaska files a quarterly financial report with the Federal Financial Institution Examination Council. Our latest Consolidated Report of Condition and Income (Call Report) is filed by the 30^th of the month following quarter-end and is subsequently posted at www.FNBAlaska.com > Financial Reports and at www.OTCMarkets.com.

Alaskan-owned and -operated since 1922, First National proudly meets the financial needs of Alaskans with ATMs and branches in 18 communities throughout the state, and by providing banking services to meet their needs across the nation and around the world. In 2020, Alaska Business readers voted the bank the “Best of Alaska Business” in the Best Place to Work category for the fifth year in a row. American Banker recognized First National as a “Best Bank to Work For” for the third year in a row in 2020, and Anchorage Daily News readers voted the bank one of the state’s top two financial institutions in the ADN “Best of Alaska” Awards in 2020. First National has also been recognized as the most admired company in the state by MSN.com and received the Rita Sholton Large Business of the Year Award from the Alaska Chamber.

Visit FNBAlaska.com for more information about Alaska’s largest locally owned bank and access to efficient and secure online banking services. First National Bank Alaska is a Member FDIC and Equal Housing Lender.

Financial Overview (Unaudited)	Quarter Ended ($ in thousands)
	12/31/2020		9/30/2020		6/30/2020		3/31/2020		12/31/2019
Balance Sheet
Total Assets	$ 4,695,315		$ 4,718,640		$ 4,594,205		$ 3,859,319		$ 3,808,254
Total Securities	$ 1,870,814		$ 1,735,916		$ 1,767,024		$ 1,501,474		$ 1,588,721
Total Loans	$ 2,211,288		$ 2,290,158		$ 2,309,166		$ 2,003,829		$ 2,011,611
Total Deposits	$ 3,113,169		$ 3,045,898		$ 2,912,046		$ 2,430,983		$ 2,387,785
Repurchase Agreements	$ 969,766		$ 1,022,024		$ 1,024,610		$ 822,835		$ 859,425
Total Deposits and Repurchase Agreements	$ 4,082,935		$ 4,067,922		$ 3,936,656		$ 3,253,818		$ 3,247,210
Total Shareholders' Equity	$ 586,589		$ 585,429		$ 589,966		$ 575,774		$ 547,682
Income Statement
Net Interest and Loan Fee Income	$ 35,721		$ 36,615		$ 37,910		$ 34,520		$ 35,579
Provision for Loan losses	$ 32		$ 250		$ 1,949		$ (36	)	$ (3	)
Total Noninterest Income	$ 7,102		$ 6,677		$ 6,459		$ 5,757		$ 5,917
Total Noninterest Expense	$ 24,823		$ 22,196		$ 22,951		$ 21,454		$ 22,863
Provision for Income Taxes	$ 4,704		$ 5,293		$ 4,899		$ 4,711		$ 4,406
Net Income	$ 13,264		$ 15,553		$ 14,570		$ 14,148		$ 14,230
Earnings per common share	$ 4.19		$ 4.91		$ 4.60		$ 4.47		$ 4.49
Dividend per common share	$ 3.20		$ 6.40		$ 3.20		$ 3.20		$ 3.20
Financial Measures
Return on Assets	1.33	%	1.40	%	1.43	%	1.49	%	1.47	%
Return on Equity	9.97	%	10.27	%	10.06	%	10.07	%	10.48	%
Net Interest Margin	3.45	%	3.56	%	3.72	%	3.76	%	3.74	%
Efficiency Ratio	53.28	%	51.74	%	52.24	%	52.98	%	53.26	%
Capital
Shareholders' Equity/Total Assets	12.49	%	12.41	%	12.84	%	14.92	%	14.38	%
Tier 1 Leverage Ratio	11.52	%	11.63	%	12.72	%	14.14	%	13.76	%
Regulatory Well Capitalized Minimum Ratio - Tier 1 Leverage Ratio	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Tier 1 (Core) Capital	$ 538,520		$ 535,390		$ 540,105		$ 535,669		$ 531,807
Credit Quality
Noncurrent Loans and OREO	$ 14,094		$ 13,803		$ 13,511		$ 11,653		$ 8,235
Noncurrent Loans and OREO/Total Assets	0.30	%	0.29	%	0.29	%	0.30	%	0.22	%
Noncurrent Loans and OREO/Tier 1 Capital	2.62	%	2.58	%	2.50	%	2.18	%	1.55	%
Allowance for Loan Losses	$ 21,550		$ 21,550		$ 21,550		$ 19,500		$ 19,500
Allowance for Loan Losses/Total Loans	0.97	%	0.94	%	0.93	%	0.97	%	0.97	%
Net interest margin and efficiency ratios are tax effected.
Financial measures are year-to-date.
Per common share amounts are not in thousands.

 

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