3Q assets up, mixed loan results
Alaska’s banks saw a mixed third quarter, with many institutions feeling the impacts of a recovering market that is still picking up speed.
Loan performance is more steady now than it was a year ago, which means some institutions aren’t seeing the significant boosts that resulted when loans returned to accrual status or otherwise improved, according to Northrim Bank and First National Bank Alaska, two major Alaska banks.
But many are seeing increased loan activity in general.
Northrim also saw an increase in commercial loans.
“With both residential and commercial building returning to a more healthy level, we are seeing improved demand for construction loans,” said CEO Joe Beedle in a statement about the bank’s performance.
First Bank, in Ketchikan, is seeing a boost from a slight increase in loans and leases.
First Bank reported $51,000 in recoveries through Sept. 30, up just slightly from the end of June, and up from $31,000 in the prior year.
First Bank also had an increase in loans and leases of just less than $4 million compared to the third quarter of 2012, and a commensurate uptick in the allowance for loan and loss leases, at $3.3 million for the third quarter, compared to $3.2 million for the same period in 2012.
The loan growth was driven by certain nonresidential construction loans, as well as multi-family residential properties, agricultural production, and commercial and industrial loans. Construction loans for multi-family residential properties were actually down $1.2 million from the prior quarter, but up $414,000 compared to the same quarter of the prior year.
Juneau-based Alaska Pacific’s total loans and leases were down slightly sequentially, at $150.3 million for the third quarter compared to $151.3 million in the second. Small business loans were up about 2 percent compared to the prior quarter, at a total $16.2 million.
Northrim and Alaska Pacific recently announced a merger, under which Northrim will purchase Alaska Pacific for $14.3 million in cash and stock, and Northrim executives pointed to Alaska’s diverse base, and the industries it serves, as a highlight for business going forward.
Mt. McKinley Bank, based in Fairbanks, saw a slight increase in total loans and leases for the third quarter of 2013 compared to 2012.
Although Mt. McKinley saw an overall decrease in the number of loans to small businesses, there was a 20 percent increase of small commercial and industrial loans with an original amount of between $100,000 and $250,000.
Also in the Interior, Denali State Bank had fewer lower loans to small businesses in most categories and sizes, although there was an increase in loans less than $250,000 secured by nonfarm and nonresidential properties.
Total, loans at Denali were at $147 million at the end of the third quarter, compared to $163.4 million for the same period in 2012.
The value of construction and land development loans also dropped at Denali compared to the prior year, by about 50 percent.
Assets, however, are generally up.
At Northrim, assets totaled $1.18 billion at the end of the third quarter, compared to $1.16 billion for the second quarter and $1.13 billion a year ago.
Beedle noted that asset quality is also up at Northrim, with a drop in the ratio of nonperforming assets to total assets compared to the prior quarter and prior year.
Northrim’s loans for impairment were also down, at $11 million for the third quarter of 2013, compared to $11.2 million for the second quarter and $13.1 million for the third quarter of 2012.
Mt. McKinley has increased its assets as well, posting $340 million in assets and $269.8 million in deposits through the third quarter of 2013, compared to $333.6 millon in assets and $261.9 in deposits for the same period in 2012.
Denali has seen a similar trend, with about a $5 million increase in assets driven by a similar growth in deposits year-over-year.
Through Sept. 30, First Bank held $513.2 million in total assets, up from $447.6 in the prior quarter, and $468.8 at the end of the same period in 2012.
Assets at First National Bank Alaska, or FNBA, also grew, largely driven by an increase in deposits, according to the bank. FNBA had $3.13 billion in assets at the end of the third quarter.
The average yield on earning assets decreased slightly compared to the third quarter of 2012. That figure was 3.40 percent for the quarter that ended Sept. 30, down from 3.55 percent in 2012.
That contributed to a decrease in net income for the year at FNBA. The bank was at $24.5 million for the third quarter, compared to $24.5 million at the end of the second quarter.
FNBA’s quarterly net income is also down, at $8.3 million for the period ending Sept. 30, versus $11.1 million for the same time in 2012.
Alaska Pacific had $161 million in deposits at the end of the third quarter, up from $155 million at the end of the second quarter, according to call sheets filed with the FDIC. Total securities were down slightly for the third quarter compared to the second, driven by a slight decrease in government-backed securities.
At Denali, there have been fewer charge-offs for commercial and industrial loans this year than last. Charge-offs continue to outnumber the recoveries there, although the ratio shifted towards more recoveries this year. In 2012, the bank had 705 charge-offs and 113 recoveries by the end of the third quarter; this year, there have been 203 charge-offs and 107 recoveries.
Issues with the health insurance exchange run by the federal government are also impacting Northrim. An affiliate of the bank launched a program to help consumers navigate the exchange and enroll in the new health care plans, but the site largely hasn’t worked for Alaskans, and the company announced that it would no longer access plans through the site.
Molly Dischner can be reached at email@example.com.