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First National Bank Alaska reported stable net income of $13.476 million for Q1 2024, with assets at $5.2 billion. The bank experienced a decrease in assets due to repayments on the Federal Reserve Bank Term Funding Program and deposit outflow. Despite an increase in total loans, nonperforming loans rose compared to the previous year. Interest and loan fee income increased by 26.6%, with a higher interest rate environment impacting interest expense. Shareholders’ equity increased to $470.7 million, and the bank maintained well-capitalized standards. Efficiency remained strong, while noninterest income increased, and noninterest expenses grew below inflation.
Positive
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Stable net income of $13.476 million for Q1 2024
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Total loans increased by $85.7 million compared to the previous year
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Interest and loan fee income saw a 26.6% increase, reaching $59.5 million
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Shareholders’ equity rose to $470.7 million
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Efficiency ratio of 56.00% remains better than peer groups
Negative
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Decrease in assets to $5.2 billion due to repayments on the Federal Reserve Bank Term Funding Program and deposit outflow
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Nonperforming loans increased by $23.8 million from the previous year
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Interest expense rose by $11.9 million due to higher interest rates
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Return on equity decreased to 11.52% from 12.87% compared to last year
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Efficiency ratio for Q1 2024 was 56.00%, slightly higher than previous periods
ANCHORAGE, Alaska, May 06, 2024 (GLOBE NEWSWIRE) — First National Bank Alaska’s (OTCQX:FBAK) net income for the first quarter of 2024 remained stable at $13.476 million, or $4.26 per share. This compares to a net income of $13.454 million, or $4.25 per share, for the same period in 2023.
“Positive signs across sectors of the Alaska economy give First National an optimistic outlook for growth in the coming year, as evident in first quarter lending activity,” said Betsy Lawer, First National Board Chair and CEO/President. “Our lending, treasury management services, and wealth management and trust* relationship officers are all working closely with customers as seasonal activity builds momentum.”
Assets totaled $5.2 billion as of March 31, 2024, decreasing $517.9 million since December 31, 2023. The decrease in assets was primarily due to the first scheduled repayment of $350.0 million on the Federal Reserve Bank Term Funding Program (BTFP), along with first quarter deposit outflow. Two remaining repayments under BTFP are scheduled for May and December 2024. Return on assets as of March 31, 2024 was 0.95%, three basis points lower compared to the same period last year.
Total loans increased $85.7 million over March 31, 2023. On March 31, 2024, delinquent loans from 30 to 89 days were $3.9 million, 0.16% of outstanding loans compared to $3.6 million and 0.16% on lower loan balances as of March 31, 2023. Nonperforming loans were $28.6 million, 1.21% of outstanding loans, an increase of $23.8 million from March 31, 2023. The provision for credit losses totaled $1.1 and $0.6 million as of March 31, 2024 and 2023, respectively, including an impairment reserve of $0.5 million recorded on a real estate loan in the first quarter of 2024. The allowance for credit losses on March 31, 2024 was $18.8 million, 0.79% of total loans.
Deposits and repurchase agreements totaled $4.2 billion as of March 31, 2024, compared to $4.7 billion as of March 31, 2023, and $4.4 billion as of December 31, 2023. First quarter deposit outflow totaled $172.8 million. Approximately 55% of the 2021-2022 pandemic period deposit growth remains in the bank.
Total interest and loan fee income came to $59.5 million, a 26.6% increase from March 31, 2023. The blended yield on interest-earning assets increased to 4.28% compared to 3.53% as of March 31, 2023. Interest and fees on loans increased $4.6 million, and interest and dividends on investment securities increased $3.8 million over March 31, 2023 totals. Interest on cash increased $4.1 million year-over-year, driven by the higher interest rate environment and higher cash balances for the first quarter.
The year-to-date net interest margin was 2.76% compared to 2.84% for the three months ending March 31, 2023. Interest expense increased $11.9 million year-over-year due to the rising cost of interest-bearing deposits resulting from elevated Federal Open Market Committee interest rate increases of 225 basis points across 2023. Interest expense as a percentage of average assets increased to 1.52% as of March 31, 2024, an increase from 0.69% as of March 31, 2023.
Year-to-date noninterest income saw a significant boost totaling $6.5 million compared to $5.5 million as of March 31, 2023. This 19.3% increase in quarterly noninterest income resulted from diversified income streams, including service charges on deposit accounts, mortgage loan servicing, income from fiduciary activities, and gains on the sale of securities. Noninterest expenses through March 31, 2024 increased 1.90% compared to the same period last year, below inflation level growth. The efficiency ratio for March 31, 2024 was 56.00% and remains better than First National’s Alaska and national peer groups.
Shareholders’ equity was $470.7 million as of March 31, 2024, compared to $464.8 million as of December 31, 2023. This $5.9 million increase resulted from net income retained in excess of dividends and a decrease in the net unrealized loss position of the securities portfolio. Return on equity as of March 31, 2024 was 11.52% compared to 12.87% for the same period last year, calculated on average equity for the respective quarters. Book value per share as of March 31, 2024 was $148.63, compared to $146.77 as of December 31, 2023. The bank’s March 31, 2024 Tier 1 leverage capital ratio of 9.96% remains above well-capitalized standards.
*Investment products are not insured by the FDIC; are not deposits; and may lose value.
ABOUT FIRST NATIONAL BANK ALASKA
First National Bank Alaska files a quarterly financial report with the Federal Financial Institution Examination Council. The bank’s latest Consolidated Report of Condition and Income (Call Report) is filed by the 30th of the month following quarter-end and is subsequently posted at FNBAlaska.com and at OTCMarkets.com.
Alaska’s community bank since 1922, First National proudly meets the financial needs of Alaskans with ATMs and 28 locations in 19 communities throughout the state, and by providing banking services to meet their needs across the nation and around the world.
In 2023, Alaska Business readers voted First National “Best of Alaska Business” in the Best Place to Work category for the eighth year in a row, Best Bank/Credit Union for the third time running, and Best Corporate Citizen for the fourth time. American Banker recognized First National as a “Best Bank to Work For” for the sixth year running. The bank was also voted “Best of Alaska” in the Anchorage Daily News awards for the fifth year in a row, earning the top spot, the Platinum Award in the Bank/Financial category.
First National Bank Alaska is a Member FDIC and Equal Housing Lender.
CONTACT: Marketing, 907-277-7270
| Financial Overview (Unaudited) | Quarter Ended ($ in thousands) | ||||||||||||||
| 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||
| Balance Sheet | |||||||||||||||
| Total Assets | $ | 5,212,976 | $ | 5,730,835 | $ | 5,559,883 | $ | 5,505,931 | $ | 5,473,245 | |||||
| Total Securities | $ | 2,404,078 | $ | 2,384,951 | $ | 2,331,129 | $ | 2,413,791 | $ | 2,606,018 | |||||
| Total Loans | $ | 2,369,282 | $ | 2,273,311 | $ | 2,318,454 | $ | 2,294,558 | $ | 2,283,553 | |||||
| Total Deposits | $ | 3,665,066 | $ | 3,780,018 | $ | 3,911,091 | $ | 3,874,988 | $ | 3,989,843 | |||||
| Repurchase Agreements | $ | 571,463 | $ | 629,280 | $ | 626,082 | $ | 642,114 | $ | 671,532 | |||||
| Total Deposits and Repurchase Agreements | $ | 4,236,529 | $ | 4,409,298 | $ | 4,537,173 | $ | 4,517,102 | $ | 4,661,375 | |||||
| Total Borrowing under the Federal Reserve Bank Term Funding Program | $ | 430,000 | $ | 780,000 | $ | 530,000 | $ | 530,000 | $ | 350,000 | |||||
| Unrealized gain (loss) on marketable securities, net of tax | $ | (95,809 | ) | $ | (98,378 | ) | $ | (143,514 | ) | $ | (137,198 | ) | $ | (128,594 | ) |
| Total Shareholders’ Equity | $ | 470,702 | $ | 464,791 | $ | 423,343 | $ | 424,274 | $ | 428,555 | |||||
| Income Statement | |||||||||||||||
| Net Interest and Loan Fee Income | $ | 38,325 | $ | 40,958 | $ | 38,739 | $ | 37,011 | $ | 37,771 | |||||
| Provision for Loan losses | $ | 953 | $ | (344 | ) | $ | (387 | ) | $ | (574 | ) | $ | 375 | ||
| Total Noninterest Income | $ | 6,540 | $ | 6,522 | $ | 6,774 | $ | 6,646 | $ | 5,484 | |||||
| Total Noninterest Expense | $ | 25,085 | $ | 24,651 | $ | 24,465 | $ | 24,435 | $ | 24,617 | |||||
| Provision for Income Taxes | $ | 5,351 | $ | 6,593 | $ | 5,916 | $ | 5,339 | $ | 4,809 | |||||
| Net Income | $ | 13,476 | $ | 16,580 | $ | 15,519 | $ | 14,457 | $ | 13,454 | |||||
| Earnings per common share | $ | 4.26 | $ | 5.23 | $ | 4.90 | $ | 4.57 | $ | 4.25 | |||||
| Dividend per common share | $ | 3.20 | $ | 6.40 | $ | 3.20 | $ | 3.20 | $ | 3.20 | |||||
| Financial Measures | |||||||||||||||
| Return on Assets | 0.95 | % | 1.07 | % | 1.04 | % | 1.01 | % | 0.98 | % | |||||
| Return on Equity | 11.52 | % | 13.97 | % | 13.76 | % | 13.29 | % | 12.87 | % | |||||
| Net Interest Margin | 2.76 | % | 2.82 | % | 2.78 | % | 2.77 | % | 2.84 | % | |||||
| Yield on Loans | 6.40 | % | 6.25 | % | 6.08 | % | 5.95 | % | 5.81 | % | |||||
| Yield on Securities | 2.36 | % | 1.66 | % | 1.65 | % | 1.67 | % | 1.72 | % | |||||
| Cost of Interest Bearing Deposits | 1.55 | % | 1.02 | % | 0.92 | % | 0.79 | % | 0.65 | % | |||||
| Efficiency Ratio | 56.00 | % | 54.28 | % | 55.16 | % | 55.45 | % | 55.66 | % | |||||
| Capital | |||||||||||||||
| Shareholders’ Equity/Total Assets | 9.03 | % | 8.11 | % | 7.61 | % | 7.71 | % | 7.83 | % | |||||
| Tier 1 Leverage Ratio | 9.96 | % | 9.85 | % | 9.98 | % | 10.01 | % | 10.20 | % | |||||
| Regulatory Well Capitalized Minimum Ratio – Tier 1 Leverage Ratio | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | 5.00 | % | |||||
| Tier 1 (Core) Capital | $ | 566,511 | $ | 563,169 | $ | 566,857 | $ | 561,472 | $ | 557,149 | |||||
| Credit Quality | |||||||||||||||
| Noncurrent Loans and OREO | $ | 28,634 | $ | 4,659 | $ | 5,227 | $ | 4,843 | $ | 4,984 | |||||
| Noncurrent Loans and OREO/Total Assets | 0.55 | % | 0.08 | % | 0.09 | % | 0.09 | % | 0.09 | % | |||||
| Noncurrent Loans and OREO/Tier 1 Capital | 5.05 | % | 0.83 | % | 0.92 | % | 0.86 | % | 0.89 | % | |||||
| Allowance for Loan Losses | $ | 18,800 | $ | 17,750 | $ | 18,475 | $ | 18,850 | $ | 19,050 | |||||
| Allowance for Loan Losses/Total Loans | 0.79 | % | 0.78 | % | 0.80 | % | 0.82 | % | 0.83 | % | |||||
| Net interest margin, yields, and efficiency ratios are tax effected. |
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| Financial measures are year-to-date. |
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| Per common share amounts are not in thousands. |
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FAQ
What was First National Bank Alaska’s net income for Q1 2024?
First National Bank Alaska reported a stable net income of $13.476 million for the first quarter of 2024.
What caused the decrease in assets for First National Bank Alaska in Q1 2024?
The decrease in assets was primarily due to the first scheduled repayment of $350.0 million on the Federal Reserve Bank Term Funding Program and first quarter deposit outflow.
How did total loans change for First National Bank Alaska in Q1 2024?
Total loans increased by $85.7 million over the same period in 2023.
What was the efficiency ratio for First National Bank Alaska in Q1 2024?
The efficiency ratio for First National Bank Alaska was 56.00% for the first quarter of 2024, remaining better than peer groups.
What was the return on equity for First National Bank Alaska in Q1 2024 compared to the previous year?
The return on equity for First National Bank Alaska decreased to 11.52% from 12.87% for the same period last year.
