FIRST NATIONAL BANK ALASKA
Anchorage, Alaska
FINANCIAL STATEMENTS
December 31, 2023 and 2022
FIRST NATIONAL BANK ALASKA
Anchorage, Alaska
FINANCIAL STATEMENTS
December 31, 2023 and 2022
CONTENTS
INDEPENDENT AUDITOR'S REPORT | 1 |
FINANCIAL STATEMENTS | |
STATEMENTS OF FINANCIAL CONDITION | 3 |
STATEMENTS OF INCOME | 4 |
STATEMENTS OF COMPREHENSIVE INCOME | 5 |
STATEMENTS OF CASH FLOWS | 6 |
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | 8 |
NOTES TO FINANCIAL STATEMENTS | 9 |
Crowe LLP
Independent Member Crowe Global
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
First National Bank Alaska
Anchorage, Alaska
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of First National Bank Alaska, which comprise the statements of financial condition as of December 31, 2023 and 2022, and the related statements of income, comprehensive income, changes in shareholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of First National Bank Alaska as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with auditing standards generally accepted in the United States of America, First National Bank Alaska's internal control over financial reporting as of December 31, 2023, based on criteria established in the Internal Control-IntegratedFramework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) relevant to reporting objectives for the express purpose of meeting the regulatory requirements of Section 112 of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) and our report dated March 12, 2024 expressed an unmodified opinion.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of First National Bank Alaska and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1 to the consolidated financial statements, First National Bank Alaska changed its method for accounting for credit losses effective January 1, 2023, due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification No. 326, Financial Instruments - Credit Losses (ASC 326). Our opinion is not modified with respect to this matter.
(Continued)
1.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about First National Bank Alaska's ability to continue as a going concern for one year from the date the financial statements are available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about First National Bank Alaska's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Crowe LLP
Oak Brook, Illinois
March 12, 2024
2.
FIRST NATIONAL BANK ALASKA
STATEMENTS OF FINANCIAL CONDITION
December 31, 2023 and 2022
(Dollars in thousands, except per share data)
ASSETS | 2023 | 2022 | |||||||||
Cash and cash equivalents | $ | 923,414 | $ | 93,547 | |||||||
Securities available-for-sale, at fair value | 2,384,951 | 2,815,357 | |||||||||
Real estate loans to be sold | 6,193 | 1,728 | |||||||||
Loans, net of allowance for credit losses of $17,750 and | |||||||||||
$18,800 as of December 31, 2023 and 2022, respectively | 2,255,561 | 2,208,247 | |||||||||
Premises and equipment, net | 50,532 | 52,335 | |||||||||
Due from brokers | - | 45,000 | |||||||||
Deferred taxes, net | 39,538 | 60,825 | |||||||||
Other assets | 70,646 | 60,698 | |||||||||
Total assets | $ | 5,730,835 | $ | 5,337,737 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Liabilities: | |||||||||||
Deposits: | |||||||||||
Noninterest bearing | $ | 1,932,290 | $ | 2,368,659 | |||||||
Interest bearing: | |||||||||||
Savings | 738,785 | 1,023,024 | |||||||||
Business interest checking | 97,671 | 124,357 | |||||||||
Business interest sweep | 451,495 | 278,553 | |||||||||
NOW | 140,661 | 159,929 | |||||||||
Money market | 107,033 | 147,026 | |||||||||
Time | 312,083 | 123,309 | |||||||||
Total interest bearing | 1,847,728 | 1,856,198 | |||||||||
Total deposits | 3,780,018 | 4,224,857 | |||||||||
Securities sold under agreements to repurchase | 629,280 | 670,974 | |||||||||
Federal Reserve Bank advances | 780,000 | - | |||||||||
Federal Home Loan Bank advances | 15,000 | - | |||||||||
Other liabilities | 61,746 | 34,356 | |||||||||
Total liabilities | 5,266,044 | 4,930,187 | |||||||||
Shareholders' equity: | |||||||||||
Common stock, $10 par value | |||||||||||
(authorized: 4,000,000 shares) | |||||||||||
(issued and outstanding: 2023 and 2022 - 3,166,885) | 31,669 | 31,669 | |||||||||
Surplus | 40,000 | 40,000 | |||||||||
Retained earnings | 491,500 | 482,160 | |||||||||
Accumulated other comprehensive loss | (98,378) | (146,279) | |||||||||
Total shareholders' equity | 464,791 | 407,550 | |||||||||
Total liabilities and shareholders' equity | $ | 5,730,835 | $ | 5,337,737 |
See accompanying notes to financial statements.
3.
FIRST NATIONAL BANK ALASKA
STATEMENTS OF INCOME
Years ended December 31, 2023 and 2022 (Dollars in thousands, except per share data)
2023 | 2022 | |||||||
Interest income and loan fees: | ||||||||
Interest and fees on loans: | $ | 142,418 | $ | 111,692 | ||||
Taxable | ||||||||
Nontaxable | 606 | 867 | ||||||
Total interest and fees on loans | 143,024 | 112,559 | ||||||
Interest and dividends on investment securities: | 40,994 | 38,431 | ||||||
Taxable | ||||||||
Nontaxable | 3,677 | 3,800 | ||||||
Total interest and dividends on investment securities: | 44,671 | 42,231 | ||||||
Interest on cash and cash equivalents | 26,823 | 5,232 | ||||||
Total interest and loan fee income | 214,518 | 160,022 | ||||||
Interest expense: | ||||||||
Deposits | 18,850 | 3,892 | ||||||
Federal fund purchased and securities sold under agreements to repurchase | 22,350 | 8,141 | ||||||
FHLB advances and other borrowed funds | 18,839 | 2,619 | ||||||
Total interest expense | 60,039 | 14,652 | ||||||
Net interest and loan fee income | 154,479 | 145,370 | ||||||
Credit loss expense - loans | (855) | (1,249) | ||||||
Credit loss expense - off-balance sheet credit exposures | (75) | - | ||||||
Credit loss expense | ||||||||
(930) | (1,249) | |||||||
Net interest and loan fee income after provision for credit loss expense | ||||||||
155,409 | 146,619 | |||||||
Noninterest income: | 10,693 | 10,391 | ||||||
Bankcard fees | ||||||||
Service charges on deposit accounts | 5,487 | 5,056 | ||||||
Gain on sale of mortgage loans | 757 | 1,417 | ||||||
Mortgage loan servicing income | 2,107 | 1,872 | ||||||
Other noninterest income | 6,682 | 5,936 | ||||||
Total noninterest income | 25,726 | 24,672 | ||||||
Noninterest expense: | 63,652 | 60,741 | ||||||
Salaries and employee benefits | ||||||||
Occupancy expense, net | 7,323 | 7,006 | ||||||
Furniture and equipment expense | 2,909 | 2,664 | ||||||
Bankcard expenses | 2,839 | 2,656 | ||||||
Losses on investment securities, net | 300 | 64 | ||||||
Other noninterest expense | 21,445 | 20,008 | ||||||
Total noninterest expense | ||||||||
98,468 | 93,139 | |||||||
Income before taxes | 82,667 | 78,152 | ||||||
Provision for income taxes | 22,657 | 19,917 | ||||||
Net income | ||||||||
$ | 60,010 | $ | 58,235 | |||||
Earnings per common share | $ | 18.95 | $ | 18.39 |
See accompanying notes to financial statements.
4.
FIRST NATIONAL BANK ALASKA
STATEMENTS OF COMPREHENSIVE INCOME
Years ended December 31, 2023 and 2022
(Dollars in thousands)
2023 | 2022 | ||||||
Net income | $ | 60,010 | $ | 58,235 | |||
Other comprehensive income (loss) - | |||||||
Unrealized gains (losses) on securities: | |||||||
Unrealized holding gains (losses) arising during the period, | |||||||
net of tax effect of ($18,939) and $61,397 in 2023 and 2022, | 47,686 | (154,591) | |||||
respectively | |||||||
Reclassification adjustment for losses included in net income, | |||||||
net of tax effect of ($85) and ($18) in 2023 and 2022, | |||||||
respectively | 215 | 46 | |||||
Other comprehensive income (loss) | 47,901 | (154,545) | |||||
Comprehensive income (loss) | $ | 107,911 | $ | (96,310) |
See accompanying notes to financial statements.
5.
FIRST NATIONAL BANK ALASKA STATEMENTS OF CASH FLOWS
Years ended December 31, 2023 and 2022
(Dollars in thousands)
2023 | 2022 | ||||||||
Cash flows from operating activities | |||||||||
Net Income | $ | 60,010 | $ | 58,235 | |||||
Adjustments to reconcile net income to net cash provided by | |||||||||
operating activities: | |||||||||
Amortization of premium on investment securities, net | 5,337 | 10,950 | |||||||
(Gain) loss from equity method investments | (155) | 467 | |||||||
Loss on mortgage servicing rights | 297 | 316 | |||||||
Depreciation, accretion, and amortization | 5,174 | 5,156 | |||||||
Credit loss expense | (930) | (1,249) | |||||||
Deferred taxes | 2,263 | 3,910 | |||||||
Gain on sale of mortgage loans | (757) | (1,417) | |||||||
Net loss on the sale of premises and equipment | 3 | 142 | |||||||
Net loss on investment securities | 300 | 64 | |||||||
Real estate loans to be sold-originated | (66,900) | (84,330) | |||||||
Real estate loans to be sold-shipped | 62,692 | 91,502 | |||||||
Net increase in other assets | (1,305) | (2,425) | |||||||
Net decrease (increase) in other liabilities | 21,230 | (790) | |||||||
Net cash provided by operating activities | 87,259 | 80,531 | |||||||
Cash flows from investing activities | |||||||||
Proceeds from calls or maturities of securities, available-for-sale | 496,355 | 243,804 | |||||||
Proceeds from sales of securities, available-for-sale | 187,736 | 235,335 | |||||||
Purchase of securities, available-for-sale | (147,422) | (723,486) | |||||||
Net sale (purchase) of Federal Home Loan Bank stock | 2,820 | (1,063) | |||||||
Net decrease in loans | 285,144 | 100,777 | |||||||
Purchase of participation loans | (335,386) | (211,599) | |||||||
Proceeds from sales of premises and equipment | - | 11 | |||||||
Purchase of land, premises and equipment | (2,417) | (8,236) | |||||||
Net cash provided (used) by investing activities | 486,830 | (364,457) |
(Continued)
6.
FIRST NATIONAL BANK ALASKA
STATEMENTS OF CASH FLOWS
Years ended December 31, 2023 and 2022
(Dollars in thousands)
____________________________________________________________________________________
Cash flows from financing activities | 2023 | 2022 | ||||||
Net (decrease) increase in total deposits | $ | (444,839) | $ | 7,933 | ||||
Net decrease in securities sold under agreement to repurchase | (41,694) | (110,726) | ||||||
Proceeds from Federal Home Loan Bank advances | 215,000 | 2,400,000 | ||||||
Repayments on Federal Home Loan Bank advances | (200,000) | (2,400,000) | ||||||
Proceeds from Federal Reserve Bank advances | 780,000 | - | ||||||
Payments on notes payable and finance lease | (2,019) | (1,020) | ||||||
Dividends paid | (50,670) | (50,670) | ||||||
Net cash provided (used) by financing activities | 255,778 | (154,483) | ||||||
Increase (decrease) in cash and cash equivalents | 829,867 | (438,409) | ||||||
Cash and cash equivalents, January 1 | 93,547 | 531,956 | ||||||
Cash and cash equivalents, December 31 | ||||||||
$ | 923,414 | $ | 93,547 | |||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the year for interest | $ | 38,440 | $ | 14,596 | ||||
Cash paid during the year for income taxes | 21,280 | 11,551 | ||||||
Noncash investing and financing activities: | ||||||||
Bank financed sales of other real estate owned | $ | - | $ | 29 | ||||
Purchase of copier equipment under finance lease obligation | - | 1,164 | ||||||
Commitments for investments in qualified affordable housing | ||||||||
projects | 12,000 | 15,000 | ||||||
Settlement of purchased loans and securities via | ||||||||
short-term payable | (4,133) | (8,225) | ||||||
Due from brokers for security maturities | - | (45,000) |
See accompanying notes to financial statements
7.
FIRST NATIONAL BANK ALASKA
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years ended December 31, 2023 and 2022 (Dollars in thousands, except per share data)
Common | Accumulated | Total | ||||||||||||||
Retained | Other | |||||||||||||||
Stock ($10 | Comprehensive Shareholders' | |||||||||||||||
Par Value) | Surplus | Earnings | Income (Loss) | Equity | ||||||||||||
Balance, January 1, 2022 | $ | 31,669 | $ 40,000 | $ | 474,595 | $ | 8,266 | $ | 554,530 | |||||||
Net income | - | - | 58,235 | - | 58,235 | |||||||||||
Other comprehensive loss, | ||||||||||||||||
net of tax | - | - | - | (154,545) | (154,545) | |||||||||||
Dividends declared - | ||||||||||||||||
$16.00 per share | - | - | (50,670) | - | (50,670) | |||||||||||
Balance, December 31, 2022 | 31,669 | 40,000 | 482,160 | (146,279) | 407,550 | |||||||||||
Net income | - | - | 60,010 | - | 60,010 | |||||||||||
Other comprehensive gain, | ||||||||||||||||
net of tax | - | - | - | 47,901 | 47,901 | |||||||||||
Dividends declared - | ||||||||||||||||
$16.00 per share | - | - | (50,670) | - | (50,670) | |||||||||||
Balance, December 31, 2023 | $ | 31,669 | $ 40,000 | $ | 491,500 | $ | (98,378) | $ | 464,791 | |||||||
See accompanying notes to financial statements
8.
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First National Bank Alaska published this content on 15 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 March 2024 20:10:28 UTC.