ITEM 1. BUSINESS.
National Bancorp of Alaska, Inc. (the Corporation) is a Delaware corporation organized on June 21, 1982, and registered as a Bank holding company under the Bank Holding Company Act of 1956.
The Corporation's principal asset is its investment in National Bank of Alaska (the Bank), a wholly-owned subsidiary. Through its subsidiary, the Corporation engages in commercial banking and trust activities.
For additional information concerning the business of National Bancorp of Alaska, Inc. and its subsidiaries, see pages 2 through 20 of National Bancorp of Alaska, Inc.'s 1995 Annual Report to Shareholders (Annual Report), which is incorporated in this Item 1 by reference.
The Bank
The Bank was established as a state-chartered bank in 1916 and converted to a national banking association in 1950.
General Banking Services
The Bank engages in general banking business offering checking accounts, savings accounts, money market accounts, Time Certificates of Deposit, securities sold under agreements to repurchase, Individual Retirement Accounts, commercial loans, home equity loans, unsecured lines of credit, consumer loans, construction and mortgage loans, lease financing, safe deposit services, night depositories, Visa credit cards (Classic and Gold), walk-up and drive-in banking with an international automated teller machine network and other services incidental to serving the banking needs of individuals, corporations, government and quasi-government bodies.
As of December 31, 1995, the Bank's banking operations are conducted from 52 banking offices and 48 electronic branches located throughout the state of Alaska, including 15 offices and 19 electronic branches in Anchorage.
Trust Services
The Bank's Trust Department offers services to individuals and corporations throughout Alaska including estate planning, settlement of estates, administration of living and testamentary trusts, management of investment agency accounts, custodianships, and administration of employee benefit trusts. The Bank had trust assets of approximately $804 million under its supervision as of December 31, 1995.
International Banking
The Bank's International Department offers customer services in connection with international business. The Department maintains correspondent relationships with banks located in certain world trade centers, including Tokyo and New York. Transactions handled by this Department include cable, wire, and mail transfers of funds, negotiating and advancing funds under export Letters of Credit, buying and selling foreign currencies, handling collection from foreign banks, and financing imports and exports.
An Edge Act subsidiary, National Bank of Alaska International Banking, Corp., has a branch located in Seattle, Washington with its head office in Anchorage, Alaska.
Competition
The Bank competes actively with national and state banks and other financial institutions, including savings and loan associations, savings banks, brokerage houses, money market funds, and credit unions located both in Alaska and other states. The bank maintains a competitive position by providing convenient service in the branch network located throughout the state and by competitive pricing of the products mentioned above.
Alaska allows out-of-state bank holding companies to acquire banks and domestic bank holding companies located in Alaska. The law does not require reciprocal provisions by the home state of out-of-state bank holding companies. Management is of the opinion that to the extent that out-of-state bank holding companies enter the Alaskan market, the Corporation may encounter intensified competition.
Employment
The Bank employs approximately 1,101 people. Management considers employment relations to be good. None of the Bank's employees are covered by a collective bargaining agreement.
SUPERVISION AND REGULATION
National Bancorp of Alaska, Inc. is a bank holding company subject to regulation under the Bank Holding Company Act of 1956. A bank holding company is required to file with the Federal Reserve Board annual reports and other information regarding the business operations of itself and its subsidiaries and is also subject to examination by the Federal Reserve Board. A bank holding company must obtain Federal Reserve Board approval prior to acquiring, directly and indirectly, ownership or control of any voting shares of any bank if, after such acquisition, it would own or control, directly or indirectly, more than 5% of the voting stock of such bank unless it already owns a majority of the voting stock of such bank. Furthermore, a bank holding company is, with limited exceptions, prohibited from acquiring direct or indirect ownership or control of any voting stock of any company which is not a bank or a bank holding company, and must engage only in the business of banking or managing or controlling banks or furnishing services to or performing services for its subsidiary banks. One of the exceptions to this prohibition is the ownership of shares of a company the activities of which the Federal Reserve Board has determined to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
A bank holding company and its subsidiaries are prohibited from acquiring any voting shares of, or interest in, any banks located outside of the state in which the operations of the bank holding company's banking subsidiaries are located, unless the acquisition is specifically authorized by the statutes of the state in which the bank is located. Further, a bank holding company and its subsidiaries are prohibited from engaging in certain tie-in arrangements in connection with the extension of credit or provision of any property or service. Thus, an affiliate may not extend credit, lease, sell property or furnish any services or fix or vary the consideration for these on the condition that (i) the customer must obtain or provide some additional credit, property or service from or to its bank holding company or subsidiaries thereof or (ii) the customer may not obtain some other credit, property or services from a competitor, except to the extent reasonable conditions are imposed to assure soundness of credit extended.
In approving acquisitions by bank holding companies of banks and companies engaged in the banking-related activities, the Federal Reserve Board considers a number of factors, including the benefit to the public such as greater convenience, increased competition, conflicts of interest, or unsound banking practices. The Federal Reserve Board is also empowered to differentiate between new activities and activities commenced through acquisition of a going concern.
Alaska law permits bank holding companies to acquire and own all or any portion of the voting securities or other capital stock of, or all or substantially all of the assets of, one or more banks or bank holding companies unless the bank is a state or national bank conducting a banking business in Alaska that commenced the business of banking in Alaska on or after July 1, 1982, and that has not been in existence and continuously operating in Alaska for three years or more. It is permissible under Alaska state law for out-of-state bank holding companies to acquire banks and domestic bank holding companies located in Alaska.
The banking laws of Alaska permit banks located in the state to establish branches throughout the state.
The Bank is subject to regulation and supervision, of which regular bank examinations are a part, by the Office of the Comptroller of the Currently (OCC). The Bank is also a member of the Federal Deposit Insurance Corporation (FDIC), which currently insures the deposits of each member bank to a maximum of $100,000 per depositor. For this protection, each bank pays a semiannual statutory assessment and is subject to the rules and regulations of the FDIC. The Corporation is an "affiliate" of the Bank, which imposes restrictions on loans by the Bank to the Corporation, on investments by the Bank in the stock or securities of the Corporation and on the use of such stock or securities as collateral security for loans by the Bank to any borrower. The Corporation is also subject to certain restrictions with respect to engaging in the business of issuing, flotation, underwriting, public sale and distribution of securities.
The ability of the Corporation to pay dividends will largely depend upon the amount of dividends declared by the Bank and any subsequently acquired companies. Approval of the OCC will be required for any dividend to the Corporation by the Bank, if the total of all dividends, including any proposed dividend, declared by the Bank in any calendar year exceeds the total of its net profits for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus. In the event that the Bank were to experience either significant loan losses or rapid growth of loans or deposits, the Corporation, as the sole stockholder, could be compelled by bank regulatory authorities to invest additional capital.
Statistical Disclosure
The information as required by the Securities and Exchange Commission's Guide 3 - - Statistical Disclosure by Bank Holding Companies is incorporated herein by reference to the Registrant's 1995 Annual Report to Shareholders.
Description Annual Report Page Numbers
I. Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rate and Interest Differential:
A. and B. Average Balance Sheet Combined with an Analysis of Net Interest Earnings.......................46-47
C. Analysis of Changes in Net Interest Income due to rate and volume...........................47
II. Investment Portfolio:
A. Book Value of Investments...............................40
B. Weighted Average Yield..................................40
III. Loan Portfolio:
A. Types of Loans for Each Reported Period.................41
B. Maturities and Sensitivity to Changes in Interest Rates..........................................41
C. Risk Elements...........................................42
IV. Summary of Loan Loss Experience:
A. Analysis of Allowances for Loan Loss Experience.........................................43
V. Deposits:
A. Average Balance by Type.................................44
B. Large TCD Maturities - Over $100,000....................41
VI. Return on Equity and Assets Selected Ratios for Each Reported Period...........................45
VII. Short-Term Borrowings..............................................44
Schedules Included Herein
III. Loan Portfolio
C. Risk Elements.
Potential Problem Loans
At December 31, 1995, an additional $17,082,000 in loans are being closely monitored by management. These loans are not included in any category of non- performing loans. However, management has concern about the borrowers' abilities to comply with their present loan repayment terms. These loans are reviewed monthly to assess any change in collectability.
Foreign Outstandings
There were no foreign outstandings to individual countries as of December 31, 1995.
IV. Summary of Loan Loss Experience:
B. Allocation of the Allowance for Loan Losses:
Allocation of Reserves To Loan Categories Loan Category As a % % of Total Amount of of Total Loans Reserve Reserves(000's) December 31, 1995 Commercial and Industrial 35.5% 2.2% $468 Real Estate Construction 1.9 - 3 Real Estate Long-Term 31.9 1.2 267 Installment 25.0 15.3 3,288 Nontaxable 4.8 0.4 81 Lease Financing 0.9 - - Unallocated - 80.9 17,422 ----------------------------------------- 100.0% 100.0% $21,529
December 31, 1994 Commercial and Industrial 35.9% 5.4% $1,035 Real Estate Construction 1.8 0.9 165 Real Estate Long-Term 33.9 2.3 442 Installment 22.1 13.8 2,664 Nontaxable 5.5 0.8 152 Lease Financing 0.8 - - Unallocated - 76.8 14,768 ----------------------------------------- 100.0% 100.0% $19,226
December 31, 1993 Commercial and Industrial 37.9% 21.3% $3,704 Real Estate Construction 2.6 0.2 35 Real Estate Long-Term 33.9 13.0 2,271 Installment 18.2 6.9 1,195 Nontaxable 6.5 3.4 587 Lease Financing 0.9 - - Unallocated - 55.2 9,616 ----------------------------------------- 100.0% 100.0% $17,408
December 31, 1992 Commercial and Industrial 44.5% 21.3% $4,547 Real Estate Construction 2.0 1.3 269 Real Estate Long-Term 26.3 5.5 1,183 Installment 17.6 5.2 1,103 Nontaxable 8.8 3.8 807 Lease Financing 0.8 - - Unallocated - 62.9 13,429 ----------------------------------------- 100.0% 100.0% $21,338
December 31, 1991 Commercial and Industrial 46.7% 20.3% $4,314 Real Estate Construction 4.3 2.8 589 Real Estate Long-Term 24.4 4.4 947 Installment 14.7 2.7 572 Nontaxable 8.8 4.0 848 Lease Financing 1.1 - - Unallocated - 65.8 14,014 ----------------------------------------- 100.0% 100.0% $21,284
ITEM 2.

ITEM 2. PROPERTIES
The Bank's main banking office is at its headquarters building, which is located at Northern Lights Boulevard and C Street, Anchorage, Alaska.
In addition to its headquarters building, the Bank owns 39 of its banking offices (including four which are subject to ground leases) and leases 61 other banking offices under agreements expiring between 1996 and 2031.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
For information concerning legal proceedings, see Note 10 of "Notes to Financial Statements" at page 32 of the Annual Report, which is incorporated herein by reference.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the fourth quarter of 1995.
PART II
ITEM 5.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
For information concerning market for the registrant's common equity and related stockholder matters, reference is made to page 48 of the Annual Report, which is incorporated herein by reference.
The above-referenced schedule shows the high and low bid quotations of the Corporation's stock as reported by the National Association of Securities Dealers Automated Quotations System (NASDAQ). National Bancorp of Alaska, Inc. common stock is traded in the over-the-counter market. Such over-the-counter market quotations reflect interdealer prices, without retail markup, markdown, or commission and may not necessarily represent actual transactions.
The Corporation has engaged Salomon Brothers, Inc. for financial advisory and investment banking services.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the prior ten years is incorporated herein by reference on pages 22-23 of the Annual Report.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
For management's discussion and analysis of financial condition and results of operations see "Management Discussion and Analysis" at pages 38 through 47, and the Chairman's message to shareholders on inside cover of the Annual Report, which are incorporated herein by reference.
Capital Resources
The Federal Reserve Board has standards for measuring capital adequacy based on "risk-adjusted" assets. As of December 31, 1992, banks and bank holding companies are expected to meet target risk-based capital ratio of 8.00%. Effective September 7, 1990, the Federal Reserve Board implemented regulations that establish a minimum leverage capital ratio of 3% of Tier 1 capital to total assets less goodwill. The table below illustrates the Corporation's regulatory capital ratios as of December 31:
1995 1994 Tier 1 Capital $343,954 $314,243 Tier 2 Capital 21,529 19,226 -------------------- Total Qualifying Capital $365,483 $333,469 ==================== Risk Adjusted Total Assets (including off-balance sheet exposure) $1,869,720 $1,692,316 ====================== Total Risk-Based Capital Ratio 19.55% 19.70% ================= Leverage Ratio 13.90% 13.20% =================
Management monitors the asset and liability position closely. As market and business conditon change, asset and liability positions and pricing structures are adjusted to control the risks associated with interest rate movement and to generate a stable growth in net interest income. The table above reflects the contractual repricing dates for interest sensitive assets and liabilities. Interest bearing demand and savings accounts with no stated maturity totaling $743,653,000 are included in the 1 to 90-day category. These deposits reprice at management's discretion and have normally repriced less frequently than those products indexed to market rates. Due to the continuing policy of analyzing rate sensitivity, management believes National Bancorp of Alaska is reasonably well positioned for subsequent rate movements.
Nonperforming Assets
Other real estate owned decreased from $4.3 million at December 31, 1994 to $3.1 million at December 31, 1995. During 1995, nonaccrual loans totaling $0.4 million were transferred to other real estate owned. Assets with a book value of $2.2 million were sold. Restructured loans decreased from $1.7 million at December 31, 1994 to $0.3 million at December 31, 1995.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The report of independent auditors and the consolidated financial statements and notes to consolidated financial statements on pages 24 through 37 of the Annual Report are incorporated herein by reference.
The quarterly financial data on page 48 of the Annual Report is incorporated herein by reference.
ITEM 9.

ITEM 9. CHANGE IN ACCOUNTANTS
Not Applicable
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
For information concerning directors and executive officers of National Bancorp of Alaska, Inc., see "Election of Directors" at pages 2 through 5 of the Proxy Statement for the March 19, 1996, Annual Meeting of Shareholders, which is incorporated herein by reference.
The following table sets forth the executive officers of the Bank, all of whom serve at the discretion of the Board, their ages and their positions with the Bank:
Served as an Positions and Offices Currently Held Executive Officer Name Age with Bank Since
Donald L. Mellish 68 Chairman of the Executive Committee 1964 Edward B. Rasmuson 55 Chairman of the Board of Directors 1972 Richard Strutz 45 President 1985 Kathleen Soderberg 47 Executive Vice President and Treasurer 1982 B. John Shipe 46 Executive Vice President 1984 Gary Dalton 41 Executive Vice President 1988
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION.
Reference is made to pages 5 through 9 of the Proxy Statement for the March 19, 1996, Annual Meeting of Shareholders, which is incorporated herein by reference for information concerning management remuneration and transactions.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
For information concerning the Corporation's security ownership by certain beneficial owners and management, reference is made to pages 1 through 9 of the Proxy Statement, which is incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
For information concerning certain relationships and related transactions, see page 10 of the Proxy Statement, which is incorporated herein by reference.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS FORM 8-K
(a) The following documents are filed as part of the report:
1. Financial Statements
The following consolidated financial statements of National Bancorp of Alaska, Inc. and its subsidiaries and report of independent auditors are incorporated in Item 8 by reference from the 1995 Annual Report to Shareholders. Page number references are to the Annual Report:
National Bancorp of Alaska and subsidiaries: Page
Consolidated Statements of Condition December 31, 1995 and 1994.............................25
Consolidated Statements of Income Years ended December 31, 1995, 1994, and 1993..........24
Consolidated Statements of Cash Flows Years ended December 31, 1995, 1994, and 1993..........26
Consolidated Statements of Changes in Shareholders' Equity Years ended December 31, 1995, 1994, and 1993...27
Notes to Consolidated Financial Statements.............27-36
Report of Independent Auditors.........................37
2. Financial Statement Schedules
All schedules are omitted because they are not applicable, not material or because the information is included in the financial statements or the notes thereto.
3. Exhibits
(3) Articles of incorporation and bylaws are incorporated herein by reference to Exhibit (3) to Registration on Form S-14, File No. 2-78795 dated August 11, 1982.
(4) Instruments defining the rights of security holders - specimen of stock certificate to be issued by the Registrant (as amended to date) is incorporated herein by reference to Exhibit (4) to Registration on Form S-14, File No. 2-78795 dated August 11, 1982.
(13) Annual Report to shareholders for the year ended December 31, 1995.
(21) Subsidiaries of the registrant are as follows:
Business Name State Incorporated
National Bank of Alaska and subsidiaries Alaska
National Bank of Alaska Leasing Corporation Alaska
NBA Advertising, Inc. Alaska
National Bank of Alaska International Banking Corporation Washington
Alaska Bankcard Center, Inc. Alaska
NBA Mortgage Corporation Delaware
Northland Credit Corporation Alaska
NB Aviation, Inc. Delaware
(22) There were no matters submitted to a vote of security holders during the fourth quarter of 1995.
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended December 31, 1995.
(c) Exhibits - See list of exhibits set forth above at Item 14(a)3.
(d) Financial Statement Schedules
Schedules required to be filed in response to this portion of Item 14 are listed above in Item 14(a)2.
Report of independent auditors for Form 10-K for the year ended December 31, 1995, is incorporated herein by reference in Item 14(a)1.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL BANCORP OF ALASKA, INC.
March 19, 1996 By /s/Edward B. Rasmuson Date Edward B. Rasmuson, Chairman of the Board and Director (Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
March 19, 1996 /s/Edward B. Rasmuson Date Edward B. Rasmuson, Chairman of the Board and Director (Principal Executive Officer)
March 19, 1996 /s/Richard Strutz Date Richard Strutz, President and Director (Principal Financial Officer)
March 19, 1996 /s/Gary Dalton Date Gary Dalton, Senior Vice President (Principal Accounting Officer)
March 19, 1996 /s/Gary M. Baugh Date Gary M. Baugh, Director
March 19, 1996 /s/Carl F. Brady, Jr. Date Carl F. Brady, Jr., Director
March 19, 1996 /s/Alec W. Brindle Date Alec W. Brindle, Director
March 19, 1996 /s/Sharon Burrell Date Sharon Burrell, Director
March 19, 1996 /s/James O. Campbell Date James O. Campbell, Director
March 19, 1996 /s/Jeffrey J. Cook Date Jeffrey J. Cook, Director
March 19, 1996 /s/Patrick S. Cowan Date Patrick S. Cowan, Director
March 19, 1996 /s/Roy Huhndorf Date Roy Huhndorf, Director
March 19, 1996 /s/James H. Jansen Date James H. Jansen, Director
March 19, 1996 /s/Donald L. Mellish Date Donald L. Mellish, Director
March 19, 1996 /s/Tennys B. Owens Date Tennys B. Owens, Director
March 19, 1996 /s/Eugene A. Parrish Date Eugene a. Parrish, Director
March 19, 1996 /s/Michael Pate, Date Michael Pate, Director
March 19, 1996 /s/Martin R. Pihl, Date Michael Pate, Director
March 19, 1996 By /s/Edward F. Randolph Date Edward F. Randolph, Director
March 19, 1996 By /s/Major General John Schaeffer Date Major General John Schaefer(Ret.) Director
March 19, 1996 By /s/Michael K. Snowden Date Michael K. Snowden, Director
March 19, 1996 By /s/George S. Suddock Date George S. Suddock, Director
March 19, 1996 By /s/Richard A. Wien Date Richard A. Wien, Director