Seven years ago, Alaska was one of the hottest community banking markets in the country.

That was when oil prices peaked above $30 a barrel, pumping huge amounts of money into the state's economy.

But today, only four community banks remain.

"It's been sad," said Willis Kirkpatrick, director of the Division of Banking and Securities at the Alaska Department of Commerce. "I wish I was a younger man, because I've seen about every cycle there can be in banking in my last years of service."

Between 1986 and 1992, 16 banks and savings and loans were either closed by regulators or bought up when they ran into trouble. Today, about 90 percent of the state's banking market is controlled by three large institutions.

The only community banks left in Alaska are Denali State Bank, Mt. McKinley Mutual Savings Bank, First Bank, and Northrim Bank. Together they have $457 million in assets. The banks survived and even prospered by "finding their niche and sticking to their knitting," Mr. Kirkpatrick said.

William Moran, chief executive of the 70-year-old First Bank in Ketchikan, said his bank survived because it dropped out of the lending market altogether in the mid-1980s.

"We sat back and watched the party at the height of its craziness," Mr. Moran said. "Our loan-to-deposit ratio at one point was 25 percent."

First Bank's loan-to-deposit ratio is now at just over 40%, and Mr. Moran said loan demand is slowly rising.

Northrim Bank in Anchorage was founded in 1990 at the end of the state's banking crisis. It lost $1 million in its first year, but was profitable in its second year and now has a 0.60% return on its $83 million in assets.

"Our strategy was to gain market share from the bigger banks," said chief executive Chris Knudson. "When we started, we assumed a flat economy for the first five to seven years of our existence, but it's turned out a little better than that."

The "bigger banks" Mr. Knudson is trying to get business from are the ones that benefited most from the 1986-89 banking consolidation wave after the state's economy plunged, and all of which bought the franchises of failed institutions: Security Pacific Bank (since acquired by BankAmerica Corp.), Keycorp of New York, National Bank of Alaska, and First National Bank of Anchorage.

First Bank's Mr. Moran said that the consolidation of the state's biggest banks and the entrance of vastly larger out-of-state bank holding companies hasn't hurt his business.

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