Alaska Pacific Bancshares (AKPB) 8-K Financial Statements and Exhibits

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant To Section 13 Or 15 (D) Of The Securities Exchange Act Of 1934

Date of Report (Date of earliest event reported): March 6, 2007

Alaska Pacific Bancshares, Inc.
(Exact name of registrant as specified in its charter)

Alaska	0-26003	92-0167101
State or other jurisdiction  of incorporation	Commission  File Number	I.R.S. Employer  Identification No.
2094 Jordan Avenue, Juneau, Alaska  (Address of principal executive offices)		99801  (Zip Code)
Registrant's telephone number (including area code):(907) 789-4844

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133 -4(c))

Item 2.02 Results of Operations and Financial Condition

On March 6, 2007, Alaska Pacific Bancshares, Inc. issued its earnings release for the quarter ended December 31, 2006. A copy of the earnings release is attached hereto as Exhibit 99.1, which is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(c)	Exhibits
	99.1 Press Release of Alaska Pacific Bancshares, Inc. March 6, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.




                                                                                     ALASKA PACIFIC BANCSHARES, INC.

DATE: March 6, 2007                                                   By:/s/ Roger K. White
                                                                                     Senior Vice President and 
                                                                                     Chief Financial Officer

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Exhibit 99.1

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News Release
For Immediate Release

     ALASKA PACIFIC POSTS RECORD EARNINGS FOR 2006 AND FOURTH QUARTER

JUNEAU, Alaska, March 6, 2007 -- Alaska Pacific Bancshares, Inc. (OTCBB: AKPB), the parent company of Alaska Pacific Bank, announced record earnings for 2006 and for the fourth quarter. Net income for the year was $1,061,000, or $1.63 per diluted share. This represents a 45% increase compared with $731,000 ($1.15 per diluted share) earned in 2005. For the fourth quarter, net income was $409,000, or $.63 per diluted share, a 78% increase from $230,000 ($.36 per diluted share) in the fourth quarter of 2005.

Net interest income increased $456,000 (5.6%) to $8.5 million in 2006 compared to 2005, reflecting a 4.8% increase in average loans. The net interest margin on average earning assets was 5.13% for 2006 compared with 5.08% in 2005.

Loans (excluding loans held for sale) were $158.6 million at December 31, 2006, an increase of 4.5% from last quarter and 3.8% from a year ago, reflecting strong loan demand. Deposits at December 31, 2006 were $145.2 million, an $8.6 million (5.6%) decrease from last quarter, and a $1.4 million decrease (1.0%) from a year ago.

Nonperforming loans at December 31, 2006 were zero compared with $1.3 million last quarter and $1.4 million a year ago, reflecting the return of a commercial loan to accruing status. This troubled loan was restructured in 2005 and has performed in accordance with the restructured terms since that time. Due to uncertainties in the ultimate recoverability of principal, however, the loan remains in a substandard classification and an impairment of $450,000 has been recognized in management’s assessment of the allowance for loan losses at year end.

Net loan chargeoffs for the year amounted to $32,000 compared with $52,000 in 2005. The provision for loan losses increased to $250,000 in 2006 from $120,000 in 2005, reflecting loan growth as well as management’s assessment of risks in the portfolio.

Gains on sale of loans in 2006 increased to $255,000 compared with $95,000 in 2005 as a result of improved mortgage production and an increase in the portion sold in the secondary market.

Noninterest expense for 2006, excluding branch closure costs, was $139,000 (1.8%) lower than 2005. The net decrease is due to savings resulting from closing the two offices during the first quarter of 2006, partially offset by normal increases in expenses.

As previously announced, the Company declared a regular quarterly dividend of $.09 per share, payable February 23, 2007, to shareholders of record as of February 12, 2007.

Forward-Looking Statements

Certain matters in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among others, expectations of the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, potential future credit

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experience, and statements regarding the Company's mission and vision. These forward-looking statements are based upon current management expectations, and may, therefore, involve risks and uncertainties. The Company's actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, interest rates, the economy in Southeast Alaska, the real estate market, competitive conditions between banks and non-bank financial services providers, regulatory changes, and other risks detailed in the Company's reports filed with the Securities and Exchange Commission.

Contact:	Roger K. White		Craig E. Dahl
	Senior Vice President and CFO	or	President and CEO
	907-790-5135		907-790-5101

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Alaska Pacific Bancshares, Inc.
Financial Highlights (Unaudited)
Year and Fourth Quarter 2006
(dollars in thousands, except per-share amounts)
		Year Ended December 31,
		2006			2005
Condensed Income Statement:
Interest income	$	11,913		$	10,184
Interest expense		(3,382	)		(2,109		)
Net interest income		8,531			8,075
Provision for loan losses		(250	)			(120	)
Gain on sale of loans		255				95
Other noninterest income		1,047			1,034
Branch closure costs		(113	)			(25	)
Other noninterest expense		(7,701	)		(7,840		)
Net income before income tax		1,769			1,219
Income tax expense		(708	)			(488	)
Net income	$	1,061		$		731
Earnings per share:
Basic	$	1.71		$	1.20
Diluted		1.63				1.15
Performance Ratios:
Return on average equity		6.23	%			4.50	%
Return on average assets		0.60				0.43
Yield on average earning assets		7.16				6.41
Cost of average interest-bearing liabilities		2.56				1.68
Interest rate spread		4.60				4.73
Net interest margin on:
Average earning assets		5.13				5.08
Average total assets		4.83				4.79
Efficiency ratio (a)		80.40			86.34
Average balances:
Loans	$	154,352		$	147,218
Earning assets		166,307			158,997
Assets		176,444			168,680
Interest-bearing deposits		118,153			114,910
Total deposits		143,055			139,671
Interest-bearing liabilities		131,882			125,303
Shareholders' equity		17,037			16,253
Average shares outstanding:
Basic		621,774			608,826
Diluted		649,952			639,068

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					Three Months Ended
		December 31,			September 30,			December 31,
		2006			2006			2005
Condensed Income Statement:
Interest income	$	3,227		$	3,013		$	2,837
Interest expense		(946	)		(887	)		(695	)
Net interest income		2,281			2,126			2,142
Provision for loan losses		(45	)		(55	)		(30	)
Gain on sale of loans		116			59			41
Other noninterest income		243			288			249
Noninterest expense		(1,913	)		(1,886	)		(2,018	)
Net income before income tax		682			532			384
Income tax expense		(273	)		(213	)		(154	)
Net income	$	409		$	319		$	230
Earnings per share:
Basic		$ .65			$ .51			$.38
Diluted		.63			.49			.36
Performance Ratios:
Return on average equity		9.37	%		7.48	%		5.57	%
Return on average assets		0.91			0.71			0.52
Yield on average earning assets		7.65			7.17			6.74
Cost of average interest-bearing liabilities		2.83			2.71			2.08
Interest rate spread		4.82			4.46			4.66
Net interest margin on:
Average earning assets		5.41			5.06			5.09
Average total assets		5.08			4.74			4.81
Efficiency ratio (a)		75.79			78.13			84.40
Average balances:
Loans	$	154,876		$	153,581		$	157,075
Earning assets		168,738			168,120			168,330
Assets		179,637			179,261			178,282
Interest-bearing deposits		121,834			118,595			120,407
Total deposits		148,231			146,637			146,717
Interest-bearing liabilities		133,670			130,800			133,671
Shareholders' equity		17,464			17,070			16,506
Average shares outstanding:
Basic		626,170			625,592			609,747
Diluted		652,518			651,796			639,067

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		December 31,			September 30,			December 31,
		2006			2006			2005
Balance sheet data:
Total assets	$	178,923		$	184,603		$	177,157
Loans, before allowance		158,597			151,820			152,722
Loans held for sale		519			1,340			531
Investment securities		5,288			5,647			7,464
Total deposits		145,201			153,801			146,650
Federal Home Loan Bank advances		14,062			11,783			12,048
Shareholders' equity		17,705			17,224			16,638
Shares outstanding (b)		639,809			638,654			627,754
Book value per share	$	27.67		$	26.97		$	26.50
Asset quality:
Allowance for loan losses	$	1,666		$	1,620		$	1448
Allowance as a percent of loans		1.05	%		1.07	%		0.95	%
Nonaccrual loans		$ -		$	1,269		$	1,299
Total nonperforming assets		-			1,269			1,400
Net chargeoffs (recoveries) for quarter		(2	)		-			(2	)
Net chargeoffs for year		32						52

(a)	Noninterest expense, excluding branch closure costs, divided by the sum of net interest income and noninterest income, excluding gains on sale of loans or securities.
(b)	Excludes only treasury stock.

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