| [X] | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|-----|------------------------------------------------------------------------------------------------|

| [  ] | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|----------------|----------------------------------------------------------------------------------------------------|

|                                           Alaska  |   | 92-0167101                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|
| (State or other      jurisdiction of incorporation or organization)                                                                                                                                                                   |   | (I.R.S. Employer      Identification No.)     |
|                                                                                                                                                                                                                                       |   |                                               |
|  2094      Jordan Avenue, Juneau, Alaska 99801(Address      of principal executive offices) (Zip code) Registrant’s      telephone number, including area code: (907)  789-4844                                            |
|                                                                                                                                                                                                                                       |   |                                               |
| Securities      registered pursuant to Section 12(b) of the Exchange      Act:  None                                                                                                                                             |   |
|                                                                                                                                                                                                                                       |   |                                               |
| Securities      registered pursuant to Section 12(g) of the Exchange Act:                                                                                                                                                             |   | Common Stock, par      value $0.01 per share  |
|                                                                                                                                                                                                                                       |   | (Title of      Class)                         |

| Large accelerated      filer [  ]   |   |  Accelerated      filer [  ]   |   |  Non-accelerated      filer [  ]   |   |  Smaller      reporting company [X ] |
|---------------------------------------------------------|--------|---------------------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------------------|

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| 1. | Portions      of the Proxy Statement for the 2009 Annual Meeting of Stockholders are      incorporated by reference in this Form 10-K in response to Part      III. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                     |   |  Page    No. |
|--------------------------------------------------------------------------------------------------------------------------|--------|-------------------|
|                                                                                                                     |   |              |
|  Report of      Independent Registered Public Accounting Firm                                                       |   |  64          |
|  Consolidated      Balance Sheets as of December 31, 2009 and 2008                                                  |   |  65          |
|  Consolidated      Statements of Operations For the Years Ended                                                     |   |              |
|          December      31, 2009 and 2008                                                                  |   |  66          |
|  Consolidated      Statements of Changes in Shareholders’ Equity and Comprehensive Income      (Loss) For the |   |
|          Years Ended December 31, 2009 and 2008                                                           |   |  67          |
|  Consolidated      Statements of Cash Flows For the Years Ended                                                     |   |              |
|          December 31, 2009 and 2008                                                                       |   |  68          |
|  Notes to      Consolidated Financial Statements                                                                    |   |  70          |
|                                                                                                                     |   |              |

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Alaska Pacific Bancshares,Inc. and Subsidiary

| (dollars in thousands)      December 31,                                                                                                |                  2009 |    |                   2008 |    |
|-----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------|---------|
| Assets                                                                                                                                  |                                                                         |    |                                                                               |    |
| Cash      and due from banks                                                                                                            | $   6,273                                                     |    | $   6,344                                                           |    |
| Interest-earning      deposits in banks                                                                                                 | 669                                                                          |    | 3,058                                                                              |    |
|   Total      cash and cash equivalents                                                                                        | 6,942                                                                        |    | 9,402                                                                              |    |
| Investment      securities available for sale, at fair value (amortized cost:         2009 - $2,536; 2008 - $3,233) | 2,606                                                                        |    | 3,243                                                                              |    |
| Federal      Home Loan Bank stock, at cost                                                                                              | 1,784                                                                        |    | 1,784                                                                              |    |
| Loans      held for sale                                                                                                                | 55                                                                           |    | 2,586                                                                              |    |
| Loans                                                                                                                                   | 158,108                                                                      |    | 168,982                                                                            |    |
| Less      allowance for loan losses                                                                                                     | (1,786                                                                       | )  | (2,688                                                                             | )  |
| Loans,      net                                                                                                                         | 156,322                                                                      |    | 166,294                                                                            |    |
| Accrued      interest receivable                                                                                                        | 698                                                                          |    | 822                                                                                |    |
| Premises      and equipment, net                                                                                                        | 2,816                                                                        |    | 3,122                                                                              |    |
| Repossessed      assets                                                                                                                 | 2,598                                                                        |    | 408                                                                                |    |
| Other      assets                                                                                                                       | 4,487                                                                        |    | 3,190                                                                              |    |
| Total      Assets                                                                                                                       | $178,308                                                                     |    | $190,851                                                                           |    |

| Liabilities      and Shareholders’ Equity                                                                                                                                                                                                                    |                |    |                |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------|---------|---------------------|---------|
| Deposits:                                                                                                                                                                                                                                                          |                |    |                |    |
| Noninterest-bearing      demand                                                                                                                                                                                                                                    | $  27,416 |    | $  25,707 |    |
| Interest-bearing      demand                                                                                                                                                                                                                                       | 32,474              |    | 31,042              |    |
| Money      market                                                                                                                                                                                                                                                  | 28,982              |    | 33,072              |    |
| Savings                                                                                                                                                                                                                                                            | 19,170              |    | 17,536              |    |
| Certificates      of deposit                                                                                                                                                                                                                                       | 40,175              |    | 54,818              |    |
| Total      deposits                                                                                                                                                                                                                                                | 148,217             |    | 162,175             |    |
| Federal      Home Loan Bank advances                                                                                                                                                                                                                               | 9,834               |    | 10,320              |    |
| Advance      payments by borrowers for taxes and insurance                                                                                                                                                                                                         | 751                 |    | 733                 |    |
| Accounts      payable and accrued expenses                                                                                                                                                                                                                         | 379                 |    | 480                 |    |
| Accrued      interest payable                                                                                                                                                                                                                                      | 307                 |    | 449                 |    |
| Other      liabilities                                                                                                                                                                                                                                             | 140                 |    | 411                 |    |
| Total      liabilities                                                                                                                                                                                                                                             | 159,628             |    | 174,568             |    |
| Commitments      and contingencies (Note 14)                                                                                                                                                                                                                       |                |    |                |    |
| Shareholders’      Equity:                                                                                                                                                                                                                                   |                |    |                |    |
| Preferred      stock ($0.01 par value; 1,000,000 shares authorized; Series A –      Liquidation      preference $1,000      per share, 4,781 and –0- shares issued and outstanding      at December 31, 2009 and December      31, 2008, respectively) |   4,497   |    |   -       |    |
| Common      stock ($0.01 par value; 20,000,000 shares authorized; 655,415shares      issued; 654,486      shares outstanding at December 31, 2009 and at December 31,      2008)                                                                              |   7       |    |   7       |    |
| Additional      paid-in capital                                                                                                                                                                                                                                    | 6,446               |    | 6,121               |    |
| Treasury      stock                                                                                                                                                                                                                                                | (11                 | )  | (11                 | )  |
| Retained      earnings                                                                                                                                                                                                                                             | 7,699               |    | 10,161              |    |
| Accumulated      other comprehensive income                                                                                                                                                                                                                        | 42                  |    | 5                   |    |
| Total      shareholders’ equity                                                                                                                                                                                                                              | 18,680              |    | 16,283              |    |
| Total      Liabilities and Shareholders’ Equity                                                                                                                                                                                                              | $178,308            |    | $190,851            |    |
|                                                                                                                                                                                                                                                               |                |    |                |    |
| See      notes to consolidated financial statements.                                                                                                                                                                                                               |                |    |                |    |
|                                                                                                                                                                                                                                                               |                |    |                |    |

----

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| (in thousands, except per      share) Year ended December 31, |             2009 |    |            2008                       |    |
|---------------------------------------------------------------|------------------------------------------------|---------|----------------------------------------------------------------|---------|
| Interest      Income                                          |                                           |    |                                                           |    |
| Loans,      including fees                                    | $10,053                                        |    | $11,838                                                        |    |
| Investment      securities                                    | 126                                            |    | 195                                                            |    |
| Interest-earning      deposits in banks                       | 5                                              |    | 42                                                             |    |
| Total      interest income                                    | 10,184                                         |    | 12,075                                                         |    |
| Interest      Expense                                         |                                           |    |                                                           |    |
| Deposits                                                      | 1,369                                          |    | 2,585                                                          |    |
| Federal      Home Loan Bank advances                          | 493                                            |    | 730                                                            |    |
| Total      interest expense                                   | 1,862                                          |    | 3,315                                                          |    |
| Net      Interest Income                                      | 8,322                                          |    | 8,760                                                          |    |
| Provision      for loan losses                                | 2,947                                          |    | 5,034                                                          |    |
| Net      interest income after provision for loan losses      | 5,375                                          |    | 3,726                                                          |    |
| Noninterest      Income                                       |                                           |    |                                                           |    |
| Mortgage      servicing income                                | 186                                            |    | 161                                                            |    |
| Service      charges on deposit accounts                      | 729                                            |    | 709                                                            |    |
| Other      service charges and fees                           | 257                                            |    | 165                                                            |    |
| Gain      on sale of loans                                    | 712                                            |    | 251                                                            |    |
| Other      noninterest income                                 | -                                              |    | 56                                                             |    |
| Total      noninterest income                                 | 1,884                                          |    | 1,342                                                          |    |
| Noninterest      Expense                                      |                                           |    |                                                           |    |
| Compensation      and benefits                                | 4,696                                          |    | 4,871                                                          |    |
| Occupancy      and equipment                                  | 1,393                                          |    | 1,537                                                          |    |
| Data      processing                                          | 258                                            |    | 255                                                            |    |
| Professional      and consulting fees                         | 541                                            |    | 487                                                            |    |
| Marketing      and public relations                           | 268                                            |    | 317                                                            |    |
| Repossessed      property, net                                | 235                                            |    | 116                                                            |    |
| Loss      on sale or impairment of repossessed assets         | 503                                            |    | -                                                              |    |
| Other                                                         | 1,538                                          |    | 1,208                                                          |    |
| Total      noninterest expense                                | 9,432                                          |    | 8,791                                                          |    |
| Loss      before income tax                                   | (2,173                                         | )  | (3,723                                                         | )  |
| Expense      (Benefit) for income tax                         | 18                                             |    | (1,405                                                         | )  |
| Net      Loss                                                 | $      (2,191                                  | )  | $      (2,318                                                  | )  |
| Preferred      stock dividend and discount accretion          |                                           |    |                                                           |    |
| Preferred      stock dividend                                 | $     216             |    | $          - |    |
| Preferred      stock discount accretion                       | 55                                             |    | -                                                              |    |
| Net      loss available to common shareholders                | $      (2,462                                  | )  | $      (2,318                                                  | )  |
|                                                          |                                           |    |                                                           |    |
| Net      loss per share:                                      |                                           |    |                                                           |    |
| Basic                                                         | $(3.76                                         | )  | $(3.54                                                         | )  |
| Diluted                                                       | (3.76                                          | )  | (3.54                                                          | )  |
|                                                          |                                           |    |                                                           |    |
| See      notes to consolidated financial statements.          |                                           |    |                                                           |    |

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| (in      thousands)                                                                                                                                                | Preferred      Stock | Common      Stock | Additional      Paid-In      Capital |    | Treasury      Stock |    | Unearned      ESOP      Shares | Retained      Earnings |    | Accumulated      Other Comprehensive Income (Loss) | Total      Share-holders’      Equity |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|-------------------|--------------------------------------|---------|---------------------|---------|--------------------------------|------------------------|---------|----------------------------------------------------|---------------------------------------------|---------|
|     Balance,      January 1, 2008                                                                                                              | $-                   | $7                | $6,067                               |    | $(30                | )  | $(41)                          | $12,675                |    | $(9)                                               | $18,669                                     |    |
|        Net loss                                                                                                                                               |                 |              |                                 |    |                |    |                           |  (2,318           | )  |                                               | (2,318                                      | )  |
|        Other comprehensive income:                                                                                                                            |                 |              |                                 |    |                |    |                           |                   |    |                                               |                                        |    |
|  Change      in net unrealized losses on          securities available for sale, net of     related      income tax effect |                 |              |                                 |    |                |    |                           |                   |    | 14                                                 | 14                                          |    |
| Comprehensive    loss                                                                                                                                              |                 |              |                                 |    |                |    |                           |                   |    |                                               | (2,304                                      | )  |
|        Exercise of stock options                                                                                                                              |                 |              | (4                                   | )  | 19                  |    |                           |                   |    |                                               | 15                                          |    |
|        Excess tax benefits from share-based payment arrangements                                                                                              |                 |              |  7                              |    |                |    |                           |                   |    |                                               | 7                                           |    |
|        ESOP shares earned                                                                                                                                     |                 |              | 25                                   |    |                |    | 41                             |                   |    |                                               | 66                                          |    |
|        Stock compensation expense                                                                                                                             |                 |              | 26                                   |    |                |    |                           |                   |    |                                               | 26                                          |    |
|        Cash dividends on common stock ($0.30 per share)                                                                                                       |                 |              |                                 |    |                |    |                           | (196                   | )  |                                               | (196                                        | )  |
|          Balance, December 31, 2008                                                                                                                 | -                    | 7                 | 6,121                                |    | (11                 | )  | -                              | 10,161                 |    | 5                                                  | 16,283                                      |    |
|         Net loss                                                                                                                                         |                 |              |                                 |    |                |    |                           |  (2,191           | )  |                                               | (2,191                                      | )  |
|        Other comprehensive income:                                                                                                                            |                 |              |                                 |    |                |    |                           |                   |    |                                               |                                        |    |
|        Change in net unrealized gains on     securities      available for sale, net of          related income tax effect |                 |              |                                 |    |                |    |                           |                   |    | 37                                                 | 37                                          |    |
| Comprehensive      loss                                                                                                                                            |                 |              |                                 |    |                |    |                           |                   |    |                                               | (2,154                                      | )  |
|        Stock compensation expense                                                                                                                             |                 |              | 27                                   |    |                |    |                           |                   |    |                                               | 27                                          |    |
|        Issuance of preferred stock to U.S. Treasury                                                                                                           |  4,442          |              |                                 |    |                |    |                           |                   |    |                                               | 4,442                                       |    |
|        Issuance of common stock warrants to U.S.        Treasury                                                           |                 |              |  339                            |    |                |    |                           |                   |    |                                               | 339                                         |    |
|        Accretion of preferred stock discount                                                                                                                  | 55                   |              |                                 |    |                |    |                           | (55                    | )  |                                               |                                        |    |
|        Preferred stock issuance costs                                                                                                                         |                 |              | (41                                  | )  |                |    |                           |                   |    |                                               | (41                                         | )  |
|        Cash dividends on preferred stock                                                                                                                      |                 |              |                                 |    |                |    |                           | (216                   | )  |                                               | (216                                        | )  |
|     Balance,      December 31, 2009                                                                                                            | $4,497               | $7                | $6,446                               |    | $(11                | )  | $-                             | $7,699                 |    | $42                                                | $18,680                                     |    |

|                                                 |   |   |   |   |   |   |   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| See      notes to consolidated financial statements. |   |   |   |   |   |   |

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| (in thousands) Year      ended December 31,                                                                 | 2009    |    | 2008    |    |
|-------------------------------------------------------------------------------------------------------------|---------|---------|---------|---------|
| Operating      Activities                                                                                   |    |    |    |    |
| Net      loss                                                                                               | $(2,191 | )  | $(2,318 | )  |
| Adjustments      to reconcile net loss to net cash provided by        operating activities:       |    |    |    |    |
| Provision      for loan losses                                                                              | 2,947   |    | 5,034   |    |
| Provision      for income tax benefit                                                                       | 905     |    | -       |    |
| Gain      on sale of loans                                                                                  | (712    | )  | (251    | )  |
| Depreciation      and amortization                                                                          | 335     |    | 462     |    |
| Deferred      income tax benefit                                                                            | (421    | )  | (513    | )  |
| Amortization      of fees, discounts, and premiums, net                                                     | (201    | )  | (326    | )  |
| ESOP      expense                                                                                           | -       |    | 66      |    |
| Stock      compensation expense                                                                             | 27      |    | 26      |    |
| Loans      originated for sale                                                                              | (43,260 | )  | (16,816 | )  |
| Proceeds      from sale of loans originated for sale                                                        | 46,503  |    | 17,401  |    |
| Excess      tax benefits from share-based payments arrangements                                             | -       |    | (7      | )  |
| Loss      on sale or impairment of repossessed assets                                                       | 503     |    | -       |    |
| Cash      provided by (used in) changes in operating assets and      liabilities:                           |    |    |    |    |
| Accrued      interest receivable                                                                            | 124     |    | 156     |    |
| Other      assets                                                                                           | (1,804  | )  | (1,060  | )  |
| Advance      payments by borrowers for taxes and insurance                                                  | 18      |    | 2       |    |
| Accrued      interest payable                                                                               | (142    | )  | (219    | )  |
| Accounts      payable and accrued expenses                                                                  | (101    | )  | (54     | )  |
| Other      liabilities                                                                                      | (302    | )  | (19     | )  |
| Net      cash provided by operating activities                                                              | 2,228   |    | 1,564   |    |
| Investing      Activities                                                                                   |    |    |    |    |
| Maturities      and principal repayments of investment securities         available for sale | 687     |    | 681     |    |
| Loan      originations, net of principal repayments                                                         | 3,728   |    | (8,007  | )  |
| Purchase      of premises and equipment                                                                     | (29     | )  | (148    | )  |
| Proceeds      from sale of repossessed assets                                                               | 815     |    | 334     |    |
| Net      cash used in investing activities                                                                  | (5,201  | )  | (7,140  | )  |
| Financing      Activities                                                                                   |    |    |    |    |
| Cash      dividends paid on preferred stock                                                                 | (185    | )  | -       |    |
| Cash      dividends paid on common stock                                                                    | -       |    | (196    | )  |
| Proceeds      from issuance of preferred stock and common stock warrants                                    | 4,781   |    | -       |    |
| Stock      issuance costs paid                                                                              | (41     | )  | -       |    |

----

| Net      decrease in Federal Home Loan Bank advances                                             | (486         | )  | (6,756       | )  |
|--------------------------------------------------------------------------------------------------|--------------|---------|--------------|---------|
| Net      increase in demand and savings deposits                                                 | 685          |    | 5,714        |    |
| Net      increase (decrease) in certificates of deposit                                          | (14,643      | )  | 7,094        |    |
| Excess      tax benefits from share-based payments arrangements                                  | -            |    | 7            |    |
| Proceeds      from exercise of stock options                                                     | -            |    | 15           |    |
| Net      cash provided by (used in) financing activities                                         | (9,889       | )  | 5,878        |    |
| Increase      (decrease) in cash and cash equivalents                                            | (2,460       | )  | 302          |    |
| Cash      and cash equivalents at beginning of year                                              | 9,402        |    | 9,100        |    |
| Cash      and cash equivalents at end of year                                                    | $6,942       |    | $9,402       |    |
| Supplemental      information:                                                                   |         |    |         |    |
| Cash      paid for interest                                                                      | $      2,004 |    | $      3,534 |    |
| Cash      paid for (received from) income taxes                                                  | (9           | )  | 344          |    |
| Loans      repossessed and transferred to repossessed assets                                     | 3,508        |    | 742          |    |
| Net      change in unrealized gains and losses on securities available for sale,      net of tax | 37           |    | 14           |    |
|  See      notes to consolidated financial statements.                                       |         |    |         |    |
|                                                                                             |         |    |         |    |

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|                                                          |                                 | Minimum      Capital Required             |
|---------------------------------------------------------------|--------------------------------------|-------------------------------------------|
| (dollars      in thousands)                                   | Actual                               | For      Capital Adequacy Purposes        | To      Be Categorized as “Well      Capitalized” Under      PCA Provisions |
|                                                          |           Amount |            Ratio |              Amount |              Ratio |            Amount |          Ratio |
| December      31, 2009:                                       |                                 |                                      |   |   |   |   |
| Tangible      capital (to total assets)                       | $17,237                              | 9.70%                                     | $  2,666 | 1.50% | N/A | N/A    |
| Core      capital (to total assets)                           | 17,237                               | 9.70                  | 7,110 | 4.00     | $  8,887 | 5.00% |
| Total      risk-based capital (to risk weighted assets)       | 18,508                               | 12.84                 | 11,531 | 8.00     | 14,413 | 10.00     |
| Tier I      risk-based capital (to risk weighted assets) | 17,237                               | 11.96                 |   N/A | N/A    | 8,648 | 6.00     |
|                                                          |                                 |                                      |   |   |   |   |
| December      31, 2008:                                       |                                 |                                      |   |   |   |   |
| Tangible      capital (to total assets)                       | $16,053                              | 8.43%                                     | $  2,857 | 1.50% | N/A | N/A    |
| Core      capital (to total assets)                           | 16,053                               | 8.43                       | 7,618 | 4.00     | $  9,522 | 5.00% |
| Total      risk-based capital (to risk weighted assets)       | 17,724                               | 11.58                      | 12,241 | 8.00     | 15,302 | 10.00     |
| Tier I      risk-based capital (to risk weighted assets) | 16,053                               | 10.49                      |   N/A | N/A    | 9,181 | 6.00     |

| (in      thousands)              |  Amortized      Cost | Gross      Unrealized      Gains | Gross      Unrealized      Losses |    |  FairValue |
|----------------------------------|---------------------------|----------------------------------|-----------------------------------|---------|-----------------|
| December      31, 2009:          |                      |                             |                              |    |            |
| Mortgage-backed      securities: | $2,445                    | $81                              | $(12                              | )  | $2,514          |
| U.S.      government agencies    | 91                        | 1                                | -                                 |    | 92              |
| Total                            | $2,536                    | $82                              | $(12                              | )  | $2,606          |
|                             |                      |                             |                              |    |            |
| December      31, 2008:          |                      |                             |                              |    |            |
| Mortgage-backed      securities: | $3,134                    | $49                              | $(38                              | )  | $3,145          |
| U.S.      government agencies    | 99                        | -                                | (1                                | )  | 98              |
| Total                            | $3,233                    | $49                              | $(39                              | )  | $3,243          |

----

|                                                    | Impaired      less than12      months | Impaired      12 monthsor      more                               | Total                              |
|---------------------------------------------------------|---------------------------------------|-------------------------------------------------------------------|------------------------------------|
| (in      thousands)                                     |          Fair Value    |          Unrealized          Losses |          Fair Value |          Unrealized          Losses |          Fair Value |          Unrealized          Losses |
| Mortgage-backed               securities | $12                                   | $(1)                                                              | $571                               | $(11) | $583 | $(12) |
| U.S.      government     agencies   | -                                     | -                                                                 | -                                  | - | - | - |
| Total                                                   | $12                                   | $(1)                                                              | $571                               | $(11) | $583 | $(12) |

|                                                        | Impaired      less than12      months | Impaired      12 monthsor      more                               | Total                              |
|-------------------------------------------------------------|---------------------------------------|-------------------------------------------------------------------|------------------------------------|
| (in      thousands)                                         |          Fair Value    |          Unrealized          Losses |          Fair Value |          Unrealized          Losses |          Fair Value |          Unrealized           Losses |
| Mortgage-backed               securities     | $-                                    | $-                                                                | $1,180                             | $(38) | $1,180 | $(38) |
| U.S.      agencies and          corporations | -                                     | -                                                                 | 98                                 | (1) | 98 | (1) |
| Total                                                       | $-                                    | $-                                                                | $1,278                             | $(39) | $1,278 | $(39) |

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| (in thousands) December      31, |               2009 |                  2008 |
|----------------------------------|------------------------------------------------------------|------------------------------------------------------------------------------|
| Real      estate:                |                                                       |                                                                         |
| Permanent:                       |                                                       |                                                                         |
| One-      to four-family         | $  33,787                                        | $  38,875                                                          |
| Multifamily                      | 1,736                                                      | 2,575                                                                        |
| Commercial      nonresidential   | 64,453                                                     | 56,019                                                                       |
|    Land           | 9,697                                                      | 13,360                                                                       |
| Construction:                    |                                                       |                                                                         |
| One-      to four-family         | 3,050                                                      | 4,179                                                                        |
| Commercial      nonresidential   | 2,637                                                      | 5,064                                                                        |
| Commercial      business         | 19,856                                                     | 24,429                                                                       |
| Consumer:                        |                                                       |                                                                         |
| Home      equity                 | 16,522                                                     | 18,661                                                                       |
| Boat                             | 4,287                                                      | 4,060                                                                        |
| Automobile                       | 1,269                                                      | 998                                                                          |
| Other                            | 814                                                        | 762                                                                          |
| Loans                            | $158,108                                                   | $168,982                                                                     |

|                     |   |   |
|--------------------------|--------|--------|
| Loans      held for sale | $55    | $2,586 |

| (in thousands) Year      ended December 31,                                                        |             2009 |                2008 |
|----------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------------------------|
| Impaired      loans at end of year                                                                 | $5,342                                         | $10,685                                                          |
| Impaired      loans at end of year for which specific valuation allowances have been      provided | 1,922                                          | 10,685                                                           |
| Amount      of allowances at end of year                                                           | 514                                            | 875                                                              |

| (in thousands) Year      ended December 31,                       |                 2009 |                2008 |
|-------------------------------------------------------------------|------------------------------------------------------------------------|------------------------------------------------------------------|
| Average      investment in impaired loans                         | $11,503                                                                | $8,892                                                           |
| Interest      income recognized on impaired loans                 | 151                                                                    | 313                                                              |
| Interest      income recognized on a cash basis on impaired loans | 151                                                                    | 313                                                              |

----

| (in thousands) Year      ended December 31, |         2009 |    |         2008 |    |
|---------------------------------------------|------------------------|---------|------------------------|---------|
| Balance      at beginning of year           | $2,688                 |    | $1,783                 |    |
| Provision      for loan losses              | 2,947                  |    | 5,034                  |    |
| Loans      charged off                      | (3,875                 | )  | (4,182                 | )  |
| Recoveries                                  | 26                     |    | 53                     |    |
| Balance      at end of year                 | $1,786                 |    | $2,688                 |    |

----

| (in thousands) December      31,                    | 2009                               | 2008                               |
|-----------------------------------------------------|------------------------------------|------------------------------------|
| Land                                                | $   424   | $   424   |
| Buildings                                           | 2,254                              | 2,254                              |
| Leasehold      improvements                         | 3,670                              | 3,667                              |
| Furniture,      fixtures and equipment              | 3,021                              | 2,998                              |
|                                                | 9,369                              | 9,343                              |
| Less      accumulated depreciation and amortization | (6,553)                            | (6,221)                            |
|                                                | $2,816                   | $3,122                   |

| (in thousands) Year      ending December 31,           |                          |
|--------------------------------------------------------|-------------------------------|
|           | 2010                     | $23,452 |
|           | 2011                          | 11,371 |
|           | 2012                          | 2,443 |
|                | 2013                          | 240 |
|                | 2014      and thereafter | 2,669 |
|                                                   |                          | $40,175 |

| (in thousands) Year      ended December 31, | 2009                                   | 2008                             |
|---------------------------------------------|----------------------------------------|----------------------------------|
| Interest-bearing      demand                | $        54                  | $        93            |
| Money      market                           |          218            |         545            |
| Savings                                     |            47 |           64 |
| Certificates      of deposit                |  1,050                            |  1,883                      |
|                                        | $1,369                                 | $2,585                           |

| Year      ended December 31, | 2009                          | 2008                    |
|------------------------------|-------------------------------|-------------------------|
| Interest-bearing      demand |          0.17% |         0.32% |
| Money      market            | 0.50                          | 1.84                    |
| Savings                      | 0.23                          | 0.38                    |
| Certificates      of deposit | 2.36                          | 3.51                    |

----

| (dollars in thousands)      December 31,                                                               | 2009                                   | 2008                                    |
|--------------------------------------------------------------------------------------------------------|----------------------------------------|-----------------------------------------|
| Overnight      advances, 0.64%                                                                         | $4,800                                 |           $  - |
| Putable      advance, maturing in 2009, putable earlier         at discretion of FHLB, 6.13% |            -  |          5,000           |
| Seven-year      amortizing advance, final maturity in         2010, 3.62%                    |            34 |       320 |
| Four-year      advance, maturing in 2010, 5.24%                                                        |  1,500                            |          1,500           |
| Five-year      advance, maturing in 2011, 5.26%                                                        |  2,000                            |          2,000           |
| Seven-year      advance, maturing in 2013, 5.30%                                                       |  1,500                            |          1,500           |
|                                                                                                   | $9,834                                 | $10,320                                 |

| (in      thousands)Year      ending December 31, |                                        |
|--------------------------------------------------|---------------------------------------------|
| 2010                                             | $1,534                                      |
| 2011                                             |  2,000                                 |
| 2012                                             |             - |
| 2013                                             |  1,500                                 |
| Total                                            | $5,034                                      |

----

| (in      thousands)Year      ended December 31,                       | 2009                   | 2008                                     |
|-----------------------------------------------------------------------|------------------------|------------------------------------------|
|                                                                  | Number      of Options | Weighted      AverageExercise      Price | Number      of Options | Weighted      AverageExercise      Price |
| Stock      options outstanding at         beginning of year | 54,188                 | $16.08                                   | 57,665 | $16.25 |
| Granted                                                               | -                      | -                                        |              - |               - |
| Exercised                                                             | -                      | -                                        |        (1,477) |        $9.75 |
| Forfeited                                                             | -                      | -                                        |        (2,000) | $25.50 |
| Stock      options outstanding at         end of year       | 54,188                 | $16.08                                   | 54,188 | $16.08 |
|                                                                  |                   |                                     |   |   |
| Options      exercisable at end of          year       | 45,288                 | $14.23                                   | 41,268 | $13.13 |

| Weighted-Average      Exercise      Price | Number      Outstanding      at End      of Year | Weighted-Average      Remaining      Contractual      Term (Years) | Aggregate      Intrinsic      Value | Exercisable             |
|-------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------|-------------------------------------|-------------------------|
| Number      of Shares                     | Aggregate      Intrinsic      Value              |
| $  9.75                         | 31,188                                           | 0.6                                                                | $      -                            | 31,188                  | $      - |
|        17.50       25.50        |   2,40020,600                          | 3.17.7                                                             |        -       -          |        2,40011,700 |        -       - |
| $16.08                                    | 54,188                                           | 3.4                                                                | $      -                            | 45,288                  | $      - |

----

| (in thousands) Year      ending December 31,                                               |                           |
|--------------------------------------------------------------------------------------------|--------------------------------|
|                      | 2010                      | $   479 |
|                      | 2011                      |           449 |
|                      | 2012                      |           449 |
|                      | 2013                      |           377 |
|                      | 2014                      |           271 |
|                 | 2015      and  thereafter |   1,107 |
|                                                                                       |                           | $3,132 |

----

| (in thousands) Year      ended December 31,       |           2009 |           2008 |
|---------------------------------------------------|------------------------------------|------------------------------------|
| Current      tax expense (benefit):               |                               |                               |
| Federal                                           | $(397)                             | $(758)                             |
| State                                             | (70)                               | (134)                              |
| Total      current                                | (467)                              | (892)                              |
| Deferred      tax expense (benefit):              |                               |                               |
| Federal                                           | (357)                              | (436)                              |
| State                                             | (63)                               | (77)                               |
| Total      deferred                               | (420)                              | (513)                              |
| Increase      in deferred tax valuation allowance | 905                           |                               |
| Expense      (Benefit) for income tax             | $18                           | $(1,405)                           |

| (in thousands) Year      ended December 31,         |            2009 |            2008 |
|-----------------------------------------------------|------------------------------------------|------------------------------------------|
| Income      tax expense (benefit) at statutory rate | $(739)                                   | $(1,266)                                 |
| Income      tax effect of:                          |                                     |                                     |
| State      income tax                               | (134)                                    | (223)                                    |
| Tax-exempt      interest                            | (12)                                     | (14)                                     |
| Increase      in deferred tax valuation allowance   | 905                                      | -                                   |
| Other                                               | (2)                                      | 98                                  |
| Expense      (Benefit) for income tax               | $18                                 | $(1,405)                                 |
|                                                |                                     |                                     |
| Effective      tax rate                             | (1%)                                     | 38%                                      |

----

| (in thousands) December      31,                       |              2009 |    |               2008 |    |
|--------------------------------------------------------|------------------------------------------------------|---------|------------------------------------------------------------|---------|
| Deferred      tax assets:                              |                                                 |    |                                                       |    |
| Bad      debt reserves                                 | $929                                                 |    | $1,227                                                     |    |
| Nonaccrual      loan interest                          | 308                                                  |    | 252                                                        |    |
| Premises      and equipment                            | 128                                                  |    | -                                                          |    |
| Accrued      vacation                                  | 68                                                   |    | 68                                                         |    |
| Nondeductible      REO write-down                      | 21                                                   |    | -                                                          |    |
| Net      operating loss carry-forward                  | 524                                                  |    |                                                       |    |
| Other                                                  | 29                                                   |    | 28                                                         |    |
| Gross deferred tax      assets                         | 2,007                                                |    | 1,575                                                      |    |
| Deferred      tax liabilities:                         |                                                 |    |                                                       |    |
| Deferred      loan fees, net                           | (48                                                  | )  | (42                                                        | )  |
| FHLB      stock dividends                              | (610                                                 | )  | (610                                                       | )  |
| Prepaids                                               | (94                                                  | )  | -                                                          |    |
| Premises      and equipment                            | -                                                    |    | (38                                                        | )  |
| Other                                                  | -                                                    |    | (50                                                        | )  |
| Gross deferred tax      liabilities                    | (752                                                 | )  | (740                                                       | )  |
| Net      deferred tax assets                           | 1,255                                                |    | 835                                                        |    |
| Valuation      allowance for deferred tax asset        | (905                                                 | )  | -                                                          |    |
| Net      deferred tax assets after valuation allowance | $350                                                 |    | $835                                                       |    |

----

----

----

|  (in thousands)      December 31,                    |  2009                                                                                                  |   |  2008                                                                                                          |
|-----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|
| Net      loss                                             |  $     (2,191)                                                                |   |  $      (2,318)                                                                  |
|    Preferred      stock dividend accrual   |            (216)                                     |   |                   -  |
|    Preferred      stock discount accretion |              (55)                          |   |                   -  |
| Net      loss available to common shareholders            |  $     (2,462)                                                                |   |   $      (2,318)                                                            |
|                                                      |                                                                                                        |   |                                                                                                                |
| Average      shares issued                                |             655,415                        |   |               655,415                    |
| Less      treasury stock                                  |                  (929) |   |                 (1,114)             |
| Less      unallocated ESOP shares                         | -                                                                                                      |   |                 -              |
| Basic      weighted average shares outstanding            |             654,486                        |   |               654,301                    |
|                                                      |                                                                                                        |   |                                                                                                                |
| Net      incremental shares                               |           -                                          |   | -                                                                                                              |
| Weighted      incremental shares                          | 654,486                                                                                                |   |  654,301                                                                                                  |
|                                                      |                                                                                                        |   |                                                                                                                |
| Loss      per common share                                |                                                                                                        |   |                                                                                                                |
|    Basic                                   |  $             (3.76)                 |   |  $               (3.54)             |
|    Diluted                                 |  $             (3.76)                 |   |  $               (3.54)             |

| (in thousands) December      31,              | 2009                     | 2008                     |
|-----------------------------------------------|--------------------------|--------------------------|
|                                          |  CarryingAmount     | EstimatedFairValue       |  CarryingAmount | EstimatedFairValue |
| Financial      Assets                         |                     |                     |   |   |
| Cash      and cash equivalents                | $   6,942 | $   6,942 | $   9,402 | $   9,402 |
| Investment      securities available for sale | 2,606                    | 2,606                    | 3,243 | 3,243 |
| FHLB      stock                               | 1,784                    | 1,784                    | 1,784 | 1,784 |
| Loans,      including held for sale           | 158,163                  | 166,184                  | 171,568 | 179,691 |
| Accrued      interest receivable              | 698                      | 698                      | 822 | 822 |
| Mortgage      servicing rights                | 813                      | 1,234                    | 646 | 804 |
|                                          |                     |                     |   |   |
| Financial      Liabilities                    |                     |                     |   |   |
| Demand      and savings deposits              | 108,042                  | 108,042                  | 107,357 | 107,357 |
| Certificates      of deposit                  | 40,175                   | 40,230                   | 55,814 | 48,166 |
| FHLB      Advances                            | 9,834                    | 10,082                   | 10,320 | 10,915 |
| Accrued      interest payable                 | 307                      | 307                      | 449 | 449 |
|                                          |                     |                     |   |   |

----

|                                              |   | Fair      Value Measurements Using |   |
|---------------------------------------------------|--------|------------------------------------|--------|
|                                              |   | Fair      Value                    |   |   | Quoted      Prices      inActive      Markets for      Identical      Assets(Level      1) |   |   | Significant      Other      Observable      Inputs      (Level      2) |   |   | Significant      Unobservable Inputs(Level      3) |   |
|                                              |   | (in      thousands)                |   |
| December      31, 2009:                           |   |                               |   |   |   |   |   |   |   |   |   |   |
| Recurring:                                        |   |                               |   |   |   |   |   |   |   |   |   |   |
| Available      for sale securities:               |   |                               |   |   |   |   |   |   |   |   |   |   |
|    Mortgage      backed securities |   | $                                  | 2,514  |   |   | $ | – |   |   | $ | 2,514 |   |   | $ | – |   |
|    U.S.      government agencies   |   |                               | 92     |   |   |   |   |   |   |   | 92 |   |   |   |   |   |
| Mortgage      servicing rights                    |   |                               | 1,234  |   |   |   | – |   |   |   | 1,234 |   |   |   | – |   |
|                                              |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-recurring:                                    |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired      loans                               |   |                               | 1,408  |   |   |   | – |   |   |   | – |   |   |   | 1,408 |   |
| Repossessed      assets                           |   |                               | 2,598  |   |   |   | – |   |   |   | 2,598 |   |   |   | – |   |
|                                              |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2008:                           |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recurring:                                        |   |                               |   |   |   |   |   |   |   |   |   |   |
| Available      for sale securities:               |   |                               |   |   |   |   |   |   |   |   |   |   |
|    Mortgage      backed securities |   | $                                  | 3,145  |   |   | $ | – |   |   | $ | 3,145 |   |   | $ | – |   |
|    U.S.      government agencies   |   |                               | 98     |   |   |   |   |   |   |   | 98 |   |   |   |   |   |
| Mortgage      servicing rights                    |   |                               | 804    |   |   |   | – |   |   |   | 804 |   |   |   | – |   |
|                                              |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-recurring:                                    |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired      loans                               |   |                               | 3,033  |   |   |   | – |   |   |   | – |   |   |   | 3,033 |   |
| Repossessed      assets                           |   |                               | 408    |   |   |   |   |   |   |   | 408 |   |   |   |   |   |

----

| (in thousands) December      31,                      | 2009                                          | 2008                                                     |
|-------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------|
| Assets                                                |                                          |                                                     |
| Cash                                                  | $  1,431                            | $     224                       |
| Investment      in subsidiary                         |        17,280                            |        16,059                                       |
| Total      Assets                                     | $18,711                                       | $16,283                                                  |
|                                                  |                                          |                                                     |
| Liabilities      and Shareholders’ Equity       |                                          |                                                     |
| Other      liabilities                                | $       31 | $         - |
| Shareholders’      equity                       |        18,680                            |   16,283                                       |
| Total      Liabilities and Shareholders’ Equity | $18,711                                       | $16,283                                                  |

| (in thousands) Year      ended December 31, | 2009                                          | 2008                                          |
|---------------------------------------------|-----------------------------------------------|-----------------------------------------------|
| Deficit      in earnings of subsidiary      | $(2,043)                                      | $(2,174)                                      |
| Total      loss                             |        (2,043)                           |        (2,174)                           |
| Operating      expenses, net                |            148  |            144  |
| Net      loss                               | $(2,191)                                      | $(2,318)                                      |

----

| (in thousands) Year      ended December 31,                                                        |                           2009 |    |                   2008 |    |
|----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------|---------|
| Cash      flows from operating activities:                                                         |                                                                                            |    |                                                                               |    |
| Net      loss                                                                                      | $(2,191                                                                                         | )  | $(2,318                                                                            | )  |
| Adjustments      to reconcile net loss to net cash used in         operating activities: |                                                                                            |    |                                                                               |    |
| Deficit      in earnings of subsidiary                                                             | 2,043                                                                                           |    | 2,174                                                                              |    |
| Net      cash used in operating activities                                                         | (148                                                                                            | )  | (144                                                                               | )  |
|                                                                                               |                                                                                            |    |                                                                               |    |
| Cash      flows from investing activities:                                                         |                                                                                            |    |                                                                               |    |
| Distributions      received from subsidiary                                                        | -                                                                                               |    | 252                                                                                |    |
| Investment      in subsidiary                                                                      | (3,200                                                                                          | )  | -                                                                                  |    |
| Net      cash provided by (used in) investing activities                                           | (3,200                                                                                          | )  | 252                                                                                |    |
|                                                                                               |                                                                                            |    |                                                                               |    |
| Cash      flows from financing activities:                                                         |                                                                                            |    |                                                                               |    |
| Proceeds      from issuance of preferred stock and common          stock warrants   |  4,781                                                                                     |    |  -                                                                            |    |
| Stock      issuance costs paid                                                                     | (41                                                                                             | )  | -                                                                                  |    |
| Issuance      of common stock                                                                      | -                                                                                          |    | 15                                                                                 |    |
| Cash      dividends paid on preferred stock                                                        | (185                                                                                            | )  | -                                                                                  |    |
| Cash      dividends paid on common stock                                                           | -                                                                                               |    | (196                                                                               | )  |
| Net      cash provided by (used in) financing activities                                           | 4,555                                                                                           |    | (181                                                                               | )  |
|                                                                                               |                                                                                            |    |                                                                               |    |
| Net      increase (decrease) in cash                                                               | 1,207                                                                                           |    | (73                                                                                | )  |
| Cash      at beginning of year                                                                     | 224                                                                                             |    | 297                                                                                |    |
| Cash      at end of year                                                                           | $1,431                                                                                          |    | $224                                                                               |    |

----

|                      | ALASKA      PACIFIC BANCSHARES, INC.       |
|---------------------------|--------------------------------------------|
|                      |                                       |
|                      |                                       |
| Date:      March 31, 2010 | /s/      Craig E. Dahl                     |
|                      | Craig      E. Dahl                         |
|                      | President      and Chief Executive Officer |
|                      | (Duly      Authorized Representative)      |

----

|           31.1 | Certification      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002 |
|------------------------------------|--------------------------------------------------------------------------------------------------------------|

|           31.2 | Certification      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley      Act of 2002 |
|------------------------------------|--------------------------------------------------------------------------------------------------------------|

|           32.1 | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002 |
|------------------------------------|--------------------------------------------------------------------------------------------------------------|

|           32.2 | Certification      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002 |
|------------------------------------|--------------------------------------------------------------------------------------------------------------|

----