EXHIBIT 99.1
Washington Banking Company Earns $8.3 Million, or $0.88 Per Diluted Share in 2008
OAK HARBOR, WA – January 28, 2009 – Washington Banking Company (NASDAQ: WBCO), the holding company for Whidbey Island Bank, today reported that its well-diversified loan portfolio and strong capital ratios contributed to a profitable quarter. Washington Banking earned $1.7 million, or $0.18 per diluted share, in the quarter ended December 31, 2008, compared to $1.9 million, or $0.19 per diluted share, in the fourth quarter a year ago. In 2008, net income was $8.3 million, or $0.88 per diluted share, compared to $9.4 million, or $0.99 per diluted share in 2007.
“Our core strengths and consistent operating practices are reflected in our solid balance sheet, strong capital position and diversified loan portfolio,” said Jack Wagner, President and CEO. “We achieved these respectable results in spite of the continued deterioration in the overall economy.”
Conference Call Information
Management will host a conference call tomorrow, January 29, 2009, at 10:00 AM PST (1:00 noon EST) to discuss the quarterly results. The live call can be accessed by dialing (303) 262-2053 or on the web atwww.wibank.com. The replay, which will be available for 90 days beginning shortly after the call concludes, can be heard at (303) 590-3000 with access code 11124816#, or on the web atwww.wibank.com.
Fourth Quarter 2008 Financial Highlights(December 31, 2008, compared to December 31, 2007)
- Capital ratios remained well above the regulatory requirements for well-capitalizedinstitutions, with Tier 1 Capital to risk-adjusted assets of 11.98% compared to11.14%.
- Continued strong asset quality with nonperforming assets to total assets at 0.46%from 0.48%.
- Total net loans increased 2% to $811 million from $795 million.
- Book value per share increased 9% to $8.47 compared to $7.78.
- Continued payment of quarterly cash dividends equivalent to an annual dividend of$0.26 per common share, with a yield of 3.2% at recent share prices.
- Core deposits, consisting of transaction accounts and CDs under $100,000, totaled$561.1 million and accounted for 75% of total deposits.
Credit Quality
“Considering the difficult market conditions, our asset quality has remained above average,” said Joe Niemer, Chief Credit Officer. “Like other banks in the area, we are seeing stress in our construction portfolio and higher credit costs in our indirect loan program, although at manageable levels.” Nonperforming assets totaled $4.1 million, or 0.46% of total assets at December 31, 2008, compared to $4.6 million, or 0.50% of total assets at September 30, 2008, and $4.3 million, or 0.48% of total assets, a year ago. “Our NPAs continue to be limited to a handful of relationships and our loan portfolio remains well diversified by borrowers, loan type and geography within our operating area in Northwest Washington.” Nonperforming assets consist of nonaccrual loans, accruing loans 90 days or more past due, restructured loans and other real estate owned (OREO).
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| | WBCO – 4Q08 Profits
January 28, 2009
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The allowance for loan losses increased to $12.3 million, or 1.49% of total loans at quarter end, compared to $11.1 million or 1.38% at December 31, 2007, in part, reflecting growth in the loan portfolio and deteriorating market conditions.
Net charge-offs in the fourth quarter were $1.1 million, or 55 basis points of average loans, compared to $429,000, or 21 basis points of average loans for the same period a year ago. In 2008, net charge-offs were $3.9 million, or 48 basis points, compared to $1.9 million, or 25 basis points for 2007. Net charge-offs in the indirect lending portfolio were $507,000 in the fourth quarter and $1.4 million for the year, reflecting the softening in the local economy. “Our indirect consumer loan program provides funding for new and used vehicles to creditworthy customers,” Niemer noted. “In 2008, the average FICO credit score was 709 in this portfolio and we continue to maintain strong underwriting criteria.” The indirect consumer portfolio was $108.3 million compared to $110.2 million at September 30, 2008, and $114.3 million a year ago, reflecting the reduced demand for auto loans.”
Capital
Washington Banking’s Tier 1 capital ratio was 11.98% at December 31, 2008, compared with 11.81% from the linked quarter and 11.14% at December 31, 2007. The total risk-based ratio was 13.23% at December 31, 2008, compared with 13.06% from the previous quarter and 12.45% at December 31, 2007. All regulatory ratios continue to exceed the “well-capitalized” requirements established by regulators. Washington Banking’s tangible equity at year end was equal to 8.9% of total assets.
Last week, the company announced a quarterly cash dividend of $0.065 per common share payable on February 19 to shareholders of record on February 3, 2009. “As a result of the solid performance in 2008, which reflects our strong capital position, we are able to continue to reward our shareholders with quarterly cash dividends,” Wagner noted. Washington Banking has paid a quarterly cash dividend since its 1998 initial public offering.
Balance Sheet
“We continue to maintain strong capital, adequate liquidity and a well-managed loan portfolio,” stated Wagner. “Due to the strength of our organization and balance sheet, we were selected to participate in the Treasury’s Capital Purchase Program, and received $26.38 million in funding this month. We plan to continue to lend to creditworthy customers in our markets for business and consumer needs.”
At December 31, 2008, total assets increased 2% to $900 million compared to $882 million a year ago. Total net loans also grew 2% to $811 million from $795 million a year ago, and remained relatively flat from $812 million at the end of the third quarter 2008.
Total deposits were down 1% to $747 million at December 31, 2008 compared to $758 million a year ago and down 5% from $784 million at September 30, 2008. Money market accounts decreased 9% from the end of the linked quarter but grew 8% year-over-year. Time deposits were evenly balanced between certificates under $100,000 and certificates over $100,000 with a very small component of brokered deposits. “We initiated service to our customers last year through the Certificate of Deposit Account Registry Service (CDARS), which allows us to help customers maximize FDIC insurance coverage,” stated Rick Shields, Chief Financial Officer.
Shareholder equity increased 10% to $80.6 million, or $8.47 per share, at December 31, 2008, compared to $73.6 million, or $7.78 per share, a year ago. Following the $26.38 million capital infusion from the preferred shares issued to the U.S. Treasury the pro forma total shareholders’ equity was $106.9 million.
| | WBCO – 4Q08 Profits
January 28, 2009
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Operating Results
Revenue, consisting of net interest income and noninterest income, was $11.2 million in the fourth quarter of 2008, compared to $11.6 million for the third quarter and $11.4 million in the fourth quarter of 2007. For the 2008 full year, revenue was down slightly at $45.2 million compared to $45.7 million in 2007. Net interest income, before the provision for loan losses, decreased 1% to $9.5 million in the fourth quarter of 2008 from $9.6 million in the previous quarter and was flat compared to $9.5 million in the fourth quarter a year ago. For the year, net interest income, before provision for loan losses, increased modestly to $37.9 million in 2008 compared to $37.6 million for 2007.
Net interest margin was 4.50% in the fourth quarter of 2008, down 12 basis points from the linked quarter of 4.62%, and down 21 basis points from 4.71% in the same quarter a year ago. For the full year, Washington Banking’s net interest margin stood at 4.60% compared to 4.89% in 2007.
Noninterest expense for the fourth quarter dropped 14% to $6.7 million compared with $7.9 million in the same quarter of 2007. Noninterest expense for the year fell 3% to $27.5 million compared to $28.5 million for 2007. Included in the 2008 operating expenses were $1.1 million in costs associated with the terminated merger agreement and employee separation expense, which included the retirement of the former CEO. In 2007, costs associated with the merger were $513,000.
The efficiency ratio during the fourth quarter of 2008 was 60.22%, compared to 65.26% reported in the linked quarter, and 68.61% at December 2007. For the year 2008, the efficiency ratio was 60.90% compared to 62.31% for 2007. Return on average assets and return on average equity were 0.74% and 8.37%, respectively, for the fourth quarter of 2008 and 0.94% and 10.82%, respectively, for the reporting year.
ABOUT WASHINGTON BANKING COMPANY
Washington Banking Company is a bank holding company based in Oak Harbor, Washington, that operates Whidbey Island Bank, a state-chartered full-service commercial bank. Founded in 1961, Whidbey Island Bank provides various deposit, loan and investment services to meet customers’ financial needs. Whidbey Island Bank operates 19 full-service branches located in five counties in Northwestern Washington.
www.wibank.com
This press release contains statements that the Company believes are “forward-looking statements.” These statements relate to the Company’s financial condition, results of operations, plans, objectives, future performance or business. The words “anticipate,” “expect,” “will,” “believe,” and words of similar meaning are intended, in part, to help identify forward-looking statements. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. These statements speak only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements.Factors which could cause actual results to differ materially include, but are not limited to: adverse developments in the capital markets; legislative or regulatory requirements affecting financial institutions; restructuring of the regulation of the financial services industry; changes in the interest rate environment; adverse changes in regional and national economic conditions and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and Form 10-Q for quarters ended March 31, 2008 and September 30, 2008. Accordingly, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.
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| January 28, 2009 | | | | | | | | | | |
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| |
| CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) | | Quarter Ended | | Quarter Ended | | Three | | Quarter Ended | | One |
| ($ in thousands, except per share data) | | December 31, | | September 30, | | Month | | December 31, | | Year |
| | | 2008 | | 2008 | | Change | | 2007 | | Change |
|
| Interest Income | | | | | | | | | | |
| Loans | | $ 13,968 | | $ 14,432 | | -3% | | $ 15,813 | | -12% |
| Taxable Investment Securities | | 103 | | 88 | | 16% | | 135 | | -24% |
| Tax Exempt Securities | | 52 | | 51 | | 1% | | 59 | | -13% |
| Other | | 22 | | 6 | | 287% | | 21 | | 9% |
|
| Total Interest Income | | 14,145 | | 14,577 | | -3% | | 16,028 | | -12% |
| |
| Interest Expense | | | | | | | | | | |
| Deposits | | 4,195 | | 4,411 | | -5% | | 6,017 | | -30% |
| Other Borrowings | | 199 | | 276 | | -28% | | 62 | | 222% |
| Junior Subordinated Debentures | | 279 | | 286 | | -2% | | 471 | | -41% |
|
| Total Interest Expense | | 4,673 | | 4,973 | | -6% | | 6,550 | | -29% |
| |
| Net Interest Income | | 9,472 | | 9,604 | | -1% | | 9,478 | | 0% |
| |
| Provision for Loan Losses | | 1,900 | | 1,075 | | 77% | | 800 | | 138% |
|
| Net Interest Income after Provision for Loan Losses | | 7,572 | | 8,529 | | -11% | | 8,678 | | -13% |
| |
| Noninterest Income | | | | | | | | | | |
| Service Charges and Fees | | 841 | | 708 | | 19% | | 772 | | 9% |
| Electronic Banking Income | | 316 | | 356 | | -11% | | 329 | | -4% |
| Investment Products | | 78 | | 93 | | -16% | | 69 | | 14% |
| Bank Owned Life Insurance Income | | 73 | | 11 | | 561% | | 153 | | -53% |
| Income from the Sale of Loans | | 46 | | 36 | | 27% | | 109 | | -58% |
| SBA Premium Income | | 20 | | 50 | | -59% | | 156 | | -87% |
| Other Income | | 205 | | 621 | | -67% | | 221 | | -7% |
|
| Total Noninterest Income | | 1,579 | | 1,875 | | -16% | | 1,809 | | -13% |
| |
| Noninterest Expense | | | | | | | | | | |
| Compensation and Employee Benefits | | 3,644 | | 3,940 | | -8% | | 4,373 | | -17% |
| Occupancy and Equipment | | 966 | | 944 | | 2% | | 938 | | 3% |
| Office Supplies and Printing | | 170 | | 162 | | 5% | | 103 | | 65% |
| Data Processing | | 156 | | 155 | | 0% | | 170 | | -8% |
| Consulting and Professional Fees | | 325 | | 107 | | 204% | | 294 | | 11% |
| Employee Separation Expense | | 58 | | 816 | | -93% | | - | | 100% |
| Merger Related Expenses | | 18 | | 64 | | -72% | | 513 | | -97% |
| Other | | 1,398 | | 1,390 | | 1% | | 1,460 | | -4% |
|
| Total Noninterest Expense | | 6,735 | | 7,578 | | -11% | | 7,851 | | -14% |
| |
| Income Before Income Taxes | | 2,416 | | 2,825 | | -14% | | 2,636 | | -8% |
| Provision for Income Taxes | | 746 | | 921 | | -19% | | 785 | | -5% |
|
| Net Income | | $ 1,670 | | $ 1,904 | | -12% | | $ 1,851 | | -10% |
|
| Earnings per Common Share | | | | | | | | | | |
|
| Net Income per Share, Basic | | $ 0.18 | | $ 0.20 | | -10% | | $ 0.19 | | -5% |
|
|
| Net Income per Share, Diluted | | $ 0.18 | | $ 0.20 | | -10% | | $ 0.19 | | -5% |
|
| |
| Average Number of Common Shares Outstanding | | 9,486,000 | | 9,473,000 | | | | 9,365,000 | | |
| Fully Diluted Average Common and Equivalent Shares Outstanding | | 9,513,000 | | 9,518,000 | | | | 9,500,000 | | |
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| January 28, 2009 | | | | | | | | | | |
| Page 5 | | | | | | | | | | |
| |
| CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited) | | Twelve Months Ended | | One |
| ($ in thousands, except per share data) | | | | December 31, | | | | Year |
| | | 2008 | | | | | | 2007 | | Change |
|
| Interest Income | | | | | | | | | | |
| Loans | | $ 58,144 | | $ 61,385 | | -5% |
| Taxable Investment Securities | | | | 397 | | | | 547 | | -27% |
| Tax Exempt Securities | | | | 205 | | | | 263 | | -22% |
| Other | | | | 36 | | | | 173 | | -79% |
|
| Total Interest Income | | 58,782 | | | | 62,368 | | -6% |
| |
| Interest Expense | | | | | | | | | | |
| Deposits | | 18,442 | | | | 22,669 | | -19% |
| Other Borrowings | | 1,138 | | | | 379 | | 201% |
| Junior Subordinated Debentures | | 1,254 | | | | 1,762 | | -29% |
|
| Total Interest Expense | | 20,834 | | | | 24,810 | | -16% |
| |
| Net Interest Income | | 37,948 | | | | 37,558 | | 1% |
| |
| Provision for Loan Losses | | 5,050 | | | | 3,000 | | 68% |
|
| Net Interest Income after Provision for Loan Losses | | 32,898 | | | | 34,558 | | -5% |
| |
| Noninterest Income | | | | | | | | | | |
| Service Charges and Fees | | 2,987 | | | | 3,135 | | -5% |
| Electronic Banking Income | | 1,333 | | | | 1,252 | | 6% |
| Investment Products | | | | 338 | | | | 364 | | -7% |
| Bank Owned Life Insurance Income | | | | 306 | | | | 587 | | -48% |
| SBA Premium Income | | | | 259 | | | | 490 | | -47% |
| Income from the Sale of Loans | | | | 223 | | | | 667 | | -67% |
| Other Income | | 1,440 | | | | 995 | | 45% |
|
| Total Noninterest Income | | 6,886 | | | | 7,490 | | -8% |
| |
| Noninterest Expense | | | | | | | | | | |
| Compensation and Employee Benefits | | 15,373 | | | | 17,082 | | -10% |
| Occupancy and Equipment | | 3,762 | | | | 3,805 | | -1% |
| Office Supplies and Printing | | | | 572 | | | | 558 | | 3% |
| Data Processing | | | | 625 | | | | 663 | | -6% |
| Consulting and Professional Fees | | | | 794 | | | | 735 | | 8% |
| Employee Separation Expense | | | | 874 | | | | - | | 100% |
| Merger Related Expenses | | | | 266 | | | | 513 | | -48% |
| Other | | 5,257 | | | | 5,115 | | 3% |
|
| Total Noninterest Expense | | 27,523 | | | | 28,471 | | -3% |
| |
| Income Before Income Taxes | | 12,261 | | | | 13,577 | | -10% |
| Provision for Income Taxes | | 3,929 | | | | 4,179 | | -6% |
|
| Net Income | | $ 8,332 | | $ 9,398 | | -11% |
|
| Earnings per Common Share | | | | | | | | | | |
|
| Net Income per Share, Basic | | $ 0.88 | | $ 1.00 | | -12% |
|
|
| Net Income per Share, Diluted | | $ 0.88 | | $ 0.99 | | -11% |
|
| |
| Average Number of Common Shares Outstanding | | 9,465,000 | | | | 9,365,000 | | |
| Fully Diluted Average Common and Equivalent Shares Outstanding | | 9,513,000 | | | | 9,493,000 | | |
| WBCO – 4Q08 Profits | | | | | | | | | | |
| January 28, 2009 | | | | | | | | | | |
| Page 6 | | | | | | | | | | |
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| CONSOLIDATED BALANCE SHEETS(unaudited) | | | | | | Three | | | | One |
| ($ in thousands except per share data) | | December 31, | | September 30, | | Month | | December 31, | | Year |
| | | 2008 | | 2008 | | Change | | 2007 | | Change |
|
| Assets | | | | | | | | | | |
| Cash and Due from Banks | | $ 13,609 | | $ 19,202 | | -29% | | $ 18,795 | | -28% |
| Interest-Bearing Deposits with Banks | | 381 | | 451 | | -16% | | 257 | | 48% |
| Fed Funds Sold | | - | | 17,410 | | -100% | | - | | 0% |
|
| Total Cash and Cash Equivalents | | 13,990 | | 37,063 | | -62% | | 19,052 | | -27% |
| |
| Investment Securities Available for Sale | | 17,798 | | 10,781 | | 65% | | 13,832 | | 29% |
| |
| FHLB Stock | | 2,430 | | 2,880 | | -16% | | 1,984 | | 22% |
| |
| Loans Held for Sale | | 2,896 | | 995 | | 191% | | 2,347 | | 23% |
| |
| Loans Receivable | | 823,068 | | 823,089 | | 0% | | 805,862 | | 2% |
| Less: Allowance for Loan Losses | | (12,250) | | (11,488) | | 7% | | (11,126) | | 10% |
|
| Loans, Net | | 810,818 | | 811,601 | | 0% | | 794,736 | | 2% |
| |
| Premises and Equipment, Net | | 24,971 | | 24,476 | | 2% | | 25,138 | | -1% |
| Bank Owned Life Insurance | | 16,822 | | 16,750 | | 0% | | 16,517 | | 2% |
| Other Real Estate Owned | | 2,226 | | 669 | | 233% | | 1,440 | | 55% |
| Other Assets | | 7,680 | | 7,247 | | 6% | | 7,243 | | 6% |
|
| Total Assets | | $ 899,631 | | $ 912,462 | | -1% | | $ 882,289 | | 2% |
|
| |
| Liabilities and Shareholders' Equity | | | | | | | | | | |
| Deposits: | | | | | | | | | | |
| Noninterest-Bearing Demand | | $ 91,482 | | $ 90,183 | | 1% | | $ 101,539 | | -10% |
| NOW Accounts | | 119,115 | | 121,503 | | -2% | | 140,145 | | -15% |
| Money Market | | 143,855 | | 157,614 | | -9% | | 133,265 | | 8% |
| Savings | | 41,161 | | 41,645 | | -1% | | 41,888 | | -2% |
| Time Deposits | | 351,546 | | 372,796 | | -6% | | 341,517 | | 3% |
|
| Total Deposits | | 747,159 | | 783,741 | | -5% | | 758,354 | | -1% |
| FHLB Overnight Borrowings | | 11,640 | | - | | 100% | | 20,500 | | -43% |
| Other Borrowed Funds | | 30,000 | | 20,000 | | 50% | | - | | 100% |
| Junior Subordinated Debentures | | 25,774 | | 25,774 | | 0% | | 25,774 | | 0% |
| Other Liabilities | | 4,498 | | 3,964 | | 13% | | 4,091 | | 10% |
|
| Total Liabilities | | 819,071 | | 833,479 | | -2% | | 808,719 | | 1% |
| |
| Shareholders' Equity: | | | | | | | | | | |
| Common Stock (no par value) | | | | | | | | | | |
| Authorized 13,679,757 Shares: | | | | | | | | | | |
| Issued and Outstanding 9,510,007 at 12/31/08 | | | | | | | | | | |
| 9,488,101 at 9/30/08 and 9,453,767 at 12/31/07 | | 33,701 | | 33,384 | | 1% | | 32,812 | | 3% |
| Retained Earnings | | 46,567 | | 45,513 | | 2% | | 40,652 | | 15% |
| Other Comprehensive Income | | 292 | | 86 | | 241% | | 106 | | 174% |
|
| Total Shareholders' Equity | | 80,560 | | 78,983 | | 2% | | 73,570 | | 10% |
|
| Total Liabilities and Shareholders' Equity | | $ 899,631 | | $ 912,462 | | -1% | | $ 882,289 | | 2% |
|
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| January 28, 2009 | | | | | | | | | | |
| Page 7 | | | | | | | | | | |
| |
|
| ASSET QUALITY(unaudited) | | Quarter Ended | | Quarter Ended | | Quarter Ended | | Twelve Months Ended |
| ($ in thousands, except per share data) | | December 31, | | September 30, | | December 31, | | December 31, |
| | | 2008 | | 2008 | | 2007 | | 2008 | | 2007 |
|
| |
| Allowance for Loan Losses Activity: | | | | | | | | | | |
| |
| Balance at Beginning of Period | | $ 11,488 | | $ 11,585 | | $ 10,755 | | $ 11,126 | | $ 10,048 |
| Indirect Loans: | | | | | | | | | | |
| Charge-offs | | (691) | | (638) | | (423) | | (2,023) | | (1,020) |
| Recoveries | | 184 | | 111 | | 144 | | 583 | | 343 |
|
| Indirect Net Charge-offs | | (507) | | (527) | | (279) | | (1,440) | | (677) |
| |
| Other Loans: | | | | | | | | | | |
| Charge-offs | | (1,151) | | (798) | | (288) | | (3,381) | | (1,762) |
| Recoveries | | 520 | | 153 | | 138 | | 895 | | 517 |
|
| Other Net Charge-offs | | (631) | | (645) | | (150) | | (2,486) | | (1,245) |
| |
| Total Net Charge-offs | | (1,138) | | (1,172) | | (429) | | (3,926) | | (1,922) |
| Provision for Loan Losses | | 1,900 | | 1,075 | | 800 | | 5,050 | | 3,000 |
|
| Balance at End of Period | | $ 12,250 | | $ 11,488 | | $ 11,126 | | $ 12,250 | | $ 11,126 |
|
| Net Charge-offs to Average Loans: | | | | | | | | | | |
| Indirect Loans Net Charge-Offs, to Avg Indirect Loans, Annualized(1) | | 1.82% | | 1.89% | | 0.99% | | 1.30% | | 0.61% |
| Other Loans Net Charge-Offs, to Avg Other Loans, Annualized(1) | | 0.35% | | 0.36% | | 0.09% | | 0.35% | | 0.19% |
| Net Charge-offs to Average Total Loans(1) | | 0.55% | | 0.57% | | 0.21% | | 0.48% | | 0.25% |
| | | December 31, | | September 30, | | December 31, | | | | |
| | | 2008 | | 2008 | | 2007 | | | | |
| | |
| Nonperforming Assets | | | | | | | | | | |
| |
| Nonperforming Loans(2) | | $ 1,918 | | $ 3,888 | | $ 2,839 | | | | |
| Other Real Estate Owned | | 2,226 | | 669 | | 1,440 | | | | |
| | |
| Total Nonperforming Assets | | $ 4,144 | | $ 4,557 | | $ 4,279 | | | | |
| | |
| |
| Nonperforming Loans to Loans(1) | | 0.23% | | 0.47% | | 0.35% | | | | |
| Nonperforming Assets to Assets | | 0.46% | | 0.50% | | 0.48% | | | | |
| Allowance for Loan Losses to Nonperforming Loans | | 638.67% | | 295.46% | | 391.90% | | | | |
| Allowance for Loan Losses to Loans | | 1.49% | | 1.40% | | 1.38% | | | | |
| |
| Loan Composition | | | | | | | | | | |
| Commercial | | $ 94,522 | | $ 93,821 | | $ 102,284 | | | | |
| Real Estate Mortgages | | | | | | | | | | |
| One-to-Four Family Residential | | 58,099 | | 55,984 | | 56,636 | | | | |
| Commercial | | 327,704 | | 325,314 | | 296,902 | | | | |
| Real Estate Construction | | | | | | | | | | |
| One-to-Four Family Residential | | 101,022 | | 104,505 | | 101,912 | | | | |
| Commercial | | 44,401 | | 45,147 | | 44,735 | | | | |
| Consumer | | | | | | | | | | |
| Indirect | | 108,266 | | 110,239 | | 114,271 | | | | |
| Direct | | 86,364 | | 85,321 | | 86,716 | | | | |
| Deferred Loan Costs, net | | 2,690 | | 2,758 | | 2,406 | | | | |
| | |
| Total Loans | | $ 823,068 | | $ 823,089 | | $ 805,862 | | | | |
| | |
| |
| Time Deposit Composition | | | | | | | | | | |
| Time Deposits less than or equal to $100 | | $ 165,475 | | $ 168,833 | | $ 150,667 | | | | |
| Time Deposits greater than $100 | | 163,344 | | 192,083 | | 180,850 | | | | |
| Brokered Deposits | | | | | | | | | | |
| CDARS (Certificate of Deposit Account Registry Service) | | 12,727 | | 1,880 | | - | | | | |
| Non-CDARS | | 10,000 | | 10,000 | | 10,000 | | | | |
| | |
| Total Time Deposits | | $ 351,546 | | $ 372,796 | | $ 341,517 | | | | |
| | |
| (1) | Excludes Loans Held for Sale. |
| (2) | Nonperforming loans includes nonaccrual loans plus accruing loans 90 or more days past due. |
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| WBCO – 4Q08 Profits | | | | | | | | | | |
| January 28, 2009 | | | | | | | | | | |
| Page 8 | | | | | | | | | | |
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| FINANCIAL STATISTICS(unaudited) | | Quarter Ended | | Quarter Ended | | Quarter Ended | | Twelve Months Ended |
| ($ in thousands, except per share data) | | December 31, | | September 30, | | December 31, | | December 31, |
| | | 2008 | | 2008 | | 2007 | | 2008 | | 2007 |
|
| Revenues(1)(2) | | $ 11,184 | | $ 11,613 | | $ 11,443 | | $ 45,194 | | $ 45,694 |
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| Averages | | | | | | | | | | |
| Total Assets | | $ 901,487 | | $ 889,483 | | $ 867,357 | | $ 890,589 | | $ 836,738 |
| Loans and Loans Held for Sale | | 823,217 | | 820,425 | | 791,546 | | 819,468 | | 759,242 |
| Interest Earning Assets | | 849,210 | | 835,704 | | 810,783 | | 837,456 | | 781,296 |
| Deposits | | 766,362 | | 748,375 | | 759,676 | | 748,649 | | 732,107 |
| Shareholders' Equity | | $ 79,402 | | $ 78,084 | | $ 72,439 | | $ 76,998 | | $ 69,488 |
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| Financial Ratios | | | | | | | | | | |
| Return on Average Assets, Annualized | | 0.74% | | 0.85% | | 0.85% | | 0.94% | | 1.12% |
| Return on Average Equity, Annualized | | 8.37% | | 9.70% | | 10.14% | | 10.82% | | 13.53% |
| Average Equity to Average Assets | | 8.81% | | 8.78% | | 8.35% | | 8.65% | | 8.30% |
| Efficiency Ratio(2) | | 60.22% | | 65.26% | | 68.61% | | 60.90% | | 62.31% |
| Yield on Earning Assets(2) | | 6.67% | | 6.98% | | 7.92% | | 7.07% | | 8.07% |
| Cost of Interest Bearing Liabilities | | 2.54% | | 2.76% | | 3.77% | | 2.89% | | 3.75% |
| Net Interest Spread | | 4.13% | | 4.22% | | 4.15% | | 4.18% | | 4.32% |
| Net Interest Margin(2) | | 4.50% | | 4.62% | | 4.71% | | 4.60% | | 4.89% |
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| Book Value Per Share | | $ 8.47 | | $ 8.32 | | $ 7.78 | | | | |
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| | | | | | | | | Regulatory Requirements |
| | | December 31, | | September 30, | | December 31, | | Adequately- | | Well- |
| | | 2008 | | 2008 | | 2007 | | capitalized | | capitalized |
|
| Period End | | | | | | | | | | |
| Total Risk-Based Capital Ratio - Consolidated | | 13.23%(3) | | 13.06% | | 12.45% | | 8.00% | | N/A |
| Tier 1 Risk-Based Capital Ratio - Consolidated | | 11.98%(3) | | 11.81% | | 11.14% | | 4.00% | | N/A |
| Tier 1 Leverage Ratio - Consolidated | | 11.68%(3) | | 11.68% | | 11.29% | | 4.00% | | N/A |
| | |
| Total Risk-Based Capital Ratio - Whidbey Island Bank | | 13.10%(3) | | 12.97% | | 12.03% | | 8.00% | | 10.00% |
| Tier 1 Risk-Based Capital Ratio - Whidbey Island Bank | | 11.85%(3) | | 11.72% | | 10.78% | | 4.00% | | 6.00% |
| Tier 1 Leverage Ratio - Whidbey Island Bank | | 11.54%(3) | | 11.58% | | 10.92% | | 4.00% | | 5.00% |
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| (1) | Revenues is the fully tax-equivalent net interest income before provision for loan losses plus noninterest income. |
| (2) | Fully tax-equivalent is a non-GAAP performance measurement that management believes provides investors with a more accurate picture of the net interest margin, revenues and efficiency ratio for comparative purposes. The calculation involves grossing up interest income on tax-exempt loans and investments by an amount that makes it comparable to taxable income. |
| (3) | Capital ratios for the most recent period are an estimate pending filing of the Company's regulatory reports. |
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Note: Transmitted on GlobeNewswire at 1:50 p.m. PST January 28,2009.
