Washington Banking 8K mpany Posts Profitable Results in 2Q09 | WBCO 24 Jul 09

Exhibit 99.1

Washington Banking Company Posts Profitable Results in 2Q09

OAK HARBOR, WA – July 23, 2009 – Washington Banking Company (NASDAQ: WBCO), the holdingcompany for Whidbey Island Bank, today reported that core deposit growth, efficient operatingmetrics and strong capital ratios contributed to profitability for the second quarter and first half of2009. Income available to common shareholders was $818,000, or $0.09 per diluted commonshare, in the quarter ended June 30, 2009, compared to $1.2 million, or $0.13 per diluted commonshare, in the first quarter of 2009, and $2.4 million, or $0.25 per diluted common s hare, in thesecond quarter a year ago. For the first six months of 2009, net income available to commonshareholders after preferred dividend payments of $772,000, was $2.0 million, or $0.21 per dilutedcommon share, compared to $4.8 million, or $0.50 per diluted common share, which included nopreferred dividends in the first six months of 2008.

“With a strong capital position and a relatively healthy loan portfolio, we are attracting new depositsand making loans to meet the needs of our customers. Although our total loans were down slightlyfrom the previous period, we actually originated over $40 million in new loans during the secondquarter – we are clearly open for business,” said Jack Wagner, President and CEO. “At the same time,we continue to build our reserves, conserve capital and focus on operations as the recession in ourregion continues to take its toll on jobs. While our asset quality remains well above our peers, bothregionally and nationally, we are continuing to add to our reserves and remain diligent in ourportfolio management.”

Conference Call Information
Management will host a conference call tomorrow, July 24, 2009, at 10:00 a.m. PDT (1:00 p.m. EDT)to discuss the results. The call will also be broadcast live via the internet atwww.wibank.com.Investment professionals and all current and prospective shareholders are invited to access the live
call by dialing 480-629-9722 using Call ID 4106197 at 10:00 a.m. PDT. To listen to the call online,either live or archived, visit the Investor Relations page of Whidbey Island Bank’s website atwww.wibank.com.

Second Quarter 2009 Financial Highlights(June 30, 2009 compared to June 30, 2008)

Capital ratios remained well above the regulatory requirements for well-capitalizedinstitutions, with Tier 1 Capital to risk-adjusted assets of 14.99% compared to 11.54%.Tangible common equity to assets stood at 8.89% compared to 8.58% a year earlier.
Relatively good asset quality was maintained in a very difficult economic environment withnonperforming assets to total assets at 1.08%, up from 0.41%.
Reserves grew to 1.80% of total loans, up 40 basis points year-over-year.
The provision for loan losses was $3.0 million in the second quarter, bringing year-to-date provisions to$5.5 million.
Total loans were $821 million, almost unchanged from $825 million.
Book value per common share increased 7% to $8.71 compared to $8.17.
Core deposits, consisting of transaction accounts and CDs under $100,000, were $600million and accounted for 76% of total deposits.
Washington Banking was added to the Russell 2000 index of small-cap companies at theend of June 2009.

WBCO – 2Q09 Profits
July 23, 2009
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Credit Quality
“While our loan portfolio continues to remain diversified by both type and size and our asset quality metrics continue to perform better than peer averages at the national and regional levels, further deterioration in our loan portfolio is anticipated,” said Joe Niemer, Chief Credit Officer. According to the FDIC as of March 31, 2009, the average ratio of nonperforming assets to total assets was 2.32% for all commercial banks nationally and 6.48% for all commercial banks in the state of Washington. Washington Banking’s nonperforming assets totaled $10.1 million, or 1.08% of total assets at June 30, 2009, compared to $10.3 million, or 1.12% of total assets at March 31, 2009, and $3.7 million, or 0.41% of total assets, a year ago. Nonperforming assets consist of nonaccrual loans, accruing loans 90 days or more past due, restructured loans and other real estate owned (OREO).

“Our exposure to residential construction and land development loans, although only 15% of the total loan portfolio, continue to show signs of stress,” Niemer continued. “We are building reserves primarily for these loans. And although we are seeing some signs of a bottoming, we do recognize the possibility of further deterioration in our construction and land development loans in the next quarter or two. This deterioration would primarily be reflected in an increase in our level of nonperforming assets.” Net charge-offs in the second quarter were $1.6 million, or 75 basis points of average loans, compared to $869,000, or 42 basis points of average loans for the same period a year ago. Year-to-date, net charge-offs were $2.9 million, or 72 basis points of average loans, compared to $1.6 million, or 40 basis points for average loans in the first six months of 2008. Net charge-offs in the indirect lending portf olio were $228,000 in the second quarter, down from $445,000 in the first quarter, and up from $214,000 in the second quarter a year ago. For the first half of 2009, indirect net charge-offs were $672,000 or 1.27% of average indirect loans, compared to $405,000, or 0.73% of indirect loans in the first half of 2008.

Boosted by the $5.5 million provision for loan losses booked in the first half of 2009, the allowance for loan losses increased to $14.8 million, or 1.80% of total loans at quarter end, compared to $11.6 million, or 1.40% at June 30, 2008.

Capital
Washington Banking’s capital ratios were very strong at the end of the second quarter, which included the $26.4 million raised from the sale of preferred shares to the U.S. Treasury in January of this year. Tier 1 capital ratio was 14.99% up from 14.94% at March 31, 2009, and 11.54% a year ago. The total risk-based capital ratio was 16.25% at June 30, 2009, compared to 16.19% at March 31, 2009, and 12.79% at June 30, 2008. All regulatory ratios continue to exceed the “well-capitalized” requirements established by regulators. Washington Banking’s tangible common equity at quarter end was equal to 8.89% of total assets.

“Each quarter our board of directors reviews our dividend payment on common shares, and at our board meeting being held today, I am recommending that we temporarily reduce dividend payments until the regional economy begins to show signs of recovery,” said Wagner. “The dividend payment is reviewed in light of earnings, the regional economic outlook and capital requirements. With the issuance of the preferred shares I believe it is prudent to conserve capital in order to put the Company in a position to be able to redeem preferred shareholders on an accelerated schedule, if appropriate. Washington Banking, however, has paid a quarterly cash dividend since its 1998 initial public offering, and we are very aware of the needs of our shareholders.”

Balance Sheet

WBCO – 2Q09 Profits
July 23, 2009
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At June 30, 2009, total assets increased 3% to $935 million compared to $904 million a year ago. Total net loans decreased 1% to $806 million from $813 million a year ago and $816 million at the end of the first quarter of 2009.

Total deposits were up 3% in the quarter and 7% year-over-year at $788 million at June 30, 2009, compared to $763 million at the end of March and $733 million a year ago. Year-over-year, money market accounts increased 19% and now comprise 19% of total deposits. Time deposits increased 3% to $363 million and accounted for 46% of total deposits with a very small component of brokered deposits. “We are continuing to build our core deposit base and are seeing very strong new account growth,” said Rick Shields, Chief Financial Officer. Core deposits, excluding brokered CDs and time deposits over $100,000, represent 76% of all deposits, up from 73% a year ago.

Retained earnings increased 7% to $47.5 million, bringing common shareholder equity to $8.71 per share at June 30, 2009, compared to $8.17 per share a year ago. Following the $26.4 million capital infusion from the preferred shares issued to the U.S. Treasury, total shareholders’ equity was $107.9 million.

Operating Results
Bolstered by premiums received from loan sales and annuity commissions, revenue(fully tax equivalent) was $20.0 million in the second quarter of 2009, compared to $11.5 million for the first quarter and $11.1 million a year ago. Net interest income, before the provision for loan losses, grew 5% in the second quarter to $9.8 million from $9.3 million in both the previous and year ago quarters. Year-to-date revenue increased 4% to $23.2 million from $22.3 million in the first six months a year ago. Net interest income before provision for loan losses increased 1% to $19.1 million from $18.9 million a year ago.

Noninterest income rose to $2.1 million in the second quarter, up 4% from the prior quarter at $2.0 million and up 27% from $1.6 million a year ago. For the first six months of 2009, noninterest income grew 19% to $4.1 million from $3.4 million in the first half of 2008. “We are still generating solid volumes from residential mortgage lending for both new purchase and refinance activity, although we believe demand is starting to moderate and expect volumes will slow in the second half of the year,” Shields noted.

Net interest margin was 4.57% in the second quarter of 2009, up 6 basis points from the first quarter and 2 basis points from the year ago quarter. For the first six months of the year, net interest margin was 4.54% down from 4.63% in the like period a year ago.

Second quarter noninterest expense was up 10% in the quarter and 14% from a year ago primarily related to the $400,000 FDIC special assessment levied in the 2009 second quarter and costs associated with opening the new Smokey Point branch and relocating the administrative center in Burlington. Operating expenses were $7.2 million in the second quarter compared to $6.5 million in the first quarter and $6.3 million in the second quarter a year ago. For the first six months of 2009, noninterest expense was $13.7 million, up 4% from $13.2 million in the first six months of 2008. The efficiency ratio during the second quarter of 2009 was 59.72%, compared to 57.07% reported in the linked quarter, and 56.88% a year ago. Year-to-date, the efficiency ratio improved slightly to 58.43% compared to 58.46% in the first six months of 2008. Return on average assets and return on average common equity were 0.53% and 5.90%, respectively, for the second quarter of 2009 and 0.62% and 5.00%, respectively, for the first half of 2009.

ABOUT WASHINGTON BANKING COMPANY

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July 23, 2009
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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 18 full-service branches located in five counties in Northwestern Washington. In June 2009, Washington Banking was added to the Russell 2000 Index, a subset of the Russell 3000 Index. Both indices are widely used by professional money managers as benchmarks for investment strategies.

www.wibank.com

This news release may contain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements describe management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, credit quality and loan losses, and continued success of the Company’s business plan. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The words “anticipate,” “expect,” “will,” “believe,” and words of similar meaning are intended, in part, to help identify forward-looking statements. Future events are difficult to predict, and the expectations described above are subject to risk and uncertainty that may cause actual results to differ materially. In addition to discussions about risks and uncertainties set forth from time to time in the Company’s filings with the Securities and Exchange Commission, factors that may cause actual results to differ materially from those contemplated in these forward-looking statements include, among others: (1) local and national general and economic condition; (2) changes in interest rates and their impact on net interest margin; (3) competition among financial institutions; (4) legislation or regulatory requirements; and (5) the ability to realize the efficiencies expected from investment in personnel and infrastructure. Washington Banking Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made. Any such statements are made in reliance on the safe harbor protections provided under the Securities Exchange Act of 1934, as amended.


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CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)		Quarter Ended		Quarter Ended	Three			Quarter Ended	One
($ in thousands, except per share data)		June 30,		March 31,	Month			June 30,	Year
		2009		2009	Change			2008	Change
Interest Income
Loans	$	13,244		13,000	2	%	$	14,383	-8	%
Taxable Investment Securities		141		136	3	%		96	47	%
Tax Exempt Securities		95		67	40	%		51	86	%
Other		8		2	248	%		3	197	%
Total Interest Income		13,488		13,205	2	%		14,533	-7	%

Interest Expense
Deposits		3,386		3,519	-4	%		4,542	-25	%
Other Borrowings		114		133	-15	%		359	-68	%
Junior Subordinated Debentures		180		224	-20	%		284	-37	%
Total Interest Expense		3,680		3,876	-5	%		5,185	-29	%

Net Interest Income		9,808		9,329	5	%		9,348	5	%

Provision for Loan Losses		3,000		2,450	22	%		1,050	186	%
Net Interest Income after Provision for Loan Losses		6,808		6,879	-1	%		8,298	-18	%

Noninterest Income
Service Charges and Fees		853		858	-1	%		711	20	%
Electronic Banking Income		348		310	12	%		347	0	%
Investment Products		161		170	-5	%		39	316	%
Bank Owned Life Insurance Income		112		94	20	%		121	-7	%
Income from the Sale of Loans		301		270	11	%		51	488	%
SBA Premium Income		16		18	-11	%		45	-65	%
Other Income		282		283	-1	%		324	-13	%
Total Noninterest Income		2,073		2,003	4	%		1,638	27	%

Noninterest Expense
Compensation and Employee Benefits		3,437		3,424	0	%		3,798	-9	%
Occupancy and Equipment		1,071		1,033	4	%		902	19	%
Office Supplies and Printing		207		171	21	%		120	72	%
Data Processing		146		131	11	%		153	-5	%
Consulting and Professional Fees		211		278	-24	%		147	44	%
Other		2,115		1,509	40	%		1,208	75	%
Total Noninterest Expense		7,187		6,546	10	%		6,328	14	%

Income Before Income Taxes		1,694		2,336	-27	%		3,608	-53	%
Provision for Income Taxes		463		762	-39	%		1,187	-61	%
Net Income		1,231		1,574	-22	%		2,421	-49	%
Preferred Dividends		413		359	15	%		-	100	%
Net Income Available to Common Shareholders	$	818	$	1,215	-33	%	$	2,421	-66	%
Earnings per Common Share
Net Income per Share, Basic	$	0.09	$	0.13	-31	%	$	0.25	-64	%

Net Income per Share, Diluted	$	0.09	$	0.13	-31	%	$	0.25	-64	%

Average Number of Common Shares Outstanding		9,530,000		9,507,000				9,464,000
Fully Diluted Average Common and Equivalent Shares Outstanding		9,552,000		9,527,000				9,519,000


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CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)			Six Months Ended				One
($ in thousands, except per share data)			June 30,				Year
		2009			2008		Change
Interest Income
Loans	$	26,245		$	29,744	-12		%
Taxable Investment Securities			277		206	34		%
Tax Exempt Securities			162		102	59		%
Other			10		8	25		%
Total Interest Income		26,694			30,060	-11		%

Interest Expense
Deposits		6,905			9,837	-30		%
Other Borrowings			247		663	-63		%
Junior Subordinated Debentures			404		689	-41		%
Total Interest Expense		7,556			11,189	-32		%

Net Interest Income		19,138			18,871	1		%

Provision for Loan Losses		5,450			2,075	163		%
Net Interest Income after Provision for Loan Losses		13,688			16,796	-19		%

Noninterest Income
Service Charges and Fees		1,711			1,437	19		%
Electronic Banking Income			658		661	0		%
Investment Products			331		167	98		%
Bank Owned Life Insurance Income			205		222	-8		%
Income from the Sale of Loans			570		141	304		%
SBA Premium Income			33		189	-83		%
Other Income			568		615	-8		%
Total Noninterest Income		4,076			3,432	19		%

Noninterest Expense
Compensation and Employee Benefits		6,861			7,788	-12		%
Occupancy and Equipment		2,104			1,851	14		%
Office Supplies and Printing			378		240	58		%
Data Processing			277		314	-12		%
Consulting and Professional Fees			489		362	35		%
Other		3,625			2,653	37		%
Total Noninterest Expense		13,734			13,208	4		%

Income Before Income Taxes		4,030			7,020	-43		%
Provision for Income Taxes		1,225			2,262	-46		%
Net Income		2,805			4,758	-41		%
Preferred Dividends			772		-	100		%
Net Income Available to Common Shareholders	$	2,033		$	4,758	-57		%
Earnings per Common Share
Net Income per Share, Basic	$	0.21		$	0.50	-58		%

Net Income per Share, Diluted	$		0.21	$	0.50	-58		%

Average Number of Common Shares Outstanding		9,513,000			9,445,000
Fully Diluted Average Common and Equivalent Shares Outstanding		9,535,000			9,511,000



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CONSOLIDATED BALANCE SHEETS(unaudited)							Three					One
($ in thousands, except per share data)		June 30,			March 31,		Month		June 30,			Year
		2009			2009		Change		2008			Change
Assets
Cash and Due from Banks	$	22,403		$	17,019		32	%	$	22,783		-2	%
Interest-Bearing Deposits with Banks		1,275			275		364	%	515			147	%
Fed Funds Sold		12,395			7,675		61	%	3,280			278	%
Total Cash and Cash Equivalents		36,073			24,969		44	%	26,578			36	%

Investment Securities Available for Sale		31,740			20,481		55	%	11,310			181	%

FHLB Stock		2,430			2,430		0	%	2,880			-16	%

Loans Held for Sale		4,385			2,665		65	%	562			680	%

Loans Receivable		820,776			829,142		-1	%	824,600			0	%
Less: Allowance for Loan Losses		(14,770	)		(13,323	)	11	%	(11,585		)	27	%
Loans, Net		806,006			815,819		-1	%	813,015			-1	%

Premises and Equipment, Net		25,527			25,365		1	%	24,662			4	%
Bank Owned Life Insurance		17,028			16,916		1	%	16,739			2	%
Other Real Estate Owned		2,599			1,799		45	%	1,198			117	%
Other Assets		8,865			8,227		8	%	6,933			28	%
Total Assets	$	934,653		$	918,671		2	%	$	903,877		3	%

Liabilities and Shareholders' Equity
Deposits:
Noninterest-Bearing Demand	$	103,226		$	98,564		5	%	$	91,764		12	%
NOW Accounts		130,877			124,736		5	%	126,307			4	%
Money Market		146,115			142,176		3	%	122,724			19	%
Savings		44,766			43,024		4	%	41,406			8	%
Time Deposits		362,640			354,490		2	%	350,667			3	%
Total Deposits		787,624			762,989		3	%	732,868			7	%
FHLB Overnight Borrowings							100	%	34,000			-100	%
Other Borrowed Funds		10,000			20,000		-50	%	30,000			-67	%
Junior Subordinated Debentures		25,774			25,774		0	%	25,774			0	%
Other Liabilities		3,329			2,187		52	%	3,699			-10	%
Total Liabilities		826,727			810,950		2	%	826,341			0	%

Shareholders' Equity:
Preferred Stock (no par value) 26,380 Shares Authorized
Series A (Liquidation preference $1,000 per share);
26,380 Issued and Outstanding at 6/30/09 and 3/31/09;		24,827			24,744		0	%	-			100	%
none in 2008.

Common Stock (no par value) 13,679,757 Shares Authorized
9,538,899 Issued and Outstanding at 6/30/09,
9,529,322 at 3/31/09 and 9,487,560 at 6/30/08		35,456			35,468		0	%	33,208			7	%
Retained Earnings		47,527			47,246		1	%	44,226			7	%
Other Comprehensive Income		116			263		-56	%	102			14	%
Total Shareholders' Equity		107,926			107,721		0	%	77,536			39	%
Total Liabilities and Shareholders' Equity	$	934,653		$	918,671		2	%	$	903,877		3	%


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ASSET QUALITY(unaudited)	Quarter Ended			Quarter Ended			Quarter Ended				Six Months Ended
($ in thousands, except per share data)		June 30,			March 31,			June 30,			June 30,
		2009			2009			2008			2009			2008

Allowance for Loan Losses Activity:

Balance at Beginning of Period	$	13,323		$	12,250		$	11,404		$	12,250		$	11,126
Indirect Loans:
Charge-offs		(482	)		(649	)		(331	)		(1,131	)		(693	)
Recoveries		254			204			117			459			288
Indirect Net Charge-offs		(228	)		(445	)		(214	)		(672	)		(405	)

Other Loans:
Charge-offs		(1,508	)		(1,132	)		(773	)		(2,640	)		(1,432	)
Recoveries		183			200			118			382			221
Other Net Charge-offs		(1,325	)		(932	)		(655	)		(2,258	)		(1,211	)

Total Net Charge-offs		(1,553	)		(1,377	)		(869	)		(2,930	)		(1,616	)
Provision for Loan Losses		3,000			2,450			1,050			5,450			2,075
Balance at End of Period	$	14,770		$	13,323		$	11,585		$	14,770		$	11,585

Net Charge-offs to Average Loans:
Indirect Loans Net Charge-offs, to Avg Indirect Loans, Annualized⁽¹⁾		0.86	%		1.68	%		0.77	%		1.27	%		0.73	%
Other Loans Net Charge-offs, to Avg Other Loans, Annualized⁽¹⁾		0.74	%		0.53	%		0.37	%		0.63	%		0.34	%
Net Charge-offs to Average Total Loans⁽¹⁾		0.75	%		0.68	%		0.42	%		0.72	%		0.40	%

		June 30,			March 31,			June 30,
		2009			2009			2008
Nonperforming Assets

Nonperforming Loans⁽²⁾	$	7,478		$	8,474		$	2,515
Other Real Estate Owned		2,599			1,799			1,198
Total Nonperforming Assets	$	10,077		$	10,273		$	3,713

Nonperforming Loans to Loans⁽¹⁾		0.91	%		1.02	%		0.30	%
Nonperforming Assets to Assets		1.08	%		1.12	%		0.41	%
Allowance for Loan Losses to Nonperforming Loans		197.52	%		157.22	%		460.64	%
Allowance for Loan Losses to Loans⁽³⁾		1.80	%		1.61	%		1.40	%

Loan Composition
Commercial	$	95,935		$	98,503		$	97,572
Real Estate Mortgages
One-to-Four Family Residential		57,414			61,946			56,796
Commercial		346,322			334,236			322,943
Real Estate Construction
One-to-Four Family Residential		79,494			93,587			104,597
Commercial		39,183			44,206			45,359
Consumer
Indirect		104,178			106,139			109,167
Direct		95,652			87,877			85,603
Deferred Fees		2,598			2,648			2,563
Total Loans	$	820,776		$	829,142		$	824,600

Time Deposit Composition
Time Deposits $100 and greater	$	160,253			162,698			190,039
All Other Time Deposits		174,556			172,188			150,628
Brokered Deposits
CDARS (Certificate of Deposit Account Registry Service)		20,331			12,104			-
Non-CDARS		7,500			7,500			10,000
Total Time Deposits	$	362,640		$	354,490		$	350,667

⁽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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FINANCIAL STATISTICS(unaudited)	Quarter Ended			Quarter Ended			Quarter Ended					Six Months Ended
($ in thousands, except per share data)	June 30,			March 31,			June 30,					June 30,
	2009			2009			2008					2009			2008
Revenues⁽¹⁾(2)	$	12,034		$	11,473			$	11,125		$	23,507		$	22,595

Averages
Total Assets	$	929,932		$	904,437		$	890,997			$	916,883		$	885,639
Loans and Loans Held for Sale		830,591			825,694			823,052				828,156			817,090
Interest-Earning Assets		874,828			851,100			838,140				863,029			832,399
Deposits		773,037			750,807			736,991				761,983			739,835
Common Shareholders' Equity	$	83,677		$	80,897		$		76,203		$	81,922		$	75,234

Financial Ratios
Return on Average Assets, Annualized		0.53	%		0.71	%			1.09	%		0.62	%		1.08	%
Return on Average Common Equity, Annualized⁽³⁾		5.90	%		6.10	%			12.78	%		5.00	%		12.72	%
Efficiency Ratio⁽²⁾		59.72	%		57.07	%			56.88	%		58.43	%		58.46	%
Yield on Earning Assets⁽²⁾		6.26	%		6.36	%			7.04	%		6.31	%		7.33	%
Cost of Interest-Bearing Liabilities		2.06	%		2.23	%			2.91	%		2.14	%		3.15	%
Net Interest Spread		4.20	%		4.13	%			4.14	%		4.17	%		4.18	%
Net Interest Margin⁽²⁾		4.57	%		4.51	%			4.55	%		4.54	%		4.63	%

Book Value Per Share	$	8.71		$	8.71		$		8.17

		June 30,		March 31,				June 30,				Regulatory Requirements
		2009		2009				2008				capitalized			capitalized
Period End
Total Risk-Based Capital Ratio - Consolidated		16.25%	⁽⁴⁾		16.19	%			12.79	%		8.00	%		N/A
Tier 1 Risk-Based Capital Ratio - Consolidated		14.99%	⁽⁴⁾		14.94	%			11.54	%		4.00	%		N/A
Tier 1 Leverage Ratio - Consolidated		14.28%			14.66	%			11.50	%		4.00	%		N/A
Total Risk-Based Capital Ratio - Whidbey Island Bank		16.11%	⁽⁴⁾		16.01	%			12.58	%		8.00	%		10.00	%
Tier 1 Risk-Based Capital Ratio - Whidbey Island Bank		14.86%	⁽⁴⁾		14.76	%			11.33	%		4.00	%		6.00	%
Tier 1 Leverage Ratio - Whidbey Island Bank		14.15%			14.48	%			11.28	%		4.00	%		5.00	%

⁽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⁾Return on average common equity is adjusted for preferred stock dividends.
⁽⁴⁾Capital ratios for the most recent period are an estimate pending filing of the Company's regulatory reports.

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