Washington Banking 8K Results of Operations and Financial Condition | WBCO 23 Oct 09

EXHIBIT 99.1

Washington Banking Company Earns $1.7 Million in 3Q09

OAK HARBOR, WA – October 22, 2009 – Washington Banking Company (NASDAQ: WBCO), the holding company for Whidbey Island Bank, today reported another profitable quarter with consistent core deposit growth, strong capital ratios and efficient operations. Income available to common shareholders totaled $1.3 million, or $0.13 per diluted share, in the quarter ended September 30, 2009, compared to $818,000, or $0.09 per diluted common share, in the preceding quarter, and $1.9 million, or $0.20 per diluted common share, in the third quarter a year ago. For the first nine months of 2009, Washington Banking’s net income available to common shareholders was $3.3 million, or $0.35 per diluted common share, compared to $6.7 million, or $0.70 per diluted common share in the first nine months of 2008. Year-to-date, preferred dividend payments totaled $1.2 million and there were no preferred dividends paid in 2008.

“Our third quarter profits remain solid and consistent, despite the difficult economic environment,” said Jack Wagner, President and CEO. “We are attracting core deposits and continuing to meet the lending needs of our customers. Our asset quality remains good and we continue to build reserves. I am extremely pleased with the ongoing efforts of our staff, which enable us to post these positive results during such trying times.” Conference Call Information Management will host a conference call tomorrow, October 23, 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 at www.wibank.com. Investment professionals and all current and prospective shareholders are invited to access the live call by dialing 480-629-9772 using Call ID #4166810 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 at www.wibank.com. The replay will be available at (303) 590-3030, using access code #4166810, where it will be archived for ninety days.

Third Quarter 2009 Financial Highlights(September 30, 2009 compared to September 30, 2008)

Capital ratios again exceeded the regulatory requirements for well-capitalized institutions,with Tier 1 Capital to risk-adjusted assets of 15.03% compared to 11.81%. Tangiblecommon equity to tangible assets stood at 8.82%% compared to 8.66% a year earlier.
Asset quality continues to be better than average for the region and the nation withnonperforming assets to total assets at 0.85%, up from 0.50%. (SNL’s Bank & Thrift Indexinstitutions averaged 1.37% in June and SNL peer institutions averaged 2.39% as of June30, 2009)
Loan loss reserves increased to 1.95% of total loans, up 55 basis points year-over-year.
The provision for loan losses was $2.5 million in the third quarter, bringing year-to-dateprovisions to $8.0 million.
Pretax pre-provision income grew 5% in the quarter and 26% year-over-year to $4.9million compared to $4.7 million in the second quarter and $3.9 million a year ago.
Total loans were $816 million, slightly down from $823 million.
Book value per common share increased 7% to $8.87 compared to $8.32.
Deposits increased 4% to $812 million with noninterest-bearing demand deposits up 16%year-over-year.

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October 22, 2009
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Whidbey Island Bank remains the No.1 bank in deposits in Island County, with its marketshare rising to 45.5% of deposits in the county as of June 2009.

Credit Quality
“Our loan portfolio is performing well on a comparative basis, but continues to be hampered by overall weak economic fundamentals,” said Joe Niemer, Chief Credit Officer. “Nonperforming loans were down by $4.3 million from last quarter and $709,000 from a year ago; however, other real estate owned (OREO) increased by $2.4 million quarter-over-quarter as nonaccrual loans moved through the collection process. While our credit quality remains above average by current industry standards, we continue to have concerns about the ongoing economic factors and their impact on our borrowing customers and our loan portfolio metrics.” Washington Banking’s nonperforming assets totaled $8.2 million, or 0.85% of total assets at September 30, 2009, compared to $10.1 million, or 1.08% of total assets at June 30, 2009, and $4.6 million, or 0.50% of total assets, a year ago. Nonperforming assets consist of nonaccrual loans, accruing loan s 90 days or more past due, restructured loans and OREO. “We continue to see stress in our construction and land development loans, which total about 14% of the loan portfolio,” Niemer continued. “Consequently, we are continuing to build reserves.” Net charge-offs in the third quarter were $1.4 million, or 67 basis points of average loans on an annualized basis, compared to $1.2 million, or 57 basis points of average loans for the same quarter a year ago. Year-to-date, net charge-offs were $4.3 million, or 70 basis points of average loans, compared to $2.8 million, or 46 basis points for average loans in the first nine months of 2008. Net charge-offs in the indirect lending portfolio were $449,000 in the third quarter, compared to $228,000 in the second quarter, and $527,000 in the third quarter a year ago. Year-to-date, indirect net charge-offs were $1.1 million or 1.41% of average indirect loans, compared to $932,000, or 1.12% of indirect loans in the first nine months of 2008.

Boosted by the $8.0 million provision for loan losses booked in the first nine months of 2009, the allowance for loan losses increased to $15.9 million, or 1.95% of total loans at quarter end, compared to $11.5 million, or 1.40% at September 30, 2008.

Capital
Washington Banking’s capital ratios were very strong at the end of the third 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 15.03% up from 14.99% at June 30, 2009, and 11.81% a year ago. The total risk-based capital ratio was 16.29% at September 30, 2009, compared to 16.25% at June 30, 2009, and 13.06% at September 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 8.82% of total assets.

Balance Sheet
At September 30, 2009, total assets increased 5% to $960 million compared to $912 million a year ago. Total net loans decreased 1% to $800 million from $812 million a year ago and $806 million at the end of the second quarter of 2009.

Total deposits were up 3% in the quarter and 4% year-over-year at $812 million at September 30, 2009, compared to $788 million at the end of June and $784 million a year ago. Noninterest-bearing demand deposits increased 16% year-over-year, now representing 13% of total deposits. Year-over-year, money market accounts decreased 1% and now comprise 19% of total deposits. Time deposits also declined 1% to $369 million and accounted for 45% of total deposits with a very small component of brokered deposits. “Our deposit market remains competitive, and we are delighted with the continuing strength in attracting new accounts in our region,” said Rick Shields,

WBCO – 3Q09 Profits
October 22, 2009
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Chief Financial Officer. “We believe building core deposits is in our best interest over time, even though deposit rates here in the Northwest are higher than in some other markets. While we could actually increase our margin, short term, by relying on brokered funding, we prefer to build relationships with our local clientele for the long run.” Core deposits, excluding brokered CDs and time deposits over $100,000 represent 76% of all deposits, up from 74% a year ago.

Retained earnings increased 7% to $48.6 million, bringing common shareholder equity to $8.87 per share at September 30, 2009, compared to $8.32 per share a year ago. Including the $26.4 million capital infusion from the preferred shares issued to the U.S. Treasury, total shareholders’ equity was $109.6 million.

Operating Results
Bolstered by premiums received from loan sales and new account fees, revenue (fully tax equivalent) was $12.5 million in the third quarter of 2009, compared to $12.0 million for the second quarter and $11.6 million a year ago. Net interest income, before the provision for loan losses, grew 9% to $10.4 million in the third quarter from $9.6 a year ago and increased 6% from the linked quarter of $9.8 million. Year-to-date revenue increased 5% to $36.0 million from $34.1 million in the first nine months a year ago. Net interest income before provision for loan losses increased 4% to $29.6 million from $28.5 million a year ago.

Noninterest income totaled $1.8 million in the third quarter, down 11% from $2.1 million in the preceding quarter and down 1% from $1.8 million a year ago. “Residential mortgage volumes are beginning to taper off, as expected, as the refinancing wave recedes,” Shields noted. Year-to-date, noninterest income grew 12% to $5.9 million from $5.3 million in the first nine months of 2008.

Washington Banking’s net interest margin was 4.72% in the third quarter of 2009, up 15 basis points from the second quarter and 8 basis points from the year ago quarter. Year-to-date, the net interest margin was 4.60% down from 4.62% in the like period a year ago.

Third quarter noninterest expense was up 3% in the quarter and down 3% year-over-year primarily related to the higher FDIC premiums, increased costs for OREO management and higher occupancy expenses from our new administration facilities. Operating expenses were $7.4 million in the third quarter compared to $7.2 million in the second quarter and $7.6 million in the third quarter a year ago. For the first nine months of 2009, noninterest expense was $21.1 million, up 2% from $20.8 million in the first nine months of 2008.

The efficiency ratio during the third quarter of 2009 was 59.20%, compared to 59.72% reported in the linked quarter, and 65.26% a year ago. Year-to-date, the efficiency ratio improved to 58.70% compared to 60.94% in the first nine months of 2008. Return on average assets and return on average common equity were 0.70% and 5.95%, respectively, for the third quarter of 2009 and 0.65% and 5.34%, respectively, for the first nine months of 2009.

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 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

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October 22, 2009
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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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October 22, 2009
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CONSOLIDATED BALANCE SHEETS(unaudited)							Three					One
($ in thousands except per share data)	September 30,				June 30,		Month			September 30,		Year
	2009				2009		Change			2008		Change
Assets
Cash and Due from Banks	$	16,699		$	22,403		-25	%	$	19,202		-13	%
Interest-Bearing Deposits with Banks		132			1,275		-90	%		451		-71	%
Fed Funds Sold		25,365			12,395		105	%		17,410		46	%
Total Cash and Cash Equivalents		42,196			36,073		17	%		37,063		14	%

Investment Securities Available for Sale		56,204			31,740		77	%		10,781		421	%

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

Loans Held for Sale		2,951			4,385		-33	%		995		197	%

Loans Receivable		816,316			820,776		-1	%		823,089		-1	%
Less: Allowance for Loan Losses		(15,882	)		(14,770	)	8	%		(11,488	)	38	%
Loans, Net		800,434			806,006		-1	%		811,601		-1	%

Premises and Equipment, Net		25,649			25,527		0	%		24,476		5	%
Bank Owned Life Insurance		17,134			17,028		1	%		16,750		2	%
Other Real Estate Owned		5,012			2,599		93	%		669		649	%
Other Assets		7,656			8,865		-14	%		7,247		6	%
Total Assets	$	959,666		$	934,653		3	%	$	912,462		5	%

Liabilities and Shareholders' Equity
Deposits:
Noninterest-Bearing Demand	$	104,761		$	103,226		1	%	$	90,183		16	%
NOW Accounts		134,190			130,877		3	%		121,503		10	%
Money Market		156,582			146,115		7	%		157,614		-1	%
Savings		47,172			44,766		5	%		41,645		13	%
Time Deposits		369,313			362,640		2	%		372,796		-1	%
Total Deposits		812,018			787,624		3	%		783,741		4	%
FHLB Overnight Borrowings		-			-		100	%		-		100	%
Other Borrowed Funds		10,000			10,000		0	%		20,000		-50	%
Junior Subordinated Debentures		25,774			25,774		0	%		25,774		0	%
Other Liabilities		2,282			3,329		-31	%		3,964		-42	%
Total Liabilities		850,074			826,727		3	%		833,479		2	%

Shareholders' Equity:
Preferred Stock, no par value, 26,380 shares authorized
Series A (Liquidation preference $1,000 per shares); issued
and outstanding 26,380 at 9/30/09 and 6/30/09 and		24,911			24,827		0	%		-		100	%
none in 2008.

Common Stock (no par value)
Authorized 13,679,757 Shares:
Issued and Outstanding 9,547,946 at 9/30/2009,
9,538,899 at 6/30/09 and 9,488,101 at 9/30/08		35,502			35,456		0	%		33,384		6	%
Retained Earnings		48,632			47,527		2	%		45,513		7	%
Other Comprehensive Income		547			116		371	%		86		-538	%
Total Shareholders' Equity		109,592			107,926		2	%		78,983		39	%
Total Liabilities and Shareholders' Equity	$	959,666		$	934,653		3	%	$	912,462		5	%

WBCO – 3Q09 Profits
October 22, 2009
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CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)	Quarter Ended			Quarter Ended	Three			Quarter Ended	One
($ in thousands, except per share data)	September 30,			June 30,	Month			September 30,	Year
	2009			2009	Change			2008	Change
Interest Income
Loans	$	13,538	$	13,244	2	%	$	14,432	-6	%
Taxable Investment Securities		191		141	36	%		88	116	%
Tax Exempt Securities		130		95	38	%		51	156	%
Other		18		8	131	%		6	209	%
Total Interest Income		13,877		13,488	3	%		14,577	-5	%

Interest Expense
Deposits		3,201		3,386	-5	%		4,411	-27	%
Other Borrowings		94		114	-18	%		276	-66	%
Junior Subordinated Debentures		139		180	-23	%		286	-51	%
Total Interest Expense		3,434		3,680	-7	%		4,973	-31	%

Net Interest Income		10,443		9,808	6	%		9,604	9	%

Provision for Loan Losses		2,500		3,000	-17	%		1,075	133	%
Net Interest Income after Provision for Loan Losses		7,943		6,808	17	%		8,529	-7	%

Noninterest Income
Service Charges and Fees		909		853	7	%		708	28	%
Electronic Banking Income		376		348	8	%		356	5	%
Investment Products		38		161	-77	%		93	-59	%
Bank Owned Life Insurance Income		106		112	-5	%		11	867	%
Income from the Sale of Loans		138		301	-54	%		36	283	%
SBA Premium Income		49		16	218	%		50	-1	%
Other Income		232		282	-18	%		621	-63	%
Total Noninterest Income		1,848		2,073	-11	%		1,875	-1	%

Noninterest Expense
Compensation and Employee Benefits		3,638		3,437	6	%		3,940	-8	%
Occupancy and Equipment		1,099		1,071	3	%		944	16	%
Office Supplies and Printing		198		207	-4	%		162	22	%
Data Processing		141		146	-4	%		155	-9	%
Consulting and Professional Fees		228		211	8	%		107	113	%
FDIC Premiums		283		676	-58	%		119	137	%
OREO & Reposssion Expenses		346		267	30	%		136	154	%
Other		1,445		1,172	23	%		2,014	-28	%
Total Noninterest Expense		7,378		7,187	3	%		7,578	-3	%

Income Before Income Taxes		2,413		1,694	42	%		2,825	-15	%
Provision for Income Taxes		740		463	60	%		921	-20	%
Net Income		1,673		1,231	36	%		1,904	-12	%
Preferred dividends		414		413	0	%		-	100	%
Net Income Available to Common Shareholders	$	1,259	$	818	54	%	$	1,904	-34	%
Earnings per Common Share
Net Income per Share, Basic	$	0.13	$	0.09	44	%	$	0.20	-35	%

Net Income per Share, Diluted	$	0.13	$	0.09	44	%	$	0.20	-35	%

Average Number of Common Shares Outstanding		9,532,000		9,530,000				9,473,000
Fully Diluted Average Common and Equivalent Shares Outstanding		9,554,000		9,552,000				9,518,000

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October 22, 2009
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CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)		Nine Months Ended				One
($ in thousands, except per share data)		September 30,				Year
		2009		2008		Change
Interest Income
Loans	$	39,782		$	44,176	-10	%
Taxable Investment Securities			468		294	59	%
Tax Exempt Securities			292		153	91	%
Other			28		14	100	%
Total Interest Income		40,570			44,637	-9	%

Interest Expense
Deposits		10,106			14,247	-29	%
Other Borrowings			341		939	-64	%
Junior Subordinated Debentures			543		975	-44	%
Total Interest Expense		10,990			16,161	-32	%

Net Interest Income		29,580			28,476	4	%

Provision for Loan Losses		7,950			3,150	152	%
Net Interest Income after Provision for Loan Losses		21,630			25,326	-15	%

Noninterest Income
Service Charges and Fees		2,620			2,145	22	%
Electronic Banking Income		1,034			1,017	2	%
Investment Products			368		260	41	%
Bank Owned Life Insurance Income			312		233	34	%
Income from the Sale of Loans			708		177	300	%
SBA Premium Income			83		239	-65	%
Other Income			800		1,236	-35	%
Total Noninterest Income		5,925			5,307	12	%

Noninterest Expense
Compensation and Employee Benefits		10,499			11,729	-10	%
Occupancy and Equipment		3,203			2,796	15	%
Office Supplies and Printing			577		402	44	%
Data Processing			418		469	-11	%
Consulting and Professional Fees			717		469	53	%
FDIC Premiums		1,106			324	242	%
OREO & Reposssion Expenses			829		364	128	%
Other		3,763			4,235	-11	%
Total Noninterest Expense		21,112			20,788	2	%

Income Before Income Taxes		6,443			9,846	-35	%
Provision for Income Taxes		1,965			3,183	-38	%
Net Income		4,478			6,663	-33	%
Preferred dividends		1,185			-	100	%
Net income available to common shareholders	$	3,292		$	6,663	-51	%
Earnings per Common Share
Net Income per Share, Basic		$	0.35	$	0.70	-50	%

Net Income per Share, Diluted		$	0.35	$	0.70	-50	%

Average Number of Common Shares Outstanding		9,519,000			9,457,000
Fully Diluted Average Common and Equivalent Shares Outstanding		9,541,000			9,514,000

WBCO – 3Q09 Profits
October 22, 2009
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ASSET QUALITY(unaudited)	Quarter Ended				Quarter Ended			Quarter Ended			Nine Months Ended
($ in thousands, except per share data)	September 30,				June 30,			September 30,			September 30,
	2009				2009			2008			2009			2008

Allowance for Loan Losses Activity:

Balance at Beginning of Period	$	14,770		$	13,323		$	11,585		$	12,250		$	11,126
Indirect Loans:
Charge-offs		(650	)		(482	)		(638	)		(1,781	)		(1,332	)
Recoveries		201			254			111			660			399
Indirect Net Charge-offs		(449	)		(228	)		(527	)		(1,121	)		(932	)

Other Loans:
Charge-offs		(1,540	)		(1,508	)		(798	)		(4,180	)		(2,231	)
Recoveries		601			183			153			983			375
Other Net charge-offs		(939	)		(1,325	)		(645	)		(3,197	)		(1,856	)

Total Net Charge-offs		(1,388	)		(1,553	)		(1,172	)		(4,318	)		(2,788	)
Provision for loan losses		2,500			3,000			1,075			7,950			3,150
Balance at End of Period	$	15,882		$	14,770		$	11,488		$	15,882		$	11,488

Net Charge-offs to Average Loans:
Indirect Loans Net Charge-Offs, to Avg Indirect Loans, Annualized⁽¹⁾		1.69	%		0.86	%		1.89	%		1.41	%		1.12	%
Other Loans Net Charge-Offs, to Avg Other Loans, Annualized⁽¹⁾		0.52	%		0.74	%		0.36	%		0.60	%		0.35	%
Net Charge-offs to Average Total Loans⁽¹⁾		0.67	%		0.75	%		0.57	%		0.70	%		0.46	%

	September 30,				June 30,			September 30,
		2009			2009			2008
Nonperforming Assets
Nonperforming Loans⁽²⁾	$	3,179		$	7,478		$	3,888
Other Real Estate Owned		5,012			2,599			669
Total Nonperforming Assets	$	8,191		$	10,077		$	4,557

Nonperforming Loans to Loans⁽¹⁾		0.39	%		0.91	%		0.47	%
Nonperforming Assets to Assets		0.85	%		1.08	%		0.50	%
Allowance for Loan Losses to Nonperforming Loans		499.60	%		197.52	%		295.46	%
Allowance for Loan Losses to Loans		1.95	%		1.80	%		1.40	%

Loan Composition
Commercial		90,919		$	95,935		$	93,821
Real Estate Mortgages
One-to-Four Family Residential		55,914			57,414			55,984
Commercial		354,449			346,322			325,314
Real Estate Construction
One-to-Four Family Residential		73,409			79,494			104,505
Commercial		38,226			39,183			45,147
Consumer
Indirect		105,358			104,178			110,239
Direct		95,449			95,652			85,321
Deferred Fees		2,592			2,598			2,758
Total Loans	$	816,316		$	820,776		$	823,089

Time Deposit Composition
Time Deposits $100,000 and more		157,071			160,253			193,185
All other time deposits		175,300			174,556			167,731
Brokered Deposits
CDARS (Certificate of Deposit Account Registry Service)		29,443			20,331			1,880
Non-CDARS		7,500			7,500			10,000
Total Time Deposits	$	369,314		$	362,640		$	372,796
⁽¹⁾Excludes Loans Held for Sale.
⁽²⁾Nonperforming loans includes nonaccrual loans plus accruing loans 90 or more days past due.

WBCO – 3Q09 Profits
October 22, 2009
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FINANCIAL STATISTICS(unaudited)	Quarter Ended			Quarter Ended				Quarter Ended				Nine Months Ended
($ in thousands, except per share data)	September 30,			June 30,				September 30,				September 30,
		2009		2009				2008				2009			2008
Revenues⁽¹⁾⁽²⁾	$	12,462		$	12,035			$	11,613		$	35,969		$	34,109

Averages
Total Assets	$	946,723		$	929,932		$	889,483			$	926,747		$	886,930
Loans and Loans Held for Sale		821,375			830,591			820,425				825,871			818,210
Interest Earning Assets		892,075			874,827			835,704				872,818			833,509
Deposits		799,179			773,037			748,375				774,518			742,702
Shareholders' Equity	$	83,988		$	83,677			$	78,084		$	82,427		$	76,191

Financial Ratios
Return on Average Assets, Annualized		0.70	%		0.53	%			0.85	%		0.65	%		1.00	%
Return on Average Common Equity, Annualized⁽³⁾		5.95	%		3.92	%			9.70	%		5.34	%		11.68	%
Efficiency Ratio⁽²⁾		59.20	%		59.72	%			65.26	%		58.70	%		60.94	%
Yield on Earning Assets⁽²⁾		6.25	%		6.26	%			7.00	%		6.29	%		7.21	%
Cost of Interest Bearing Liabilities		1.87	%		2.06	%			2.77	%		2.05	%		3.02	%
Net Interest Spread		4.38	%		4.20	%			4.24	%		4.24	%		4.18	%
Net Interest Margin⁽²⁾		4.72	%		4.57	%			4.64	%		4.60	%		4.62	%

Tangible Book Value Per Share	$	8.87		$	8.71			$	8.32
Tangible Common Equity/Tangible Assets		8.82	%		8.89	%			8.66	%

	September 30,			June 30,				September 30,				Regulatory Requirements
												Adequately-			Well-
		2009		2009				2008				capitalized			capitalized
Period End
Total Risk-Based Capital Ratio - Consolidated		16.29	%⁽⁴⁾		16.25	%			13.06	%		8.00	%		N/A
Tier 1 Risk-Based Capital Ratio - Consolidated		15.03	%⁽⁴⁾		14.99	%			11.81	%		4.00	%		N/A
Tier 1 Leverage Ratio - Consolidated		14.16	%⁽⁴⁾		14.28	%			11.68	%		4.00	%		N/A
Total Risk-Based Capital Ratio - Whidbey Island Bank		16.09	%⁽⁴⁾		16.11	%			12.97	%		8.00	%		10.00	%
Tier 1 Risk-Based Capital Ratio - Whidbey Island Bank		14.83	%⁽⁴⁾		14.86	%			11.72	%		4.00	%		6.00	%
Tier 1 Leverage Ratio - Whidbey Island Bank		14.04	%⁽⁴⁾		14.15	%			11.58	%		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.

Washington Banking (WBCO) Inactive 8-KResults of Operations and Financial Condition