OAK HARBOR, Wash., Oct. 22, 2009 (GLOBE NEWSWIRE) -- 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%. Tangible common
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 with nonperforming assets to total assets
at 0.85%, up from 0.50%. (SNL's Bank & Thrift Index
institutions averaged 1.37% in June and SNL peer institutions
averaged 2.39% as of June 30, 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-date provisions to $8.0 million.
-- Pretax pre-provision income grew 5% in the quarter and 26%
year-over-year to $4.9 million 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.
-- Whidbey Island Bank remains the No.1 bank in deposits in Island
County, with its market share 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 loans 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, 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.
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.
CONSOLIDATED BALANCE SHEETS (unaudited)
----------------------------------------
($ in thousands except per share data)
Three One
Sept. 30, June 30, Month Sept. 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 none in 2008 24,911 24,827 0% -- 100%
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%
---------------------------------------------------------------------
CONSOLIDATED STATEMENTS Quarter Quarter Quarter
OF OPERATIONS (unaudited) Ended Ended Three Ended One
($ in thousands, Sept. 30, June 30, Month Sept. 30, Year
except per share data) 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 & Repossession
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
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
-------------------------------------------------
($ in thousands, except per share data)
Nine Months Ended One
Sept. 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 & Repossession 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
ASSET QUALITY
(unaudited) Quarter Quarter Quarter Nine Months
($ in thousands, Ended Ended Ended Ended
except per Sept. 30, June 30, Sept. 30, Sept. 30,
share data) 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%
Sept. 30, June 30, Sept. 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 $372,796
=====================================================================
(1) Excludes Loans Held for Sale.
(2) Nonperforming loans includes nonaccrual loans plus
accruing loans 90 or more days past due.
FINANCIAL STATISTICS (unaudited)
--------------------------------
($ in thousands, except per share data)
Quarter Quarter Quarter
Ended Ended Ended Nine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 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%
Regulatory
Requirements
-------------------
Sept. 30, June 30, Sept. 30, Adequately- Well-
capital- capital-
2009 2009 2008 ized ized
------------------------------------------------- -------------------
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.