BELLINGHAM, Wash., Nov. 9, 2009 (GLOBE NEWSWIRE) -- Horizon Financial Corp. (Nasdaq:HRZB) ("Horizon"), the bank holding company for Horizon Bank, today reported a net loss of $35.1 million, or $2.93 per share, for the second quarter of fiscal 2010, and a net loss of $80.8 million, or $6.74 per share, for the six months ended September 30, 2009. The loss for the quarter reflects a $29.0 million provision for loan losses, $4.1 million from losses on real estate owned and collection related expenses, along with $1.5 million in FDIC insurance premiums. Horizon had a net loss of $4.6 million, or $0.39 per share, and $2.6 million, or $0.22 per share, for the quarter and six months ended September 30, 2008.
The current period losses have reduced capital levels significantly and resulted in both the holding company and its subsidiary bank being considered "critically undercapitalized," with the Bank's total risk based capital ratio falling to 1.98%, Tier 1 leverage ratio at 0.77% and the Tier 1 risk based capital ratio at 0.99% as of September 30, 2009.
For a full discussion of Horizon's financial results and operating condition, and the consequences to the Bank of being critically undercapitalized, investors are encouraged to read the report on Form 10-Q for the quarter ended September 30, 2009, that was filed today with the SEC.
"Subsequent to the quarter ended September 30, 2009, Congress passed legislation relating to recovering taxes paid in prior years. The new law regarding expanding the application of net operating losses, both for future and past earnings, is a positive development for us," said Rich Jacobson, President and Chief Executive Officer. "The new law, passed and signed last week, will allow us to reverse a valuation allowance and recognize in earnings a tax benefit of $17.9 million in the third fiscal quarter. Under the new tax law, companies will be permitted to carry back 2008 or 2009 losses to reduce taxable income for the past five years and obtain a refund of taxes already paid. A refund for the fifth year would be subject to a 50% reduction. In addition, companies can carry forward previous year losses for up to 20 years, using the tax credit against future income. This change to our balance sheet would have placed our capital situation at 'significantly undercapitalized' at September 30, 2009, rather than 'critically undercapitalized.' Capital ratios under the new tax treatment would have shown the total risk based capital ratio at 3.92% rather than the reported 1.98%, Tier 1 leverage ratio at 2.09% rather than the reported 0.77% and the Tier 1 risk based capital ratio at 2.64% rather than 0.99% as of September 30, 2009."
"We continue to work through our non-performing asset challenges while working with investment bankers to raise new capital," said Jacobson. "However, no assurances can be made that we will be successful in this regard.
"As part of our balance sheet management process, we are deleveraging our balance sheet and have increased liquidity to meet the needs of our customers," Jacobson continued. Cash, interest bearing deposits and investment securities totaled $221 million, which is almost double the level of liquid investments on the balance sheet a year ago. Net loans are down $302 million, or 24% year-over-year. Of the reduction, $204 million is in the commercial construction portfolio, which is down 60% from a year ago, and $41 million is in the land development portfolio, which is down 23% from one year ago. "As a result of continued declining market values for the collateral supporting our real estate loan portfolio, we once again set aside an elevated provision for loan losses. This continued deterioration of the housing market and the economy has materially adversely affected our business, liquidity and financial results."
Core deposits (excluding brokered CDs and CDs over $100,000) increased 7% year over year and helped replace $47 million in matured brokered CDs which, based on our agreement with our regulators, cannot be renewed. Total deposits increased 2% to $1.17 billion at September 30, 2009 from $1.15 billion at September 30, 2008. "All of our team members recognize the value of core deposits to our franchise, and I am very pleased with their efforts to work to maintain FDIC insurance coverage for our customers. Any customer who has questions regarding their account insurance is encouraged to contact their local Horizon office," said Jacobson.
Total non-performing assets were $128.4 million, or 9.88% of total assets at September 30, 2009, an improvement from $138.4 million, or 10.17% of total assets at June 30, 2009, and up from $80.2 million, or 5.53% of total assets at September 30, 2008. Net charge-offs during the second quarter of fiscal 2010 were $44.6 million compared to $23.0 million in the immediate prior quarter and $5.6 million in the second fiscal quarter a year ago. The allowance for loan losses was $35.9 million, or 3.83% of net loans at September 30, 2009, down from $51.5 million or 4.98% of net loans at June 30, 2009, and up from $25.6 million, or 2.06% of net loans a year ago.
Progress on Regulatory Agreement
As reported in our March 2, 2009, Form 8-K filing with the SEC, Horizon Bank entered into a formal agreement with our regulators. This agreement became effective March 3, 2009, and contained target dates to achieve certain objectives, as outlined in the Form 8-K filing and Horizon's Form 10-K filing for its fiscal year ended March 31, 2009. "We are pleased to report that all of the requirements that were due within 90 days were completed on-time and submitted to our regulators," said Jacobson. "Also included in the agreement is a requirement to reduce our balances of loans which were classified during our September 2008 regulatory examination as "substandard" and "doubtful" to specified levels within 270 days of the effective date of the agreement. As of the date of this release, we have met the requirement to reduce substandard loans to the target levels set forth in the agreement, and are within $1.0 million of the target for doubtful loans. As a result, we intend to meet this requirement in advance of the 270 day target date."
The agreement also contains a requirement to increase our Tier 1 capital ratio to 10% within 270 days. At September 30, 2009, Horizon Bank's Tier 1 capital was $10.4 million, representing 0.77% of average assets. The Bank is working to bring in additional capital to meet the 10% regulatory requirement, in accordance with the terms of the agreement, however no reassurances can be made that it will be successful in this regard. In addition, due to the significant reduction in capital levels over the past year, which has resulted in both the holding company and our subsidiary bank to be considered "critically undercapitalized," Horizon expects its regulators to initiate additional remedial actions as discussed in more detail in its Form 10-Q for the quarter ended September 30, 2009. Also discussed in the Form 10-Q is Horizon's and Horizon Bank's ability to continue as a going concern.
Horizon Financial Corp. is a $1.30 billion, bank holding company headquartered in Bellingham, Washington. Its primary subsidiary, Horizon Bank, maintains a regional banking presence that has been serving customers for 87 years, and operates 18 full-service offices, four commercial loan centers and four real estate loan centers throughout Whatcom, Skagit, Snohomish and Pierce Counties in Washington.
Included in Horizon's SEC filing of Form 10-Q for the second fiscal quarter of 2009 is additional financial information and discussion relating to the financial results as of September 30, 2009. This filing is located at http://www.horizonbank.com or a copy can be requested by e-mail at investorrelations@horizonbank.com.
Safe Harbor Statement: Except for the historical information in this news release, the matters described herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the Corporation's expectations and are subject to risks and uncertainties that cannot be predicted or quantified and are beyond the Corporation's control, including the potential that (1) the Corporation may not be able to continue as a going concern and (2) because of our critically undercapitalized status, our regulators may initiate additional enforcement actions against us, which could include placing the Bank under conservatorship or into receivership. Although we believe that our plans, intentions and expectations, as reflected in these forward-looking statements are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or realized. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety or range of factors including, but not limited to:: the risk that the Bank will be subject to other remedies and other sanctions as result of being critically undercapitalized under a Prompt Corrective Action ("PCA") or because the Corporation is not able to improve its capital position; the possibility that the Bank will not be unable to comply with the conditions imposed by the Order, including but not limited to its ability to increase capital, reduce non-performing assets and reduce its reliance on brokered certificates of deposit, or to comply with statutory obligations applicable to critically undercapitalized institutions under PCA or to comply with other regulatory requirements which could result in the imposition of further enforcement action imposing additional restrictions on our operations or other remedies and sanctions at any time; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs, results of examinations by our banking regulators and our ability to comply with the regulatory agreement with our regulators, our ability to increase our capital and manage our liquidity, our ability to manage loan delinquency rates, the ability to successfully expand existing relationships, deposit pricing and the ability to gather low-cost deposits, success in new markets and expansion plans, expense management and the efficiency ratio, expanding or maintaining the net interest margin, interest rate risk, the local and national economic environment, and other risks and uncertainties discussed from time to time in Horizon's filings with the Securities and Exchange Commission ("SEC"). Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. Horizon undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the SEC report of Horizon, particularly its Form 10-K for the fiscal year ended March 31, 2009 and its Form 10-Q filings for the quarters ended June 30, 2009 and September 30, 2009 for meaningful cautionary language discussion why actual results may vary from those anticipated by management.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited) (in 000s, except share data)
Quarter Quarter Quarter
Ended Three Ended One Ended
Sept 30, Month June 30, Year Sept 30,
2009 Change 2009 Change 2008
---------------------------------------------------------------------
Interest income:
Interest on
loans $ 12,813 -6% $ 13,684 -35% $ 19,808
Interest and
dividends on
securities 816 -6% 864 -14% 949
---------- ---------- ----------
Total interest
income 13,629 -6% 14,548 -34% 20,757
Interest expense:
Interest on
deposits 7,932 -4% 8,257 -7% 8,500
Interest on
borrowings 701 -3% 725 -47% 1,334
---------- ---------- ----------
Total interest
expense 8,633 -4% 8,982 -12% 9,834
---------- ---------- ----------
Net interest
income 4,996 -10% 5,566 -54% 10,923
Provision for
loan losses 29,000 -18% 35,521 142% 12,000
---------- ---------- ----------
Net interest
loss after
provision
for loan
losses (24,004) -20% (29,955) 2129% (1,077)
Non-interest
income (loss):
Service fees 681 -18% 830 -17% 819
Net gain (loss)
on sales of
loans (98) -121% 477 -168% 144
Net loss on
sales and
impairment of
real estate
owned (2,044) -1% (2,064) 510% (335)
Net loss on
sales of
investment
securities (54) N/A -- -93% (777)
Other than
temporary
impairment
on investment
securities (1) -100% (204) N/A --
Other
non-interest
income 456 -1% 462 -65% 1,288
---------- ---------- ----------
Total
non-interest
income (loss) (1,060) 112% (499) -193% 1,139
Non-interest
expense:
Compensation
and employee
benefits 3,624 7% 3,376 -16% 4,337
Building
occupancy 1,086 0% 1,086 -8% 1,175
REO/collection
expense 2,040 -16% 2,439 890% 206
FDIC insurance 1,452 -18% 1,768 579% 214
Data processing 244 -6% 260 1% 241
Advertising 140 1% 139 -36% 219
Other
non-interest
expense 1,767 55% 1,138 27% 1,387
---------- ---------- ----------
Total
non-interest
expense 10,353 1% 10,206 33% 7,779
Loss before
provision for
income taxes (35,417) -13% (40,660) 359% (7,717)
Current benefit
for income taxes (12,791) -11% (14,336) 311% (3,109)
Deferred tax
valuation
allowance 12,503 -36% 19,400 N/A --
---------- ---------- ----------
Net loss (35,129) -23% (45,724) 662% (4,608)
Less: Net loss
attributable to
noncontrolling
interests (15) 0% (15) 400% (3)
---------- ---------- ----------
Net loss
attributable to
Horizon
Financial Corp. $ (35,114) -23% $ (45,709) 663% $ (4,605)
========== ========== ==========
Earnings per
share:
Basic loss per
share $ (2.93) -23% $ (3.81) 651% $ (0.39)
Diluted loss
per share $ (2.93) -23% $ (3.81) 651% $ (0.39)
Weighted average
shares
outstanding:
Basic 11,995,279 0% 11,981,529 0% 11,940,064
Common stock
equivalents -- N/A -- N/A --
---------- ---------- ----------
Diluted 11,995,279 0% 11,981,529 0% 11,940,064
========== ========== ==========
Six Months Six Months
CONSOLIDATED STATEMENTS OF INCOME Ended Ended
(unaudited) (in 000s, except per Sept 30, Sept 30,
share data) 2009 Change 2008
---------------------------------------------------------------------
Interest income:
Interest on loans $ 26,497 -34% $ 40,254
Interest and dividends on
securities 1,681 -12% 1,910
---------- ----------
Total interest income 28,178 -33% 42,164
Interest expense:
Interest on deposits 16,189 -5% 17,087
Interest on borrowings 1,427 -51% 2,927
---------- ----------
Total interest expense 17,616 -12% 20,014
---------- ----------
Net interest income 10,562 -52% 22,150
Provision for loan losses 64,521 330% 15,000
---------- ----------
Net interest income (loss) after
provision for loan losses (53,959) -855% 7,150
Non-interest income (loss):
Service fees 1,511 -15% 1,779
Net gain on sales of loans 387 11% 348
Net loss on sales and impairment
of real estate owned (4,108) 1126% (335)
Net loss on sales of investment
securities (54) -73% (198)
Other than temporary impairment on
investment securities (205) N/A --
Other 918 -49% 1,800
---------- ----------
Total non-interest income (loss) (1,551) -146% 3,394
Non-interest expense:
Compensation and employee benefits 7,000 -21% 8,840
Building occupancy 2,172 -6% 2,301
REO/collection expense 4,479 1340% 311
FDIC insurance 3,220 1143% 259
Data processing 504 4% 485
Advertising 279 -36% 438
Other expenses 2,905 6% 2,730
---------- ----------
Total non-interest expense 20,559 34% 15,364
Loss before provision for income
taxes (76,069) 1478% (4,820)
Current benefit for income taxes (27,127) 1118% (2,228)
Deferred tax valuation allowance 31,903 N/A --
---------- ----------
Net loss (80,845) 3019% (2,592)
Less: Net loss attributable to
noncontrolling interests (30) 329% (7)
---------- ----------
Net loss attributable to Horizon
Financial Corp. $ (80,815) 3026% $ (2,585)
========== ==========
Earnings per share:
Basic loss per share $ (6.74) N/A $ (0.22)
Diluted loss per share $ (6.74) N/A $ (0.22)
Weighted average shares outstanding:
Basic 11,988,442 1% 11,917,065
Common stock equivalents -- N/A --
---------- ----------
Diluted 11,988,442 1% 11,917,065
========== ==========
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited) (in 000s, except share data)
Three One
Sept 30, Month June 30, Year Sept 30,
2009 Change 2009 Change 2008
---------------------------------------------------------------------
Assets:
Cash and due
from banks $ 10,636 -39% $ 17,523 -52% $ 22,117
Interest-
bearing
deposits 148,406 26% 117,876 689% 18,816
Investment
securities
Available
for sale,
at fair
value 62,009 -2% 63,420 -13% 71,686
Held to
maturity, at
amortized
cost 0 -100% 8 -100% 10
Federal Home
Loan Bank
stock 7,247 0% 7,247 -16% 8,580
Loans held for
sale 1,253 -58% 2,982 -16% 1,496
Gross loans
receivable 973,992 -10% 1,086,275 -23% 1,265,275
Reserve for
loan losses (35,941) -30% (51,499) 41% (25,579)
---------- ---------- ----------
Net loans
receivable 938,051 -9% 1,034,776 -24% 1,239,696
Investment in
real estate
joint venture 18,164 0% 18,087 2% 17,742
Accrued
interest and
dividends
receivable 4,543 -28% 6,345 -35% 6,942
Property and
equipment, net 25,257 -2% 25,733 -7% 27,142
Net deferred
income tax
assets -- N/A -- -100% 7,304
Income tax
receivable 21,018 0% 21,018 411% 4,111
Real estate
owned 40,117 78% 22,537 2058% 1,859
Other assets 23,399 0% 23,483 -2% 23,798
---------- ---------- ----------
Total assets $1,300,100 -4% $1,361,035 -10% $1,451,299
========== ========== ==========
Liabilities:
Deposits $1,174,020 0% $1,172,178 2% $1,147,278
Other borrowed
funds 84,029 -23% 109,456 -45% 151,571
Borrowing
related to
investment in
real estate
joint venture 24,500 0% 24,500 5% 23,404
Accounts
payable and
other
liabilities 2,725 -52% 5,644 -39% 4,461
Advances by
borrowers for
taxes and
insurance 348 102% 172 -6% 372
Deferred
compensation 1,701 -1% 1,726 -11% 1,905
---------- ---------- ----------
Total
liabilities $1,287,323 -2% $1,313,676 -3% $1,328,991
Stockholders'
equity:
Serial
preferred
stock, $1.00
par value;
10,000,000
shares
authorized;
none issued or
outstanding -- -- --
Common stock,
$1.00 par
value;
30,000,000
shares
authorized;
11,995,504,
11,994,945,
and 11,960,371
shares
outstanding 11,996 0% 11,995 0% 11,960
Additional
paid-in
capital 51,167 0% 51,155 0% 51,086
Retained
earnings
(deficit) (52,482) 202% (17,368) -189% 59,115
Accumulated
other
comprehensive
income (loss) 1,992 37% 1,458 -20020% (10)
Noncontrolling
interests 104 -13% 119 -34% 157
---------- ---------- ----------
Total
stockholders'
equity 12,777 -73% 47,359 -90% 122,308
---------- ---------- ----------
Total
liabilities
and
stockholders'
equity $1,300,100 -4% $1,361,035 -10% $1,451,299
========== ========== ==========
Intangible
assets:
Goodwill $ -- N/A $ -- -100% $ 545
Mortgage
servicing
asset 153 -3% 158 -35% 235
---------- ---------- ----------
Total
intangible
assets $ 153 -3% $ 158 -80% $ 780
========== ========== ==========
LOANS
(unaudited) Sept 30, June 30, Sept 30,
(in 000s) 2009 2009 2008
----------------------------------------------------------------------
1-4 Mortgage
1-4 Family
residential $ 144,603 $ 153,005 $ 157,502
1-4 Family
construction 18,169 21,396 37,877
Participations
sold (32,683) (34,006) (50,198)
---------- ---------- ----------
Subtotal 130,089 140,395 145,181
Commercial land
development 137,030 171,198 177,600
Commercial
construction 136,214 183,579 339,774
Multi family
residential 57,190 55,180 44,522
Commercial real
estate 278,346 278,928 286,728
Commercial loans 176,368 193,307 207,348
Home equity
secured 52,418 54,387 56,047
Other consumer
loans 6,337 9,301 8,075
---------- ---------- ----------
Subtotal 843,903 945,880 1,120,094
---------- ---------- ----------
Subtotal 973,992 1,086,275 1,265,275
Less:
Reserve for
loan losses (35,941) (51,499) (25,579)
---------- ---------- ----------
Net loans
receivable $ 938,051 $1,034,776 $1,239,696
========== ========== ==========
Net residential
loans $ 128,628 14% $ 136,680 13% $ 143,555 12%
Net commercial
loans 167,936 18% 182,117 18% 202,271 16%
Net commercial
real estate
loans 583,689 62% 655,616 63% 831,123 67%
Net consumer
loans 57,798 6% 60,363 6% 62,747 5%
---------------- ---------------- ----------------
$ 938,051 100% $1,034,776 100% $1,239,696 100%
================ ================ ================
DEPOSITS
(unaudited) Sept 30, June 30, Sept 30,
(in 000s) 2009 2009 2008
----------------------------------------------------------------------
Core Deposits
Savings $ 15,977 1% $ 15,980 1% $ 18,135 2%
Checking 83,920 7% 81,349 7% 75,633 6%
Checking - non
interest
bearing 93,679 8% 92,988 8% 65,365 6%
Money market 114,941 10% 125,586 11% 179,714 16%
Certificates
of Deposit
under
$100,000 361,326 31% 353,910 30% 289,945 25%
---------------- ---------------- ----------------
Subtotal 669,843 57% 669,813 57% 628,792 55%
Other Deposits
Certificates
of Deposit
$100,000 and
above 315,838 27% 290,440 25% 283,015 24%
Brokered
Certificates
of Deposit 188,339 16% 211,925 18% 235,471 21%
---------------- ---------------- ----------------
Total Other
Deposits 504,177 43% 502,365 43% 518,486 45%
---------------- ---------------- ----------------
Total $1,174,020 100% $1,172,178 100% $1,147,278 100%
================ ================ ================
WEIGHTED AVERAGE INTEREST RATES:
(unaudited)
Six Six
Quarter Quarter Quarter Months Months
Ended Ended Ended Ended Ended
Sept 30, June 30, Sept 30, Sept 30, Sept 30,
2009 2009 2008 2009 2008
----------------------------------------------------------------------
Yield on loans 5.10% 4.96% 6.36% 5.03% 6.50%
Yield on investments 1.55% 1.91% 4.05% 1.72% 4.18%
-------- -------- -------- -------- --------
Yield on interest-
earning assets 4.49% 4.53% 6.20% 4.51% 6.34%
Cost of deposits 2.69% 2.76% 3.04% 2.73% 3.14%
Cost of borrowings 2.34% 2.31% 2.92% 2.33% 2.89%
-------- -------- -------- -------- --------
Cost of interest-
bearing
liabilities 2.66% 2.72% 3.02% 2.69% 3.10%
AVERAGE BALANCES
(unaudited) Six Six
(in 000s) Quarter Quarter Quarter Months Months
Ended Ended Ended Ended Ended
Sept 30, June 30, Sept 30, Sept 30, Sept 30,
2009 2009 2008 2009 2008
---------------------------------------------------------------------
Loans $1,004,674 $1,104,524 $1,246,410 $1,054,599 $1,239,101
Invest-
ments 210,467 180,972 93,757 195,719 91,388
---------- ---------- ---------- ---------- ----------
Total
inte-
rest-
earning
assets 1,215,141 1,285,496 1,340,167 1,250,318 1,330,489
Deposits 1,177,285 1,196,743 1,118,799 1,187,014 1,087,478
Borrow-
ings 119,698 125,627 182,656 122,663 202,563
---------- ---------- ---------- ---------- ----------
Total
inte-
rest-
bearing
liabil-
ities $1,296,983 $1,322,370 $1,301,455 $1,309,677 $1,290,041
Average
assets $1,330,567 $1,414,503 $1,449,475 $1,376,369 $1,430,376
Average
stock-
holders'
equity $ 30,068 $ 70,192 $ 124,790 $ 51,054 $ 125,966
CONSOLIDATED FINANCIAL RATIOS
Six Six
Quarter Quarter Quarter Months Months
Ended Ended Ended Ended Ended
Sept 30, June 30, Sept 30, Sept 30, Sept 30,
(unaudited) 2009 2009 2008 2009 2008
--------------------------------------------------------------------
Return on average
assets -10.56% -12.92% -1.27% -11.74% -0.36%
Return on average
equity -467.13% -260.43% -14.76% -316.59% -4.10%
Efficiency ratio 263.02% 201.10% 64.49% 228.15% 60.15%
Net interest spread 1.82% 1.81% 3.17% 1.82% 3.24%
Net interest margin 1.64% 1.73% 3.26% 1.69% 3.33%
Equity-to-assets
ratio 0.98% 3.48% 8.43%
Book value per share $ 1.07 $ 3.95 $ 10.23
Tangible book value
per share $ 1.05 $ 3.94 $ 10.16
RESERVE FOR LOAN LOSSES
Six Six
Quarter Quarter Quarter Months Months
Ended Ended Ended Ended Ended
(unaudited) Sept 30, June 30, Sept 30, Sept 30, Sept 30,
(dollars in 000s) 2009 2009 2008 2009 2008
--------------------------------------------------------------------
Balance at beginning
of period $ 51,499 $ 38,981 $ 19,149 $ 38,981 $ 19,114
Provision for loan
losses 29,000 35,521 12,000 64,521 15,000
Charge offs - net of
recoveries (44,558) (23,003) (5,570) (67,561) (8,535)
-------- -------- -------- -------- --------
Balance at end of
period $ 35,941 $ 51,499 $ 25,579 $ 35,941 $ 25,579
Reserves/Gross Loans
Receivable 3.69% 4.74% 2.02%
Reserves/Net Loans
Receivable 3.83% 4.98% 2.06%
NON-PERFORMING ASSETS Sept 30, June 30, Sept 30,
(unaudited) (dollars in 000s) 2009 2009 2008
---------------------------------------------------------------------
Accruing loans - 90 days past due $ 47 $ 14 $ 589
Non-accrual loans 88,242 115,894 77,781
-------- -------- --------
Total non-performing loans $ 88,289 $115,908 $ 78,370
Total non-performing loans/net
loans 9.41% 11.20% 6.32%
Real estate owned $ 40,117 $ 22,537 $ 1,859
-------- -------- --------
Total non-performing assets $128,406 $138,445 $ 80,229
Total non-performing assets/total
assets 9.88% 10.17% 5.53%
Troubled debt restructured loans $ 29,188 $ 29,039 $ --
NON-PERFORMING ASSETS
(unaudited) Sno-
(dollars What- hom- Per-
in 000s) com Skagit ish King Pierce Other Total cent
----------------------------------------------------------------------
1-4 Family
residen-
tial $ 3,056 $ -- $ 62 $ -- $ 1,990 $ -- $ 5,108 4%
1-4 Family
construc-
tion -- 253 191 -- 544 -- 988 1%
------------------------------------------------------------
Subtotal 3,056 253 253 -- 2,534 -- 6,096 5%
Commercial
land
devel-
opment 7,119 162 25,110 3,773 8,426 12,047 56,637 44%
Commercial
construc-
tion 296 212 5,348 12,042 18,923 2,396 39,217 31%
Multi
family
residen-
tial -- -- -- -- -- -- -- 0%
Commercial
real
estate 1,990 5,148 11,831 -- 2,094 -- 21,063 16%
Commercial
loans 1 719 2,735 -- 148 -- 3,603 3%
Home
equity
secured 85 82 -- -- 1,620 -- 1,787 1%
Other
consumer
loans 3 -- -- -- -- -- 3 0%
------------------------------------------------------------
Subtotal 9,494 6,323 45,024 15,815 31,211 14,443 122,310 95%
------------------------------------------------------------
Total non-
perform-
ing
assets $12,550 $6,576 $45,277 $15,815 $33,745 $14,443 $128,406 100%
============================================================
Percent of
total
non-per-
forming
assets 10% 5% 35% 13% 26% 11% 100%