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Washington Banking Company Earns $14.5 Million, or $0.93 per Share, in 2013
Continuing Improvements in Asset Quality and Solid Loan Growth Contribute to Profits
OAK HARBOR, WA – January 30, 2014 – Washington Banking Company (NASDAQ: WBCO), the holding company for Whidbey Island Bank, today reported it earned $14.5 million, or $0.93 per diluted share in 2013, with a 38.2% decline in nonperforming assets and 4.3% growth in originated loans compared to a year ago. In 2012, Washington Banking earned $16.8 million, or $1.09 per diluted share, with strong contribution from its covered loan portfolio. In the fourth quarter of 2013, earnings were $2.5 million, or $0.16 per diluted share, compared to $4.5 million, or $0.29 per diluted share, in the third quarter of 2013 and $4.6 million, or $0.30 per diluted share in the fourth quarter of 2012.
“The announcement that we will be merging with Heritage Financial Corporation (Nasdaq: HFWA) was an exciting event to finish our year,” said Jack Wagner, President and Chief Executive Officer. “We believe this merger of two of Washington’s strongest community banks will be a winning combination. We have received regulatory approval of the merger from the FDIC and Washington DFI. We believe we remain on track to close in the second quarter, as planned.”
“C&I, real estate and consumer lending were all strong in the fourth quarter and full year periods, offsetting the planned run-off of construction loans in our portfolio,” said Bryan McDonald, Whidbey Island Bank’s President and CEO. “Loan demand remains strong and our pipeline of activity continues to grow. During the fourth quarter, we closed $48.7 million in new commercial loans, renewed or extended $46.3 million in existing commercial loans and funded $28.6 million in residential mortgages, for both refinance and purchase transactions. We are continuing to see strong demand for SBA loans, closing $2.9 million in the fourth quarter, which is almost double the volume produced in the third quarter, and the SBA pipeline is up 60% from the end of September.”
Fourth quarter loan production contributed to 1.9% net non-covered loan growth in the quarter and 4.3% net growth year-over-year. In the 2013 fourth quarter, average loans increased 4.0% to $874.9 million from $841.0 million a year ago. Mortgage banking income contributed $469,000 to fourth quarter revenues, down from $726,000 in the third quarter of 2013 and $1.2 million in the fourth quarter a year ago.
2013 Financial Highlights (as of, or for the period ended December 31, 2013)
|·||On a consolidated basis, Total Risk-Based Capital to risk-adjusted assets was 19.76% compared to 19.39% a year ago. The minimum ratio to be considered well-capitalized under FDIC rules is 10%.|
|·||With the exception of planned runoff in construction loans, all loan categories increased for both the quarter and the year.|
|·||Asset quality continues to improve with the ratio of nonperforming non-covered assets (NPAs) to total assets dropping to 0.68% from 0.89% at September 30, 2013 and 1.10% a year ago. Classified loans declined to $66.1 million at December 31, 2013, from $77.3 million at December 31, 2012.|
|·||Low-cost demand, money market, savings and NOW accounts were $1.11 billion, or 75% of total deposits.|
|·||Loan loss reserves were 1.92% of non-covered loans, compared to 2.01% a year ago.|
|·||The interest income generated from the loan portfolios in the FDIC-assisted acquisitions contributed $5.5 million to fourth quarter and $23.7 million to full year revenues in 2013.|
|·||In the fourth quarter, the net interest margin fell 9 basis points to 4.50% compared to 4.59% in the preceding quarter, and fell 73 basis points from 5.23% in the year ago quarter, reflecting declines in both the yields and balances of covered loans.|
“We generated net recoveries in our non-covered loan portfolio, which allowed us to take a minimal loan loss provision in the fourth quarter of 2013,” said Dan Kuenzi, Chief Credit Officer. “Residential construction projects, which continue to
The following information was filed by Washington Banking Co (WBCO) on Friday, January 31, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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