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Washington Banking Company Earns $23.6 Million, or $1.53 per Diluted Common Share, in 2010
Operating Profits Increase to $12.4Million, or $0.80 per Diluted Common Sharebefore Gains on Acquisitions
OAK HARBOR, WA February 1, 2011 Washington Banking Company (NASDAQ: WBCO), the holding company for Whidbey Island Bank, today reported its core banking business generated strong operating profits in 2010 augmented by two FDIC-assisted acquisitions, which contributed an $18.9 million one-time bargain purchase gain in pretax income for the year.Before preferred dividends, net income grew to $25.3 million in 2010,compared to $6.2 million in 2009.Net income available to common shareholders was$23.6millionor $1.53per diluted common share in2010, compared to $4.6 million, or $0.46per diluted common share, in 2009.
In the fourth quarter of 2010, Washington Banking earned $4.1 million, compared to $1.7 million for the same period last year. For the fourth quarter of 2010, net income available to common shareholders, after preferred dividend payments increased to $3.7 million, or $0.24 per diluted common share, compared to $1.3 million, or $0.11 per diluted common share, for the fourth quarter of 2009.
It has been a pivotal year for our franchise, said Jack Wagner, President and Chief Executive Officer. The two FDIC-assisted acquisitions have proven to be strategically and financially attractive, filling out our branch network in Snohomish County and North King County. Weve added some very talented bankers to our ranks, not only from the institutions we acquired, but also from other banks, and they have been successful in bringing some terrific customer relationships to our franchise. In the short term, the acquisitions contributed a significant one-time pretax gain, added $4.9 million in goodwill to our balance sheet and greatly complicated the accounting and reporting process.In addition, the gain and goodwill recognized are subject to future adjustment up to one year from the date of each acquisition. With all the accounting noise from the acquisitions, we have included certain non-GAAP presentations that illustrate the earnings power of our franchise, which we hope will be useful to investors.
Another item of significance is that we repaid $26.6 million to the US Treasury to redeem the preferred shares issued under the TARP Capital Purchase Program, while maintaining well-capitalized status. Since the redemption took place in January 2011, it is not reflected in the 2010 yearend statements, Wagner added.
The core operating earnings available to common shareholders, which exclude merger related costs and the bargain purchase gain on the FDIC-assisted transactions, totaled $12.4million, or $0.80 per diluted common share, in 2010, compared to $5.5 million, or $0.55 per diluted share in 2009.Core operating earnings and core operating earnings per share are non-GAAP financial measures; please refer to the GAAP reconciliation table in this release.
2010 Financial Highlights (December 31, 2010 compared to December 31, 2009)
- Capital ratios exceeded all regulatory requirements for well-capitalized institutions, with Total Risk Based Capital to risk-adjusted assets of 21.05% compared to 22.15%.
- Tangible book value per common share increased to $9.69 compared to $8.79.
- Deposits, including $633 million acquiredthrough acquisitions, increased 76%year over year to $1.49 billion. Transaction account deposits in the acquired institutions increased $10.8 million since closing.
- Low cost demand, money market, savings and NOW accounts totaled $826 million and make up55% of total deposits.
- Net non-covered loans increased $17.8 million from a year agoand totaled $815 million.
- The provision for non-covered loan losses was $12.2million in 2010, a19% increase from the $10.2 million a year ago.
- Loan loss reserves increased to 2.25% of non-covered loans, from 1.99% a year ago.
- A cash dividend of $0.05 per share will be paid March 1to shareholders of record as of February 11.
Whidbey Island Bank completed two FDIC-assisted acquisitions in 2010 which include theformerNorth County Bank, Arlington, WA and CityBank of Lynnwood, WA. The accounting for these transactions is complex and our year-end results include a number of accounting adjustments for both transactions, said Rick Shields, Chief Financial Officer.These
The following information was filed by Washington Banking Co (WBCO) on Wednesday, February 2, 2011 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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