This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Washington Banking Company Reports Profitable Second Quarter; Earns $2.8 Million, Or $0.18 Per Diluted Share

Washington Banking Company (NASDAQ: WBCO), the holding company for Whidbey Island Bank, today reported earnings in the second quarter of 2012 were $2.8 million, or $0.18 per diluted share, compared to $4.8 million, or $0.31 per diluted share, in the first quarter of 2012, and $4.0 million, or $0.26 per diluted share in the second quarter of 2011. The Company experienced better than anticipated performance in its collection of the covered loan portfolio resulting in an additional $1.1 million FDIC-clawback liability expense. Coupled with a $400,000 Provision for Covered Loan Losses, pre-tax results were impacted by approximately $1.5 million, or $0.07 per share net of tax. In the first half of 2012, Washington Banking’s net income totaled $7.6 million, or $0.49 per diluted share, compared to $7.0 million, or $0.45 per diluted share, which included its last $1.1 million preferred dividend payment in the first half a year ago.

“In addition to the gains we recorded at the time of the two FDIC transactions in 2010, we also benefit from the strong contribution to our margin that these covered loans produce,” said Jack Wagner, President and Chief Executive Officer. “However, since our forecasted losses on this portfolio continue to decline, we recorded an increase to the clawback liability this quarter.”

“The low interest rate environment is fueling the mortgage loan pipeline to higher and higher levels,” said Bryan McDonald, Whidbey Island Bank’s President and CEO. “And our calling activities and high quality staff are showing good results in a very competitive market place. We are generating a consistently strong number of new accounts, and believe we are becoming the primary bank for more and more of our customers. This is providing higher transaction volumes and generating strong quarter-over-quarter gains in electronic banking income.”

Second quarter 2012 Financial Highlights (as of, or for the period ended June 30, 2012)
  • Net interest margin (NIM) compressed 14 basis points to 5.67% from 5.81% in the preceding quarter and grew 28 basis points from 5.39% in the year ago quarter.
  • On a consolidated basis, Total Risk-Based Capital to risk-adjusted assets was 19.90% compared to 19.50% a year ago. The FDIC requires a minimum of 10% Total Risk-Based Capital ratio to be considered well-capitalized.
  • Nonperforming non-covered assets/total assets improved to 1.30%, compared to 1.42% in the preceding quarter and 1.83% a year ago. Classified loans declined to $84.8 million at June 30, 2012, from $97.3 million at March 31, 2012.
  • Tangible book value per common share increased to $10.97, compared to $10.08 a year ago.
  • Low cost demand, money market, savings and NOW accounts totaled $947.5 million and make up 65% of total deposits.
  • Loan loss reserves were 2.16% of non-covered loans, and 2.34% a year ago.
  • The interest income generated from the loan portfolios in the FDIC-assisted acquisitions contributed $9.4 million to second quarter revenues, up from $8.4 million in the second quarter a year ago.
  • Year-to-date return on average assets was 0.92% and return on average common equity was 8.84%, annualized.
  • The Seattle Times’ ranked Washington Banking Company as the top financial institution in the region for the third consecutive year in their 21st annual “Best of the Northwest” listing.

Regional and Acquisitions Update

“The benefits of the acquisitions made in 2010 continue to contribute to margin and overall profitability, although expenses associated with the covered loan portfolio were up this quarter,” stated Rick Shields, Chief Financial Officer. “The FDIC indemnification asset declined 10% in the quarter, 39% year-over-year and is down 56% from its peak,” Shields continued. “In addition to the clawback adjustment of $1.1 million recorded in the second quarter of 2012, the FDIC indemnification asset was written down by $3.1 million in the second quarter of 2012, $3.0 million in the first quarter of 2012 and $1.7 million in the second quarter a year ago.”

1 of 10

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs