Washington Banking Company (NASDAQ:WBCO), the holding company for Whidbey Island Bank, today reported earnings in the third quarter of 2012 increased to $4.6 million, or $0.30 per diluted share, compared to $2.8 million, or $0.18 per diluted share, in the second quarter of 2012, and $3.6 million, or $0.24 per diluted share in the third quarter of 2011. Good loan growth, strong mortgage banking income, and declining expenses related to the 2010 FDIC-assisted acquisitions contributed to the solid financial results produced in both the third quarter and first nine months of 2012. In the first nine months of 2012, Washington Banking’s net income increased 15% to $12.3 million, or $0.79 per diluted share, compared to $10.6 million, or $0.69 per diluted share, which included its last $1.1 million preferred dividend payment in the first nine months a year ago.
“Our third quarter profits show the improving market conditions in the Pacific Northwest, and we remain guardedly optimistic about the economic recovery in the area,” said Jack Wagner, President and Chief Executive Officer. “Demand for commercial loans continues to grow, and residential mortgage refinancing activity remains robust.”
“We are still on track to open our new branch in Woodinville before the end of the year, and we see this market as an attractive addition to our franchise,” said Bryan McDonald, Whidbey Island Bank’s President and CEO. “The expanded workforce in the aerospace industry, fueled by Boeing’s strength, along with strong in-migrations and a rebound in our housing markets, are all contributing to an improving regional economy.”
Third quarter 2012 Financial Highlights (as of, or for the period ended September 30, 2012)
- Net interest margin (NIM) compressed 19 basis points to 5.48% from 5.67% in the preceding quarter, but increased 5 basis points from 5.43% in the year ago quarter.
- On a consolidated basis, Total Risk-Based Capital to risk-adjusted assets was 19.65% compared to 19.43% 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 1.29%, compared to 1.30% in the preceding quarter and 1.75% a year ago. Classified loans declined to $78.2 million at September 30, 2012, from $84.8 million at June 30, 2012.
- Tangible book value per common share increased to $11.31, compared to $10.33 a year ago.
- Low cost demand, money market, savings and NOW accounts totaled $986.5 million and make up 68% of total deposits.
- Loan loss reserves were 2.01% of non-covered loans, and 2.30% a year ago.
- The interest income generated from the loan portfolios in the FDIC-assisted acquisitions contributed $9.0 million to third quarter revenues, up from $8.6 million in the third quarter a year ago.
- Return on average assets was 1.10% and return on average common equity was 10.43%, 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.