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10 Buy-Rated Bank Stocks With Highest Dividend Yields

8. Washington Banking Co.

Shares of Washington Banking Co. (WBCO) of Oak Harbor, Wash., closed at 13.74 Thursday, returning 2% year-to-date, following a 19% return during 2012. The shares trade for 1.2 times tangible book value and for 12.0 times the consensus 2014 EPS estimate of $1.15. The consensus 2013 EPS estimate is $1.13.

Based on a quarterly payout of $0.15, the shares have a dividend yield of 4.37%.

Washington Banking Co. is rated an A-minus (Excellent) by TheStreet Ratings.

The company had $1.7 billion in total assets as of Dec. 31 and reported 2012 net income available to common shareholders of $16.8 million, or $1.09 a share, increasing from $14.9 million, or $0.97 a share, in 2011. The 2012 ROA was 1.00%, improving from 0.95% the previous year.

KBW analyst Jacquelynne Chimera rates Washington Banking Co. "outperform," with a $17 price target, estimating the company will earn $1.10 a share this year, with EPS increasing to $1.15 in 2014.

Chimera said in a report on Feb. 1 that she expected "continued loan growth and expense management to help combat [net interest margin] pressure in the current low-rate environment."

"Management is engaged in M&A discussions," Chimera wrote, "and to the extent the company is able to complete a deal, we believe this would prove accretive to earnings and beneficial to the franchise as a whole."

Washington Banking Co.'s net interest margin narrowed sharply to 5.23% from 5.48% the previous quarter. But Chimera expects the decline in net interest income to be partially offset by strong loan growth of 6.5% this year and 6.9% in 2014.

Interested in more on Washington Banking Co.? See TheStreet Ratings' report card for this stock.
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