OAK HARBOR — Washington Banking Co. reported strong earnings Oct. 28, saying its regulator-assisted purchases of two Snohomish County banks leave it well positioned for future growth, officials said.
Washington Banking, the holding company for Whidbey Island Bank, took over Arlington’s North County Bank this summer and Lynnwood’s City Bank this spring after regulators said the banks didn’t have enough capital to continue operating safely.
“Our FDIC-assisted acquisition of North County Bank, which closed Sept. 24, produced a significant bargain purchase gain in the third quarter, but more importantly it is a solid geographic and cultural addition to our franchise,” said Jack Wagner, president and CEO of Washington Banking.
The acquisitions give the company branches from King County north to the Canadian border.
Wagner said shareholders earned $13.3 million for the quarter, or 86 cents a diluted share, in comparison to $4.2 million during the previous quarter.
The company acquired four branches from North County Bank, deciding to keep 39 of 46 employees.
It also purchased nearly all the bank’s assets valued at $279 million, loans of $133 million, deposits of $258 million, cash and equivalents of $67 million and high quality securities of $22 million.
The Federal Deposit Insurance Corp. agreed to cover 80 percent of most losses in the forced sale.
It provided a similar deal with the purchase of eight branches of City Bank in April, but Washington Banking only wanted 60 percent of the assets, which include a large number of loans for real estate and home development.
Both City Bank and North County Bank were brought down by the crash of the real estate market.
Washington Banking reported that during the past year, its assets have increased by 91 percent to $1.83 billion and its deposits have increased by 98 percent to $1.61 billion.
Shareholders’ equity has increased by 64 percent to $179.7 million.
Wagner said that the acquisitions were a good strategic decision providing immediate growth and long-term potential. But he said the bank’s original holdings also have done well.
He said the number of nonperforming loans has grown because of the poor economy, but that the bank continues to have ample capital to earn what regulators describe as “well capitalized.”
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