Wheatland Bank

Wheatland Bank Announces Year End Results of Record Growth and Exceptional Asset Quality

(SPOKANE) “Given the state of the economy, and the challenges facing the financial industry as a whole, we are pleased to report Wheatland Bank’s record  growth, exceptional asset quality and a very strong capital and liquidity position” stated Susan Horton, Chairman and Chief Executive Officer of Wheatland Bank, and its holding company, Community Financial Group, Inc.

At December 31, 2008, Wheatland Bank’s asset quality was one of the best in the country.  The Bank is proud of this achievement, which included $0 net loan losses for the entire year of 2008.  Wheatland ended 2008 with a very low .4% of its total loans delinquent, and .1% of its loans not performing.  Susan Horton stated that excellent credit administration and conservative lending policies carried out by very experienced lenders, as well as sound diversification, are responsible for Wheatland’s prime loan quality.  At a time when other financial institutions are facing unprecedented loan losses, Wheatland Bank bucked the industry trend and may be one of the only banks in the state or even the country that has experienced no loan losses during 2008.  Despite this performance, growth was not sacrificed to maintain quality.  In fact, Wheatland Bank also experienced record growth during 2008.

For the year ended December 31, 2008, total assets increased 21% to $209 million.  Wheatland Bank achieved record net loan growth of 26% during 2008, ending the year with $169 million in total loans outstanding.  Total deposits were $175 million at year end, representing 17% deposit growth for the year ended December 31, 2008.

“Wheatland Bank embarked on an aggressive organic expansion plan into Central Washington and made a long-term commitment to that market with the opening of four new branches in Wenatchee, Yakima, Ellensburg and Chelan during the last year. The first year of this strategic plan has delivered excellent results in terms of high quality loan growth, loan diversification and strong core deposit growth” stated Susan Horton.  Combined loan and deposit growth in Wheatland’s Central Washington market exceeded $70 million in the first year alone, even though two of the branches have only been open since fall 2008.  Susan reported that “The Bank’s expansion in Central Washington has been a home run.  The success of the plan is attributed to the outstanding expertise and performance of the local bankers Wheatland employs in that market, solid risk based financial analysis and decision making by our Executive Team and Board of Directors, as well as excellent support of the strategic plan by all Bank employees”.  She noted that even though it was well planned, it was an aggressive move for Wheatland Bank, and one that wasn’t without risk.  The rewards of this big move for Wheatland will continue to substantially enhance shareholder value for years to come. 

Wheatland Bank’s net income for the year ended December 31, 2008 was $1.1 million, representing a .58% Return on Average Assets, which exceeded the Bank’s budget for the year by 7%.  The budget was reflective of the anticipated first year costs of the major expansion plan and opening of four new branches.  Despite higher than anticipated aggressive Federal Reserve rate reductions, Wheatland Bank’s net interest margin for year ended December 31,  2008 was a strong 4.96%, as a result of sound asset liability management and a low cost of funds resulting from a very strong core deposit base.  Wheatland Bank is well positioned given the strength of its balance sheet and record growth in 2008 to see improved profits in future years from the expansion plan and continued growth in existing markets as the economy improves and interest rates start to go back up. 

Wheatland Bank remains well-capitalized by all regulatory guidelines.  Wheatland’s capital ratio at December 31, 2008 was 9.98% (capital as a percentage of total assets) and the regulatory threshold for a well capitalized bank (the highest category) is 5%.  Susan Horton noted that “Wheatland Bank’s capital ratio does not include any TARP funding, and that Wheatland does not need and has no plans to take taxpayer money from the US Treasury”.  Wheatland’s strong internally generated capital position will allow Wheatland to continue with its growth plans, and to lend much needed money to the businesses and consumers in the communities it serves.  Due to strong demand, Wheatland Bank’s Board is considering the merits of a limited private placement of common stock in the future.  Wheatland Bank currently has approximately 350 shareholders, primarily comprised of directors and officers, and long time customers in its local communities.   In any event, Wheatland Bank’s strategic mission of remaining a locally owned independent community bank is alive and well. 

About Wheatland Bank

Wheatland Bank, formed in 1979 in Davenport, Washington, is a locally owned independent community bank. Wheatland Bank’s commitment to Eastern Washington is strong and has deep roots.  It’s a commitment that is kept alive with powerful local ownership and decision making.  In the 30 years since inception, Wheatland Bank has grown to over $200 million in total assets with 13 branches throughout Adams, Chelan, Douglas, Grant, Kittitas, Lincoln, Spokane and Yakima Counties and over 10,000 customers. Wheatland Bank focuses on helping small businesses, farmers, and consumers succeed by offering the highest quality personalized banking relationships and services. Wheatland Bank is a value-oriented financial services provider dedicated to serving the needs of its customers, communities and employees while enhancing shareholder value.