Wheatland Bank

Wheatland Bank Announces Favorable Year End Results and Holding Company Declares Dividend

(Spokane, WA) “We are pleased to report Wheatland Bank’s strong financial results for the year ended December 31, 2009.  Despite the state of the economy and the unprecedented losses and asset quality deterioration of many banks across the country, Wheatland Bank has avoided these troubles and remains very sound financially.  Once again in 2009, as in 2008, Wheatland Bank posted solid earnings, favorable asset quality, strong growth, and remains very well capitalized. ” stated Susan Horton, President , Chief Executive Officer and Chairman of the Board of Wheatland Bank, and its holding company, Community Financial Group, Inc. (CFG).  On January 14, 2010, the Board of Directors of Wheatland Bank’s holding company, CFG, declared a 4% stock dividend, and approved a dividend repurchase program for those shareholders desiring the cash instead of stock.

Wheatland Bank is rated 5-Stars by Bauer Financial, Inc. and noted as one of the strongest banks in the country, for the 11th consecutive quarter.  The 5-Star rating is the highest rating attainable from Bauer Financial, Inc. the nation’s leading independent bank and credit union rating and research firm. No institution pays for its rating, nor can it be eluded. Wheatland is the only 5-Star rated Bank in Spokane, Lincoln, Adams and Grant Counties, and one of a small percentage in Washington State.

Wheatland Bank posted net income after tax for the year ended December 31, 2009 of $1,016,000, or a .47% return on average assets and may be one of the few banks in the local area to show profitability for 2009.  The Bank generated this net income despite having to pay over $350,000 in FDIC premiums for 2009 and after absorbing the first full year of operations of all four of its new branches recently opened in central Washington.  This profitability was a result of a very strong net interest margin to average assets of 4.9% for 2009, which was generated from a high quality loan portfolio with minimal delinquencies, a strong core deposit base, and a relatively low level of loan losses and non performing loans.

Wheatland Bank had total assets of $241 million at December 31, 2009, representing strong annual growth of over 15% for 2009.  Directly related to depositors’  “Flight to Safety”, Wheatland Bank’s total deposits grew 13% during 2009 to $198 million at year end.  Wheatland Bank enjoys a rock solid core deposit base, and has no brokered deposits, which are often used by Banks that do not have the liquidity from their own deposit base to fund their loans.  Brokered deposits, like other debt instruments, drive up a Bank’s cost of funds, and are definitely out of favor in today’s regulatory environment.  Wheatland Bank continued to lend into its local communities; total loans increased by 4% to $175 million, coming off a year of record loan growth in 2008, of 26% when the new markets in central Washington were first entered.  Wheatland Bank continues to maintain one of the lowest levels of delinquent loans in the country with only 2% of its loans delinquent at December 31, 2009, $0 of real estate owned as of yearend, and only a .22% net charge off ratio.  Wheatland is very well capitalized and has plenty of liquidity and capacity to lend to qualified commercial, agricultural and individual borrowers.    Wheatland Bank’s total capital at December 31, 2009 was $23.4 million, representing a Tier 1 Leverage Regulatory Capital Ratio of 10.03% and a Total Risk Based Tier 2 Regulatory Capital Ratio of 12.39%.  Wheatland Bank and its Holding Company were both well capitalized by all regulatory measures. 

Susan Horton stated that “Wheatland Bank’s Board of Directors and employees are proud of the fact that they have maintained this safe and sound financial position in the most tumultuous of times, without ever taking a taxpayer bailout”.   Susan stated that “Wheatland Bank’s favorable asset quality position is a result of conservative lending policies and credit administration carried out by very experienced lenders, as well as appropriate diversification of its loan portfolio.  We have never been willing to sacrifice quality for growth.  When others were growing faster with excessive concentrations of high risk, high profit loans, Wheatland chose to avoid following the herd and instead to focus on more measured and diversified growth within their own core competencies and local geographic markets”.  

That’s not to say that Wheatland doesn’t take risks.  Hiring a large new team of bankers and opening four new branches in four new markets in 2008, as the economy and real estate market tumbled, was a gutsy move.  But it was one that was thoroughly analyzed from a risk management standpoint.  The strategic organic expansion plan was chosen over an acquisition strategy, and has already proven to be a big success for Wheatland.  The Bank now has over $100 million in combined loan and deposit business in central Washington. Wheatland Bank recently completed an extensive remodel of their Yakima branch, which began when they purchased the 10,000 square foot building on Yakima Avenue and embarked upon a three phase project including an expanded new branch, drive-thru facility and available tenant space.  In addition, Wheatland purchased property in Wenatchee and has plans to begin construction of a 5,500 square foot, full service branch beginning spring 2010. The new Wenatchee location at 1115 N. Miller Street will replace their current location on Mission. Susan Horton stated that much more growth is expected in the new markets over time, and that the Spokane and other existing markets have a lot of growth potential as well.

Wheatland’s holding company, CFG, plans to offer key customers and existing shareholders a unique opportunity to purchase stock in a Private Placement of Common Stock to Accredited Shareholders later this year.   “While we have absolutely no current need or regulatory direction to do so, we believe that there will be many opportunities in the coming years to gain market share in our new and existing markets, and want to raise the capital within our local communities to take advantage of future growth potential and other opportunities that may arise.”  Anyone interested in receiving a prospectus should contact CFG and Wheatland Bank’s President, Susan Horton.

Wheatland Bank, formed in 1979 in Davenport, Washington, is a locally owned independent community bank. Wheatland Bank’s commitment to eastern and central 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 13 branches throughout Adams, Douglas, Grant, Kittitas, Lincoln, Spokane and Yakima Counties and over 10,000 customers. Wheatland Bank focuses on helping 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.

# # #