Washington Banking Co. in Oak Harbor, Wash., is cutting its work force in an effort to improve performance.
The $789 million-asset parent of Whidbey Island Bank said late Wednesday that it has eliminated 20 positions, mainly from its back office.
The company will take a $600,000 restructuring charge this quarter that will include the cost of severance packages and accelerated stock-option vesting. As a result, after-tax earnings per share for the quarter will be reduced by about 4 cents. Earnings for the year are expected to roughly match last year's $9.5 million.
Washington Banking said it expects staff reduction to generate about $1.2 million annual cost savings in 2007 and beyond, which should improve its return on equity and earnings. The company's goal is ROE in excess of 18% and double-digit annual growth in earnings per share. In 2005 it generated a 17.9% return on equity and earned $1.01 per diluted share, up 47% from 2004. For the first nine months of this year its ROE was 16.9%, and earnings per share were up 8%, to 81 cents.
