Baker Boyer Bancorp Announces First Half Earnings

Date: August 2, 2005 BB Contact: Teresa Larson; (509) 526-1241; larsont@bakerboyer.com Subject: Baker Boyer Bancorp Announces First Half Earnings Release: Immediate Walla Walla - Baker Boyer Bancorp reported first half net income of $1.9 million, compared to $2.0 million during the same period last year. Megan Clubb, president and CEO, reported that the company's recovery from the effects of previous problem loans is in its second year and is gathering strength in virtually every area. A clear sign of year-over-year improvement in the loan portfolio at June 30 was evident in the 80 percent decrease ($8.2 million) in loans 90 days or more past due or on non-accrual status (non-performing loans). Also, at June 30, the ratio of classified loans to total risk-based capital of Baker Boyer Bank improved to about 32 percent, compared to about 45 percent a year ago. Prospects for the second half of this year and 2006 remain good. "We are seeing many signs that the economy is continuing to improve and interest rates are increasing slightly, all of which should improve our net interest margin and net interest income," Clubb said. "In addition, because of a company-wide effort we are experiencing continued success in expense management." Several first half events helped Baker Boyer build on its reputation as the leading independent publicly traded financial institution in the region. "Our staff is actively calling on customers and prospects and this is resulting in a steady stream of new business. In addition, we broke ground on a new office for the Investment Management and Trust division in Yakima and completed an extensive remodeling of the College Place Branch. A similar remodel is now underway at the Plaza branch," Clubb said. The company also received two awards which reflect its deep ties to the community and its ability to provide a unique services approach to the region. The national organization Independent Community Bankers of America voted Baker Boyer's branch remodels as "Most Community Reflective" in an Architectural Excellence contest, as announced in the July issue of Independent Banker magazine. Also, "the bank was the only Eastern Washington company included on Washington CEO magazine's list of "Best Companies to Work For" in Washington," Clubb said. "Seventy percent of the award was based on the results of anonymous surveys filled out by a majority of our employees. Satisfied employees always lead to better customer service." Founded in 1869, Baker Boyer Bank is the oldest independently owned community bank in the state. It is headquartered in Walla Walla and has 9 branches, including business banking and trust offices in the Tri-Cities and Yakima. It has 196 employees and year-to-date average assets of $381 million as of June 30, 2005. It was the only Eastern Washington company included in the 2005 Washington CEO Best Companies to Work For list. Its branches were voted "Most Community Reflective" in the 2005 Architectural Excellence awards competition held by Independent Community Bankers of America. To learn more about Baker Boyer Bank, visit their website at www.bakerboyer.com. PO Box 1796 Walla Walla, WA 99362 (800) 234-7923