Baker Boyer Earnings More Than Tripled Last Year

Date: February 8, 2005 BB Contact: Teresa Larson; (509) 526-1241; larsont@bakerboyer.com Subject: Baker Boyer Earnings More Than Tripled Last Year Release: Immediate Earnings at Baker Boyer Bank more than tripled in 2004 to $4.285 million or $3.30 per share, compared to $1.208 million or 93 cents per share for the twelve months of 2003, president and CEO Megan Clubb reported today. "We just completed a great year with an impressive rebound in earnings and a celebration of our 135th anniversary," she said. The bank continues to expand in its core markets and has just opened a new branch in the Wheatland Village Retirement Community, Clubb said. "It allows us to give local personalized service to some of our most loyal, long-term clients. It is a tremendous advantage to be an independent community bank and it is highly unusual to have remained independent for over a century." Early in her term as president, the bank unearthed some large credit quality challenges. "The strong measures we took to strengthen our credit administration and manage costs have paid off," Clubb said. Baker Boyer's credit quality improved measurably in 2004. Loans on non-accrual status at year-end were cut in half and net charge offs dropped sharply. Improvement in its loan portfolio, combined with the sale of its Connell branch, caused total loans to decline, but with favorable results. Despite the sale and strong competition for deposits, the bank's core deposits increased and bank management successfully controlled growth in non-interest expense for the period. Non-interest income and equity capital increased while earnings per share more than tripled. Baker Boyer is also upgrading its College Place and Plaza branches. Plans for the construction of a new Investment Management and Trust Services office in Yakima are also underway, with construction beginning in April. All three projects are anticipated to be completed within the year. 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 Kennewick and Yakima. It has 199 employees and $388 million in assets as of December 31, 2004. To learn more about Baker Boyer Bank, visit www.bakerboyer.com. PO Box 1796 7 W Main Walla Walla, WA 99362 (800) 234-7923 Walla Walla & College Place, WA (509) 525-2000 Kennewick, WA (509) 783-6800 Yakima, WA (509) 576-9000 Milton-Freewater, OR (541) 938-5544 Weston, OR (541) 566-3512