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INTERWEST SAVINGS BANK REPORTS RECORD QUARTERLY INCOME

 OAK HARBOR, Wash., April 12 /PRNewswire/ -- InterWest Savings Bank (NASDAQ: IWBK), the third-largest savings bank headquartered in Washington state, today reported its highest quarterly income since its formation in 1957. The bank's net income increased 41.5 percent to $2.6 million or 45 cents per share(a) in the fiscal second quarter ended March 31, 1993, compared to $1.8 million or 33 cents per share in the like quarter a year ago. For the six months ended March 31, 1993, net income is $5.0 million or 88 cents per share, as compared to $3.8 million or 69 cents a share for the same period a year ago, a 27.5 percent increase in earnings per share.
 "Our record performance resulted in a return on shareholder equity of 16.3 percent and a return on assets of 1.30 percent this quarter," said Stephen M. Walden, president and chief executive officer. "Operations were strong across the board. We controlled expenses, decreased real estate owned and achieved a greater net interest margin as compared to last quarter and the like quarter a year ago," Walden added. Return on equity for the six months ended March 31, 1993, was 16.0 percent, and return on assets was 1.26 percent for the same time period.
 "The quality of our loan portfolio improved again this quarter, as total non-performing assets, including real estate owned through foreclosure, decreased 34 percent to $9.2 million or only 1.1 percent of assets, as compared to $14.0 million or 1.9 percent of assets a year ago," said Walden. Non-accrual loans and loans more than 90 days past due fell to $2.1 million at March 31, 1993, as compared to $2.9 million for the same period last year. "However, management and the board, in their on-going evaluation of reserves, decided to maintain a cautious course because of the uncertain economic forecast for Western Washington," Walden added. As a result, the bank added another $330,000 to loan loss reserves.
 "Loan originations slowed somewhat this quarter to $72.9 million, compared to $113.1 million in the preceding quarter, but the loan pipeline has now returned to its previous levels. We are expecting third quarter loan originations to show a significant improvement," said Walden.
 Net interest income, after provision for loan losses, increased 41.5 percent to $7.5 million this quarter, compared to $5.3 million in the second quarter a year ago. The bank's net interest margin this quarter was 4.20 percent, compared to 4.06 percent in the quarter ended Dec. 31, 1992.
 InterWest's assets totaled $815 million at March 31, 1993, compared to $739 million a year ago. Shareholder equity stood at $64.6 million, and tangible book value was $10.04 per share at March 31, 1993. The bank's tangible capital ratio is 7.8 percent, well above regulatory minimum.
 InterWest is a 26-branch, state-chartered savings bank with 22 offices in the Puget Sound region of Western Washington and four offices in Central Washington. The bank, which was founded in 1957, offers its customers highly personalized banking services within its 12-county market area.
 (a) Adjusted to reflect the additional shares from the 15 percent stock dividend declared March 16, 1993. The shares will be issued May 6, 1993, to stockholders of record April 15, 1993.
 INTERWEST SAVINGS BANK
 Financial Highlights
 (Unaudited)
 Dollars in thousands - except per share amounts
 Second Quarter Ended Six Months Ended
 March 31, March 31,
 1993 1992 1993 1992
 Interest income $15,504 $15,015 $31,491 $29,984
 Interest expense 7,631 9,245 16,071 18,630
 Net interest income after
 provision for losses
 on loans 7,542 5,320 14,711 10,454
 Other operating income 1,333 2,020 2,817 3,447
 Other operating expense 5,006 4,873 10,005 9,214
 Income tax 1,278 635 2,528 1,313
 Cumulative effect of
 change in accounting
 for income taxes --- --- --- 434
 Net income 2,591 1,832 4,995 3,808
 Earnings per share (b) $0.45 $0.33 $0.88 $0.69
 Weighted average shares
 outstanding (b) 5,752,479 5,555,494 5,672,146 5,555,677
 March 31, 1993 Sept. 30, 1992
 Total assets $815,130 $779,981
 Shareholders' equity $64,616 $60,105
 Book value per share $10.14 $10.89
 Tangible book value per share $10.04 $10.74
 (b) Adjusted to reflect the additional shares from the 15 percent stock dividend declared March 16, 1993. The shares will be issued May 6, 1993 to stockholders of record April 15, 1993.
 -0- 4/12/93
 /CONTACT: H. Glenn Mouw, CFO, or Gina Dyer, marketing coordinator, of InterWest Savings Bank, 206-679-4181/
 (IWBK)


CO: InterWest Savings Bank ST: Washington IN: FIN SU: ERN

LS-JL -- LA009 -- 4562 04/12/93 06:00 EDT
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Date:Apr 12, 1993
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