The Washington Savings Bank, F.S.B. Reports First Quarter Results & Dividend

WSB reports net income of $352,000 or $0.05 per basic share and $0.04 perdiluted share for the first fiscal quarter ended October 31, 2007, a 67%decrease compared to net earnings $1,075,000 or $0.14 per basic share and$0.13 per diluted share for the same quarter last year.

The decrease in net income for the three month period reflects the generalslowdown of the residential real estate market and the related decline inmortgage loan originations and the continuing reduction in the Bank'sconcentration in higher-yielding construction loans. WSB has seen a reductionin its construction loan portfolio by approximately 47% compared to October31, 2006. The overall reduction in WSB's loan production has resulted in a16% decrease in net interest income and a 41% decrease in non-interest income,compared to same three month period last year. The decrease in non-interestincome is primarily the result of a decrease in loan related fees and gain onloan sales for loans sold in the secondary market which offset the increase inother income, which is primarily the result of proceeds from the bank ownedlife insurance.

WSB EXPANDS COMMERCIAL CUSTOMER BASE

As previously discussed, management continues to seek more diversity inits loan portfolio and has established commercial business and commercial realestate lending departments staffed with experienced lenders in an effort tosignificantly expand its nonresidential loan portfolio. This has resulted inan increase the portfolios of commercial business and commercial real estateof $17 million during the quarter. WSB expects to see the results of itsinvestment in loans to commercial business and commercial real estate tocommercial borrowers to continue in fiscal 2008. To expand its commercialcustomer deposit base, the Bank recently implemented remote deposit captureservices for commercial customers. This service complements the Bank's PCBanking platform and allows us a commercially viable means to serve thedepository needs of businesses beyond our branch network. The expansion ofits commercial base is significant to the profitability of the Bank in thatcommercial customers provide lower cost deposit funding, with commercial loanborrowings structures that reprice to interest rate changes under terms thatare favorable to the Bank. This change is particularly important given thecurrent state of the residential housing markets and the Bank's prior relianceon residential construction and mortgage origination.

WSB SEES IMPROVEMENT IN NON-PERFORMING LOANS

At October 31, 2007, total non-performing loans were $7.0 million,consisting solely of non-accrual loans, representing 3.36% of total loansheld-for-investment, compared favorably to $8.8 million, consisting of non-accrual loans of $8.3 million and $518,000 in accruing loans which werecontractually past due more than four months but with current payments, or4.18% of total loans held-for-investment, as of October 31, 2006. At October31, 2007, foreclosed real estate totaled $1.2 million which compared favorablyto $2.3 million as of October 31, 2006. While WSB continues to closely monitorits loan portfolio, management believes its exposure on land development loansis limited as a result of actions taken since 2005 to tighten credit standardson land development lending along with reducing its position in speculativeresidential construction.

The non-interest expenses decreased 5% primarily as a result of a decreasein salaries and benefits and professional services offsetting the increase inother expenses. The decrease in salaries and benefits is the result of thereduced loan production on loans sold in the secondary market and thecommissions associated with these loans. Professional services decreased as aresult of lower expenses associated with recruiting key personnel in the priorperiod. Other expenses increased primarily as a result of increased expensesassociated with foreclosed loans.

WSB's October 31, 2007 total assets decreased by 0.46% to $435,356,000over last year's first quarter ending balance. Book value per share increased1% to $8.36 over last year's October 31st level of $8.28.

                           FINANCIAL HIGHLIGHTS                               (Unaudited)                                      Three Months Ended October 31,                                               2007            2006   % Change    Interest Income                      $7,016,000      $7,289,000      (4)%    Interest Expense                     $3,871,000      $3,533,000      10 %    Net Interest Income                  $3,145,000      $3,755,000     (16)%    Non-Interest Income                    $628,000      $1,068,000     (41)%    Non-Interest Expenses                $3,296,000      $3,462,000      (5)%    Provision for Loan Losses                    $0       $(300,000)   (100)%    Net Earnings                           $352,000      $1,075,000     (67)%    Basic Earnings Per Share                  $0.05           $0.14     (64)%    Diluted Earnings Per Share                $0.04           $0.13     (69)%    Average Shares Outstanding            7,588,331       7,427,680       2 %    Average Diluted Shares     Outstanding                          8,065,638       8,123,595       1 %                                                   As of October 31,                                               2007            2006   % Change    Total Assets                       $435,356,000    $437,399,000      (0)%    Deposits and Borrowings            $369,557,000    $373,310,000      (1)%    Total Stockholders' Equity          $63,443,000     $61,684,000       3 %    Book Value Per Share                      $8.36           $8.28       1 %    Return on Average Assets                   0.32 %          0.98 %   (67)%    Return on Average Equity                   2.23 %          7.06 %   (68)%    Efficiency Ratio                           87.4            71.8

This release contains forward-looking statements within the meaning of andpursuant to the safe harbor provisions of the Private Securities LitigationReform Act of 1995. A forward-looking statement encompasses any estimate,prediction, opinion or statement of belief contained in this release and theunderlying management assumptions. Forward-looking statements are based oncurrent expectations and assessments of potential developments affectingmarket conditions, interest rates and other economic conditions, and resultsmay ultimately vary from the statements made in this release. In addition toexpectations, assessments, and risks described by the Bank in its AnnualReport on Form 10-K for the year ended July 31, 2007 and in such other reportsfiled with the OTS, the Bank's future results and prospects may be dependentupon a number of other factors that could cause the Bank's performance tocompare unfavorably to prior periods.