W Holding Company, Inc., the Financial Holding Company of Westernbank Puerto Rico, Reports Earnings Results for the Quarter and

MAYAGUEZ, Puerto Rico, Jan. 30  /PRNewswire-FirstCall/ -- W Holding Company, Inc. (NYSE: "WHI"), the financial holding company of Westernbank Puerto Rico, today reported its financial position and results of operations for the quarter and year ended December 31, 2006.

YEAR-END AND FOURTH QUARTER HIGHLIGHTS:

For the year ended December 31, 2006, W Holding reported a net income of $100.5 million or $0.39 earnings per basic common share ($0.38 on a diluted basis). This is a decrease of $62.6 million or 38.36%, when compared to a net income of $163.1 million or $0.77 earnings per basic common share ($0.74 on a diluted basis) for the same period in 2005.

Net income for the fourth quarter of year 2006, was $17.9 million or $0.05 earnings per basic and diluted common share, when compared to $30.2 million or $0.13 earnings per basic common share ($0.12 on a diluted basis) for the same quarter in 2005, a decrease of $12.3 million or 40.81%.

  The fourth quarter of year 2006 was mainly impacted by the following:

  * an increase of $5.5 million in the current income tax provision, mainly
    as a result of additional income tax provisions for the transitory
    income tax of 2% approved by the Government of Puerto Rico on May 13,
    2006, a provision of $2.9 million for income tax contingencies, and a
    change in the proportion between exempt and taxable income, therefore
    increasing the Company's effective tax rate. The transitory income taxes
    of 2% and 2.5% (the latter was approved by the Government of Puerto Rico
    on August 1, 2005) are intended to be temporary in nature and are
    scheduled to end on December 31, 2006;

  * an increase of $5.2 million in noninterest expenses, principally
    attributed to the Company's continued growth and expansion in all of its
    business areas, mainly in the San Juan Metropolitan area;

  * a $14.0 million increase in the provision for loan losses as a result of
    the increases in the Company's loan portfolios, net loans charged-off,
    non-performing loans and loss allowances on classified loans;

  * and a $10.0 million increase in net interest income.



The net income for the year ended December 31, 2006, was mainly impacted by:

  * an increase of $24.1 million in the current income tax provision, which
    includes a provision for income tax contingencies of $10.2 million for
    the year ended December 31, 2006;

  * an increase of $16.3 million in noninterest expenses;

  * an increase of $33.6 million in the provision for loan losses;

  * and a $7.2 million increase in net interest income.



Effective January 1, 2007, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation No. 48 ("FIN No. 48"), "Accounting for Uncertainty in Income Taxes". For the preliminary cumulative effect of the adoption of FIN No. 48, refer to the "New Accounting Pronouncement" section.

Overview

W Holding reported net income for the fourth quarter of 2006 of $17.9 million or $0.05 earnings per basic common and diluted common share, when compared to $30.2 million or $0.13 earnings per basic common share ($0.12 on a diluted basis) for the same quarter in 2005, a decrease of $12.3 million or 40.81%. Net income for the fourth quarter of 2006 was impacted by a $14.0 million increase in the provision for loan losses (mainly attributed to the loan portfolio of the Company's asset-based lending division), an increase of $5.2 million in noninterest expenses and an increase of $6.4 million in the provision for income taxes. Such effects were partially offset by an increase of $10.0 million or 13.26% in net interest income and a positive variance of $3.8 million on the net gain (loss) on derivative instruments.

For the year ended December 31, 2006, W Holding reported a net income of $100.5 million or $0.39 earnings per basic common share ($0.38 on a diluted basis). This is a decrease of $62.6 million or 38.36%, when compared to a net income of $163.1 million or $0.77 earnings per basic common share ($0.74 on a diluted basis) for the same period in 2005. Net income for the year ended December 31, 2006, was impacted by an increase of $33.6 million in the provision for loan losses, an increase of $16.3 million in noninterest expenses and an increase of $21.2 million in the provision for income taxes. Such increases were partially offset by an increase of $7.2 million or 2.32% in net interest income.

The return on assets (ROA) and the return on common stockholders' equity (ROCE) for the quarter ended December 31, 2006 were 0.42% and 4.96%, respectively, compared to 0.76% and 12.77% reported for the same quarter in 2005. For the year ended December 31, 2006, the ROA and the ROCE were 0.60% and 9.36%, respectively, compared to 1.07% and 20.53%, for the same period in the prior year.

At December 31, 2006, driven by strong increases in the W Holding loan portfolio, total assets ended at $17.15 billion. Total assets grew $1.00 billion or 6.21%, from $16.15 billion at December 31, 2005, almost exclusively from the growth of $825.4 million or 10.56% in the loans-net portfolio, partially offset by a decrease of $51.1 million in the investment portfolio, excluding short-term money market instruments. Continuing management's strategy implemented in the latter part of 2004, and in light of the current interest rate scenario and a flat-to-inverted yield curve during the year ended December 31, 2006, the Company has continued to emphasize the growth of its loan portfolio, principally through floating rate loans, so as to lessen the impact of margin compression, while remaining on the sidelines of the investment side until investment opportunities arise.

Stockholders' equity increased by $34.4 million or 2.88%, to $1.23 billion as of December 31, 2006, when compared to December 31, 2005. Such increase resulted principally from the combination of the net income of $100.5 million generated during the year ended December 31, 2006, and the proceeds from the exercise of stock options of $1.1 million, partially offset by dividends declared during year 2006 of $31.2 million and $36.9 million on the Company's common and preferred shares, respectively.

The period-end number of common shares outstanding increased from 164,098,237 as of December 31, 2005, to 164,486,691 as of December 31, 2006, as a result of the conversion of 3,550 shares of the Company's convertible preferred stock Series A, into 12,403 shares of the Company's common stock, and the issuance of 376,051 common shares from the exercise of stock options.

Net Interest Income

Net interest income for the fourth quarter ended December 31, 2006, was $85.3 million, an increase of $10.0 million or 13.26%, from $75.3 million for the same quarter in 2005. This increase mainly resulted from an increase in the average net interest-earning assets of $56.3 million, which contributed a $10.4 million positive volume variance, partially offset by a $448,000 negative rate variance. In addition, such increase includes a $5.9 million prepayment fee collected in the quarter on a commercial loan relationship. Average interest-earning assets for the fourth quarter of 2006 increased by $1.00 billion or 6.43%, compared to the same quarter in year 2005. The average loan portfolio increased by $981.5 million or 12.80%, particularly in the commercial real estate collateralized and commercial, industrial and agricultural ("Commercial & C&I") and in the construction loan portfolios. The average investment portfolio, excluding short-term money market instruments, increased by $149.8 million or 2.37%, primarily in short- term tax-exempt securities, such as U.S. Government Agencies discount notes. Average mortgage-backed securities and average money market instruments decreased by $58.7 million or 8.10% and $71.7 million or 8.28%, respectively. The change in the investments portfolio is attributable to the reinvestment in short-term tax-exempt securities, specifically U.S. Government Agencies discount notes, as part of management's strategy of growing the Company's tax exempt interest income.

For the year ended December 31, 2006, net interest income increased from $311.6 million in 2005 to $318.8 million in 2006, an increase of $7.2 million or 2.32%.  This increase mainly resulted from an increase in the average net interest-earning assets of $97.4 million, which contributed a $52.8 million positive volume variance, partially offset by a $45.6 million negative rate variance. In addition, such increase includes a $5.9 million prepayment fee collected in the fourth quarter of 2006 on a commercial loan relationship. Average interest-earning assets increased by $1.35 billion or 9.01%. The average loan portfolio increased by $1.32 billion or 18.92%, particularly in the Commercial & C&I loan portfolio, as explained before. The average investment portfolio, excluding short-term money market instruments, increased by $252.2 million or 4.02%, primarily in short-term tax-exempt securities, such as U.S. Government Agencies discount notes, as explained before, while average mortgage-backed securities and average money market instruments decreased by $120.0 million or 15.95% and $105.6 million or 11.10%, respectively.

The average yield earned on interest-earning assets increased 89 basis points from 5.53% to 6.42%, and 81 basis points from 5.32% to 6.13%, for the quarter and the year ended December 31, 2006, respectively, when compared to the same periods in the prior year. The increase in the average yield for the quarter and the year ended December 31, 2006, was mainly due to higher average yields earned on the loan portfolio, higher reinvestment rates on matured and called securities and higher yields earned on mortgage-backed securities and money market instruments. The increase in the average yield earned on the loan portfolio was due to new higher yielding loans and the repricing of existing floating and adjustable rate Commercial and C&I loans. In addition, such increase includes a $5.9 million prepayment fee collected and mentioned before. During the year ended December 31, 2006, the Federal Reserve increased the discount rate by 100 basis points, which has reflected equally on the Prime Rate, the index used by the Bank to reprice most of its floating rate commercial loans.

For the quarter ended December 31, 2006, the Company's overall cost of funds increased 81 basis points when compared to the same quarter in 2005. This increase was due to a general increase in the cost of funding sources of the Company. The average interest rate paid on deposits increased by 89 basis points for the quarter ended December 31, 2006, as compared to the same period in 2005. Average interest rate paid on federal funds purchased and repurchase agreements increased by 77 basis points for the quarter ended December 31, 2006, as compared to the same period in 2005. The average interest rate paid on advances from the FHLB also increased by 102 basis points for the quarter ended December 31, 2006, as compared to the same period in 2005.

For the year ended December 31, 2006, the overall cost of funds increased 101 basis points as compared to the year ended December 31, 2005. The average interest rate paid on deposits increased by 90 basis points for the year ended December 31, 2006, as compared to the same period in 2005. Average interest rates paid on federal funds purchased and repurchase agreements increased 122 basis points for the year ended December 31, 2006, as compared to the year ended December 31, 2005. The average interest rate paid on advances from the FHLB increased 117 basis points for the year ended December 31, 2006, as compared to the same period in 2005.

The strong growth in average interest-earning assets between both periods was in part offset by an increase in the average interest-bearing liabilities of $944.7 million or 6.51%, and $1.25 billion or 8.96%, for the quarter and the year ended December 31, 2006, respectively. Deposits grew on average by $966.1 million or 11.97%, and $1.39 billion or 18.91%, during the quarter and year ended December 31, 2006, respectively, while other borrowings (federal funds purchased, repurchase agreements and advances from FHLB) on average decreased by $21.4 million or 0.33%, and $144.0 million or 2.19%, for the same periods in 2005, respectively.

On a linked quarter comparison, the average yield earned in interest- earning assets increased 19 basis points, from 6.23% for the third quarter of 2006 to 6.42% for the fourth quarter of 2006. The increase in the average yield for the fourth quarter of 2006 was mainly due to higher average yields earned on the loan portfolio and on the mortgage-backed securities portfolio. Meanwhile, the Company's overall cost of funds increased by 5 basis points for the fourth quarter of 2006, as compared to the third quarter of 2006. The increase in the overall cost of funds was due to a general increase in the cost of funding sources of the Company, principally in the average interest rate paid on deposits.

Net Interest Margin

The Company's net interest margin increased 12 basis points for the fourth quarter of 2006 to 2.04%, as compared to 1.92% in the fourth quarter of 2005. On a tax equivalent basis, the Company's net interest margin remained relatively unchanged at 2.09% for the fourth quarter of 2006, when compared to the same quarter in 2005. The improvement in the net interest margin for the fourth quarter of 2006 was mainly due to the increase in the average yield earned on the loan portfolio as a result of higher yielding loans and the repricing of existing floating and adjustable rate Commercial and C&I loans. In addition, such increase includes a $5.9 million prepayment fee collected in the quarter on a commercial loan. For the year ended December 31, 2006, the Company's net interest margin decreased 12 basis points, and on a tax equivalent basis, decreased 30 basis points, when compared to the year ended December 31, 2005. The decrease in the Company's net interest margin when compared to prior year was due to the fact that the upward repricing of the Company's interest-earning assets lagged behind the increase in the cost of funds of its interest-bearing liabilities. In addition, the net interest margin on a tax equivalent basis resulted from a reduction in the proportion of the Company's exempt assets. On a linked quarterly comparison, the Company's net interest margin increased by 13 basis points, from 1.91% in the third quarter of 2006. On a tax equivalent basis, the Company net interest margin improved by 10 basis points from 1.99% in the third quarter of 2006.

Under a flat interest rate scenario for the next twelve-month period, based on the Company's asset and liability composition as of December 31, 2006, we estimate the Company's net interest margin will be within a range of 1.79% to 1.87% during said period. Assuming an instantaneous 100 basis-points decrease in the fed funds rate, we estimate the Company's net interest margin will fluctuate within a range of 1.84% to 1.95% during said period. Under an instantaneous 200 basis-points decrease in the fed funds rate, we estimate the Company's net interest margin will fluctuate within a range of 1.71% to 1.91%. Assuming a 100 basis-points increase in the fed funds rate, we estimate the Company's net interest margin will fluctuate within a range of 1.59% to 1.90%. Furthermore, a 200 basis-points increase in the fed funds rate will cause the Company's net interest margin to fluctuate between a range of 1.33% to 1.92%. The lower and higher values of such range mean the lowest and highest net interest margin for any given quarter within the said twelve-month period. These ranges are management's estimates based on instantaneous rate shocks of 100 and 200 basis-points with results one year (twelve months) forward. They do not consider any asset/liability management strategy that could be undertaken given such interest rate changes during said one year period.

Attached as Exhibits IIIa, IIIb and IIIc are supplemental unaudited data schedules providing additional information on the net interest margin, including average balances and average rates for both, interest-earning assets and interest-bearing liabilities, as well as changes in volumes and rates for the periods presented.

Noninterest Income

Noninterest income increased $3.3 million or 48.19% for the three-month period ended December 31, 2006, when compared to the same period in 2005. This increase was mainly due to a positive variance of $3.8 million in net gain (loss) on derivative instruments, as a result of the mark to market of such positions. On January 3, 2006, the Company redesignated most of its interest rate swaps relating to its brokered certificates of deposit ("brokered CDs") utilizing the "long-haul" method of SFAS No. 133. In cases in which the hedging relationship is effective, the changes in the fair value of both the hedged items (the brokered CDs) and the interest rate swaps are recorded through earnings. Service fees and other fees and commissions for the fourth quarter of 2006 increased slightly to $10.2 million, when compared to $10.0 million for the same period in 2005.

For the year ended December 31, 2006, noninterest income increased $1.3 million or 3.57%, when compared to year 2005. This increase was mainly the result of an increase of $4.2 million or 12.61% in service fees and other fees and commissions due to higher activity and fees resulting from the Company's overall growing volume of business and other fees. Such increase was partially offset by a negative variance of $1.2 million on net gain (loss) on derivative instruments, as a result of the mark to market of such positions. Also, during the year ended December 31, 2006, the Company recorded a loss of $1.8 million on other-than-temporarily impaired investments, mainly related to certain investments in Puerto Rico Government Obligations that were downgraded by one notch below investment grade in May 2006.

Noninterest Expenses

Total noninterest expenses increased $5.2 million or 18.01% for the three- month period ended December 31, 2006, and $16.3 million or 15.05% for the year ended December 31, 2006, when compared to the corresponding periods in 2005. Salaries and employees' benefits, the largest component of total noninterest expenses, increased $2.2 million or 17.47% for the quarter ended December 31, 2006 and $7.7 million or 16.56%, for the year ended December 31, 2006 compared to the corresponding periods in 2005. Such increases are attributed to the increases in personnel, normal salary increases and related employees' benefits, principally related to the Company's continued expansion in all of its business areas, mainly in the San Juan Metropolitan area. In October 2005, the Company opened its second branch in the eastern region of Puerto Rico, in the city of Fajardo. In December 2005, the Company opened a mega branch in the Condado area in the city of San Juan and in September 2006, the Company opened its newest mega branch in the city of Bayamon. Also, during the first quarter of year 2006, the Company established Westernbank International Trade Services ("WITS"), a division of Westernbank Puerto Rico that provides international trade products and services to customers. At December 31, 2006, the Company had 1,363 full-time employees, including its executive officers, an increase of 52 employees or 3.97% since December 31, 2005.

Depreciation, maintenance and related equipment expenses increased $557,000 or 22.26% for the three months ended December 31, 2006, and $2.1 million or 21.52% for the year ended December 31, 2006, when compared to the same periods in 2005. The increase was mainly due to the continued growth of the Company's branch network, as explained in the above paragraph.

Noninterest expenses, other than salaries and employees' benefits and related equipment expenses discussed above, increased by $2.4 million or 17.74% for the quarter ended December 31, 2006, and $6.5 million or 12.51% for the year ended December 31, 2006, when compared to the same period in 2005. Such increases resulted primarily from the additional investment in technology and general infrastructure to sustain and coordinate the Company's growth and expansion in all of its business areas, mainly in the San Juan Metropolitan area.

The Company has maintained operating expenses at adequate levels and achieved an efficiency ratio of 34.94% for the year ended December 31, 2006 and 35.64% for the fourth quarter of 2006, compared to 30.67% and 33.43% for the same periods in 2005, respectively. The change in the efficiency ratio in 2006 was mainly due to increases in non-interest expenses.

Provision for Income Taxes

The provision for income taxes increased $21.2 million or 47.06% for the year ended December 31, 2006, when compared to the same period in 2005. The current provision for income taxes for the year ended December 31, 2006, amounted to $76.6 million, an increase of $24.1 million or 45.80%, when compared to $52.5 million for the same period in 2005. The increase in the current provision for income taxes is attributed to three factors. First, on May 13, 2006, with an effective date of January 1, 2006, the Puerto Rico Legislature approved Law No. 89, which imposes an additional 2.0% tax on all companies covered by the Puerto Rico Banking Act, as amended, such as Westernbank.  Therefore, Westernbank is now subject to a maximum statutory tax rate of 43.5%. This transitory income tax of 2% amounted to $3.0 million for the year ended December 31, 2006. The transitory income taxes of 2% and 2.5% (the latter was approved by the Government of Puerto Rico on August 1, 2005) are intended to be temporary in nature and are scheduled to end on December 31, 2006. Second, the increase in the Company's taxable income derived from the increase in its loan portfolio has changed the proportion between exempt and taxable income, therefore increasing the Company's effective tax rate. Third, for the year ended December 31, 2006, the Company accrued $10.2 million for income tax contingencies.

The Company evaluates and assesses the relative risks and appropriate tax treatment of transactions and filing positions after considering statutes, regulations, judicial precedent and other information and maintains tax accruals consistent with its evaluation of these relative risks and merits. Changes to the estimate of accrued taxes occur periodically due, among other, to changes in tax rates, interpretations of tax laws, the status of examinations being conducted by taxing authorities and changes to statutory, judicial and regulatory guidance that impact the relative risks of tax positions. These changes, when they occur, can affect the income tax accruals as well as the current period's income tax expense and can be significant to the operating results of the Company. The Company's consolidated statements of financial condition include an accrual of $10.9 million at December 31, 2006, for the exposures resulting from tax positions identified by the Company in connection with this evaluation.

The deferred credit for the year ended December 31, 2006, increased by $2.8 million, when compared to the same period in the prior year. Such increase is attributable to temporary differences in the recognition of certain items for tax and books, principally changes in the allowance for loan losses and in the fair value of derivative instruments.

Asset Quality

W Holding's asset quality continues to be strong in spite of the Company's continued loan portfolio growth, as measured by the Company's ratios of net loan charge-offs to average total loans, provision for loan losses to net loans charged-off and reserves to total loans.

The Company's combined delinquency on all portfolios for the categories of 60 days and over was 0.66% (less than 1%) at December 31, 2006, an improvement of 6 basis points when compared to 0.72% (less than 1%) at December 31, 2005. The improvement in the combined delinquency ratio arises from a reduction in delinquent loans of the Commercial and C&I and construction loan portfolios.

The delinquency ratio on the Commercial and C&I and construction loan portfolios for the categories of 60 days and over improved to 0.63% (less than 1%), when compared to 0.85% (less than 1%) reported for year 2005, a decrease of 22 basis points. The delinquency ratio on the consumer loan portfolio, including the Expresso of Westernbank loan portfolio, for the categories of 60 days and over increased by 39 basis points, to 1.52% at December 31, 2006, when compared to 1.13% for the comparable period last year. The increase in the delinquency ratio of the consumer loans portfolio is mainly attributable to regular consumer loans past due over 60 days which are collateralized by real estate properties.

On a linked quarter comparison, the Company's combined delinquency on all portfolios for the categories of 60 days and over improved by 4 basis points, from 0.70% (less than 1%) at September 30, 2006. As explained before, the decrease in the combined delinquency ratio arises from a decrease in delinquent loans of the Commercial and C&I and construction loan portfolios. The delinquency ratio on the Commercial and C&I and construction loan portfolios for the categories of 60 days and over improved by 1 basis point from 0.64% (less than 1%) at September 30, 2006. The delinquency ratio on the consumer loan portfolio, including the Expresso of Westernbank loan portfolio, for the categories of 60 days and over decreased by 38 basis points when compared to 1.90% at September 30, 2006. The decrease in the consumer loan portfolio delinquency ratio on a linked quarter comparison is mainly due to lower loans past due over 60 days in the regular consumer loan portfolio.

The provision for possible loan losses increased by $14.0 million, up to $28.0 million for the fourth quarter of 2006, when compared to the same quarter in 2005. For the year ended December 31, 2006, the provision for possible loan losses amounted to $64.6 million, up by $33.6 million, from $31.0 million for the year ended December 31, 2005. The allowance for possible loan losses reached $126.8 million as of December 31, 2006. The increase in the provision for loan losses for both periods is attributable to the following factors: first, the overall growth in the Company's loan portfolio, mainly those of its Commercial and C&I loans; and second, to higher non- performing loans, net loans charged-off and specific reserves during the period, principally in the loan portfolio of the Company's asset-based lending division.

Commercial and C&I loan portfolio grew to $6.22 billion at December 31, 2006, an increase of $946.8 million or 17.95%, when compared to December 31, 2005. Westernbank Business Credit loan portfolio grew to $1.46 billion at December 31, 2006, an increase of $193.2 million or 15.28%, when compared to December 31, 2005.

The provision for loan losses for the asset-based lending division increased by $4.6 million and $35.1 million, for the quarter and the year ended December 31, 2006, when compared to the same periods in 2005. Such increases are mainly attributable to two factors: first, the increase in the Division's loan portfolio from $1.26 billion at December 31, 2005, to $1.46 billion at December 31, 2006; and second, the increase in classified loans of the Division's loans portfolio.  During the year ended December 31, 2006, the Company classified three loans of the Division's loan portfolio with outstanding principal balances of $44.9 million, $40.5 million and $7.3 million at December 31, 2006. These loans required valuation allowances as follows: $11.4 million for the $44.9 million loan (after a partial charge- off of $7.5 million), $15.2 million for the $40.5 million loan and $2.5 million for the $7.3 million loan (after a partial charge-off of $3.0 million). All these loans are current and have not missed their payment schedules but have shortfalls in the collaterals and in the financial condition of the borrowers.

Net loans charged-off in the fourth quarter of 2006 were $16.1 million or 0.74% (annualized) to average loans, an increase of $7.9 million, when compared to $8.2 million or 0.43% (annualized) to average loans for the same period in 2005. The increase in loans charged-off for the fourth quarter of 2006 when compared to the same quarter in 2005 is mainly attributed to an increase of $7.7 million in Commercial and C&I loans charged-off. Such increase is principally due to partial charge-offs of $7.5 million and $3.0 million on two loans of the Company's asset-based lending division with outstanding principal balances after charge-offs of $44.9 million and $7.3 million, respectively, at December 31, 2006.  Both loans are current.

Consumer loan charge-offs in the fourth quarter of 2006 remained relatively unchanged at $4.1 million, when compared to the same quarter in 2005. Such stability is principally attributed to the steadiness of loan charge-offs by the Expresso of Westernbank division, the principal component of the consumer loan charge-offs. Loans charged-off by the Expresso of Westernbank division decreased by $320,000 to $2.5 million for the fourth quarter of 2006, when compared to same quarter in 2005. Management's strategy of stabilizing loan losses and increasing the overall rates charged on the Expresso loan portfolio by continuously reviewing its underwriting policies and increasing the level of collateralized loans, has resulted in lower levels of net charge-offs and a higher yield loan portfolio.

For the year ended December 31, 2006, net loan charge-offs amounted to $30.1 million or 0.36% to average loans, an increase of $11.5 million or 61.37%, when compared to $18.7 million or 0.27% to average loans in 2005. As explained before, the increase in loans charged-off for the year ended December 31, 2006, when compared to the same period in 2005, is mainly attributed to an increase of $14.4 million in Commercial and C&I loans charged-off. Such increase in the Commercial and C&I loans charged-off resulted principally from loans charged-off on the Company's asset based lending division. During the year ended December 31, 2006, the Company partially charged-off three loans of its asset based lending division for an aggregate amount of $15.8 million.

Consumer loan charge-offs for the year ended December 31, 2006, were $12.6 million, an improvement of $1.2 million or 8.93%, when compared to $13.8 million for the same period in 2005. Such improvement is principally attributed to lower charge-offs by the Expresso of Westernbank division, the principal component of the consumer loan charge-offs. Loans charged-off by the Expresso of Westernbank division decreased from $9.8 million for the year ended December 31, 2005, to $8.9 million for the same period in 2006, a decrease of $836,000 or 8.56%. As explained before, this is the result of management's strategy of stabilizing loan losses and increasing the overall rates charged of the Expresso loan portfolio by continuously reviewing its underwriting policies and increasing the level of collateralized loans.

Non-performing loans amounted to $165.8 million or 1.89% of the total loan portfolio at December 31, 2006, an increase of $101.8 million, when compared to $64.0 million or 0.81% (less than 1%) of the total loan portfolio at December 31, 2005. The increase in non-performing loans for the year ended December 31, 2006, when compared to the same period in 2005, is mainly due to an increase of $99.3 million in non-performing loans, mainly attributed to four loans of the Company's asset based lending division, with outstanding principal balances of $44.9 million, $40.5 million, $14.2 million and $7.3 million at December 31, 2006. These loans are current and have not missed their payment schedules but have shortfalls in the collaterals and in the financial condition of the borrowers. These loans required valuation allowances as follows: $11.4 million for the $44.9 million loan, $15.2 million for the $40.5 million loan, $4.7 million for the $14.2 loan and $2.5 million for the $7.3 million loan. During the year ended December 31, 2006, five loans related to one single borrower that were in non-performing status at December 31, 2005, with an aggregate outstanding principal balance of $8.4 million, were collected.

At December 31, 2006, the allowance for possible loan losses was 76.50% of total non-performing loans (reserve coverage). Of the total allowance of $126.8 million, $40.2 million is the Company's specific allowance and the remaining $86.6 million is a general allowance.

Total Loans, Investments and Deposits

Loans receivable-net grew $825.4 million or 10.56%, to $8.64 billion at December 31, 2006, compared to $7.82 billion at December 31, 2005. This increase reflects the Company's emphasis on continued growth in its variable rate loan portfolio mainly through Commercial and C&I and construction loan portfolio. As a result, the commercial real estate mortgage loan portfolio increased from $4.26 billion as of December 31, 2005, to $4.95 billion as of December 31, 2006, an increase of $685.7 million or 16.09%. The commercial, industrial and agricultural loans portfolio increased from $1.01 billion at December 31, 2005, to $1.27 billion at December 31, 2006, up by $261.1 million or 25.78%. The construction loan portfolio increased by $217.0 million or 42.91%, from $505.8 million at December 31, 2005, to $722.8 million as of December 31, 2006. Attached as Exhibit IV is a supplemental unaudited data schedule providing additional information on W Holding's loan portfolio.

W Holding's investment portfolio, excluding short-term money market instruments, stands at $7.03 billion at December 31, 2006, decreasing by $51.1 million in comparison to $7.08 billion at December 31, 2005. In light of the current interest rate scenario, the Company's strategy has shifted to reposition its balance sheet by continuing the emphasis on growing its floating rate loans, while remaining on the sideline on the investment side until new investment opportunities arise. The investment portfolio at December 31, 2006, had an average contractual maturity of 31 months.

The Company's interest rate risk model takes into consideration the callable feature of certain investment securities. Assuming that all call features are exercised, the investment portfolio as of December 31, 2006, had a remaining average maturity of 5 months.  Under the present interest rate scenario, no single security may be called.  However, no assurance can be given that such levels will be maintained in future periods.

As of December 31, 2006, total deposits reached $9.34 billion, from $8.38 billion at December 31, 2005, an increase of $961.5 million or 11.48%, while federal funds purchased and repurchase agreements increased by $60.5 million, to $6.32 billion at December 31, 2006, from $6.26 billion at December 31, 2005.

New Accounting Pronouncement

In July 2006, the FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN No. 48"), an interpretation of FASB Statement No. 109, "Accounting for Income Taxes" ("SFAS No. 109").  FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements in accordance with SFAS No. 109.  FIN No. 48 also prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  Under the new guidance, recognition is based upon the company's determination as whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more-likely-than-not recognition threshold, a company should presume the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information.  The Company adopted the interpretation effective January 1, 2007.

We are still in the process of evaluating the cumulative effect of adopting FIN No. 48 on our consolidated results of operations and financial position.  Based on management's preliminary evaluation of the Company's tax positions, it is anticipated that the Company will record an increase in liabilities and a corresponding decrease in beginning retained earnings of between $10.0 million to $15.0 million, including interest and penalties. These numbers are preliminary and are subject to the completion of management's evaluation and the Audit Committee's approval.

Forward Looking Statements

This press release may contain some information that constitutes "forward- looking statements." Such information can be identified by the use of forward- looking terminology such as "may," "will," "should," "expect," "anticipate," "estimate," "intend," "continue," or "believe," or the negatives or other variations of these terms or comparable terminology. Forward-looking statements with respect to future financial conditions, results of operations and businesses of the Company are always subject to various risk and market factors out of management's control which could cause future results to differ materially from current management expectations or estimates and as such should be understood. Such factors include particularly, but are not limited to the possibility of prolonged adverse economic conditions or that an adverse interest rate environment could develop. For a discussion of these and other risks and uncertainties, please refer to Item 1A of the Company's Annual Report on Form 10-K for the most recently completed fiscal year. Except as required by applicable securities laws, the Company does not intend, and specifically disclaims any obligation, to update forward-looking statements.

About the Company

Westernbank Puerto Rico, a wholly owned subsidiary of W Holding Company, Inc., is the second-largest commercial bank in Puerto Rico, based on total assets, operating throughout 56 full-fledged branches, including 33 in the southwestern region of Puerto Rico, 7 in the northeastern region, 14 in the San Juan Metropolitan area of Puerto Rico and 2 in the eastern region of Puerto Rico, and a fully functional banking site on the Internet.  W Holding Company, Inc. also owns Westernbank Insurance Corp., a general insurance agent placing property, casualty, life and disability insurance, whose results of operations and financial condition are reported on a consolidated basis.

The Company's Senior Management will review W Holding's fourth quarter and year end results via teleconference on Wednesday, January 31, 2007 at 11:30 AM Puerto Rico time (USA times: 10:30 AM Eastern, 9:30 AM Central, 8:30 AM Mountain, or 7:30 AM Pacific time). Please register at https://www.myrcplus.com/rsvp-index.asp?BWebID=&CID=5449261. You will be assigned a Personal Identification Number (PIN) that should be used in order to join the conference. Conference dial-in numbers: Toll Free: 1-866-237-3252 or 1-719-457-1018, if you can't dial in with the toll-free number. Conference passcode: 449261. In case of difficulties accessing the conference call, please contact Mrs. Aileen Rodriguez, Investment Department, at [phone] ext. 2300, or .

You may contact Mr. Vixson Frank Baez, with appropriate questions regarding this press release at [phone] ext. 5535, or via email at  or ; or visit http://www.wholding.com/.

                      W HOLDING COMPANY, INC.                      EXHIBIT I
                        FINANCIAL HIGHLIGHTS
                            (UNAUDITED)

                                    Three Months Ended     Year Ended
                                    December  December  December   December
                                    31, 2006  31, 2005  31, 2006   31, 2005
                                           (Dollars in thousands,
                                           except per share data)

  Income Statement Data

   Interest income:
      Loans, including loan fees    $186,311  $137,784   $671,530  $479,042
      Investment securities           65,794    63,109    261,971   247,533
      Mortgage-backed securities       6,994     7,315     28,489    32,321
      Money market instruments         9,191     9,064     38,235    36,433
        Total interest income        268,290   217,272  1,000,225   795,329

   Interest expense:
      Deposits                       101,049    72,252    366,063   241,268
      Federal funds purchased and
       repurchase agreements          80,390    67,677    307,463   234,791
      Advances from Federal Home
       Loan Bank                       1,516     1,997      7,893     7,688
        Total interest expense       182,955   141,926    681,419   483,747
   Net interest income                85,335    75,346    318,806   311,582
   Provision for loan losses          28,000    14,000     64,550    31,000
   Net interest income after
    provision for loan losses         57,335    61,346    254,256   280,582

   Noninterest income:
      Service and other charges on
       loans                           3,376     3,731     12,527    11,577
      Service charges on deposit
       accounts                        2,700     2,334      9,976     8,636
      Other fees and commissions       4,116     3,886     15,104    13,182
      Net gain (loss) on derivative
       instruments                       487    (3,276)       632     1,878
      Net gain (loss) on sales and
       valuation of loans,
        securities, and other
         assets                         (590)      133     (1,141)      547
        Total noninterest income      10,089     6,808     37,098    35,820
   Total net interest income and
    noninterest income                67,424    68,154    291,354   316,402

   Noninterest expenses:
      Salaries and employees'
       benefits                       14,811    12,608     54,378    46,653
      Equipment                        3,059     2,502     11,610     9,554
      Deposit insurance premium and
       supervisory examination         1,011       902      3,770     3,370
      Occupancy                        2,240     2,030      8,482     7,640
      Advertising                      2,126     2,416      9,140     9,160
      Printing, postage,
       stationery, and supplies          819       800      3,654     3,128
      Telephone                          642       341      2,275     1,853
      Net gain from operations of
       foreclosed real estate held
       for sale                          (45)     (116)      (270)     (402)
      Municipal taxes                  1,833     1,276      6,218     4,708
      Other                            7,551     6,091     25,261    22,566
        Total noninterest expenses    34,047    28,850    124,518   108,230
   Income before provision for
    income taxes                      33,377    39,304    166,836   208,172
   Provision for income taxes:
       Current                        18,434    12,982     76,599    52,538
       Deferred credit                (2,914)   (3,847)   (10,294)   (7,452)
        Total provision for income
         taxes                        15,520     9,135     66,305    45,086
   Net income                         17,857    30,169    100,531   163,086
   Less dividends to preferred
    stockholders                       9,227     9,229     36,911    36,985
   Income available to common
    stockholders                      $8,630   $20,940    $63,620  $126,101

   Basic earnings per common share     $0.05     $0.13      $0.39     $0.77
   Diluted earnings per common
    share                              $0.05     $0.12      $0.38     $0.74

   Cash dividends declared on
    common stock                      $7,814    $7,794    $31,235   $30,575
   Cash dividends declared per
    common share (1)                   $0.05     $0.05      $0.19     $0.19

   Period end number of common
       shares outstanding            164,487   164,098    164,487   164,098
   Weighted average number of
       common shares outstanding     164,487   164,067    164,380   164,024
   Weighted average number of
    common shares outstanding on a
    diluted basis                    167,844   168,529    168,051   170,619

   (1) Cash dividend amounts in the table are rounded.



                     W HOLDING COMPANY, INC.                      EXHIBIT II
                      FINANCIAL HIGHLIGHTS
                           (UNAUDITED)


                                       December 31,  December 31,
  Balance Sheet Data                      2006          2005
                                            (In thousands)
  At Period End
      Cash and due from banks            $105,027      $97,612
      Money market instruments:
        Federal funds sold and resell
         agreements                       950,573      746,539
        Interest-bearing deposits in
         banks                             21,060       57,116
      Investment securities
       available for sale, at fair
       value                               20,541        5,166
      Investment securities held
       to maturity, at amortized cost   7,007,579    7,074,025
      Federal Home Loan Bank stock, at
       cost                                37,982       42,798
      Residential mortgage loans
       held for sale, at lower of cost
       or fair value                       11,379        1,539
      Loans-net                         8,641,023    7,815,623
      Accrued interest receivable         121,360      105,882
      Premises and equipment, net         124,648      117,623
      Deferred income taxes, net           51,338       41,111
      Other assets                         62,178       46,830
  Total Assets                        $17,154,688  $16,151,864

  Liabilities:
      Deposits:
         Noninterest-bearing             $373,634     $277,099
         Interest-bearing and
          related accrued
          interest payable              8,963,429    8,098,510

            Total deposits              9,337,063    8,375,609
      Federal fund purchased and
       repurchase agreements            6,320,481    6,260,029
      Advances from Federal Home Loan
       Bank                               127,000      172,000
      Mortgage note payable                35,968       36,432
      Accrued expenses and other
       liabilities                        106,289      114,316
  Total Liabilities                    15,926,801   14,958,386
      Stockholders' equity              1,227,887    1,193,478
  Total Liabilities and
   Stockholders' Equity               $17,154,688  $16,151,864



                          Quarterly Averages (1)   Year to Date Averages (1)
  Average Balances         December     December     December      December
                          31, 2006      31, 2005     31, 2006      31, 2005
                                          (In thousands)

      Cash and due from
       banks                 $98,635      $96,598     $101,320      $87,682
      Money market
       instruments:
         Federal funds
          sold and resell
          agreements         896,145      769,640      848,556      881,921
         Interest-bearing
          deposits in
          banks               18,266       81,365       39,088       53,296
      Investment
       securities
       available for sale     20,770        2,923       12,854        6,523
      Investment
       securities held
       to maturity         7,009,595    7,030,519    7,040,802    6,997,702
      Federal Home Loan
       Bank stock             40,457       39,049       40,390       47,497
      Residential
       mortgage loans
       held for sale           9,339        1,511        6,459        1,586
      Loans-net            8,547,822    7,603,589    8,228,323    6,866,488
      Accrued interest
       receivable            116,549      101,073      113,621       97,084
      Premises and
       equipment             123,534      116,140      121,136      113,837
      Deferred income
       taxes, net             49,904       39,188       46,225       37,386
      Other assets            62,269       48,801       54,502       45,741
  Total Assets           $16,993,285  $15,930,396  $16,653,276  $15,236,743

  Liabilities:
      Deposits:
         Noninterest-
          bearing           $344,361     $283,014     $325,367     $263,234
         Interest-bearing
          and related
          accrued interest
          payable          8,830,724    7,854,856    8,530,970    7,046,656

            Total
             deposits      9,175,085    8,137,870    8,856,337    7,309,890
      Federal fund
       purchased and
       repurchase
       agreements          6,318,024    6,288,398    6,290,255    6,471,778
      Advances from
       Federal Home Loan
       Bank                  132,000      172,000      149,500      191,500
      Mortgage note payable   36,029       36,488       36,200       36,645
      Accrued expenses
       and other
       liabilities           104,862      108,878      110,301       91,411
  Total Liabilities       15,766,000   14,743,634   15,442,593   14,101,224
      Stockholders'
       equity              1,227,285    1,186,762    1,210,683    1,135,519
  Total Liabilities and
   Stockholders' Equity  $16,993,285  $15,930,396  $16,653,276  $15,236,743

  (1) Average balances have been computed using beginning and period-end
  balances.


                                                               EXHIBIT III a
                         W HOLDING COMPANY, INC.
                       YIELDS EARNED AND RATES PAID
                           THREE MONTHS ENDED,
                               (UNAUDITED)
                                                December 31,
                                                    2006
                                                               Annualized
                                                    Average     Average
                                   Interest        Balance(1)  Yield/Rate
                                        (Dollars in thousands)
  Normal spread:
   Interest-earning assets:
    Loans, including loan fees (2)  $186,311        $8,647,744     8.55 %
    Investment securities (3)         65,794         6,468,173     4.04
    Mortgage-backed securities (4)     6,994           666,086     4.17
    Money market instruments           9,191           793,836     4.59
  Total                              268,290        16,575,839     6.42

  Interest-bearing liabilities:
   Deposits                          101,049         9,036,841     4.44
   Federal funds purchased and
    repurchase agreements             80,390         6,320,424     5.05
   Advances from FHLB                  1,516           106,891     5.63
  Total                              182,955        15,464,156     4.69

  Net interest income                $85,335
  Interest rate spread                                             1.73 %
  Net interest-earning assets                       $1,111,683
  Net yield on interest-earning
   assets (5)                                                      2.04 %
  Ratio of interest-earning assets
   to interest-bearing liabilities                      107.19%


  Tax equivalent spread:
   Interest-earning assets          $268,290       $16,575,839     6.42 %
   Tax equivalent adjustment           1,857                --     0.05
   Interest-earning assets -
    tax equivalent                   270,147       $16,575,839     6.47

  Interest-bearing liabilities       182,955       $15,464,156     4.69
  Net interest income                $87,192

  Interest rate spread                                             1.78 %
  Net yield on interest -
   earning assets (5)                                              2.09 %

                                                  December 31,
                                                     2005
                                                               Annualized
                                                    Average     Average
                                   Interest        Balance(1)  Yield/Rate
                                        (Dollars in thousands)
  Normal spread:
   Interest-earning assets:

    Loans, including loan fees (2)  $137,784        $7,666,231     7.13 %
    Investment securities (3)         63,109         6,318,331     3.96
    Mortgage-backed securities (4)     7,315           724,768     4.00
    Money market instruments           9,064           865,527     4.15
  Total                              217,272        15,574,857     5.53


  Interest-bearing liabilities:
   Deposits                           72,252         8,070,775     3.55
   Federal funds purchased and
    repurchase agreements             67,677         6,276,708     4.28
   Advances from FHLB                  1,997           172,000     4.61
  Total                              141,926        14,519,483     3.88

  Net interest income                $75,346
  Interest rate spread                                             1.65 %
  Net interest-earning assets                       $1,055,374
  Net yield on interest-earning
   assets (5)                                                      1.92 %
  Ratio of interest-earning assets
   to interest-bearing liabilities                      107.27%

  Tax equivalent spread:
   Interest-earning assets          $217,272       $15,574,857     5.53 %
   Tax equivalent adjustment           7,176                --     0.19
   Interest-earning assets -
    tax equivalent                   224,448       $15,574,857     5.72

  Interest-bearing liabilities       141,926       $14,519,483     3.88
  Net interest income                $82,522

  Interest rate spread                                             1.84 %
  Net yield on interest -
   earning assets (5)                                              2.10 %

                                                  September 30,
                                                     2006
                                                               Annualized
                                                    Average     Average
                                   Interest        Balance(1)  Yield/Rate
                                             (Dollars in thousands)

  Normal spread:
   Interest-earning assets:

    Loans, including loan fees (2)  $175,042        $8,414,071     8.25 %
    Investment securities (3)         65,562         6,449,169     4.03
    Mortgage-backed securities (4)     7,036           675,437     4.13
    Money market instruments          10,409           890,212     4.64
  Total                              258,049        16,428,889     6.23

  Interest-bearing liabilities:
   Deposits                           96,693         8,856,606     4.33
   Federal funds purchased and
    repurchase agreements             80,184         6,312,742     5.04
   Advances from FHLB                  2,169           154,174     5.58
  Total                              179,046        15,323,522     4.64

  Net interest income                $79,003
  Interest rate spread                                             1.59 %
  Net interest-earning assets                       $1,105,367
  Net yield on interest-earning
   assets (5)                                                      1.91 %
  Ratio of interest-earning assets
   to interest-bearing liabilities                      107.21%

  Tax equivalent spread:
   Interest-earning assets          $258,049       $16,428,889     6.23 %
   Tax equivalent adjustment           3,487                --     0.09
   Interest-earning assets -
    tax equivalent                   261,536       $16,428,889     6.32

  Interest-bearing liabilities       179,046       $15,323,522     4.64
  Net interest income                $82,490

  Interest rate spread                                             1.68 %
  Net yield on interest -
   earning assets (5)                                              1.99 %


  (1) Average balance on interest-earning assets and interest-bearing
      liabilities is computed using daily monthly average balances during
      the period.
  (2) Average loans exclude non-performing loans. Loans fees, net amounted
      to $4.4 million, $2.4 million, and $4.7 million for the three-month
      periods ended December 31, 2006 and 2005 and September 30, 2006,
      respectively.
  (3) Includes available for sale securities.
  (4) Includes trading and available for sale securities.
  (5) Annualized net interest income divided by average interest-earning
      assets.


                        W HOLDING COMPANY, INC.
                     YIELDS EARNED AND RATES PAID
                       YEARS ENDED DECEMBER 31,
                             (UNAUDITED)

                                                        2006
                                                                  Annualized
                                                       Average      Average
                                           Interest    Balance(1)   Yield/
                                                                     Rate
                                                  (Dollars in thousands)
  Normal spread:
    Interest-earning assets:
      Loans, including loan fees (2)        $671,530     $8,308,353    8.08%
      Investment securities (3)              261,971      6,519,398    4.02
      Mortgage-backed securities (4)          28,489        632,792    4.50
      Money market instruments                38,235        845,375    4.52
    Total                                  1,000,225     16,305,918    6.13

    Interest-bearing liabilities:
      Deposits                               366,063      8,771,531    4.17
      Federal funds purchased and
         repurchase agreements               307,463      6,290,818    4.89
      Advances from FHLB                       7,893        147,780    5.34
    Total                                    681,419     15,210,129    4.48

    Net interest income                     $318,806
    Interest rate spread                                               1.65%
    Net interest-earning assets                          $1,095,789
    Net yield on interest-earning
      assets (5)                                                       1.96%
    Ratio of interest-earning assets
      to interest-bearing liabilities                       107.20%


  Tax equivalent spread:
    Interest-earning assets               $1,000,225    $16,305,918    6.13%
    Tax equivalent adjustment                 16,502            --     0.11
    Interest-earning assets -
      tax equivalent                       1,016,727    $16,305,918    6.24

    Interest-bearing liabilities             681,419    $15,210,129    4.48
    Net interest income                     $335,308

    Interest rate spread                                               1.76%
    Net yield on interest -
      earning assets (5)                                               2.06%




                                                       2005
                                                                  Annualized
                                                       Average      Average
                                           Interest    Balance(1)   Yield/
                                                                     Rate
                                                  (Dollars in thousands)
  Normal spread:
    Interest-earning assets:
      Loans, including loan fees (2)      $479,042     $6,986,626    6.86%
      Investment securities (3)            247,533      6,267,159    3.95
      Mortgage-backed securities (4)        32,321        752,839    4.29
      Money market instruments              36,433        950,980    3.83
    Total                                  795,329     14,957,604    5.32

    Interest-bearing liabilities:
      Deposits                             241,268      7,376,605    3.27
      Federal funds purchased and
         repurchase agreements             234,791      6,398,451    3.67
      Advances from FHLB                     7,688        184,153    4.17
    Total                                  483,747     13,959,209    3.47

    Net interest income                   $311,582
    Interest rate spread                                             1.85%
    Net interest-earning assets                          $998,395
    Net yield on interest-earning
      assets (5)                                                     2.08%
    Ratio of interest-earning assets
      to interest-bearing liabilities                     107.15%


  Tax equivalent spread:
    Interest-earning assets               $795,329   $14,957,604     5.32%
    Tax equivalent adjustment               41,305            --     0.27
    Interest-earning assets -
      tax equivalent                       836,634   $14,957,604     5.59


    Interest-bearing liabilities           483,747    $13,959,209    3.47
    Net interest income                   $352,887

    Interest rate spread                                             2.12%
    Net yield on interest -
      earning assets (5)                                             2.36%


  (1) Average balance on interest-earning assets and interest-bearing
  liabilities is computed using daily monthly average balances during the
  period.
  (2) Average loans exclude non-performing loans. Loans fees, net amounted
  to $16.3 million for the years ended December 31, 2006 and 2005,
  respectively.
  (3) Includes available for sale securities.
  (4) Includes trading and available for sale securities.
  (5) Annualized net interest income divided by average interest-earning
  assets.



                                                              EXHIBIT
                    W HOLDING COMPANY, INC.                   III c
            CHANGES IN YIELDS EARNED AND RATES PAID
                          (UNAUDITED)

                                         Three Months Ended December 31,
                                                    2006 vs. 2005
                                          Volume       Rate         Total
                                                  (In thousands)

  Interest income:
  Loans                                    $19,014     $29,513     $48,527
  Investment securities (1)                  1,512       1,173       2,685
  Mortgage-backed securities (2)              (640)        319        (321)
  Money market instruments                    (786)        913         127
  Total increase in interest income         19,100      31,918      51,018
  Interest expense:
  Deposits                                   9,348      19,449      28,797
  Federal funds purchased and
  repurchase agreements                        475      12,238      12,713
  Advances from FHLB                        (1,160)        679        (481)
  Total increase in interest expense         8,663      32,366      41,029
  Increase (decrease) in
  net interest income                      $10,437       $(448)     $9,989



                                             Year Ended December 31,
                                                  2006 vs. 2005
                                          Volume       Rate       Total
                                                 (in thousands)

  Interest income:
  Loans                                   $98,956     $93,532    $192,488
  Investment securities (1)                10,084       4,354      14,438
  Mortgage-backed securities (2)           (5,515)      1,683      (3,832)
  Money market instruments                 (4,324)      6,126       1,802
  Total increase in interest income        99,201     105,695     204,896
  Interest expense:
  Deposits                                 50,744      74,051     124,795
  Federal funds purchased and
   repurchase agreements                   (3,880)     76,552      72,672
  Advances from FHLB                         (495)        700         205
  Total increase in interest expense       46,369     151,303     197,672
  Increase (decrease) in
   net interest income                    $52,832    $(45,608)     $7,224

  (1) Includes available for sale securities.
  (2) Includes trading and available for sale securities.




                     W HOLDING COMPANY, INC.                      EXHIBIT IV
                       LOAN RECEIVABLE-NET
                           (UNAUDITED)


                                        December      December
  By Collateral Type                    31, 2006      31, 2005
                                            (In thousands)


  Commercial real estate mortgage (1)   $4,945,932  $4,260,258
  Residential real estate - mortgage
   (2)                                   1,014,957   1,298,535
  Construction - mortgage                  722,789     505,760
  Commercial, industrial and
   agricultural (1)                      1,274,236   1,013,092
  Consumer and others (3) (4)              809,953     830,384
  Total Loans                            8,767,867   7,908,029
  Allowance for loan losses               (126,844)    (92,406)

  Loans - net                           $8,641,023  $7,815,623


  (1) Includes $1.46 billion and $1.26 billion of Westernbank Business
  Credit division outstanding loans at December 31, 2006 and 2005,
  respectively.
  (2) Includes fixed and floating interest rate loans to two mortgage
  originator groups in Puerto Rico mainly secured by mortgages on one-to-
  four family residential properties with an outstanding principal
  balance of $940.0 million and $1.14 billion at December 31, 2006 and
  2005, respectively.
  (3) Includes $129.0 million and $135.0 million of Expresso of Westernbank
  division outstanding loans at December 31, 2006 and 2005, respectively.
  (4) Includes $490.7 million and $585.9 million collateralized by real
  estate at December 31, 2006 and 2005, respectively.


                  W HOLDING COMPANY, INC.                          EXHIBIT V
            NON-PERFORMING LOANS AND FORECLOSED
                 REAL ESTATE HELD FOR SALE
                        (UNAUDITED)

                                        December  December
                                        31, 2006  31, 2005
                                      (Dollars in thousands)

  Commercial real estate - mortgages
   and commercial,
  industrial and agricultural loans     $154,862  $55,585
  Residential real estate mortgage and
   construction loans                      1,641    2,125
  Consumer loans                           9,309    6,288
  Total non-performing loans             165,812   63,998
  Foreclosed real estate held for sale     5,917    4,137
  Total non-performing loans and
   foreclosed real estate held for sale $171,729  $68,135

  Interest that would have been
   recorded if the loans had not
   been classified as non-performing      $9,052   $4,916
  Interest recorded on non-performing
   loans                                  $4,785     $743

  Total non-performing loans as a
   percentage of total loans
   at end of period                        1.89%    0.81%
  Total non-performing loans and
   foreclosed real estate
   held for sale as a percentage of
   total assets at end of period           1.00%    0.42%



                  W HOLDING COMPANY, INC.                         EXHIBIT VI
            CHANGES IN ALLOWANCE FOR LOAN LOSSES
                        (UNAUDITED)

                                       December  December
                                       31, 2006  31, 2005
                                     (Dollars in thousands)

  Balance, beginning of year             $92,406  $80,066
  Loans charged-off:
  Commercial real estate - mortgage and
   commercial, industrial and
   agricultural loans (1)                (22,606)  (8,233)
  Residential real estate-mortgage and
   construction loans                        (94)    (121)
  Consumer loans (2)                     (12,576) (13,809)
  Total loans charged-off                (35,276) (22,163)
  Recoveries of loans previously
  charged-off:
  Commercial real estate - mortgage and
   commercial, industrial and
   agricultural loans                      2,846    1,008
  Residential real estate-mortgage and
  construction loans                          66      212
  Consumer loans (3)                       2,252    2,283
  Total recoveries of loans previously
   charged-off                             5,164    3,503
  Net loans charged-off                  (30,112) (18,660)
  Provision for loan losses               64,550   31,000
  Balance, end of period                $126,844  $92,406

  Ratios:
  Allowance for loan losses to total
   loans at end of period                  1.45%    1.17%
  Provision for loan losses to net
   loans charged-off                     214.37%  166.13%
  Recoveries of loans to loans charged-
   off in previous period                 23.30%   15.78%
  Net loans charged-off to average
   total loans (4)                         0.36%    0.27%
  Allowance for loan losses to non-
   performing loans                       76.50%  144.39%

  (1) Includes charge-offs of $15.8 million and $5.3 million of Westernbank
  Business Credit Division for the years ended December 31, 2006 and 2005,
  respectively.
  (2) Includes $8.9 million and $9.8 million of Expresso of Westernbank
  loans charged-offs for the years ended December 31, 2006 and 2005,
  respectively.
  (3) Includes $1.0 and $1.1 million of Expresso of Westernbank loans
  recoveries for the years ended December 31, 2006 and 2005, respectively.
  (4) Average loans were computed using beginning and period-end balances.



                       W HOLDING COMPANY, INC.                   EXHIBIT VII
                      SELECTED FINANCIAL RATIOS
                             (UNAUDITED)

                               At and for the      At and for the
                            Three Months Ended      Years Ended
                                December 31,        December 31,
                               2006      2005      2006      2005
                         (Amounts in thousands, except per share data)

  Per share data:
    Dividend payout ratio      90.54%    37.22%    49.10%    24.25%
    Book value per common
     share                      $4.24     $4.04     $4.24     $4.04
    Preferred stock
     outstanding at end of
     period                    18,157    18,160    18,157    18,160
    Preferred stock equity
     at end of period        $530,838  $530,926  $530,838  $530,926

  Performance ratios:
    Return on assets (1)        0.42%     0.76%     0.60%     1.07%
    Return on common
     stockholders' equity
     (1)                        4.96%    12.77%     9.36%    20.53%
    Efficiency ratio           35.64%    33.43%    34.94%    30.67%
    Operating expenses to
     total end-of-period
     assets                     0.79%     0.71%     0.73%     0.67%

  Capital ratios:
    Total capital to risk-
     weighted assets           12.49%    13.13%    12.49%    13.13%
    Tier I capital to risk-
     weighted assets           11.45%    12.30%    11.45%    12.30%
    Tier I capital to
     average assets             7.21%     7.48%     7.21%     7.48%
    Equity-to-assets ratio
     (1)                        7.22%     7.45%     7.27%     7.45%

  Other selected data:

  Total trust assets managed $542,733  $486,017  $542,733  $486,017
  Branch offices                   56        55        56        55
  Number of full-time
   employees                    1,363     1,311     1,363     1,311

  (1) The return on assets is computed by dividing annualized net income by
  average total assets for the period.
  The return on common stockholders' equity is computed by dividing
  annualized net income less preferred stock dividends by average common
  stockholders' equity for the period. The equity-to-asset ratio is computed
  by dividing average equity by average total assets. Average balances have
  been computed using beginning and period-end balances.


https://www.myrcplus.com/rsvp-index.asp?BWebID=&CID=5449261DATASOURCE: W Holding Company, Inc.



CONTACT:  Vixson Frank Baez, W Holding Company, [phone], ext.

5535, or , or 



Web site:  http://www.wbpr.com/ 

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