Washington Federal (WAFD) 8-K Washington Federal Announces Increase In Quarterly Earnings

Washington Federal, Inc.

Fact Sheet

December 31, 2016

($ in Thousands)

	As of 6/16						As of 9/16						As of 12/16
Loan Loss Reserve - Total	$	114,251					$	116,729					$	123,356
General and Specific Allowance	111,016						113,494						118,456
Commitments Reserve	3,235						3,235						4,900
Allowance as a % of Gross Loans	1.08		%				1.07		%				1.09		%
	6/16 QTR			6/16 YTD			9/16 QTR			9/16 YTD			12/16 QTR			12/16 YTD
Loan Originations - Total	$	1,031,461		$	2,758,103		$	1,190,431		$	3,948,534		$	1,241,046		$	1,241,046
Single-Family Residential	194,141			456,391			236,184			692,575			215,241			215,241
Construction	342,230			670,052			230,597			900,649			338,599			338,599
Construction - Custom	97,602			277,721			144,095			421,816			122,955			122,955
Land - Acquisition & Development	14,305			33,555			25,956			59,511			16,229			16,229
Land - Consumer Lot Loans	7,817			19,256			10,405			29,661			9,065			9,065
Multi-Family	73,225			297,981			63,280			361,261			111,959			111,959
Commercial Real Estate	62,706			264,495			88,770			353,265			164,098			164,098
Commercial & Industrial	216,687			681,469			370,481			1,051,950			243,924			243,924
HELOC	21,733			54,656			19,882			74,538			18,391			18,391
Consumer	1,015			2,527			781			3,308			585			585
Purchased Loans (including acquisitions)	$	—		$	51,646		$	53,774		$	105,420		$	—		$	—
Net Loan Fee and Discount Accretion	$	6,691		$	23,168		$	6,730		$	29,898		$	6,762		$	6,762
Repayments
Loans	$	776,087		$	2,083,589		$	851,578		$	2,935,167		$	896,109		$	896,109
MBS	128,467			320,644			142,329			462,973			178,169			178,169
MBS Premium Amortization	$	3,514		$	8,958		$	3,962		$	12,920		$	5,039		$	5,039
Efficiency
Operating Expenses/Average Assets	1.52		%	1.64		%	1.49		%	1.60		%	1.46		%	1.46		%
Efficiency Ratio (%)	49.08		%	51.55		%	48.54		%	50.80		%	47.23		%	47.23		%
Amortization of Intangibles	$	576		$	1,821		$	548		$	2,369		$	521		$	521
EOP Numbers
Shares Issued and Outstanding	90,226,193						89,680,847						89,272,268
Share repurchase information
Remaining shares authorized for repurchase	1,041,309						5,039,310						4,231,553
Shares repurchased	1,097,397			3,159,921			707,642			3,867,563			757,768			757,768
Average share repurchase price	$	23.33		$	22.17		$	25.20		$	22.72		$	26.90		$	26.90

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

($ in Thousands)

Tangible Common Book Value	As of 6/16			As of 9/16			As of 12/16
$ Amount	$	1,664,648		$	1,678,742		$	1,703,133
Per Share	18.45			18.72			19.08
# of Employees	1,817			1,806			1,813
Investments
Available-for-sale:
Agency MBS	$	1,131,044		$	1,072,912		$	959,661
Other	838,825			849,982			482,274
	$	1,969,869		$	1,922,894		$	1,441,935
Held-to-maturity:
Agency MBS	$	1,492,480		$	1,417,599		$	1,752,010
	$	1,492,480		$	1,417,599		$	1,752,010
	As of 6/16			As of 9/16			As of 12/16
Loans Receivable by Category (a)	AMOUNT		%	AMOUNT		%	AMOUNT		%
Single-Family Residential	$	5,633,527	53.3%	$	5,658,830	51.7%	$	5,624,263	49.6%
Construction	1,016,305		9.6	1,110,411		10.1	1,265,747		11.2
Construction - Custom	409,116		3.9	473,069		4.3	494,447		4.4
Land - Acquisition & Development	104,412		1.0	118,497		1.1	119,085		1.1
Land - Consumer Lot Loans	104,461		1.0	104,567		1.0	101,104		0.9
Multi-Family	1,100,514		10.4	1,124,290		10.3	1,217,594		10.7
Commercial Real Estate	1,042,730		9.9	1,093,639		10.0	1,207,573		10.7
Commercial & Industrial	853,776		8.1	978,589		8.9	1,025,821		9.1
HELOC	151,352		1.4	149,716		1.4	148,452		1.3
Consumer	156,008		1.5	139,000		1.3	124,547		1.1
	10,572,201		100%	10,950,608		100%	11,328,633		100%
Less:
ALL	111,016			113,494			118,456
Loans in Process	780,720			879,484			1,027,168
Net Deferred Fees, Costs and Discounts	51,889			46,710			46,698
Sub-Total	943,625			1,039,688			1,192,322
	$	9,628,576		$	9,910,920		$	10,136,311
Net Loan Portfolio by Category (a)	AMOUNT		%	AMOUNT		%	AMOUNT		%
Single-Family Residential	$	5,571,349	57.9%	$	5,601,350	56.5%	$	5,565,673	54.9%
Construction	422,785		4.4	475,022		4.8	486,784		4.8
Construction - Custom	211,002		2.2	227,348		2.3	233,867		2.3
Land - Acquisition & Development	85,392		0.9	88,408		0.9	95,997		0.9
Land - Consumer Lot Loans	101,395		1.1	101,435		1.0	98,118		1.0
Multi-Family	1,089,658		11.3	1,113,661		11.2	1,205,737		11.9
Commercial Real Estate	1,021,596		10.6	1,074,146		10.8	1,188,637		11.7
Commercial & Industrial	822,829		8.5	945,150		9.5	992,261		9.8
HELOC	149,213		1.5	147,737		1.5	146,790		1.4
Consumer	153,357		1.6	136,663		1.4	122,447		1.2
	$	9,628,576	100%	$	9,910,920	100%	$	10,136,311	100%
(a) Some loans have been reclassified by loan type as a result of system conversion in 1Q16, primarily impacting Construction, Multi-family and Commercial Real Estate.

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

($ in Thousands)

	As of 6/30/16						As of 9/30/16						As of 12/31/16
Deposits by State	AMOUNT			%		#	AMOUNT			%		#	AMOUNT			%		#
Washington (WA)	$	5,089,214		48.1	%	82	$	5,100,754		48.1	%	81	$	5,196,140		48.8	%	81
Idaho (ID)	774,432			7.3		26	782,413			7.4		25	768,704			7.2		24
Oregon (OR)	1,956,226			18.5		49	1,964,173			18.5		48	1,952,655			18.3		48
Utah (UT)	286,792			2.7		10	285,234			2.7		10	280,457			2.6		10
Nevada (NV)	343,220			3.2		11	340,324			3.2		11	333,789			3.1		11
Texas (TX)	92,983			0.9		5	94,113			0.9		5	97,276			0.9		5
Arizona (AZ)	1,187,651			11.2		32	1,188,335			11.2		31	1,173,538			11.0		31
New Mexico (NM)	848,398			8.0		28	845,506			8.0		27	845,016			7.9		27
Total	$	10,578,916		100%		243	$	10,600,852		100%		238	$	10,647,575		100%		237
Deposits by Type	AMOUNT			%			AMOUNT			%			AMOUNT			%
Checking (noninterest)	$	1,041,258		9.8	%		$	1,091,738		10.3	%		$	1,124,169		10.6	%
NOW (interest)	1,604,741			15.2			1,629,983			15.4			1,732,836			16.3
Savings (passbook/stmt)	787,441			7.4			820,980			7.7			844,849			7.9
Money Market	2,486,802			23.5			2,462,891			23.2			2,492,483			23.4
Time Deposits	4,658,674			44.0			4,595,260			43.3			4,453,238			41.8
Total	$	10,578,916		100%			$	10,600,852		100%			$	10,647,575		100%
Deposits greater than $250,000 - EOP	$	2,209,547					$	2,250,622					$	2,410,863
Time Deposit Repricing	Amount			Rate			Amount			Rate			Amount			Rate
Within 3 months	$	890,691		0.64	%		$	824,019		0.82	%		$	933,770		0.76	%
From 4 to 6 months	787,925			0.86	%		896,484			0.80	%		896,254			0.74	%
From 7 to 9 months	562,314			1.02	%		618,180			0.89	%		532,682			0.81	%
From 10 to 12 months	585,038			0.90	%		508,732			0.83	%		391,159			0.80	%
Non-Performing Assets	AMOUNT			%			AMOUNT			%			AMOUNT			%
Non-accrual loans:
Single-Family Residential	$	36,707		77.5%			$	33,148		78.2%			$	38,568		63.5%
Construction	—			—			—			—			—			—
Construction - Custom	506			1.1			—			—			—			—
Land - Acquisition & Development	427			0.9			58			0.1			603			1.0
Land - Consumer Lot Loans	1,105			2.3			510			1.2			969			1.6
Multi-Family	1,238			2.6			776			1.8			1,160			1.9
Commercial Real Estate	6,297			13.3			7,100			16.7			9,660			15.9
Commercial & Industrial	521			1.1			583			1.4			9,230			15.2
HELOC	548			1.2			239			0.6			480			0.8
Consumer	—			—			—			—			45			0.1
Total non-accrual loans	47,349			100%			42,414			100%			60,715			100%
Real Estate Owned	31,682						29,027						22,637
Total non-performing assets	$	79,031					$	71,441					$	83,352
Non-performing loans as % of total net loans	0.49		%				0.43		%				0.60		%
Non-performing assets as % of total assets	0.53		%				0.48		%				0.56		%

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

($ in Thousands)

	As of 6/30/16					As of 9/30/16					As of 12/31/16
	AMOUNT			%		AMOUNT			%		AMOUNT			%
Restructured loans:
Single-Family Residential	$	223,531		86.6%		$	228,186		87.3%		$	217,943		87.2%
Construction	—			—		—			—		—			—
Construction - Custom	—			—		—			—		—			—
Land - Acquisition & Development	1,454			0.6		1,154			0.4		1,139			0.5
Land - Consumer Lot Loans	9,672			3.7		9,630			3.7		9,619			3.8
Multi-Family	1,514			0.6		1,505			0.6		1,496			0.6
Commercial Real Estate	20,490			7.9		19,434			7.4		18,179			7.3
Commercial & Industrial	—			—		—			—		—			—
HELOC	1,379			0.5		1,506			0.6		1,461			0.6
Consumer	95			—		116			—		113			—
Total restructured loans	$	258,135		100%		$	261,531		100%		$	249,950		100%
Restructured loans were as follows:
Performing	$	247,695		96.0%		$	251,583		96.2%		$	235,503		94.2%
Non-performing (c)	10,440			4.0		9,948			3.8		14,447			5.8
Total restructured loans	$	258,135		100%		$	261,531		100%		$	249,950		100%
(c) Included in "Total non-accrual loans" above
	AMOUNT			CO % (d)		AMOUNT			CO % (d)		AMOUNT			CO % (d)
Net Charge-offs (Recoveries) by Category
Single-Family Residential	$	473		0.03%		$	(204	)	(0.01)%		$	3		—%
Construction	(207		)	(0.08)		(388		)	(0.14)		—			—
Construction - Custom	(60		)	(0.06)		—			—		—			—
Land - Acquisition & Development	(2,711		)	(10.39)		(2,063		)	(6.96)		(3,985		)	(13.39)
Land - Consumer Lot Loans	21			0.08		29			0.11		(53		)	(0.21)
Multi-Family	—			—		—			—		—			—
Commercial Real Estate	(454		)	(0.17)		(172		)	(0.06)		(339		)	(0.11)
Commercial & Industrial	144			0.07		(2,123		)	(0.87)		(667		)	(0.26)
HELOC	27			0.07		—			—		36			0.10
Consumer	(130		)	(0.33)		(657		)	(1.89)		(291		)	(0.93)
Total net charge-offs (recoveries)	$	(2,897	)	(0.11)%		$	(5,578	)	(0.20)%		$	(5,296	)	(0.19)%
(d) Annualized Net Charge-offs (recoveries) divided by Gross Balance
ASC 310-30 Acquired Loans
Accretable Yield	$	60,453				$	55,290				$	50,389
Non-Accretable Yield	165,926					165,926					165,926
Total Contractual Payments	$	226,379				$	221,216				$	216,315
Interest Rate Risk
One Year GAP				(9.8	)%				(10.1	)%				(15.3	)%
NPV post 200 bps shock (e)				15.4	%				14.8	%				13.9	%
Change in NII after 200 bps shock (e)				3.9	%				3.2	%				1.7	%
(e) Assumes no balance sheet management actions taken

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

($ in Thousands)

Historical CPR Rates (f)
	WAFD		WAFD
Average for Quarter Ended:	SFR Mortgages		GSE MBS
9/30/2014	14.6	%	13.4	%
12/31/2014	15.9	%	12.1	%
3/31/2015	16.4	%	13.9	%
6/30/2015	18.7	%	15.9	%
9/30/2015	17.8	%	14.5	%
12/31/2015	16.7	%	13.4	%
3/31/2016	13.9	%	12.0	%
6/30/2016	17.3	%	17.5	%
9/30/2016	17.7	%	20.0	%
12/31/2016	19.3	%	24.8	%
(f) The CPR Rate (conditional payment rate) is the rate that is equal to the proportion of the principal of a pool of loans that is paid off prematurely in each period.

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

Average Balance Sheet

($ in Thousands)

	Three Months Ended
	June 30, 2016						September 30, 2016						December 31, 2016
	Average				Average		Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets
Loans receivable	$	9,561,921	$	113,728	4.77	%	$	9,756,353	$	114,283	4.65	%	$	10,013,798	$	114,835	4.55	%
Mortgage-backed securities	2,698,354		15,297		2.27		2,568,917		13,820		2.13		2,537,585		12,789		2.00
Cash & investments	1,187,023		4,012		1.36		1,218,195		4,029		1.31		1,010,299		4,246		1.67
FHLB & FRB Stock	117,022		698		2.39		117,205		740		2.50		117,210		894		3.03
Total interest-earning assets	13,564,320		133,735		3.95	%	13,660,670		132,872		3.86	%	13,678,892		132,764		3.85	%
Other assets	1,219,363						1,210,388						1,197,304
Total assets	$	14,783,683					$	14,871,058					$	14,876,196
Liabilities and Equity
Customer accounts	10,569,479		13,274		0.50	%	10,610,740		13,423		0.50	%	10,610,314		13,017		0.49	%
FHLB advances	2,075,604		16,221		3.13		2,080,000		16,633		3.17		2,080,000		16,595		3.17
Other borrowings	—		—		—		33		—		—		—		—		—
Total interest-bearing liabilities	12,645,083		29,495		0.94	%	12,690,773		30,056		0.94	%	12,690,314		29,612		0.93	%
Other liabilities	163,788						205,817						201,233
Total liabilities	12,808,871						12,896,590						12,891,547
Stockholders’ equity	1,974,812						1,974,468						1,984,649
Total liabilities and equity	$	14,783,683					$	14,871,058					$	14,876,196
Net interest income			$	104,240					$	102,816					$	103,152
Net interest margin (1)					3.07	%					3.01	%					3.02	%
(1) Annualized net interest income divided by average interest-earning assets

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Washington Federal, Inc.

Fact Sheet

December 31, 2016

Delinquency Summary

($ in Thousands)

			AMOUNT OF LOANS		# OF LOANS				% based				% based
TYPE OF LOANS	#LOANS	AVG Size	NET OF LIP & CHG-OFFs		30	60	90	Total	on #		$ Delinquent		on $
December 31, 2016
Single-Family Residential	26,259	214	$	5,623,668	88	53	165	306	1.17	%	$	60,201	1.07	%
Construction	638	804	513,046		3	—	1	4	0.63		341		0.07
Construction - Custom	1,079	219	236,668		2	1	—	3	0.28		157		0.07
Land - Acquisition & Development	126	819	103,148		1	—	4	5	3.97		1,262		1.22
Land - Consumer Lot Loans	1,204	84	101,045		4	2	15	21	1.74		1,076		1.06
Multi-Family	959	1,270	1,217,594		3	1	2	6	0.63		1,868		0.15
Commercial Real Estate	1,040	1,130	1,175,475		6	2	12	20	1.92		7,766		0.66
Commercial & Industrial	1,843	574	1,057,826		4	6	34	44	2.39		1,108		0.10
HELOC	2,931	51	148,448		7	—	32	39	1.33		1,375		0.93
Consumer	4,842	26	124,547		78	30	79	187	3.86		1,063		0.85
	40,921	252	$	10,301,465	196	95	344	635	1.55	%	$	76,217	0.74	%
September 30, 2016
Single-Family Residential	26,508	213	$	5,658,122	93	39	173	305	1.15	%	$	56,665	1.00	%
Construction	640	779	498,450		—	—	1	1	0.16		—		—
Construction - Custom	1,041	221	229,957		2	—	—	2	0.19		538		0.23
Land - Acquisition & Development	132	719	94,928		—	—	3	3	2.27		—		—
Land - Consumer Lot Loans	1,229	85	104,534		5	6	13	24	1.95		2,061		1.97
Multi-Family	944	1,191	1,124,290		2	1	3	6	0.64		1,983		0.18
Commercial Real Estate	1,074	1,018	1,093,549		1	2	10	13	1.21		4,868		0.45
Commercial & Industrial	1,832	534	978,582		—	3	32	35	1.91		42		—
HELOC	2,924	51	149,713		11	3	26	40	1.37		1,200		0.80
Consumer	5,094	27	139,000		93	34	66	193	3.79		922		0.66
	41,418	243	$	10,071,125	207	88	327	622	1.50	%	$	68,279	0.68	%
June 30, 2016
Single-Family Residential	26,758	211	$	5,632,692	84	37	189	310	1.16	%	$	55,242	0.98	%
Construction	684	649	444,014		—	—	1	1	0.15		—		—
Construction - Custom	921	232	213,465		2	1	1	4	0.43		775		0.36
Land - Acquisition & Development	135	686	92,629		—	—	5	5	3.70		468		0.51
Land - Consumer Lot Loans	1,232	85	104,413		6	2	19	27	2.19		1,993		1.91
Multi-Family	958	1,149	1,100,514		2	—	3	5	0.52		1,384		0.13
Commercial Real Estate	1,055	988	1,042,639		4	3	14	21	1.99		7,811		0.75
Commercial & Industrial	1,832	466	853,769		3	4	34	41	2.24		985		0.12
HELOC	2,907	52	151,339		11	11	26	48	1.65		2,168		1.43
Consumer	5,369	29	156,008		76	41	64	181	3.37		811		0.52
	41,851	234	$	9,791,482	188	99	356	643	1.54	%	$	71,637	0.73	%

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