Exhibit 99.1
Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Monday, July 21, 2008
FOR IMMEDIATE RELEASE
Washington Federal Announces 3rd Quarter
Earnings of $33,169,000 and an Increase
in Fiscal Year to Date Earnings
SEATTLE – Washington Federal, Inc. (Nasdaq: WFSL), parent company of Washington Federal Savings, today announced earnings of $33,169,000 or $.38 per diluted share for the quarter ended June 30, 2008, compared to $34,265,000 or $.39 per diluted share for the quarter ended June 30, 2007, a 3.2% decrease in earnings. For the nine months ended June 30, 2008 earnings were $101,669,000 or $1.16 per diluted share, compared to $101,132,000 or $1.15 per diluted share for the nine months ended June 30, 2007, a .5% increase in earnings.
The third fiscal quarter produced a return on assets of 1.13%, while return on equity amounted to 9.61%. Nonperforming assets totaled $85.1 million or 0.72% of assets as of June 30, 2008. In response to the continued decline in asset quality caused by the current housing cycle, the Company recorded a provision for loan losses of $13,216,000 for the quarter. Net charge offs amounted to $6,163,000 for the quarter. During the quarter the Company also sold real estate for a gain of $3,164,000. Net interest spread increased from 2.12% at June 30, 2007 to 2.69% at June 30, 2008, contributing to the $14,245,000 increase in net interest income for the same period.
1 of 4
Washington Federal’s Quarterly Earnings - Page Two
Chief Executive Officer Roy M. Whitehead commented, “The current fiscal year continues to play out much as we forecasted at its beginning. Loan losses in the land and construction portfolio have increased significantly, but have been largely offset by an improved spread between asset yields and funding costs. We expect both trends to continue in the near term. In light of overall concerns about the industry, investors should also know that management has significant excess capital at its disposal to deal aggressively and proactively with asset quality issues. Washington Federal will continue to be one of the strongest financial institutions in the U.S.”
On July 25, 2008, Washington Federal will pay a cash dividend of $.21 per share to common stockholders of record on July 11, 2008. This will be the Company’s 102nd consecutive quarterly cash dividend.
On July 14, 2008, Washington Federal opened a new branch in Redmond, Oregon. The Company expects to open a second branch in Bothell, Washington during its 4th fiscal quarter.
Washington Federal Savings, with headquarters in Seattle, Washington, has 147 offices in eight western states.
# # #
2 of 4
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
| June 30, 2008 | September 30, 2007 | |||||||
| (In thousands, except per share data) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 70,071 | $ | 61,378 | ||||
Available-for-sale securities, including mortgage-backed securities of $1,454,404 | 1,582,663 | 1,515,688 | ||||||
Held-to-maturity securities, including mortgage-backed securities of $119,392 | 127,177 | 138,373 | ||||||
Loans receivable, net | 9,425,874 | 8,188,278 | ||||||
Interest receivable | 54,084 | 49,611 | ||||||
Premises and equipment, net | 117,734 | 74,807 | ||||||
Real estate held for sale | 20,902 | 4,873 | ||||||
FHLB stock | 144,841 | 132,397 | ||||||
Intangible assets, net | 222,248 | 107,245 | ||||||
Other assets | 29,653 | 12,767 | ||||||
| $ | 11,795,247 | $ | 10,285,417 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Liabilities | ||||||||
Customer accounts | ||||||||
Savings and demand accounts | $ | 7,160,466 | $ | 5,979,049 | ||||
Repurchase agreements with customers | 13,536 | 17,736 | ||||||
| 7,174,002 | 5,996,785 | |||||||
FHLB advances | 2,001,146 | 1,760,979 | ||||||
Other borrowings | 1,115,600 | 1,075,000 | ||||||
Advance payments by borrowers for taxes and insurance | 22,028 | 31,824 | ||||||
Federal and state income taxes | 31,670 | 38,032 | ||||||
Accrued expenses and other liabilities | 82,407 | 64,670 | ||||||
| 10,426,853 | 8,967,290 | |||||||
Stockholders’ equity | ||||||||
Common stock, $1.00 par value, 300,000,000 shares authorized;105,056,998 and 104,921,450 shares issued;87,828,584 and 87,441,750 shares outstanding | 105,057 | 104,921 | ||||||
Paid-in capital | 1,259,312 | 1,254,490 | ||||||
Accumulated other comprehensive income (loss), net of taxes | (17,193 | ) | (13,033 | ) | ||||
Treasury stock, at cost;17,228,414and 17,479,700 shares | (210,881 | ) | (213,934 | ) | ||||
Retained earnings | 232,099 | 185,683 | ||||||
| 1,368,394 | 1,318,127 | |||||||
| $ | 11,795,247 | $ | 10,285,417 | |||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||
Stockholders’ equity per share | $ | 15.58 | $ | 15.07 | ||||
Stockholders’ equity to total assets | 11.60 | % | 12.82 | % | ||||
Tangible stockholders’ equity to tangible assets | 9.90 | 11.90 | ||||||
Weighted average rates at period end | ||||||||
Loans and mortgage-backed securities | 6.35 | % | 6.57 | % | ||||
Investment securities* | 4.35 | 4.61 | ||||||
Combined loans, mortgage-backed securities and investment securities | 6.30 | 6.50 | ||||||
Customer accounts | 3.52 | 4.36 | ||||||
Borrowings | 3.83 | 4.64 | ||||||
Combined cost of customer accounts and borrowings | 3.61 | 4.45 | ||||||
Interest rate spread | 2.69 | 2.05 | ||||||
| * | Includes municipal bonds at tax equivalent yields and cash equivalents |
3 of 4
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||
Loans | $ | 155,008 | $ | 135,458 | $ | 446,702 | $ | 387,929 | ||||||||
Mortgage-backed securities | 22,407 | 18,677 | 66,187 | 56,216 | ||||||||||||
Investment securities and cash equivalents | 3,066 | 4,485 | 11,035 | 11,952 | ||||||||||||
| 180,481 | 158,620 | 523,924 | 456,097 | |||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Customer accounts | 66,195 | 63,712 | 200,240 | 178,697 | ||||||||||||
FHLB advances and other borrowings | 33,622 | 28,489 | 104,154 | 83,399 | ||||||||||||
| 99,817 | 92,201 | 304,394 | 262,096 | |||||||||||||
Net interest income | 80,664 | 66,419 | 219,530 | 194,001 | ||||||||||||
Provision for loan losses | 13,216 | 1,000 | 23,716 | 1,200 | ||||||||||||
Net interest income after provision for loan losses | 67,448 | 65,419 | 195,814 | 192,801 | ||||||||||||
OTHER INCOME | ||||||||||||||||
Gain on sale of loans | 32 | — | 433 | — | ||||||||||||
Gain on sale of real estate | 3,164 | — | 11,876 | — | ||||||||||||
Other | 4,364 | 5,230 | 12,579 | 11,655 | ||||||||||||
| 7,560 | 5,230 | 24,888 | 11,655 | |||||||||||||
OTHER EXPENSE | ||||||||||||||||
Compensation and fringe benefits | 14,127 | 11,577 | 38,252 | 31,991 | ||||||||||||
Occupancy | 2,916 | 2,300 | 7,992 | 6,454 | ||||||||||||
Other | 6,610 | 3,340 | 16,478 | 8,779 | ||||||||||||
| 23,653 | 17,217 | 62,722 | 47,224 | |||||||||||||
Gain (loss) on real estate acquired through foreclosure, net | 72 | (17 | ) | (182 | ) | 139 | ||||||||||
Income before income taxes | 51,427 | 53,415 | 157,798 | 157,371 | ||||||||||||
Income taxes | 18,258 | 19,150 | 56,129 | 56,239 | ||||||||||||
NET INCOME | $ | 33,169 | $ | 34,265 | $ | 101,669 | $ | 101,132 | ||||||||
PER SHARE DATA | ||||||||||||||||
Basic earnings | $ | .38 | $ | .39 | $ | 1.16 | $ | 1.16 | ||||||||
Diluted earnings | .38 | .39 | 1.16 | 1.15 | ||||||||||||
Cash dividends | .210 | .210 | .630 | .620 | ||||||||||||
Weighted average number of shares outstanding, including dilutive stock options | 87,811,275 | 87,514,339 | 87,756,491 | 87,602,549 | ||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||
Return on average assets | 1.13 | % | 1.38 | % | 1.22 | % | 1.42 | % | ||||||||
Return on average stockholders’ equity | 9.61 | % | 10.55 | % | 10.01 | % | 10.49 | % | ||||||||
Net interest margin | 2.85 | % | 2.77 | % | 2.71 | % | 2.80 | % | ||||||||
4 of 4