Washington Federal (WAFD) 8-K Regulation FD Disclosure

Exhibit 99.1

Washington Federal, Inc.

425 Pike Street

Seattle, WA 98101

July 25, 2008

Fellow Shareholder:

A number of years ago we ceased providing a narrative to shareholders with our quarterly release of financial results. Given the level of public concern regarding overall financial system weakness, and the higher than usual number of questions received from shareholders recently, it seems a good time to make an exception to that policy.

First, let me assure you that your company is on solid financial footing and we remain very profitable on an operating basis. In fact, the accompanying financials report $101.7 million in earnings thus far this year, a slight increase over the same period last year. We have the luxury of excess capital and our tangible equity to assets ratio is roughly double the required amount to be considered “well-capitalized” by regulatory agencies. Net interest income, the difference between what we earn on assets and what we pay for funding is increasing. For example, last quarter, we repaid $200 million in debt that had been costing 5.59% and refinanced it with 2% short-term financing. We also recast over $1.6 billion in deposits costing an average 4.71% to rates in the low 3% range. Liquidity is also a non-issue at present as we maintain approximately $4 billion in additional borrowing capacity with the Federal Home Loan Bank System. At this time it would be difficult to conjure up a scenario that would threaten your company’s overall financial stability.

Make no mistake though, this is a tough market. It’s important to recognize that the challenges we face go beyond what would be experienced in a normal business cycle. We expect that non-performing assets and loan losses, mostly in the land and construction portfolio, will continue to increase in the near-term due to significant declines in real estate values in many markets. We have also routinely disclosed our exposure to Freddie Mac and Fannie Mae preferred stock over the past several quarters, which currently amounts to $90 million. We will wait to see what actions occur over the next several weeks to shore up their finances, but if the investment does not recover in value we will declare what’s known in the accounting world as an “Other Than Temporary Impairment” and write the investment down in the fourth fiscal quarter by way of a charge to earnings. The difference between book and estimated market value at June 30, 2008 was $27 million and is already reflected in the company’s capital position. Given the potential for this one-time charge to earnings, it would be prudent to expect lower reported income in the fourth quarter, with earnings likely to rebound thereafter.

Meanwhile, we continue to do business and we’re finding plenty of high quality opportunities to expand our reach and generate profits. We remain very confident in the future of the company and believe that we will continue to be one of the strongest financial institutions in the industry, able to handle any reasonably foreseeable challenges.

Thanks for your continued confidence and trust.

Sincerely,

Roy M. Whitehead

Chairman, President & CEO

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

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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	%

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