Washington Federal 8K Reports Net Income of $8.4 Million for its | WAFD 21 Apr 09

Exhibit 99.1

LOGO

Washington Federal, Inc.

425 Pike Street

Seattle, WA 98101

Contact: Cathy Cooper

(206) 777-8246

Friday, April 17, 2009

FOR IMMEDIATE RELEASE

Washington Federal Reports Net Income of $8.4 Million for its

Second Fiscal Quarter; Tangible Capital Improves to 10%

SEATTLE – Washington Federal, Inc. (Nasdaq: WFSL), parent company of Washington Federal Savings, today announced earnings of $8,410,000 or $.10 per diluted share for the quarter ended March 31, 2009, compared to $35,452,000 or $.40 per diluted share for the same period one year ago. Earnings decreased by $27,042,000 or 76% primarily as a result of higher credit costs. The provision for loan losses was $54 million for the quarter ended March 31, 2009, a $44.5 million increase over the $9.5 million provided for the same quarter one year ago. During the quarter, the Company’s already strong capital position improved as the ratio of tangible common equity to tangible assets increased to 10%, making it one of the best capitalized regional institutions in the U.S.

Chairman, President & CEO Roy M. Whitehead commented, “Lower earnings over the same period last year are the result of a substantial increase in loan loss provision primarily related to the residential land and construction portfolio and centered in a few large credits. We are pleased to have been solidly profitable again last quarter, given the extraordinarily difficult economic conditions. Investors should expect loan loss provisions to continue at a high level next quarter. We also foresee revenues next quarter being adversely impacted by the higher level of non-performing assets along with accelerated mortgage prepayments due to refinancing. On a positive note, we continue to experience improvement in funding expense due to declining

deposit costs. Next quarter approximately $2.3 billion, or 38% of our deposits, will reprice downward, which will add considerably to net interest margin.”

Non-performing assets amounted to $492 million or 4.01% of total assets at quarter-end. This is an increase of $328 million from September 30, 2008, and is concentrated in our portfolio of land and speculative construction loans. The gross amount of loans outstanding in these two portfolios totaled $1,036 million as of March 31, 2009, a decrease of $128 million or 11% from September 30, 2008. In response to the deteriorating credit conditions, the Company increased its allowance for loan losses from $85 million as of September 30, 2008, to $143 million as of March 31, 2009, a $58 million or 68% increase.

In March, the Company began to more aggressively market foreclosed real estate. Special mortgage loan products, beginning at a rate of 3.99% were introduced to facilitate the sale of real estate owned. The Company currently owns and is marketing 250 separate properties, of which 50 have pending sales.

Total assets increased by $466 million or 4% to $12,262,172,000 from $11,796,425,000 at September 30, 2008. Specifically, investment securities increased by $481 million or 30% during the six months ended March 31, 2009, as the Company purchased agency mortgage backed securities in anticipation of a potential increase in refinance activity. As of March 31, 2009, the Company’s investment portfolio had net unrealized gains of $81 million, an increase of $78 million from September 30, 2008. During the quarter, total loans outstanding decreased from $9.5 billion to $9.4 billion as a result of increased loan prepayments stemming from record low interest rates available on 30 year fixed rate mortgages in the market.

Net interest income for the current quarter increased by 27% or $20 million from the quarter ended March 31, 2008. This increase is the result of significant growth in earning assets as well as increased net interest spread as deposit rates have fallen. The Company’s period end spread increased to 3.11% as of March 31, 2009, compared to 2.30% one year ago.

The Company’s efficiency ratio of 25.6% for the quarter remains among the lowest in the industry. The quarter produced a return on assets of .27%, while return on equity amounted to 2.40%. These ratios represent historical lows for the Company and are reflective of the effects of the significant declines in real estate values throughout the western United States.

On April 24, 2009, Washington Federal will pay a cash dividend of $.05 per share to common stockholders of record on April 10, 2009. This will be the Company’s 105th consecutive quarterly cash dividend.

Washington Federal Savings, with headquarters in Seattle, Washington, has 150 offices in eight western states.

To find out more about the Company, please visit our website. The Company uses its website to distribute financial and other material information about the Company, which is routinely posted on and accessible atwww.washingtonfederal.com.

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2008 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Statements contained herein that are not historical facts should be considered forward-looking statements with respect to Washington Federal. Forward-looking statements of this type speak only as of the date of this report. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, unforeseen local, regional, national or global events, economic conditions, asset quality, interest rates, loan demand, changes in business or consumer spending, borrowing or savings habits, deposit growth, adequacy of the reserve for loan losses, competition, stock price volatility, government monetary and economic policy, anticipated expense levels, changes in laws and regulations, the level of success of the company’s asset/liability management strategies as well as its marketing, product development, sales and other strategies, the effect of changes in accounting policies and practices, as may be

adopted by the regulatory agencies as well as the Financial Accounting Standards Board and other accounting standard setters, the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Washington Federal undertakes no obligation to update or revise forward-looking statements to reflect subsequent circumstances, events or information or for any other reason.

# # #

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)


	March 31, 2009			September 30, 2008
	(In thousands, except per share data)
ASSETS
Cash and cash equivalents	$	86,579		$	82,600
Available-for-sale securities		1,964,200			1,476,067
Held-to-maturity securities		117,316			124,537
Loans receivable, net		9,431,599			9,501,620
Interest receivable		55,326			54,365
Premises and equipment, net		134,231			133,357
Real estate held for sale		84,715			37,107
FHLB stock		144,493			144,874
Intangible assets, net		219,515			221,294
Federal and state income taxes		2,491			5,148
Other assets		21,707			15,456

	$	12,262,172		$	11,796,425

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Customer accounts
Savings and demand accounts	$	7,521,099		$	7,146,045
Repurchase agreements with customers		38,257			23,494

		7,559,356			7,169,539
FHLB advances		2,089,753			1,998,308
Other borrowings		925,600			1,177,600
Advance payments by borrowers for taxes and insurance		30,159			37,206
Federal and state income taxes		—			—
Accrued expenses and other liabilities		55,446			81,098

		10,660,314			10,463,751
Stockholders’ equity
Common stock, $1.00 par value, 300,000,000 shares authorized;105,157,965 and 105,092,724 shares issued;88,047,438 and 87,916,286 shares outstanding		105,158			105,093
Preferred Stock, 200,000 shares issued and outstanding		198,050			—
Paid-in capital		1,264,171			1,261,032
Accumulated other comprehensive income (loss), net of taxes		48,499			2,472
Treasury stock, at cost;17,110,527 and 17,176,438 shares		(209,449	)		(210,250	)
Retained earnings		195,429			174,327

		1,601,858			1,332,674

	$	12,262,172		$	11,796,425

CONSOLIDATED FINANCIAL HIGHLIGHTS
Common stockholders’ equity per share	$	15.94		$	15.16
Stockholders’ equity to total assets		13.06	%		11.30	%
Tangible common stockholders’ equity to tangible assets		10.00			9.60
Weighted average rates at period end
Loans and mortgage-backed securities		6.17	%		6.33	%
Combined loans, mortgage-backed securities and investment securities		6.09			6.26
Customer accounts		2.54			3.25
Borrowings		4.08			3.77
Combined cost of customer accounts and borrowings		2.98			3.41
Interest rate spread		3.11			2.85

*	Includes municipal bonds at tax equivalent yields and cash equivalents

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Quarter Ended March 31,						Six Months Ended March 31,
	2009			2008			2009			2008
	(In thousands, except per share data)
INTEREST INCOME
Loans	$	147,038		$	151,190		$	299,357		$	291,694
Mortgage-backed securities		28,341			21,818			53,653			43,780
Investment securities and cash equivalents		789			3,844			1,697			7,970

		176,168			176,852			354,707			343,444

INTEREST EXPENSE
Customer accounts		51,126			68,076			107,034			134,046
FHLB advances and other borrowings		31,560			35,203			64,179			70,532

		82,686			103,279			171,213			204,578


Net interest income		93,482			73,573			183,494			138,866
Provision for loan losses		54,000			9,500			89,000			10,500

Net interest income after provision for loan losses		39,482			64,073			94,494			128,366

OTHER INCOME
Gain on sale of loans		—			401			—			401
Gain on sale of real estate		—			8,712			—			8,712
Other		4,388			3,827			8,562			8,214

		4,388			12,940			8,562			17,327

OTHER EXPENSE
Compensation and fringe benefits		13,839			13,007			28,643			24,125
Occupancy		3,359			2,837			6,533			5,076
Other		7,863			6,004			14,470			9,867

		25,061			21,848			49,646			39,068
Gain (loss) on real estate acquired through foreclosure, net		(1,719	)		(230	)		(2,959	)		(253	)

Income before income taxes		17,090			54,935			50,451			106,372
Income taxes		6,074			19,483			17,917			37,872

NET INCOME		11,016			35,452			32,534			68,500

Preferred dividends accrued		2,606			—			3,955			—

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	8,410		$	35,452		$	28,579		$	68,500


PER SHARE DATA
Basic earnings	$	.10		$	.40		$	.32		$	.78
Diluted earnings		.10			.40			.32			.78
Cash Dividends per share		.05			.21			.10			.42
Basic weighted average number of shares outstanding		88,021,483			87,635,996			87,993,592			87,535,154
Diluted weighted average number of shares outstanding, including dilutive stock options		88,028,210			87,661,907			88,018,511			87,680,352

PERFORMANCE RATIOS
Return on average assets		.27	%		1.27	%		.47	%		1.26	%
Return on average common equity		2.40	%		10.45	%		4.16	%		10.20	%

Washington Federal (WAFD) 8-KWashington Federal Reports Net Income of $8.4 Million for its