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Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Thursday, April 17, 2003
FOR IMMEDIATE RELEASE
Washington Federal Reports Record Quarterly Earnings
SEATTLE - Washington Federal, Inc. (Nasdaq: WFSL), parent company of
Washington Federal Savings, today announced earnings of $37,704,000 or
$.54 per diluted share for the quarter ended March 31, 2003, compared
to $35,759,000 or $.51 per diluted share for the same period one year
ago, a 6% per share increase. Earnings of $37,704,000 represent
a quarterly performance record for the Company.
Washington Federal's second fiscal quarter produced a return on
assets of 2.08%, while return on equity amounted to 16.40% for
the quarter. The Company's efficiency ratio was 18.4% for the
quarter. The Company's capital ratio increased to 13.51% as
of March 31, 2003. Each of these measures continues among the
best in the industry.
Chief Executive Officer Roy M. Whitehead commented,
"We are pleased to report record earnings once again this quarter.
Included in net income is a non-recurring pretax gain of $3.4 million
related to the sale of real estate held for investment. Our
overall financial condition remains very strong."
On April 18, 2003, Washington Federal will pay a cash dividend of
$.21 per share to common stockholders of record on April 4, 2003.
This will be the Company's 81st consecutive quarterly cash dividend.
Based on recent market prices, the cash dividend yield is 3.90%.
Washington Federal Savings, with headquarters in Seattle,
Washington, has 115 offices in eight western states.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
March 31, 2003 September 30, 2002
-------------- ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 1,315,305 $ 975,153
Available-for-sale securities, including mortgage-backed
securities of $584,543.......................................... 854,763 918,776
Held-to-maturity securities, including mortgage-backed
securities of $152,678......................................... 166,707 168,925
Securitized assets subject to repurchase, net ..................... 427,620 755,961
Loans receivable, net ............................................. 4,266,413 4,292,003
Interest receivable ............................................... 33,126 39,503
Premises and equipment, net ....................................... 58,668 55,119
Real estate held for sale ......................................... 15,797 17,587
FHLB stock ........................................................ 136,811 132,320
Costs in excess of net assets acquired ............................ 35,703 35,703
Other assets ...................................................... 755 1,391
----------- -----------
$ 7,311,668 $ 7,392,441
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts ................................... $ 4,355,149 $ 4,452,250
Repurchase agreements with customers .......................... 77,199 69,672
----------- -----------
4,432,348 4,521,922
FHLB advances ..................................................... 1,650,000 1,650,000
Other borrowings................................................... 100,000 100,000
Advance payments by borrowers for taxes and insurance ............. 18,555 22,704
Federal and state income taxes .................................... 71,304 84,235
Accrued expenses and other liabilities ............................ 51,492 52,862
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6,323,699 6,431,723
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 100,000,000 shares authorized;
83,992,765 and 83,833,244 shares issued; and 69,580,218
and 69,894,902 shares outstanding ............................ 83,993 76,212
Paid-in capital ................................................... 1,050,682 968,858
Accumulated other comprehensive income, net of taxes .............. 45,000 56,000
Treasury stock, at cost; 14,412,547 and 13,938,342 shares ......... (207,799) (198,279)
Retained earnings ................................................. 16,093 57,927
----------- -----------
987,969 960,718
----------- -----------
$ 7,311,668 $ 7,392,441
=========== ===========
CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 14.20 $ 13.75
Stockholders' equity to total assets .............................. 13.51% 13.00%
Weighted average rates at period end:
Loans and mortgage-backed securities* ........................... 6.94% 7.26%
Investment securities** ......................................... 2.28 2.82
Combined loans, mortgage-backed securities
and investment securities ....................................... 5.84 6.53
Customer accounts ............................................... 2.42 2.94
Borrowings ...................................................... 5.03 5.03
Combined cost of customer accounts and borrowings ............... 3.16 3.52
Interest rate spread ............................................ 2.68 3.01
* Includes securitized assets subject to repurchase
**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 March 31, Six Months Ended March 31,
------------------------- --------------------------
2003 2002 2003 2002
-------- -------- --------- ---------
(In thousands, except per share data)
INTEREST INCOME
Loans and securitized assets subject to repurchase ....... $ 90,207 $102,180 $186,323 $209,132
Mortgage-backed securities ................................. 16,190 18,862 34,405 39,266
Investment securities ...................................... 8,487 6,030 16,782 10,586
-------- -------- -------- --------
114,884 127,072 237,510 258,984
INTEREST EXPENSE
Customer accounts .......................................... 27,615 38,035 58,909 82,522
FHLB advances and other borrowings ......................... 21,950 20,239 44,359 41,109
-------- -------- -------- --------
49,565 58,274 103,268 123,631
-------- -------- -------- --------
NET INTEREST INCOME ........................................ 65,319 68,798 134,242 135,353
Provision for loan losses .................................. 150 2,000 1,400 4,000
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 65,169 66,798 132,842 131,353
OTHER INCOME
Gains on sale of securities, net ........................... - - - 765
Gain on sale of real estate ................................ 3,382 - 3,382 -
OTHER ...................................................... 2,222 1,549 4,415 3,765
-------- -------- -------- --------
5,604 1,549 7,797 4,530
OTHER EXPENSE
Compensation and fringe benefits ........................... 7,742 8,665 15,972 17,253
Occupancy .................................................. 1,294 1,106 2,604 2,293
Other ...................................................... 3,390 3,353 6,060 6,482
-------- -------- -------- --------
12,426 13,124 24,636 26,028
Gain (loss) on real estate acquired through foreclosure, net (113) 5 (441) 25
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES ................................. 58,234 55,228 115,562 109,880
Income taxes ............................................... 20,530 19,469 40,740 38,736
-------- -------- -------- --------
NET INCOME ................................................. $ 37,704 $ 35,759 $ 74,822 $ 71,144
======== ======== ======== ========
PER SHARE DATA
Basic earnings ............................................. $ .54 $ .51 $ 1.08 $ 1.02
Diluted earnings ........................................... .54 .51 1.07 1.01
Cash dividends ............................................. .21 .20 .42 .40
Weighted average number of shares outstanding,
including dilutive stock options ......................... 70,091,224 70,564,418 70,087,717 70,449,933
Return on average assets ................................... 2.08% 2.05% 2.06% 2.05%
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