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Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Wednesday, July 16, 2003
FOR IMMEDIATE RELEASE
Washington Federal Reports 3rd Quarter Earnings
SEATTLE - Washington Federal, Inc. (Nasdaq: WFSL), parent company of
Washington Federal Savings, today announced earnings of $36,411,000 or
$.52 per diluted share for the quarter ended June 30, 2003, compared
to $35,883,000 or $.51 per diluted share for the same period one year
ago, a 2% per share increase.
Washington Federal's third fiscal quarter produced a return on
assets of 2.02%, while return on equity amounted to 15.45% for
the quarter. The Company's efficiency ratio improved to 16.47% for
the quarter. The Company's capital ratio increased to 13.86% as
of June 30, 2003. Each of these measures continues among the
best in the industry.
Roy M. Whitehead, Chief Executive Officer, commented, "We are
pleased to report increased quarterly earnings from the same period
one year ago, despite reduced spreads. During the quarter we
continued to strengthen our balance sheet by building capital and
short-term assets. It's noteworthy that the Company's net worth
exceeded $1 billion for the first time."
On July 18, 2003, Washington Federal will pay a cash dividend of
$.22 per share to common stockholders of record on July 7, 2003.
This will be the Company's 82nd consecutive quarterly cash dividend.
Based on recent market prices, the cash dividend yield is 3.62%.
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)
June 30, 2003 September 30, 2002
-------------- ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 1,387,791 $ 975,153
Available-for-sale securities, including mortgage-backed
securities of $461,734.......................................... 754,071 918,776
Held-to-maturity securities, including mortgage-backed
securities of $170,599.......................................... 184,627 168,925
Securitized assets subject to repurchase, net ..................... 305,042 755,961
Loans receivable, net ............................................. 4,332,818 4,292,003
Interest receivable ............................................... 29,103 39,503
Premises and equipment, net ....................................... 59,306 55,119
Real estate held for sale ......................................... 15,337 17,587
FHLB stock ........................................................ 138,602 132,320
Costs in excess of net assets acquired ............................ 35,703 35,703
Other assets ...................................................... 370 1,391
----------- -----------
$ 7,242,770 $ 7,392,441
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts .................................... $ 4,285,458 $ 4,452,250
Repurchase agreements with customers ........................... 69,225 69,672
----------- -----------
4,354,683 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 ............. 12,564 22,704
Federal and state income taxes .................................... 74,050 84,235
Accrued expenses and other liabilities ............................ 47,514 52,862
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6,238,811 6,431,723
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 100,000,000 shares authorized;
84,060,964 and 83,833,244 shares issued; 69,648,417
and 69,894,902 shares outstanding .............................. 84,059 76,212
Paid-in capital ................................................... 1,051,489 968,858
Accumulated other comprehensive income, net of taxes .............. 39,000 56,000
Treasury stock, at cost; 14,412,547 and 13,938,342 shares ......... (207,799) (198,279)
Retained earnings ................................................. 37,210 57,927
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1,003,959 960,718
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$ 7,242,770 $ 7,392,441
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CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 14.42 $ 13.75
Stockholders' equity to total assets .............................. 13.86% 13.00%
Weighted average rates at period end:
Loans and mortgage-backed securities* ........................... 6.68% 7.26%
Investment securities** ......................................... 2.00 2.82
Combined loans, mortgage-backed securities
and investment securities .................................... 5.49 6.53
Customer accounts ............................................... 2.19 2.94
Borrowings ...................................................... 5.03 5.03
Combined cost of customer accounts and borrowings ............... 3.00 3.52
Interest rate spread ............................................ 2.49 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 June 30, Nine Months Ended June 30,
------------------------- --------------------------
2003 2002 2003 2002
-------- -------- --------- ---------
(In thousands, except per share data)
INTEREST INCOME
Loans and securitized assets subject to repurchase ........ $ 86,650 $100,274 $272,972 $309,405
Mortgage-backed securities ................................. 15,355 18,355 49,760 57,621
Investment securities and cash equivalents.................. 8,580 5,506 25,362 16,093
-------- -------- -------- --------
110,585 124,135 348,094 383,119
INTEREST EXPENSE
Customer accounts .......................................... 24,731 35,408 83,640 117,931
FHLB advances and other borrowings ......................... 22,186 20,466 66,544 61,575
-------- -------- -------- --------
46,917 55,874 150,184 179,506
-------- -------- -------- --------
NET INTEREST INCOME ........................................ 63,668 68,261 197,910 203,613
Provision for loan losses .................................. 100 1,500 1,500 5,500
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 63,568 66,761 196,410 198,113
OTHER INCOME
Gains on sale of securities, net ........................... 489 - 489 765
Gain on sale of real estate ................................ - - 3,382 -
OTHER ...................................................... 2,831 1,719 7,246 5,485
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3,320 1,719 11,117 6,250
OTHER EXPENSE
Compensation and fringe benefits ........................... 7,327 8,938 23,299 26,192
Occupancy .................................................. 1,316 1,197 3,920 3,490
Other ...................................................... 2,391 3,010 8,452 9,491
-------- -------- -------- --------
11,034 13,145 35,671 39,173
Gain (loss) on real estate acquired through foreclosure, net 162 83 (278) 108
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES ................................. 56,016 55,418 171,578 165,298
Income taxes ............................................... 19,605 19,535 60,345 58,271
-------- -------- -------- --------
NET INCOME ................................................. $ 36,411 $ 35,883 $111,233 $107,027
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PER SHARE DATA
Basic earnings ............................................. $ .52 $ .51 $ 1.60 $ 1.53
Diluted earnings ........................................... .52 .51 1.59 1.52
Cash dividends ............................................. .22 .21 .64 .61
Weighted average number of shares outstanding,
including dilutive stock options ........................ 70,147,652 70,671,762 70,106,643 70,535,870
Return on average assets ................................... 2.02% 2.04% 2.04% 2.04%
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