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Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Thursday, April 15, 2004
FOR IMMEDIATE RELEASE
Washington Federal Reports 2nd Quarter Earnings
SEATTLE - Washington Federal, Inc. (Nasdaq: WFSL), parent company of
Washington Federal Savings, today announced earnings of $32,520,000 or
$.41 per diluted share for the quarter ended March 31, 2004, compared
to $37,704,000 or $.49 per diluted share for the same period one year
ago, a 13.7% decrease. Decreased earnings from the same quarter one
year ago were attributable to a slowdown in loan prepayments and a one
time pretax gain of $3.4 million on the sale of real estate last year.
Washington Federal's capital ratio increased to 14.48% as of March 31,
2004, compared to 13.51% at the same time last year. The Company's
efficiency ratio increased slightly to 18.14% for the quarter, compared to
17.72% for the same quarter last year. The second fiscal quarter produced
a return on assets of 1.73%, while return on equity amounted to 12.04%
for the quarter.
Chief Executive Officer Roy M. Whitehead commented,"The Company's performance
continues to be quite good, despite our conservative approach to managing
the balance sheet. As a result of loan growth and investment purchases,
our net interest spread improved to 2.55% this quarter, ending six
consecutive quarters of decline. Asset quality remains very high with
nonperforming assets totaling only .33% of total assets. The Company is well
positioned to respond to changing interest rates in the future."
On April 16, 2004, Washington Federal will pay a cash dividend of $.20
per share to common stockholders of record on April 2, 2004. This will
be the Company's 85th consecutive quarterly cash dividend.
Washington Federal Savings, with headquarters in Seattle,
Washington, has 118 offices in eight western states.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
March 31, 2004 September 30, 2003
------------------ ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 1,182,891 $ 1,437,208
Available-for-sale securities, including mortgage-backed
securities of $539,498.......................................... 940,840 781,798
Held-to-maturity securities, including mortgage-backed
securities of $139,234.......................................... 176,317 154,178
Securitized assets subject to repurchase, net ..................... 150,654 210,782
Loans receivable, net ............................................. 4,758,358 4,606,726
Interest receivable ............................................... 30,077 29,489
Premises and equipment, net ....................................... 61,288 60,942
Real estate held for sale ......................................... 13,317 16,204
FHLB stock ........................................................ 147,114 143,851
Intangible assets ................................................. 59,613 60,336
Other assets ...................................................... 22,623 34,461
----------- -----------
$ 7,543,092 $ 7,535,975
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts .................................... $ 4,509,026 $ 4,520,051
Repurchase agreements with customers ........................... 51,720 57,547
----------- -----------
4,560,746 4,577,598
FHLB advances ..................................................... 1,650,000 1,650,000
Other borrowings................................................... 100,000 100,000
Advance payments by borrowers for taxes and insurance ............. 19,514 23,281
Federal and state income taxes .................................... 61,893 70,011
Accrued expenses and other liabilities ............................ 58,599 59,489
----------- -----------
6,450,752 6,480,379
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 100,000,000 shares authorized;
94,286,097 and 94,109,168 shares issued; 78,498,545
and 78,290,836 shares outstanding .............................. 94,286 85,554
Paid-in capital ................................................... 1,158,647 1,085,650
Accumulated other comprehensive income, net of taxes .............. 34,646 34,624
Treasury stock, at cost; 15,787,552 and 15,818,332 shares ......... (206,935) (207,337)
Retained earnings ................................................. 11,696 57,105
----------- -----------
1,092,340 1,055,596
----------- -----------
$ 7,543,092 $ 7,535,975
=========== ===========
CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 13.92 $ 13.48
Stockholders' equity to total assets .............................. 14.48% 14.01%
Weighted average rates at period end
Loans and mortgage-backed securities* ........................... 6.23% 6.40%
Investment securities** ......................................... 2.26 1.98
Combined loans, mortgage-backed securities
and investment securities .................................... 5.30 5.28
Customer accounts ............................................... 1.87 1.96
Borrowings ...................................................... 5.03 5.03
Combined cost of customer accounts and borrowings ............... 2.75 2.81
Interest rate spread ............................................ 2.55 2.47
* 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,
-------------------------- --------------------------
2004 2003 2004 2003
-------- -------- --------- ---------
(In thousands, except per share data)
INTEREST INCOME
Loans and securitized assets subject to repurchase ........ $ 82,388 $89,648 $164,783 $185,205
Mortgage-backed securities ................................. 12,379 16,190 24,113 34,405
Investment securities and cash equivalents.................. 7,915 8,488 16,468 16,783
-------- -------- -------- --------
102,682 114,326 205,364 236,393
INTEREST EXPENSE
Customer accounts .......................................... 21,234 27,615 42,871 58,910
FHLB advances and other borrowings ......................... 22,172 21,950 44,591 44,358
-------- -------- -------- --------
43,406 49,565 87,462 103,268
-------- -------- -------- --------
NET INTEREST INCOME ........................................ 59,276 64,761 117,902 133,125
Provision for loan losses .................................. - 150 - 1,400
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 59,276 64,611 117,902 131,725
OTHER INCOME
Gains (loss) on sale of securities, net .................... (659) - (122) -
Gain on sale of real estate ................................ - 3,382 - 3,382
OTHER ...................................................... 2,602 2,222 4,788 4,415
-------- -------- -------- --------
1,943 5,604 4,666 7,797
OTHER EXPENSE
Compensation and fringe benefits ........................... 7,789 7,742 15,349 15,972
Occupancy .................................................. 1,490 1,294 2,913 2,603
Other ...................................................... 1,824 2,832 3,620 4,945
-------- -------- -------- --------
11,103 11,868 21,882 23,520
Gain (loss) on real estate acquired through foreclosure, net 127 (113) 252 (440)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES ................................. 50,243 58,234 100,938 115,562
Income taxes ............................................... 17,723 20,530 35,596 40,740
-------- -------- -------- --------
NET INCOME ................................................. $ 32,520 $ 37,704 $ 65,342 $ 74,822
======== ======== ======== ========
PER SHARE DATA
Basic earnings ............................................. $ .41 $ .49 $ .83 $ .98
Diluted earnings ........................................... .41 .49 .82 .97
Cash dividends ............................................. .20 .19 .40 .38
Weighted average number of shares outstanding,
including dilutive stock options ........................ 71,301,242 77,100,346 79,211,105 77,096,488
Return on average assets ................................... 1.73% 2.06% 1.73% 2.03%
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