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Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Thursday, July 15, 2004
FOR IMMEDIATE RELEASE
Washington Federal's Earnings Strengthen
SEATTLE - Washington Federal, Inc. (Nasdaq: WFSL), parent company of
Washington Federal Savings, today announced earnings of $35,032,000 or
$.44 per diluted share for the quarter ended June 30, 2004, compared
to $32,520,000 or $.41 per diluted share for the quarter ended March 31,
2004, an 8% increase. For the quarter ended June 30, 2003 earnings were
$36,411,000 or $.47 per diluted share.
Washington Federal's capital ratio increased to 15.06% as of June 30,
2004, compared to 13.86% at the same time last year. The Company's
efficiency ratio improved to 16.57% for the quarter. The third fiscal
quarter produced a return on assets of 1.91%, while return on equity
amounted to 12.77% for the quarter.
Chief Executive Officer Roy M. Whitehead commented,"Improved operating
results reflect both record quarterly loan production of $604 million
and the repayment of $250 million in borrowed funds. We are optimistic
that our strong capital position coupled with low operating costs will
allow us to adapt to any change in economic conditions that may occur in
the future."
During the quarter the Company opened its new division headquarters in
Plano, Texas as well as a second branch in Bend, Oregon.
As announced on June 28, 2004, the Board of Directors of the Company
declared a 5.0% increase in the Company's quarterly cash dividend to 21
cents per share from 20 cents per share. The dividend will be payable
July 23, 2004 to common stockholders of record on July 9, 2004. This
will be Washington Federal's 86th consecutive quarterly cash
dividend and represents the 39th increase since Washington Federal began
publicly trading in 1982.
Washington Federal Savings, with headquarters in Seattle,
Washington, has 120 offices in eight western states.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
June 30, 2004 September 30, 2003
------------------ ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 720,959 $ 1,437,208
Securities purchased under agreement to resell .................... 200,000 -
Available-for-sale securities, including mortgage-backed
securities of $545,080 ......................................... 925,136 781,798
Held-to-maturity securities, including mortgage-backed
securities of $127,196 ......................................... 164,278 154,178
Securitized assets subject to repurchase, net ..................... 124,482 210,782
Loans receivable, net ............................................. 4,830,653 4,606,726
Interest receivable ............................................... 31,224 29,489
Premises and equipment, net ....................................... 61,634 60,942
Real estate held for sale ......................................... 9,095 16,204
FHLB stock ........................................................ 146,258 143,851
Intangible assets ................................................. 59,270 60,336
Other assets ...................................................... 11,406 34,461
----------- -----------
$ 7,284,395 $ 7,535,975
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts .................................... $ 4,531,015 $ 4,520,051
Repurchase agreements with customers ........................... 41,484 57,547
----------- -----------
4,572,499 4,577,598
FHLB advances ..................................................... 1,400,000 1,650,000
Other borrowings................................................... 100,000 100,000
Advance payments by borrowers for taxes and insurance ............. 14,595 23,281
Federal and state income taxes .................................... 53,887 70,011
Accrued expenses and other liabilities ............................ 46,681 59,489
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6,187,662 6,480,379
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 100,000,000 shares authorized;
94,316,377 and 94,109,168 shares issued; 78,443,825
and 78,290,836 shares outstanding .............................. 94,316 85,554
Paid-in capital ................................................... 1,159,028 1,085,650
Accumulated other comprehensive income, net of taxes .............. 21,918 34,624
Treasury stock, at cost; 15,872,552 and 15,818,332 shares ......... (208,874) (207,337)
Retained earnings ................................................. 30,345 57,105
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1,096,733 1,055,596
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$ 7,284,395 $ 7,535,975
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CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 13.98 $ 13.48
Stockholders' equity to total assets .............................. 15.06% 14.01%
Weighted average rates at period end
Loans and mortgage-backed securities* ........................... 6.16% 6.40%
Investment securities** ......................................... 2.61 1.98
Combined loans, mortgage-backed securities
and investment securities .................................... 5.44 5.28
Customer accounts ............................................... 1.90 1.96
Borrowings ...................................................... 5.03 5.03
Combined cost of customer accounts and borrowings ............... 2.67 2.81
Interest rate spread ............................................ 2.77 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 June 30, Nine Months Ended June 30,
-------------------------- --------------------------
2004 2003 2004 2003
-------- -------- --------- ---------
(In thousands, except per share data)
INTEREST INCOME
Loans and securitized assets subject to repurchase ........ $ 82,651 $86,028 $247,434 $271,233
Mortgage-backed securities ................................. 11,659 15,355 35,773 49,760
Investment securities and cash equivalents.................. 8,900 8,579 25,367 25,362
-------- -------- -------- --------
103,210 109,962 308,574 346,355
INTEREST EXPENSE
Customer accounts .......................................... 21,101 24,731 63,971 83,641
FHLB advances and other borrowings ......................... 19,939 22,185 64,531 66,543
-------- -------- -------- --------
41,040 46,916 128,502 150,184
-------- -------- -------- --------
NET INTEREST INCOME ........................................ 62,170 63,046 180,072 196,171
Provision (reversal of reserve) for loan losses ............ (231) 100 (231) 1,500
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 62,401 62,946 180,303 194,671
OTHER INCOME
Gains (loss) on sale of securities, net .................... (596) 489 (719) 489
Gain on sale of real estate ................................ - - - 3,382
Other ...................................................... 2,635 2,831 7,423 7,246
-------- -------- -------- --------
2,039 3,320 6,704 11,117
OTHER EXPENSE
Compensation and fringe benefits ........................... 7,860 7,327 23,209 23,299
Occupancy .................................................. 1,429 1,316 4,342 3,919
Other ...................................................... 1,352 1,769 4,972 6,714
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10,641 10,412 32,523 33,932
Gain (loss) on real estate acquired through foreclosure, net 303 162 556 (278)
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Income before income taxes ................................. 54,102 56,016 155,040 171,578
Income taxes ............................................... 19,070 19,605 54,666 60,345
-------- -------- -------- --------
NET INCOME ................................................. $ 35,032 $ 36,411 $100,374 $111,233
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PER SHARE DATA
Basic earnings ............................................. $ .45 $ .48 $ 1.28 $ 1.45
Diluted earnings ........................................... .44 .47 1.27 1.44
Cash dividends ............................................. .21 .20 .61 .58
Weighted average number of shares outstanding,
including dilutive stock options ........................ 79,090,964 77,162,418 79,176,510 77,117,307
Return on average assets ................................... 1.91% 2.00% 1.79% 2.02%
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