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Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact: Cathy Cooper
(206) 777-8246
Friday, July 14, 2006
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 $35,337,000 or
$.40 per diluted share for the quarter ended June 30, 2006, compared
to $34,281,000 or $.39 per diluted share for the quarter ended June 30,
2005, a 3.1% increase. For the nine months ended June 30, 2006 earnings
were $107,823,000 or $1.23 per diluted share, compared to $111,500,000
or $1.28 per diluted share for the nine months ended June 30, 2005, a
3.3% decrease.
Chief Executive Officer Roy M. Whitehead commented, "We are very
pleased that the company was able to report an increase in quarterly
profits over the same period last year, despite a fifty-four percent
increase in deposit costs and a softer housing market."
The third fiscal quarter produced a return on assets of 1.63%, while
return on equity amounted to 11.57% for the quarter. Year-to-date,
return on assets measured 1.70% and return on equity was 11.89%.
As announced on June 19, 2006, the Board of Directors of the Company
declared a 2.50% increase in the Company's quarterly cash dividend to
20.5 cents per share from 20 cents per share. The dividend will be
payable today July 14, 2006 to common stockholders of record on June 30,
2006. This will be Washington Federal's 94th consecutive quarterly
cash dividend and represents the 41st increase since Washington Federal
began publicly trading in 1982.
Washington Federal Savings, with headquarters in Seattle, Washington, has
122 offices in seven western states.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
June 30, 2006 September 30, 2005
-------------- ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 65,741 $ 637,791
Available-for-sale securities, including mortgage-backed
securities of $1,189,121 ....................................... 1,423,234 1,077,856
Held-to-maturity securities, including mortgage-backed
securities of $155,251 ......................................... 190,283 212,479
Loans receivable, net ............................................. 6,815,713 6,008,932
Interest receivable ............................................... 39,396 34,048
Premises and equipment, net ....................................... 64,074 63,287
Real estate held for sale ......................................... 4,921 5,631
FHLB stock ........................................................ 129,453 129,453
Intangible assets, net ............................................ 56,491 57,259
Other assets ...................................................... 13,829 7,714
----------- -----------
$ 8,803,135 $ 8,234,450
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts .................................... $ 5,255,882 $ 5,002,172
Repurchase agreements with customers ........................... 28,077 29,333
----------- -----------
5,283,959 5,031,505
FHLB advances ..................................................... 1,500,000 1,230,000
Other borrowings................................................... 700,000 655,000
Advance payments by borrowers for taxes and insurance ............. 17,637 27,533
Federal and state income taxes .................................... 28,655 44,617
Accrued expenses and other liabilities ............................ 53,659 58,487
----------- -----------
7,583,910 7,047,142
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 300,000,000 shares authorized;
104,404,861 and 104,140,966 shares issued; 87,255,600 and
86,933,294 shares outstanding .................................. 104,405 104,141
Paid-in capital ................................................... 1,244,133 1,240,310
Accumulated other comprehensive loss, net of taxes ................ (29,877) (704)
Treasury stock, at cost; 17,149,261 and 17,207,672 shares ......... (205,178) (205,874)
Retained earnings ................................................. 105,742 49,435
----------- -----------
1,219,225 1,187,308
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$ 8,803,135 $ 8,234,450
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CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 13.97 $ 13.66
Stockholders' equity to total assets .............................. 13.85% 14.42%
Weighted average rates at period end
Loans and mortgage-backed securities* ........................... 6.41% 6.19%
Investment securities** ......................................... 4.17 3.74
Combined loans, mortgage-backed securities
and investment securities .................................... 6.30 5.91
Customer accounts ............................................... 3.78 2.94
Borrowings ...................................................... 4.50 4.51
Combined cost of customer accounts and borrowings ............... 3.99 3.37
Interest rate spread ............................................ 2.31 2.54
* 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,
----------------------- --------------------------
2006 2005 2006 2005
-------- -------- --------- ---------
(In thousands, except per share data)
INTEREST INCOME
Loans ...................................................... $ 112,325 $ 94,206 $ 321,004 $ 271,412
Mortgage-backed securities ................................. 17,312 12,244 47,405 48,646
Investment securities and cash equivalents ................. 5,245 7,552 19,694 23,667
-------- -------- -------- --------
134,882 114,002 388,103 343,725
INTEREST EXPENSE
Customer accounts .......................................... 47,236 30,593 127,544 81,107
FHLB advances and other borrowings ......................... 24,040 20,655 67,415 57,850
-------- -------- -------- --------
71,276 51,248 194,959 138,957
-------- -------- -------- --------
NET INTEREST INCOME ........................................ 63,606 62,754 193,144 204,768
Provision for loan losses .................................. 100 (134) 185 (134)
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 63,506 62,888 192,959 204,902
OTHER INCOME
Gain (loss) on securities, net ............................. - (121) - (3,534)
Other ...................................................... 4,002 2,687 10,798 8,948
-------- -------- -------- --------
4,002 2,566 10,798 5,414
OTHER EXPENSE
Compensation and fringe benefits ........................... 9,841 8,694 27,115 25,761
Occupancy .................................................. 2,030 1,912 5,959 6,872
Other ...................................................... 1,925 2,163 6,908 6,077
-------- -------- -------- --------
13,796 12,769 39,982 38,710
Gain on real estate acquired through foreclosure, net ...... 39 464 184 1,263
-------- -------- -------- --------
Income before income taxes ................................. 53,751 53,149 163,959 172,869
Income taxes ............................................... 18,414 18,868 56,136 61,369
-------- -------- -------- --------
NET INCOME ................................................. $ 35,337 $ 34,281 $107,823 $111,500
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PER SHARE DATA
Basic earnings ............................................. $ .41 $ .40 $ 1.24 $ 1.29
Diluted earnings ........................................... .40 .39 1.23 1.28
Cash dividends ............................................. .205 .20 .605 .58
Weighted average number of shares outstanding,
including dilutive stock options ........................ 87,502,860 87,464,631 87,428,766 87,455,443
PERFORMANCE RATIOS
Return on average assets ................................... 1.63% 1.76% 1.70% 1.96%
Return on average stockholders' equity ..................... 11.57% 11.82% 11.89% 12.97%
Net interest margin ........................................ 3.00% 3.32% 3.12% 3.71%
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