Washington Federal, Inc.
425 Pike Street
Seattle, WA 98101
Contact:  Cathy Cooper
(206)777-8246


First Federal Banc of the Southwest
300 N. Pennsylvania
Roswell, NM 88202
Contact:  Aubrey Dunn
(505)622-6201

Tuesday, October 10, 2006

FOR IMMEDIATE RELEASE

WASHINGTON FEDERAL, INC. TO ACQUIRE FIRST FEDERAL BANC OF THE SOUTHWEST, INC.


SEATTLE - Washington Federal, Inc. (the "Company" or "Washington Federal")
(NASDAQ: WFSL) and First Federal Banc of the Southwest, Inc. ("First Federal")
(NASDAQ: FFSW) announced today the signing of a definitive merger agreement.
The merger agreement calls for the merger of First Federal with and into the
Company, followed by the merger of First Federal Bank into the Company's wholly
owned subsidiary, Washington Federal Savings.  After the consummation of the
merger, the Company will have 138 offices in eight western states with total
assets of approximately $9.4 billion and total deposits of approximately $5.7
billion.

Under the terms of the merger agreement, shareholders of First Federal will
receive $24.14 in cash for each share of First Federal common stock they own.
The aggregate consideration to be paid in connection with the merger is $99.0
million for the shares of common stock and vested employee stock options
outstanding immediately prior to the effective time of the merger.  The merger
is expected to close in the first calendar quarter of 2007, pending the receipt
of all requisite regulatory approvals and the approval of First Federal's
shareholders.

Roy M. Whitehead, Chairman, President and Chief Executive Officer of Washington
Federal commented, "We are very pleased to be able to enter the growing New
Mexico market through a merger with this fine organization. All existing First
Federal branches will continue to operate as usual and we warmly and
enthusiastically welcome their employees and customers to the Company. We
anticipate this acquisition will be accretive to earnings in 2007 with
additional earnings growth through the coming years."

First Federal President and Chief Executive Officer Aubrey L. Dunn stated "Our
merger with Washington Federal creates an excellent opportunity for the
shareholders, customers and employees of First Federal.  Our customers will
benefit from the financial strength and personal approach to service that
Washington Federal offers.  Together, we will also be able to offer greater
lending capacity to our borrowers.  Likewise, employees will have greater
career opportunities in a larger, more geographically diverse company.  We are
very proud to join a company with a strong reputation for integrity and a
lengthy track record of outstanding financial performance."

First Federal, headquartered in Roswell, New Mexico, had total assets of $562
million, total deposits of $392 million and total stockholders' equity of $53
million as of June 30, 2006.  Baxter Fentriss and Company served as financial
adviser to First Federal on this transaction.

As of June 30, 2006, Washington Federal had $8.8 billion in assets, $5.3
billion in deposits and $1.2 billion in stockholders' equity.

Forward Looking Statements
This press release may contain forward-looking statements regarding Washington
Federal, First Federal, and the proposed merger.  These statements involve
certain risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements.  Such risks and
uncertainties include, but are not limited to, the following factors:
governmental approval of the merger may not be obtained or adverse regulatory
conditions may be imposed in connection with governmental approvals of the
merger; and the shareholders of First Federal may fail to approve the
consummation of the merger.  Washington Federal and First Federal undertake
no obligation to revise or publicly release any revision or update to these
forward-looking statements to reflect events or circumstances that occur after
the date on which such statements were made.

Notice to First Federal Shareholders
First Federal intends to file a proxy statement in connection with the
proposed merger.  First Federal shareholders should read the proxy statement
and other relevant materials when they become available, because they will
contain important information about First Federal and the proposed merger.
In addition to the documents described above, First Federal files annual,
quarterly, and current reports, proxy statements, and other information with
the U.S. Securities and Exchange Commission (the "SEC").  The proxy statement
and other relevant materials (when they become available), and any other
documents filed with the SEC by First Federal are available without charge at
the SEC's website, at www.sec.gov.

First Federal and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from First Federal shareholders
in connection with the proposed merger.  A description of certain interests
of the directors and executive officers of First Federal is set forth in
the First Federal proxy statement for its 2006 annual meeting which was
filed with the SEC on January 27, 2006.  Additional information regarding
the interests of such potential participants will be included in the
definitive proxy statement and other relevant documents to be filed with
the SEC in connection with the proposed merger.