[WASHINGTON FEDERAL SAVINGSLOGO] [FIRST FEDERAL BANK LOGO]
Washington Federal, Inc. First Federal Banc
425 Pike Street of the Southwest
Seattle, WA 98101 300 N. Pennsylvania
Contact: Cathy Cooper Roswell, NM 88202
(206)777-8246 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.
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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 stockholder's 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.
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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.