SEATTLE, July 16, 2007 (PRIME NEWSWIRE) -- Washington Federal, Inc. (Nasdaq:WFSL), parent company of Washington Federal Savings, today announced earnings of $34,265,000 or $.39 per diluted share for the quarter ended June 30, 2007, compared to $35,337,000 or $.40 per diluted share for the quarter ended June 30, 2006, a 3.0% decrease in earnings. For the nine months ended June 30, 2007 earnings were $101,132,000 or $1.15 per diluted share, compared to $107,823,000 or $1.24 per diluted share for the nine months ended June 30, 2006, a 6.2% decrease in earnings.
The third fiscal quarter produced a return on assets of 1.38%, while return on equity amounted to 10.55% for the quarter. Nonperforming assets totaled $12 million or 0.12% of assets as of June 30, 2007. Delinquent loans remain near historic lows with only 167 loans of 45,205 in the portfolio more than 30 days past due.
Chief Executive Officer Roy M. Whitehead commented, "Earnings compared to the same period one year ago were reduced by higher operating expenses and taxes resulting from the acquisition of First Federal Bank of the Southwest. Relative to the second fiscal quarter though, earnings increased by $782 thousand, the second consecutive quarter of earnings growth. We are also encouraged to note that net interest income increased by $2.8 million over the same quarter last year, attributable in large part to the loans and deposits obtained through the acquisition.
Although charge-offs (including specific reserves) were higher this quarter, asset quality continues to be quite good, despite the persistent weakness in the housing sector."
On July 2, 2007, Washington Federal announced the signing of a definitive merger agreement with First Mutual Bancshares, Inc. ("First Mutual"). The merger agreement calls for the merger of First Mutual with and into the Company, followed by the merger of First Mutual Bank into the Company's wholly owned subsidiary, Washington Federal Savings, in a stock and cash transaction valued at approximately $189.8 million. As of March 31, 2007, First Mutual had $861 million in loans, $772 million in deposits and 12 branch locations located primarily on the eastside of Seattle. The merger is expected to close in the fourth calendar quarter of 2007, pending the receipt of all requisite regulatory approvals and the approval of First Mutual's shareholders. Management of Washington Federal expects the transaction to be accretive to earnings in 2008.
During the quarter, 71,700 shares of stock were repurchased as part of an ongoing share repurchase program. As of June 30, 2007, Washington Federal had an existing authorization to repurchase up to approximately 3 million additional shares.
On June 25, 2007, Washington Federal announced a 2.4% increase in the Company's quarterly cash dividend to 21 cents per share from 20.5 cents per share. The dividend will be payable July 20, 2007 to common stockholders of record on July 6, 2007. This will be the Company's 98th consecutive quarterly cash dividend and represents the 42nd increase in the cash dividend since 1982.
Washington Federal Savings, with headquarters in Seattle, Washington, has 136 offices in eight western states.
The Washington Federal, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3889
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
June 30, September 30,
2007 2006
----------- -----------
(In thousands, except per
share data)
ASSETS
Cash and cash equivalents $ 70,360 $ 45,722
Available-for-sale securities, including
mortgage-backed securities of $1,179,483 1,421,570 1,451,038
Held-to-maturity securities, including
mortgage-backed securities of $135,590 143,709 184,928
Loans receivable, net 7,970,312 7,078,443
Interest receivable 46,042 42,304
Premises and equipment, net 74,420 62,159
Real estate held for sale 6,200 3,903
FHLB stock 132,793 129,453
Intangible assets, net 107,834 56,259
Other assets 12,885 14,811
----------- -----------
$ 9,986,125 $ 9,069,020
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Customer accounts
Savings and demand accounts $ 5,937,080 $ 5,285,708
Repurchase agreements with customers 17,876 26,018
----------- -----------
5,954,956 5,311,726
FHLB advances 1,817,704 1,500,000
Other borrowings 800,163 870,000
Advance payments by borrowers for taxes
and insurance 19,080 29,505
Federal and state income taxes 36,026 39,667
Accrued expenses and other liabilities 62,780 55,402
----------- -----------
8,690,709 7,806,300
Stockholders' equity
Common stock, $1.00 par value, 300,000,000
shares authorized; 104,767,132 and
104,467,245 shares issued; 87,360,751 and
87,338,824 shares outstanding 104,767 104,467
Paid-in capital 1,250,684 1,246,025
Accumulated other comprehensive loss, net
of taxes (18,222) (5,975)
Treasury stock, at cost; 17,406,381 and
17,128,421 shares (211,952) (204,930)
Retained earnings 170,139 123,133
----------- -----------
1,295,416 1,262,720
----------- -----------
$ 9,986,125 $ 9,069,020
=========== ===========
CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share $ 14.83 $ 14.46
Stockholders' equity to total assets 12.97% 13.92%
Weighted average rates at period end
Loans and mortgage-backed securities 6.58% 6.48%
Investment securities* 4.45 4.10
Combined loans, mortgage-backed
securities and investment securities 6.49 6.38
Customer accounts 4.32 4.05
Borrowings 4.50 4.55
Combined cost of customer accounts and
borrowings 4.37 4.20
Interest rate spread 2.12 2.18
* Includes municipal bonds at tax equivalent yields and cash
equivalents
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended Nine Months Ended
June 30, June 30,
----------------------- -----------------------
2007 2006 2007 2006
---- ---- ---- ----
(In thousands, except per share data)
INTEREST INCOME
Loans $ 135,458 $ 112,325 $ 387,929 $ 321,004
Mortgage-backed
securities 18,677 17,312 56,216 47,405
Investment
securities and cash
equivalents 4,485 5,245 11,952 19,694
----------- ----------- ----------- -----------
158,620 134,882 456,097 388,103
INTEREST EXPENSE
Customer accounts 63,712 47,236 178,697 127,544
FHLB advances and
other borrowings 28,489 24,040 83,399 67,415
----------- ----------- ----------- -----------
92,201 71,276 262,096 194,959
----------- ----------- ----------- -----------
Net interest income 66,419 63,606 194,001 193,144
Provision for loan
losses 1,000 100 1,200 185
----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses 65,419 63,506 192,801 192,959
OTHER INCOME
Gain (loss) on
securities, net -- -- 11 --
Other 5,230 4,002 11,644 10,796
----------- ----------- ----------- -----------
5,230 4,002 11,655 10,796
OTHER EXPENSE
Compensation and
fringe benefits 11,577 9,841 31,991 27,115
Occupancy 2,300 2,030 6,454 5,959
Other 3,340 1,925 8,779 6,906
----------- ----------- ----------- -----------
17,217 13,796 47,224 39,980
Gain (loss) on real
estate acquired
through foreclosure,
net (17) 39 139 184
----------- ----------- ----------- -----------
Income before income
taxes 53,415 53,751 157,371 163,959
Income taxes 19,150 18,414 56,239 56,136
----------- ----------- ----------- -----------
NET INCOME $ 34,265 $ 35,337 $ 101,132 $ 107,823
=========== =========== =========== ===========
PER SHARE DATA
Basic earnings $ .39 $ .41 $ 1.16 $ 1.25
Diluted earnings 39 .40 1.15 1.24
Cash dividends .210 .205 .620 .605
Weighted average
number of shares
outstanding, including
dilutive stock
options 87,514,339 87,502,860 87,602,549 87,428,766
PERFORMANCE RATIOS
Return on average
assets 1.38% 1.63% 1.42% 1.70%
Return on average
stockholders' equity 10.55% 11.57% 10.49% 11.89%
Net interest margin 2.77% 3.00% 2.80% 3.12%