Washington Federal Reports Quarterly Net Income Increased 7% to

Washington Federal Reports Quarterly Net Income Increased 7% to $35
SEATTLE, WA -- (Marketwire) -- 01/15/13 --  Washington Federal, Inc.
(NASDAQ: WAFD), parent company of Washington Federal, today announced
earnings of $35,282,000 or $.33 per diluted share for the quarter
ended December 31, 2012, compared to $33,418,000 or $.31 per diluted
share for the same period one year ago, a $1.9 million or 7% increase
per diluted share. The Company's ratio of tangible common equity to
tangible assets ended the quarter at 12.83% and its total risk-based
capital ratio was 26.25%. Both of these ratios continue to be among
the best of large regional financial institutions in the U.S.  
Chairman, President & CEO Roy M. Whitehead commented, "We are pleased
to report another good quarter, helped along by the closing of the
South Valley acquisition. We regard the quarterly earnings as quite
positive in light of low interest rates and the improving, yet still
soft, overall economy." 
During the quarter, the Company completed its acquisition of South
Valley Bank & Trust (South Valley). The acquisition provided $362
million of loans, $122 million of covered loans, $533 million of
transaction deposit accounts and 24 branch locations in Central and
Southern Oregon. Total consideration at closing was $44 million,
including $34 million of Washington Federal stock and $10 million of
cash resulting from the collection of certain earn-out assets. The
total purchase price as a percentage of South Valley's tangible book
value was 67%. Preliminary purchase accounting has provided for a
discount on loans of 5%, a discount on covered loans of 13%, a core
deposit intangible asset of $3 million and goodwill of $9 million.
These amounts are subject to change, based upon the final valuation
which is currently in process.  
Total assets increased by $634 million or 5% to $13.1 billion at
December 31, 2012, from $12.5 billion at September 30, 2012 due to
the acquisition of South Valley. Loans increased by $163 million or
2%. This net increase resulted from the $362 million of acquired
loans partially offset by net runoff of $199 million of the
Washington Federal loan portfolio as the low interest rate
environment caused loan repayments to accelerate. The chart attached
shows the aver
age interest rates for 30 year mortgage loans over the
last ten years.  
Non-performing assets amounted to $264 million or 2.02% of total
assets as of December 31, 2012, a $79 million or 23% decrease from
December 31, 2011. Non-performing assets peaked at $606 million or
5.03% of total assets on June 30, 2009 and have since decreased by
$342 million or 56%. Non-performing loans decreased from $186 million
at December 31, 2011 to $163 million as of December 31, 2012, a 12%
decrease. Total loan delinquencies were 2.89% as of December 31,
2012, a decrease from the 3.13% at December 31, 2011. Compared to
September 30, 2012, total loan delinquencies increased from 2.57% to
2.89%. This increase resulted primarily from the South Valley
acquisition. Delinquencies on single family mortgage loans, the
largest component of the loan portfolio, decreased to 2.79% from
3.17% as of December 31, 2011 and increased by 6 basis points on a
linked quarter basis from 2.73% as of September 30, 2012. The
Company's single family mortgage loan delinquency ratio of 2.79%
remains significantly better than the national average of 11.4%(i).  
Net loan charge-offs decreased from $14 million for the quarter ended
December 31, 2011 to $10 million in the current quarter, a 29%
decrease. Credit costs for the quarter (including REO costs and
provision for loan losses) were $7 million, a decrease from the $22
million for the same quarter one year ago.  
Customer deposits increased $657 million or 8% during the quarter.
The weighted average rate paid on customer deposits during the
quarter was 0.83%, a decrease of 26 basis points from the same
quarter last year, as a result of the low interest rate environment.
The percentage of transaction deposit accounts has increased to 39%
of total deposits. 
During the quarter, the Company had an average balance of $507
million in cash and cash equivalents invested overnight at a yield of
approximately 0.25%. The Company is maintaining higher than normal
amounts of liquidity due to concern about potentially rising interest
rates in the future. The period end spread was 2.83% as of December
31, 2012, a decrease from 3.11% as of December 31, 2011. 
Net interest income for the quarter was $95 million, an $8 million
decrease from the quarter ended December 31, 2011. The net interest
margin was 3.22% for the quarter, compared to 3.28% for the prior
year. The margin was compressed as asset yields declined more than
interest expense.  
The Company's efficiency ratio of 38.2% for the quarter remains among
the lowest in the industry. The quarter produced a return on assets
of 1.11%, and return on equity of 7.41%. 
On December 31, 2012, Washington Federal paid a cash dividend of $.08
per share to common stockholders of record on December 27, 2012. This
was the Company's 120th consecutive quarterly cash dividend. During
the quarter ended December 31, 2012, Washington Federal repurchased
2,696,014 shares at a weighted average price of $16.60. The Company
has an authorization to repurchase up to an additional 3,492,016
The Annual Meeting of Stockholders will be held on Wednesday, January
16, 2013 at 2 p.m. Pacific Time, at the Seattle Sheraton Hotel, at
the corner of 6th and Pike in Downtown Seattle. This is a change of
venue from what was previously communicated.  
About Washington Federal
 Washington Federal, with headquarters in
Seattle, Washington, has 190 offices in eight western states. To find
out more about the Company, please visit our website. The Company
uses its website to distribute financial and other material
information about the Company, which is routinely posted on and
accessible at www.washingtonfederal.com. 
Important Cautionary Statements 
 The foregoing information should be
read in conjunction with the financial statements, notes and other
information contained in the Company's 2012 Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 
This press release contains statements about the Company's future
that are not statements of historical fact. These statements are
"forward looking statements" for purposes of applicable securities
laws, and are based on current information and/or management's good
faith belief as to future e
vents. The words "believe," "expect,"
"anticipate," "project," and similar expressions signify
forward-looking statements. Forward-looking statements should not be
read as a guarantee of future performance. By their nature,
forward-looking statements involve inherent risk and uncertainties,
which change over time; and actual performance could differ
materially from those anticipated by any forward-looking statements.
The Company undertakes no obligation to update or revise any
forward-looking statement.  
(i) OCC Mortgage Metrics Report, 3rd Quarter 2012, which is the most
recent data available 

                 WASHINGTON FEDERAL, INC. AND SUBSIDIARIES                  
                                                December 31,  September 30, 
                                                    2012           2012     
                                               -------------  ------------- 
                                                 (In thousands, except per  
                                                        share data)         
Cash and cash equivalents                      $     637,298  $     751,430 
Available-for-sale securities                      2,003,777      1,781,705 
Held-to-maturity securities                        1,407,246      1,191,487 
Loans receivable, net                              7,614,910      7,451,998 
Covered loans, net                                   380,594        288,376 
Interest receivable                                   47,830         46,857 
Premises and equipment, net                          207,185        178,845 
Real estate held for sale                            101,103         99,478 
Covered real estate held for sale                     36,030         29,549 
FDIC indemnification asset                            90,415         87,571 
FHLB stock                                           153,542        149,840 
Intangible assets, net                               267,389        256,076 
Federal and state income taxes                        26,519         22,513 
Other assets                                         133,004        137,219 
                                               -------------  ------------- 
                                               $  13,106,842  $  12,472,944 
                                               =============  ============= 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Customer accounts                                                           
  Transaction deposit accounts                 $   3,571,987  $   2,946,453 
  Time deposit accounts                            5,662,104      5,630,165 
                                               -------------  ------------- 
                                                   9,234,091      8,576,618 
FHLB advances                                      1,880,000      1,880,000 
Advance payments by borrowers for taxes and                                 
 insurance                                            16,552         40,041 
Accrued expenses and other liabilities                61,521         76,533 
                                               -------------  ------------- 
                                                  11,192,164     10,573,192 
Stockholders' Equity                                                        
Common stock, $1.00 par value, 300,000,000                                  
 shares authorized;131,966,720 and 129,950,223                              
 shares issued; 105,498,098 and 106,177,615                                 
 shares outstanding                                  131,967        129,950 
Paid-in capital                                    1,619,026      1,586,295 
Accumulated other comprehensive income, net of                              
 taxes                                                11,639         13,306 
Treasury stock, at cost; 26,468,622 and                                     
 23,772,608 shares                                  (355,326)      (310,579)
Retained earnings                                    507,372        480,780 
                                               -------------  ------------- 
                                                   1,914,678      1,899,752 
                                               -------------  ------------- 
                                               $  13,106,842  $  12,472,944 
                                               =============  ============= 
CONSOLIDATED FINANCIAL HIGHLIGHTS                                           
Common stockholders' equity per share          $       18.15  $       17.89 
Tangible common stockholders' equity per share         15.61          15.48 
Stockholders' equity to total assets                   14.61%         15.23%
Tangible common stockholders' equity to                                     
 tangible assets                                       12.83          13.45 
Weighted average rates at period end                                        
  Loans and mortgage-backed securities                  4.63%          4.72%
  Combined loans, mortgage-backed securities                                
   and investment securities                            4.09           4.18 
  Customer accounts                                     0.79           0.90 
  Borrowings                                            3.59           3.59 
  Combined cost of customer accounts and                                    
   borrowings                                           1.26           1.38 
  Interest rate spread                                  2.83           2.80 
                 WASHINGTON FEDERAL, INC. AND SUBSIDIARIES                  
                   CONSOLIDATED STATEMENTS OF OPERATIONS                    
                                                Quarter Ended December 31,  
                                                    2012           2011     
                                               -------------  ------------- 
                                                 (In thousands, except per  
                                                        share data)         
INTEREST INCOME                                                             
Loans & covered assets                         $     116,843  $     127,479 
Mortgage-backed securities                            11,732         26,296 
Investment securities and cash equivalents             2,734          2,151 
                                               -------------  ------------- 
                                                     131,309        155,926 
INTEREST EXPENSE                                                            
Customer accounts                                     18,772         23,949 
FHLB advances and other borrowings                    17,103         28,263 
                                               -------------  ------------- 
                                                      35,875         52,212 
                                               -------------  ------------- 
Net interest income                                   95,434        103,714 
Provision for loan losses                              3,600         11,210 
                                               -------------  ------------- 
Net interest income after provision for loan                                
 losses                                               91,834         92,504 
OTHER INCOME                                                                
Other                                                  4,957          4,645 
                                               -------------  ------------- 
                                                       4,957          4,645 
OTHER EXPENSE                                                               
Compensation and benefits                             21,072         18,675 
Occupancy                                              4,446          3,931 
FDIC premiums                                          3,342          4,193 
Other                                                  9,438          7,564 
                                               -------------  ------------- 
                                                      38,298         34,363 
Gain (loss) on real estate acquired through                                 
 foreclosure, net                                     (3,319)       (10,570)
                                               -------------  ------------- 
Income before income taxes                            55,174         52,216 
Income taxes provision                                19,892         18,798 
                                               -------------  ------------- 
NET INCOME                                     $      35,282  $      33,418 
                                               =============  ============= 
PER SHARE DATA                                                              
Basic earnings                                 $         .33  $         .31 
Diluted earnings                                         .33            .31 
Cash Dividends per share                                 .08            .08 
Basic weighted average number of shares                                     
 outstanding                                     105,998,184    107,845,011 
Diluted weighted average number of shares                                   
 outstanding, including dilutive stock options   106,043,914    107,894,572 
PERFORMANCE RATIOS                                                          
Return on average assets                                1.11%           .98%
Return on average common equity                         7.41%          7.02%

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Washington Federal, Inc.
425 Pike Street, Seattle, WA 98101
Cathy Cooper
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