Washington Federal Announces Quarterly Earnings per Share Increase of 12%
Washington Federal, Inc. (Nasdaq: WAFD), parent company of Washington Federal,
today announced earnings of $38,657,000 or $.38 cents per diluted share for
the quarter ended March 31, 2014, compared to $35,978,000 or $.34 cents per
diluted share for the quarter ended March 31, 2013, an increase of 11.8%.
SEATTLE, Wash., April 15, 2014 (GLOBE NEWSWIRE) -- via PRWEB - Washington
Federal, Inc. (Nasdaq:WAFD), parent company of Washington Federal, today
announced earnings of $38,657,000 or $.38 cents per diluted share for the
quarter ended March 31, 2014, compared to $35,978,000 or $.34 cents per
diluted share for the quarter ended March 31, 2013, an increase of 11.8%.
Chairman, President & CEO Roy M. Whitehead commented, "Loan growth, fewer
problem assets, improved deposit mix and increased fee income were important
measures of progress this quarter. We are quite encouraged by evidence of
increasing loan demand, although we expect expenses to remain elevated for a
few quarters due to investments in growth. Costs related to acquired branches
will be managed lower over time as we complete consolidations and refine
operations. Likewise, investments to bring our technology backbone to
state-of-the-art require spending today for future efficiencies. Management
strongly believes that the opportunities to rationalize growth-related
expenses, invest recently acquired cash, and serve 230,000 new clients make
our franchise more valuable."
Net interest income for the quarter was $101 million, an $8 million or 8.2%
increase from the quarter ended March 31, 2013. Net interest income is higher
due to increased investment income and reduced interest expense on customer
accounts, a function of both the improved deposit mix and the continued low
rate environment. Net interest margin was 3.03% for the quarter ended March
31, 2014, down from 3.12% for the prior quarter and 3.10% for the quarter
ended March 31, 2013. The margin declined primarily as a result of increased
cash and investment balances invested at lower yields. Average earning assets
increased $1.3 billion or 10.6% compared to the same quarter of the prior
The provision for loan losses was a reversal of $4 million and zero for the
quarters ended March 31, 2014 and 2013, respectively, as a result of the
improvement in asset quality. The Company maintains an allowance for loan
losses that totals $115 million or 1.40% of total gross loans. This compares
to $117 million or 1.46% of total gross loans as of September 30, 2013.
Net gain on real estate acquired through foreclosure amounted to $1 million
during the quarter, as compared to a net loss of $2 million for the quarter
ended December 31, 2013 and a net loss of $4 million for the quarter ended
March 31, 2013. The Company expects the amount of gain or loss on real estate
acquired to continue to fluctuate in future quarters based primarily on the
timing of sales and the amount, if any, of gains or losses related to those
sales. Net gain or loss on real estate acquired through foreclosure includes
gains and losses on sales, ongoing maintenance expenses and any additional
write-downs from lower valuations.
The Company's efficiency ratio was 48.5% for the quarter and remains among the
best in the industry. Total operating expenses increased by $11 million or
26.5% for the quarter as compared to the same quarter of the prior year,
driven by an increase in employees and branch locations provided by the branch
acquisitions during the prior quarter and the related costs to service the
acquired transaction accounts. Minimum balance fees on the acquired deposit
accounts were waived for three months after the closing of the transaction,
and charges resumed with the February billing cycle. Deposit related service
fees increased by $1.6 million from the prior quarter to $3.5 million for the
quarter ended March 31, 2014. The quarter produced a return on average assets
of 1.07% and a return on average equity of 7.85%.
Total assets increased by $1.3 billion or 10% to $14.4 billion at March 31,
2014 from $13.1 billion at September 30, 2013 due primarily to branch
Available for sale investments increased $750 million or 32% from the prior
year end as a result of investments made with a portion of the proceeds from
the acquisitions. During the quarter, the Company had an average balance of
cash and cash equivalents of $684 million invested overnight at a yield of
Loans receivable grew by $86 million during the quarter or 1.1% to $7.7
billion as of March 31, 2014. The fiscal year increase is $209 million or
2.8%. Loan originations for the quarter totaled $435 million, a $78 million or
22% increase over the same quarter of the prior year. The Company views
organic loan growth as the highest and best use of its capital. The weighted
average interest rate on loans as of March 31, 2014 was 4.86%, which is a
decrease from 5.26% as of the prior year. Actual yield earned on loans will be
greater than the weighted average rate due to net deferred loan fees and
discounts on acquired loans, which are accreted into income over the term of
Total non-performing assets, including real estate owned as a result of
foreclosure, amounted to $175 million or 1.22% of total assets at quarter-end,
a $39 million or 18.2% decrease from September 30, 2013. Non-performing loans
decreased from $131 million at September 30, 2013 to $100 million as of March
31, 2014, a 24.0% decrease. Net loan charge-offs decreased from $4 million in
the quarter ended March 31, 2013 to a net recovery of $2 million in the most
recent quarter. Total loan delinquencies were 1.57% as of March 31, 2014, a
decrease from 1.97% at September 30, 2013. Delinquencies on single family
mortgage loans, the largest component of the loan portfolio, declined during
the fiscal year to 1.89% from 2.21% at September 30, 2013.
During the prior quarter, Washington Federal completed the acquisition of 51
branches from Bank of America in New Mexico and the Pacific Northwest. The
acquired deposits totaled $1.3 billion and loans were $8.3 million. The
Company has grown the deposits acquired since the closing dates. As previously
announced, the Company expects to acquire an additional 23 branches from Bank
of America, representing an estimated $610 million of deposits and $4 million
of loans during the quarter ended June 30, 2014.
Transaction accounts have increased by $1.3 billion or 38% from September 30,
2013 and now represent 47% of total deposits. Over the last several years, the
Company has focused on growing transaction accounts to lessen sensitivity to
rising interest rates.
On April 18, 2014, the Company will pay a cash dividend of $.10 per share to
common stockholders of record on April 4, 2014. This will be the Company's
125th consecutive quarterly cash dividend. During the quarter, the Company has
repurchased 593,300 shares of stock at a weighted average price of $21.63. For
the fiscal year 2014, the Company has repurchased 1,448,200 shares of stock at
a weighted average price of $21.94 and has further authorization to repurchase
an additional 8.0 million shares. The ratio of tangible common equity to
tangible assets was 11.95% as of March 31, 2014.
Washington Federal, a national bank with headquarters in Seattle, Washington,
has 231 branches in eight western states. The bank gathers deposits from the
general public and invests these funds in loans of various types, including
first lien mortgage loans, home equity loans, construction loans, land
acquisition and development loans, multi-family dwelling loans, other income
producing property loans, and business loans. It also invests funds in
government and agency obligations and certain other investments.
To find out more about Washington Federal, please visit our website.
Washington Federal uses its website to distribute financial and other material
information about the Company, which is routinely posted on and accessible at
Important Cautionary Statements
The foregoing information should be read in conjunction with the financial
statements, notes and other information contained in the Company's 2013 Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
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 events.
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.
Washington Federal, Inc.
425 Pike Street, Seattle, WA 98101
Cathy Cooper, SVP Marketing Communications
This article was originally distributed on PRWeb. For the original version
including any supplementary images or video, visit
CONTACT: Washington Federal
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