UPDATE: J.P. Morgan Lowers PT on Washington Federal Following 1Q13 EPS Report

In a report published Wednesday, J.P. Morgan analyst Steven Alexopoulos reiterated a Neutral rating on Washington Federal

, but slightly lowered the price target from $17.50 to $17.00. In the report, Alexopoulos noted, “WAFD reported core EPS of $0.33 for CY1Q13 (fiscal 2Q), which was a penny shy of our $0.34 estimate and in line with the Street. While the company reported no provision (adding $0.03 to EPS), WAFD missed our estimate on PTPP coming in $0.04 below forecast on a combination of lighter spread revenues (given notable NIM pressure) and higher expenses (includes still lumpy OREO expenses). Aside from OREO expense, which could remain volatile, it appears the credit tailwind is now fully baked into results, with the balance of the year to see continued intense pressure on NII as the company continues to take a long-term view and has been unwilling to add new fixed residential mortgage into portfolio at historically low interest rates. Consequently, loans contracted at a 10% annualized pace, which contributed to NIM declining 12 bps q/q.” Washington Federal closed on Tuesday at $16.08.