Washington Federal Reports EPS $0.31 vs $0.29 Est

Washington Federal, Inc. WFSL today announced earnings of $33,418,000 or $.31 per diluted share, for the quarter ended December 31, 2011, compared to $24,530,000 or $.22 per diluted share, for the same period one year ago. Net income increased by 36% and earnings per share improved by 41%, driven primarily by lower credit costs. Credit related expenses, which include the provision for loan losses and charges related to real estate owned ("REO"), were $21,779,000 for the quarter ended December 31, 2011, a decrease of $14,774,000 or 40%, from the same quarter one year ago. Chairman, President and CEO Roy M. Whitehead commented, "We are very pleased to report the sixth consecutive quarter of improved earnings. Loan losses continued to decline, demand for foreclosed real estate increased noticeably, and improved economic conditions in virtually all of our markets were reported. Loan demand and revenue growth remain elusive, but it's a very good start to our new fiscal year." During the quarter the Company closed two separate acquisitions. On October 14th, $254 million in deposits and six branch locations in New Mexico were acquired from the former Charter Bank. Two of the acquired branches are in Santa Fe and four are located in Albuquerque. On December 16th, the Company entered into a transaction with the FDIC to acquire substantially all of the assets and liabilities of the former Western National Bank ("WNB"), headquartered in Phoenix, Arizona. WNB had gross loans of $143 million, along with $135 million in deposits and three branch locations. The Agreement with the FDIC, which does not include a loss sharing provision, provided the Company with a discount on assets of $53 million and no deposit premium. Final purchase accounting adjustments will be made in the coming quarter, but at this time the Company does not anticipate recording a significant upfront gain or goodwill asset as a result of this transaction. Loans that were classified as non-performing loans by WNB are no longer classified as non-performing because, at acquisition, the carrying value of these loans was adjusted to reflect fair value. Management believes that the new book value reflects an amount that will ultimately be collected. Due to the Company's existing presence in the Phoenix market, it is anticipated that two of the WNB branch locations will be consolidated into nearby Washington Federal branches.
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