Market Overview

Washington Federal Announces Record Quarterly Earnings

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Washington Federal, Inc. (NASDAQ:WAFD) (the "Company"), parent company
of Washington Federal, National Association, today announced quarterly
earnings of $51,670,000 or $0.59 per diluted share for the quarter ended
December 31, 2017 compared to $41,246,000 or $0.46 per diluted share for
the quarter ended December 31, 2016, a $0.13 or 28% increase in fully
diluted earnings per share. Return on equity for the quarter ended
December 31, 2017 was 10.25% compared to 8.31% for the quarter ended
December 31, 2016. Return on assets for the quarter ended December 31,
2017 was 1.35% compared to 1.11% for the same quarter in the prior year.

During the quarter, the Company had two unusual events occur that
impacted our financial results. First, as a result of the new tax
legislation commonly known as the Tax Cuts and Jobs Act (the "Act"), tax
expense for the quarter was $9.0 million. Excluding the effects of the
Act, tax expense for the quarter would have been $18.0 million, or
higher by $9.0 million. Second, during the quarter the Company made the
decision to pursue termination of its loss share agreements with the
FDIC related to two acquisitions, one in 2010 and one in 2012. Because
of this decision, a charge of $8.6 million was recorded in this
quarter's results. Additional information on both of these items is
included in the paragraphs below.

President and Chief Executive Officer Brent J. Beardall commented, "As a
result of the changes in the tax law there are several unusual items in
this quarter's results. Looking beyond those items, we are particularly
pleased with the continued improvement in our core banking operations.
Excluding the FDIC charge, this quarter produced a record $69.2 million
of pre-tax income. As we have previously announced, the tax law reduces
the advantage of credit unions and other non-tax paying competitors. It
also allows the Company to further boost investments in its people,
technology and communities while continuing to perform well for our
shareholders. Challenges remain as we make improvements to our client
facing systems and enhance our Bank Secrecy Act Program, but we are
excited about the momentum we have and future opportunities."

Total assets were $15.6 billion as of December 31, 2017 compared to
$15.3 billion as of September 30, 2017. Asset growth since September 30,
2017 resulted primarily from a $224 million increase in net loans
receivable and a $119 million increase in held-to-maturity securities.

Customer deposits increased by $167 million or 1.5% since September 30,
2017 and totaled $11.0 billion as of December 31, 2017. Transaction
accounts increased by $121 million or 1.9% during that period, while
time deposits increased $45 million or 1.0%. The mix of customer
deposits has continued to shift over the last several years as the
Company focuses on growing transaction accounts to lessen sensitivity to
rising interest rates and reduce interest expense. As of December 31,
2017, 58.9% of the Company's deposits were in transaction accounts. Core
deposits, defined as all transaction accounts and time deposits less
than $250,000, totaled 94.0% of deposits at December 31, 2017.

Borrowings from the Federal Home Loan Bank ("FHLB") totaled $2.4 billion
as of December 31, 2017 and $2.2 billion at September 30, 2017. The
weighted average rate for FHLB borrowings was 2.56% as of December 31,
2017 and 2.80% at September 30, 2017, the decline being due to the
maturity of some long-term FHLB advances.

Loan originations totaled $954 million for our first fiscal quarter 2018
compared to $1.2 billion of originations in the same quarter one year
ago. Partially offsetting loan originations in each of these respective
quarters were loan repayments of $860 million and $896 million.
Commercial loans represented 70% of all loan originations during our
first fiscal quarter 2018 with consumer loans accounting for the
remaining 30%. The Company views organic loan growth as the highest and
best use of its capital and prefers commercial loans in this low rate
environment due to the fact they generally have floating interest rates
and shorter durations. The weighted average interest rate on loans was
4.30% as of December 31, 2017, an increase from 4.28% as of
September 30, 2017.

Asset quality remained strong and the ratio of non-performing assets to
total assets improved to 0.41% as of December 31, 2017 compared to 0.56%
at December 31, 2016 and 0.46% at September 30, 2017. Since
September 30, 2017, real estate owned decreased by $3 million, or 13%,
and non-accrual loans decreased by $4 million, or 8%. Delinquent loans
were 0.43% of total loans at December 31, 2017 compared to 0.74% at
December 31, 2016 and 0.40% at September 30, 2017. The allowance for
loan losses and reserve for unfunded commitments totaled $134 million as
of December 31, 2017 and was 1.08% of gross loans outstanding, as
compared to $131 million or 1.07% of gross loans outstanding at
September 30, 2017. The slight increase in the ratio of the total
allowance and reserve to gross loans since the Company's fiscal year end
reflects continued improvement in credit conditions offset by the
continued shift in the loan portfolio mix to include a greater
proportion of commercial loans outstanding, which generally require a
higher level of reserves.

On November 20, 2017, the Company paid a regular cash dividend of $0.15
per share, which represented the 139th consecutive quarterly cash
dividend. During the quarter, the Company repurchased 1,147,370 shares
of common stock at a weighted average price of $33.98 per share and has
authorization to repurchase approximately 754 thousand additional
shares. The Company varies the pace of share repurchases depending on
several factors, including share price, lending opportunities and
capital levels. Since September 30, 2017, tangible common stockholders'
equity per share increased by $0.09 or 0.5% to $19.67 and the ratio of
tangible common equity to tangible assets remained strong at 11.12% as
of December 31, 2017.

Net interest income was $116 million for the quarter, an increase of
$12.6 million or 12.2% from the same quarter in the prior year. The
increase in net interest income from the prior year was primarily due to
both higher balances and yield. Average earning assets increased by $513
million, or 3.8%. Net interest margin increased to 3.26% in the first
fiscal quarter of 2018 from 3.02% for the same quarter in the prior
year. The margin increase is primarily due to changes in the mix of
interest earning assets, including higher yields on variable rate loans,
cash and investments, as well as a lower rate on FHLB advances due to
the maturity of some higher cost long-term advances.

The Company did not record any provision for loan losses in the first
fiscal quarter of 2018 or 2017 as net recoveries and improvement in
credit conditions were offset by strong growth in the loan portfolio.
Net recoveries were $3.1 million for the first fiscal quarter of 2018
compared to $5.3 million for the prior year's quarter.

Total other income was $6.8 million for the first fiscal quarter of
2018, a decrease of $5.1 million from $11.9 million in the same quarter
of the prior year. The decrease from the prior year was primarily due to
$8.6 million of expense from asset and liability valuation adjustments
associated with FDIC loss share agreements. The Company is actively
pursuing the early termination of all FDIC loss share agreements. The
impact of these valuation adjustments was partially offset by a $2.4
million gain recognized on bank-owned life insurance and a $1.5 million
increase in deposit fee income, which was driven by the 2017 launch of
the Company's new "Green Checking" product.

Total operating expenses were $61.9 million in the first fiscal quarter
of 2018, an increase of $7.6 million or 14.0% from the prior year's
quarter. Compensation and benefits costs increased by $2.6 million
primarily due to headcount increases and cost of living adjustments
since last year. Information technology costs increased by $1.5 million
and other expenses were elevated due to consulting and audit work to
enhance the Company's Bank Secrecy Act Program. Charitable contributions
increased by $1 million from the prior year's quarter as the Company
fulfilled the first year of its previously announced commitment to fund
its foundation by $1 million annually for the next five years. The
Company's efficiency ratio in the first fiscal quarter 2018 was 47.3%
(excluding the impact of $8.6 million reduction to noninterest income
from the FDIC loss share valuation adjustments) compared to 48.7% for
the quarter ended September 30, 2017 and 47.2% for the same period one
year ago.

On December 22, 2017, the Tax Cuts and Jobs Act was enacted and it
provides for significant changes to the U.S. Internal Revenue Code of
1986, as amended, such as a reduction in the federal corporate tax rate
from 35% to 21% effective from January 1, 2018 forward and changes or
limitations to certain tax deductions. The Company has a fiscal year end
of September 30, so the change to the corporate tax rate resulted in a
blended federal statutory tax rate for its fiscal year 2018. The
financial statements for the first fiscal quarter 2018 were also
impacted by a one-time revaluation of the Company's deferred tax assets
and liabilities and this was recognized as a discrete income tax benefit
in the period. For the quarter ended December 31, 2017, the Company
recorded federal and state income tax expense of $9.0 million, which
equates to a 14.79% effective tax rate. This compares to an effective
tax rate of 32.27% for the fiscal year ended September 30, 2017. The
Company estimates that its annual effective tax rate for fiscal 2018
(blended rate year) will be approximately 22-23%. The effective tax rate
for the current quarter was lower than the new 2018 statutory rate due
to discrete tax benefits of $4 million recognized related to the
revaluation of deferred tax assets and liabilities expected to be
utilized in 2018 as well as tax benefits related to stock based
compensation. Looking forward, the Company expects the effective tax
rate for fiscal 2019 to be approximately 19.5-20.5%.

Washington Federal, a national bank with headquarters in Seattle,
Washington, has 237 branches in eight western states. To find out more
about Washington Federal, please visit our website www.washingtonfederal.com.
Washington Federal uses its website to distribute financial and other
material information about the Company.

Non-GAAP Financial Measures

Adjusted pre-tax income of $69.2 million for the quarter ended
December 31, 2017 is calculated by adding back the FDIC loss share
valuation adjustments of $8.6 million to pre-tax income of $60.6 million.

Adjusted non-interest income of $15.3 million for the quarter ended
December 31, 2017 is calculated by adding back the FDIC loss share
valuation adjustments of $8.6 million to non-interest income of $6.8
million.

Adjusted efficiency ratio of 47.3% for the quarter ended December 31,
2017 is calculated by dividing non-interest expense of $61.9 million by
adjusted total income of $131.1 million (net interest income of $115.7
million plus adjusted non-interest income of $15.3 million).

Important Cautionary Statements

The foregoing information should be read in conjunction with the
financial statements, notes and other information contained in the
Company's 2017 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 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. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

 

 

      December 31, 2017     September 30, 2017
(In thousands, except share data)
ASSETS
Cash and cash equivalents $ 309,713 $ 313,070
Available-for-sale securities, at fair value 1,245,855 1,266,209
Held-to-maturity securities, at amortized cost 1,765,886 1,646,856
Loans receivable, net of allowance for loan losses of $127,155
and $123,073
11,107,042 10,882,622
Interest receivable 42,146 41,643
Premises and equipment, net 264,643 263,694
Real estate owned 17,928 20,658
FHLB and FRB stock 130,590 122,990
Bank owned life insurance 211,833 211,330
Intangible assets, including goodwill of $300,288 and $293,153 310,578 298,682
Other assets   177,799     185,826  
$ 15,584,013   $ 15,253,580  
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Customer accounts
Transaction deposit accounts $ 6,482,612 $ 6,361,158
Time deposit accounts   4,518,967     4,473,850  
11,001,579 10,835,008
FHLB advances 2,415,000 2,225,000
Advance payments by borrowers for taxes and insurance 23,924 56,631
Accrued expenses and other liabilities   133,892     131,253  
13,574,395 13,247,892
Stockholders' equity
Common stock, $1.00 par value, 300,000,000 shares authorized; 135,274,618
and 134,957,511 shares issued; 86,363,099 and 87,193,362
shares outstanding
135,275 134,958
Paid-in capital 1,661,866 1,660,885
Accumulated other comprehensive (loss) income, net of taxes 8,004 5,015
Treasury stock, at cost; 48,911,519 and 47,764,149 shares (877,044 ) (838,060 )
Retained earnings   1,081,517     1,042,890  
  2,009,618     2,005,688  
$ 15,584,013   $ 15,253,580  
CONSOLIDATED FINANCIAL HIGHLIGHTS
Common stockholders' equity per share $ 23.27 $ 23.00
Tangible common stockholders' equity per share $ 19.67 $ 19.58
Stockholders' equity to total assets 12.90 % 13.15 %
Tangible common stockholders' equity to tangible assets 11.12 % 11.41 %
 
Weighted average rates at period end
Loans and mortgage-backed securities 3.99 % 3.96 %
Combined loans, mortgage-backed securities and investments 3.85 3.82
Customer accounts 0.57 0.54
Borrowings 2.56 2.80
Combined cost of customer accounts and borrowings 0.93 0.92
Net interest spread 2.92 2.90
 
 
WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 
      Three Months Ended December 31,
2017     2016
(In thousands, except share data)
INTEREST INCOME
Loans receivable $ 124,511 $ 114,835
Mortgage-backed securities 16,899 12,789
Investment securities and cash equivalents   4,370     5,140  
145,780 132,764
INTEREST EXPENSE
Customer accounts 14,638 13,017
FHLB advances and other borrowings   15,407     16,595  
30,045 29,612
Net interest income 115,735 103,152
Provision (release) for loan losses        
Net interest income after provision (release) for loan losses 115,735 103,152
 
OTHER INCOME
Gain on sale of investment securities 968
FDIC loss share valuation adjustments (8,550 )
Loan fee income 1,035 1,334
Deposit fee income 6,686 5,185
Other Income   7,624     4,409  
6,795 11,896
OTHER EXPENSE
Compensation and benefits 29,619 26,994
Occupancy 8,671 8,450
FDIC insurance premiums 2,820 2,839
Product delivery 3,956 3,361
Information technology 7,929 6,451
Other   8,946     6,246  
61,941 54,341
Gain (loss) on real estate owned, net   46     398  
Income before income taxes 60,635 61,105
Income tax provision   8,965     19,859  
NET INCOME $ 51,670   $ 41,246  
 
PER SHARE DATA
Basic earnings per share $ 0.59 $ 0.46
Diluted earnings per share 0.59 0.46
Cash dividends per share 0.15 0.14
Basic weighted average shares outstanding 86,938,095 89,310,958
Diluted weighted average shares outstanding 87,082,499 89,731,024
 
PERFORMANCE RATIOS
Return on average assets 1.35 % 1.11 %
Return on average common equity 10.25 8.31
Net interest margin 3.26 3.02
Efficiency ratio (a) 47.25 47.23
 
(a) Efficiency ratio for the quarter ended December 31, 2017
excludes the impact of $8.6 million reduction to other income
related to FDIC loss share valuation adjustments.
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
($ in Thousands)
                         
As of 06/17 As of 09/17 As of 12/17
Loan Loss Reserve - Total $ 128,779 $ 130,823 $ 133,905
General and Specific Allowance 122,229 123,073 127,155
Commitments Reserve 6,550 7,750 6,750
Allowance and Reserve as a % of Gross Loans 1.08 % 1.07 % 1.08 %
 
06/17 QTR 06/17 YTD 09/17 QTR 09/17 YTD 12/17 QTR 12/17 YTD
Loan Originations - Total $ 1,030,996 $ 3,216,125 $ 1,022,853 $ 4,238,978 $ 953,552 $ 953,552
Single-Family Residential 181,721 567,509 189,607 757,116 158,086 158,086
Construction 268,027 774,048 307,416 1,081,464 279,833 279,833
Construction - Custom 129,077 372,678 157,757 530,435 99,720 99,720
Land - Acquisition & Development 21,559 48,124 31,752 79,876 24,449 24,449
Land - Consumer Lot Loans 10,200 27,423 11,728 39,151 9,279 9,279
Multi-Family 43,716 248,954 50,405 299,359 87,586 87,586
Commercial Real Estate 97,962 340,009 103,678 443,687 64,149 64,149
Commercial & Industrial 258,310 779,910 151,930 931,840 212,064 212,064
HELOC 19,310 54,922 17,991 72,913 17,651 17,651
Consumer 1,114 2,548 589 3,137 735 735
 
Purchased Loans (including acquisitions) $ $ 72,856 $ $ 72,856 $ 143,605 $ 143,605
 
Net Loan Fee and Discount Accretion $ 2,348 $ 14,874 $ 4,181 $ 19,055 $ 3,509 $ 3,509
 

Repayments

Loans $ 793,432 $ 2,400,232 $ 699,619 $ 3,099,851 $ 859,583 $ 859,583
MBS 151,218 426,287 96,156 522,443 92,808 92,808
 
MBS Premium Amortization $ 2,620 $ 10,651 $ 2,929 $ 13,580 $ 2,206 $ 2,206
 

Efficiency

Operating Expenses/Average Assets 1.52 % 1.51 % 1.66 % 1.55 % 1.62 % 1.62 %
Efficiency Ratio (%) (a) 46.57 % 47.51 % 48.68 % 47.82 % 47.25 % 47.25 %
Amortization of Intangibles $ 375 $ 1,294 $ 2,053 $ 3,347 $ 705 $ 705
(a) Efficiency ratio for the quarter ended December 31, 2017
excludes the impact of $8.6 million reduction to noninterest income
related to FDIC loss share valuation adjustments.
 

EOP Numbers

Shares Issued and Outstanding 88,750,133 87,193,362 86,363,099
 

Share repurchase information

Remaining shares authorized for repurchase (b) 3,468,854 1,900,955 753,585
Shares repurchased 811,034 1,569,279 1,567,899 3,137,178 1,147,370 1,147,370
Average share repurchase price $ 32.14 $ 29.61 $ 33.10 $ 31.36 $ 33.98 $ 33.98

(b) Remaining shares authorized for repurchase reflects a
reduction related to TARP warrants repurchased for cash to date.

 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
($ in Thousands)
 

Tangible Common Book Value

      As of 06/17         As of 09/17         As of 12/17    
$ Amount $ 1,725,491 $ 1,707,006 $ 1,699,040
Per Share 19.44 19.58 19.67
 
# of Employees 1,815 1,818 1,829

Investments

Available-for-sale:

Agency MBS

$ 809,702 $ 842,688 $ 839,855
Other   460,712   423,521   406,000
$ 1,270,414 $ 1,266,209 $ 1,245,855
Held-to-maturity:
Agency MBS $ 1,651,528 $ 1,646,856 $ 1,765,886
$ 1,651,528 $ 1,646,856 $ 1,765,886
 
As of 06/17       As of 09/17       As of 12/17      

Loans Receivable by Category

AMOUNT % AMOUNT % AMOUNT %
Single-Family Residential $ 5,687,850 47.9 % $ 5,711,004 46.8 % $ 5,693,318 45.7 %
Construction 1,436,874 12.1 1,597,996 13.1 1,710,418 13.7
Construction - Custom 561,260 4.7 602,631 4.9 583,580 4.7
Land - Acquisition & Development 119,524 1.0 124,308 1.0 136,938 1.1
Land - Consumer Lot Loans 101,626 0.9 104,405 0.9 105,086 0.8
Multi-Family 1,263,187 10.6 1,303,148 10.7 1,312,695 10.5
Commercial Real Estate 1,346,006 11.3 1,434,610 11.8 1,436,508 11.5
Commercial & Industrial 1,116,860 9.4 1,093,360 9.0 1,120,707 9.0
HELOC 148,584 1.3 144,850 1.2 136,995 1.1
Consumer   95,775 0.8     85,075 0.7     219,971 1.8  
  11,877,546 100 %   12,201,387 100 %   12,456,216 100 %
Less:
ALL 122,229 123,073 127,155
Loans in Process 1,054,513 1,149,934 1,175,642
Net Deferred Fees, Costs and Discounts   46,379   45,758   46,377
Sub-Total   1,223,121   1,318,765   1,349,174
$ 10,654,425 $ 10,882,622 $ 11,107,042
 

Net Loan Portfolio by Category

AMOUNT % AMOUNT % AMOUNT %
Single-Family Residential $ 5,628,508 52.8 % $ 5,652,365 51.9 % $ 5,636,013 50.7 %
Construction 656,287 6.2 763,742 7.0 820,969 7.4
Construction - Custom 265,722 2.5 273,520 2.5 288,162 2.6
Land - Acquisition & Development 103,414 1.0 97,587 0.9 104,426 0.9
Land - Consumer Lot Loans 98,592 0.9 101,265 0.9 101,666 0.9
Multi-Family 1,250,730 11.7 1,290,640 11.9 1,300,179 11.7
Commercial Real Estate 1,327,530 12.5 1,416,188 13.0 1,418,364 12.8
Commercial & Industrial 1,082,486 10.2 1,060,304 9.7 1,086,533 9.8
HELOC 147,012 1.4 143,381 1.3 135,623 1.2
Consumer   94,144 0.9     83,630 0.8     215,107 1.9  
$ 10,654,425 100 % $ 10,882,622 100 % $ 11,107,042 100 %
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
($ in Thousands)
 
      As of 06/30/17         As of 09/30/17         As of 12/31/17    

Deposits by State

AMOUNT     % # AMOUNT     % # AMOUNT     % #
Washington $ 5,199,590 48.9 % 81 $ 5,383,764 49.7 % 81 $ 5,605,233 50.9 % 81
Idaho 768,049 7.2 24 786,974 7.3 24 771,350 7.0 24
Oregon 1,939,619 18.2 47 1,964,490 18.1 47 1,947,171 17.7 47
Utah 270,224 2.5 10 267,717 2.5 10 263,405 2.4 10
Nevada 328,121 3.1 11 326,436 3.0 11 331,423 3.0 11
Texas 96,264 0.9 5 97,670 0.9 6 97,108 0.9 6
Arizona 1,177,997 11.1 31 1,164,743 10.7 31 1,155,381 10.5 31
New Mexico   854,414   8.0   27   843,214   7.8   27   830,508   7.5   27
Total $ 10,634,278   100 % 236 $ 10,835,008   100 % 237 $ 11,001,579   100 % 237
 

Deposits by Type

AMOUNT % AMOUNT % AMOUNT %
Checking (non-interest) $ 1,195,152 11.2 % $ 1,258,274 11.6 % $ 1,299,602 11.8 %
NOW (interest) 1,703,994 16.0 1,760,821 16.3 1,848,594 16.8
Savings 871,257 8.2 888,881 8.2 894,879 8.1
Money Market 2,433,547 22.9 2,453,182 22.6 2,439,537 22.2
Time Deposits   4,430,328   41.7     4,473,850   41.3     4,518,967   41.1  
Total $ 10,634,278   100 % $ 10,835,008   100 % $ 11,001,579   100 %
 
Deposits greater than $250,000 - EOP $ 2,524,536 $ 2,674,914 $ 2,857,838
 

Time Deposit Repricing

Amount Rate Amount Rate Amount Rate
Within 3 months $ 879,213 0.65 % $ 668,177 0.65 % $ 730,975 0.74 %
From 4 to 6 months 649,962 0.67 % 714,935 0.76 % 871,822 0.83 %
From 7 to 9 months 450,756 0.83 % 653,760 0.85 % 525,594 0.98 %
From 10 to 12 months 625,472 0.87 % 471,057 0.98 % 677,959 1.08 %
 

Non-Performing Assets

AMOUNT % AMOUNT % AMOUNT %
Non-accrual loans:
Single-Family Residential $ 32,613 57.8 % $ 27,930 56.3 % $ 26,219 57.6 %
Construction 364 0.8
Construction - Custom 536 1.0 91 0.2
Land - Acquisition & Development 71 0.1 296 0.6 1,326 2.9
Land - Consumer Lot Loans 1,066 1.9 605 1.2 976 2.1
Multi-Family 682 1.2 139 0.3 250 0.5
Commercial Real Estate 12,983 23.0 11,815 23.8 8,241 18.1
Commercial & Industrial 8,254 14.6 8,082 16.3 7,596 16.7
HELOC 181 0.3 531 1.1 476 1.0
Consumer   22       91   0.2     72   0.2  
Total non-accrual loans 56,408 100 % 49,580 100 % 45,520 100 %
Real Estate Owned   19,112     20,658     17,928  
Total non-performing assets $ 75,520   $ 70,238   $ 63,448  
 
Non-accrual loans as % of total net loans 0.53 % 0.46 % 0.41 %
Non-performing assets as % of total assets 0.50 % 0.46 % 0.41 %
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
($ in Thousands)
     
As of 06/30/17     As of 09/30/17     As of 12/31/17
AMOUNT     % AMOUNT     % AMOUNT     %

Restructured loans:

Single-Family Residential $ 196,575 87.9 % $ 181,941 87.7 % $ 170,601 85.7 %
Construction
Construction - Custom
Land - Acquisition & Development 190 0.1 90
Land - Consumer Lot Loans 8,878 4.0 7,949 3.8 7,405 3.7
Multi-Family 497 0.2 493 0.2 480 0.2
Commercial Real Estate 15,907 7.1 15,079 7.3 11,910 6.0
Commercial & Industrial 7,256 3.6
HELOC 1,409 0.6 1,728 0.8 1,432 0.7
Consumer   102       97       91    
Total restructured loans $ 223,558   100 % $ 207,377   100 % $ 199,175   100 %
 

Restructured loans were as follows:

Performing $ 215,178 96.3 % $ 202,272 97.5 % $ 194,359 97.6 %
Non-performing (c)   8,380   3.7     5,105   2.5     4,816   2.4  
Total restructured loans $ 223,558   100 % $ 207,377   100 % $ 199,175   100 %
(c) Included in "Total non-accrual loans" above
 
AMOUNT

CO %
(d)

AMOUNT

CO %
(d)

AMOUNT

CO %
(d)

Net Charge-offs (Recoveries) by Category

Single-Family Residential $ 186 0.01 % $ 267 0.02 % $ 340 0.02 %
Construction
Construction - Custom 13 0.01 50 0.03
Land - Acquisition & Development (863 ) (2.89 ) (1,729 ) (5.56 ) (3,372 ) (9.85 )
Land - Consumer Lot Loans (118 ) (0.46 ) (113 ) (0.43 ) 47 0.18
Multi-Family
Commercial Real Estate (164 ) (0.05 )
Commercial & Industrial (154 ) (0.06 ) (727 ) (0.27 ) 61 0.02
HELOC (1 ) (19 ) (0.05 )
Consumer   (138 ) (0.58 )   (236 ) (1.11 )   (208 ) (0.38 )
Total net charge-offs (recoveries) $ (1,252 ) (0.04 )% $ (2,544 ) (0.08 )% $ (3,082 ) (0.10 )%
(d) Annualized Net Charge-offs (recoveries) divided by Gross Balance
 

Interest Rate Risk

One Year GAP (15.8 )% (15.7 )% (12.9 )%
NPV post 200 bps shock (e) 14.5 % 14.6 % 14.2 %
Change in NII after 200 bps shock (e) 2.0 % 3.0 % 1.3 %
(e) Assumes no balance sheet management actions taken
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
($ in Thousands)
 
Historical CPR Rates (f)
      WAFD     WAFD
Average for Quarter Ended: SFR Mortgages GSE MBS
 
12/31/2015 16.7% 13.4%
3/31/2016 13.9% 12.0%
6/30/2016 17.3% 17.5%
9/30/2016 17.7% 20.0%
12/31/2016 19.3% 24.8%
3/31/2017 13.6% 13.5%
6/30/2017 15.0% 20.9%
9/30/2017 15.1% 14.3%
12/31/2017 15.3% 13.9%
 
(f) The CPR Rate (conditional payment rate) is the rate that is
equal to the proportion of the principal of a pool of loans that is
paid off prematurely in each period.
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
Average Balance Sheet
($ in Thousands)
       
June 30, 2017     September 30, 2017     December 31, 2017
Average         Average Average         Average Average         Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets
Loans receivable $ 10,579,593 $ 117,457 4.45 % $ 10,747,453 $ 122,197 4.51 % $ 10,984,886 $ 124,511 4.50 %
Mortgage-backed securities 2,551,598 15,992 2.51 2,493,604 15,605 2.48 2,521,407 16,899 2.66
Cash & investments 627,197 3,373 2.16 604,198 3,500 2.30 559,370 3,273 2.32
FHLB & FRB Stock   124,968       894     2.87     122,620       938     3.03     126,229       1,097     3.45  
 
Total interest-earning assets 13,883,356 137,716 3.98 % 13,967,875 142,240 4.04 % 14,191,892 145,780 4.08 %
Other assets   1,142,899   1,144,200   1,149,607
Total assets $ 15,026,255 $ 15,112,075 $ 15,341,499
 
Liabilities and Equity
Customer accounts $ 10,567,710 12,764 0.48 % $ 10,704,066 13,850 0.51 % $ 10,850,742 14,638 0.54 %
FHLB advances 2,274,451 16,337 2.88 2,214,674 15,958 2.86 2,305,978 15,407 2.65
Other borrowings                                          
 
Total interest-bearing liabilities 12,842,161 29,101 0.91 % 12,918,740 29,808 0.92 % 13,156,720 30,045 0.91 %
Other liabilities   155,460   183,542   168,382
Total liabilities 12,997,621 13,102,282 13,325,102
Stockholders' equity   2,028,634   2,009,793   2,016,397
Total liabilities and equity $ 15,026,255 $ 15,112,075 $ 15,341,499
 
Net interest income $ 108,615 $ 112,432 $ 115,735
 
Net interest margin (1) 3.13 % 3.22 % 3.26 %
 
(1) Annualized net interest income divided by average
interest-earning assets
 
 
Washington Federal, Inc.
Fact Sheet
December 31, 2017
Delinquency Summary
($ in Thousands)
 
              AMOUNT OF LOANS     # OF LOANS     % based         % based

TYPE OF LOANS

#LOANS AVG Size NET OF LIP & CHG-OFFs 30     60     90     Total on # $ Delinquent on $
 
December 31, 2017
Single-Family Residential 25,325 225 $ 5,692,045 51 35 104 190 0.75 % $ 36,172 0.64 %
Construction 675 1,262 852,164 1 3 4 8 1.19 4,371 0.51
Construction - Custom 1,241 235 292,255
Land - Acquisition & Development 122 920 112,260 4 4 3.28 1,242 1.11
Land - Consumer Lot Loans 1,209 87 104,996 2 1 10 13 1.08 750 0.71
Multi-Family 1,122 1,170 1,312,673 2 2 0.18 250 0.02
Commercial Real Estate 925 1,553 1,436,508 2 6 8 0.86 444 0.03
Commercial & Industrial 1,849 606 1,120,707 7 2 23 32 1.73 3,467 0.31
HELOC 2,859 48 136,995 8 4 17 29 1.01 991 0.72
Consumer 3,847 57   219,971 43 15 107 165 4.29     567 0.26  
39,174 288 $ 11,280,574 114 60 277 451 1.15 % $ 48,254 0.43 %
 
September 30, 2017
Single-Family Residential 25,556 223 $ 5,709,690 64 29 109 202 0.79 % $ 37,757 0.66 %
Construction 715 1,110 793,959
Construction - Custom 1,292 215 277,599 1 1 0.08 91 0.03
Land - Acquisition & Development 122 859 104,856 4 4 3.28 330 0.31
Land - Consumer Lot Loans 1,201 87 104,335 3 6 5 14 1.17 946 0.91
Multi-Family 1,135 1,148 1,303,119 2 1 3 6 0.53 399 0.03
Commercial Real Estate 931 1,541 1,434,610 2 8 10 1.07 2,558 0.18
Commercial & Industrial 1,820 601 1,093,360 2 20 22 1.21 625 0.06
HELOC 2,877 50 144,850 6 4 15 25 0.87 876 0.60
Consumer 4,039 21   85,075 50 24 103 177 4.38     431 0.51  
39,688 278 $ 11,051,453 127 66 268 461 1.16 % $ 44,013 0.40 %
 
June 30, 2017
Single-Family Residential 25,779 221 $ 5,687,169 68 36 123 227 0.88 % $ 44,653 0.79 %
Construction 624 1,095 683,273 1 1 0.16 686 0.10
Construction - Custom 1,218 221 269,612 2 2 0.16 536 0.20
Land - Acquisition & Development 118 941 111,057 4 4 3.39 123 0.11
Land - Consumer Lot Loans 1,187 86 101,584 1 2 6 9 0.76 615 0.61
Multi-Family 964 1,310 1,263,143 1 1 2 4 0.41 329 0.03
Commercial Real Estate 1,073 1,254 1,345,986 2 3 9 14 1.30 2,911 0.22
Commercial & Industrial 1,816 615 1,116,854 3 1 23 27 1.49 2,673 0.24
HELOC 2,914 51 148,581 14 7 6 27 0.93 1,491 1.00
Consumer 4,275 22   95,774 51 18 97 166 3.88     384 0.40  
39,968 271 $ 10,823,033 140 69 272 481 1.20 % $ 54,401 0.50 %

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