| Washington Federal, Inc. parent company of Washington Federal Savings, announced earnings of $35,452,000 or $.40 per diluted share for the quarter ended March 31, compared to $33,483,000 or $.38 per diluted share for the same period a year ago, a 5.9 percent increase.
The second fiscal quarter produced a return on assets of 1.27 percent, while return on equity amounted to 10.45 percent for the quarter. Nonperforming assets totaled $68 million or 0.58 percent of assets as of March 31. The Company’s average non-performing assets ratio is 0.33 percent and 0.47 percent, for 10 and 20 years, respectively. In response to declining asset quality caused by the current housing cycle, the company recorded a provision for loan losses of $9,500,000 for the quarter. Net charge offs amounted to $3,046,000 for the second quarter. During the quarter the Company sold real estate for a gain of $8,700,000.
During the quarter, the company also completed its acquisition of First Mutual Bank, adding $945,351,000 in loans, $744,182,000 in customer accounts, 169 employees and 12 offices primarily located on the rapidly growing eastside of Seattle. Total consideration amounted to $188,702,000, which the Company elected to pay in cash, and resulted in $117,093,000 of intangible assets, primarily goodwill.
Chief Executive Officer Roy M. Whitehead commented, “In the midst of the most severe financial crisis in at least a generation, we are very pleased to deliver increased earnings. The quarter benefited from a significant improvement in net interest spread and nearly two months of earnings from the recently acquired First Mutual Bank. We also took advantage of a strong commercial real estate market to harvest a gain from a non-core real estate investment that enabled the company to fund expected higher credit losses and strengthen the loan loss reserve. We believe that non-performing assets will continue to increase before peaking at some point in the future and that loan losses will also be higher than normal. Nonetheless, with improving net interest spread and a strong capital position, the company seems well positioned to handle the financial stress of current market challenges”.
On April 18, Washington Federal paid a cash dividend of $.21 per share to common stockholders of record on April 4. This was the company’s 101st consecutive quarterly cash dividend.
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