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Washington Federal Announces Quarterly Earnings Per Share of $0.95

Washington Federal, Inc. (Nasdaq: WAFD) (the “Company”), parent company of Washington Federal Bank (“WaFd Bank”), today announced quarterly earnings of $65,934,000 for the quarter ended March 31, 2023, an increase of 33.6% from $49,359,000 for the quarter ended March 31, 2022. After the effect of dividends on preferred stock, net income available for common shareholders was $0.95 per diluted share for the quarter ended March 31, 2023, compared to $0.70 per diluted share for the quarter ended March 31, 2022, a $0.25 or 35.7% increase in fully diluted earnings per common share. Return on common shareholders' equity for the quarter ended March 31, 2023 was 12.0% compared to 9.8% for the quarter ended March 31, 2022. Return on assets for the quarter ended March 31, 2023 was 1.2% compared to 1.0% for the same quarter in the prior year.

During the month of March 2023, the United States saw the 2nd and 3rd largest bank failures in its history due to sudden customer deposit outflows. WaFd Bank had net deposit inflows of $25 million in the same month. For the quarter ended March 31, 2023, WaFd Bank had net deposit outflows of $99 million or 0.6% of total deposits. Only 27% of the Bank’s deposits were uninsured as of quarter end, which is a decrease from 31% as of December 31, 2022. The Bank’s held to maturity (“HTM”) investments were $445 million as of March 31, 2023 with a net unrealized loss of $35 million. Although not permitted by U.S. Generally Accepted Accounting Principles, including these unrealized losses in accumulated other comprehensive income (“AOCI”) would result in a ratio of shareholders’ equity to total assets of 10.48%, compared to 10.64%, as reported.

President and Chief Executive Officer Brent J. Beardall commented, “We were disappointed to see the failures of both Silicon Valley Bank and Signature Bank last quarter. What is most important at this point is customers having confidence in the banking system. It is the job of management, directors and the regulatory agencies to ensure banks are run in a safe and sound manner so that customers do not have to worry. Any losses from bank failures should be absorbed by the FDIC insurance fund and replenished by surviving banks that benefit from the security that comes from FDIC insurance. We are grateful for the trust and confidence our clients have placed in WaFd Bank and work each day to earn that trust by managing the bank for the long-term, which at times translates into accepting less in short-term earnings.

“This is a challenging interest rate environment for bank earnings. Presently, the yield curve is inverted with long-term rates being lower than short-term rates. The degree to which the yield curve is inverted is near a historical high. The 10-year U.S. Treasury rate was recently at 3.35% and the 3-month rate at 4.88%, a 153 basis point inversion, the second largest since 1962, which is as far back as the data is kept. As a result, bank margins are compressing. WaFd saw its net interest margin decrease from 3.69% in the December quarter to 3.51% in the March quarter. While this is a significant decline in margin, the previous quarter had represented a 25-year high in margin for the Bank and our current margin is still meaningfully higher than the 2.90% margin reported in the March 2022 quarter.

“While credit quality remains strong, with delinquent loans representing only 0.2% of total loans, we did experience our first quarterly net charge-off in almost a decade. We are monitoring our portfolio closely for signs of deterioration which we expect will occur as the stress of higher interest rates is realized throughout the economy. With an allowance for loan losses of over $205 million and robust capital, we believe the Bank is well positioned to withstand a credit cycle if that is what materializes over the next few quarters.

“There has been a significant amount of speculation about looming deterioration in the values of commercial real estate as the market adjusts to higher vacancies and capitalization rates. We understand the macro pressures on commercial real estate and believe they will be most acute in the largest metropolitan areas. We are gratified that our loan portfolio is spread over eight western states that are generally experiencing net immigration and strong job growth. Importantly, the Bank has been conservative in its commercial real estate lending requiring substantial equity from borrowers that would absorb the first portion of any losses in value. Based on December 31, 2022 estimates, the average current loan to value ratio of our multifamily loans was 49%, on commercial office 52% and on other commercial real estate 44%.

“Banking is a noble profession that enables consumers to safely manage their savings, businesses to securely pay their obligations and borrowers to conservatively leverage their assets for growth. Despite potential short-term challenges, the economic vitality of the markets we operate in is strong, our bankers are experienced, and we take pride in being a source of strength and consistent support for our clients.”

Total assets were $22.3 billion as of March 31, 2023, compared to $20.8 billion at September 30, 2022, primarily due to the $1.2 billion, or 7.2%, increase in net loans. In addition, cash increased by $434.6 million while investment securities decreased by $62.8 million.

Customer deposits totaled $15.9 billion as of March 31, 2023, a decrease of $168.6 million or 1.1% since September 30, 2022. Transaction accounts decreased by $811.2 million or 6.4% during that period, while time deposits increased $642.6 million or 19.2%. As of March 31, 2023, 74.9% of the Company’s deposits were transaction accounts, down from 79.2% at September 30, 2022. Core deposits, defined as all transaction accounts and time deposits less than $250,000, totaled 92.3% of deposits at March 31, 2023. Our focus historically has been on growing transaction accounts to lessen sensitivity to rising interest rates and manage interest expense, however, the current rate environment has resulted in increased demand for higher yielding deposits.

Borrowings totaled $3.8 billion as of March 31, 2023, an increase from $2.1 billion at September 30, 2022. The effective weighted average interest rate of borrowings was 3.69% as of March 31, 2023, an increase from 2.02% at September 30, 2022.

The Company had loan originations of $1.0 billion for the second fiscal quarter of 2023, compared to $2.2 billion of originations in the same quarter one year ago. Offsetting loan originations in each of these quarters were loan repayments of $1.1 billion and $1.5 billion, respectively. The Company has intentionally slowed new loan production, given the uncertain economic environment, with repayments exceeding originations. Even so, net loans outstanding grew for the quarter due to the funding of construction loans previously originated. Commercial loans represented 73% of all loan originations during the second fiscal quarter of 2023 and consumer loans accounted for the remaining 27%. Commercial loans are preferable as they generally have floating interest rates and shorter durations. The weighted average interest rate on the loan portfolio was 4.96% at March 31, 2023, an increase from 4.25% as of September 30, 2022, due primarily to higher rates on adjustable rate loans as well as higher rates on newly originated loans.

Credit quality is being monitored closely in light of the shifting economic and monetary environment. As of March 31, 2023, non-performing assets remained low from a historical perspective and totaled $46.8 million, or 0.2% of total assets, compared to 0.2% at March 31, 2022 and 0.2% at September 30, 2022. Delinquent loans were 0.2% of total loans at March 31, 2023, compared to 0.3% at March 31, 2022 and 0.2% at September 30, 2022. The allowance for credit losses (including the reserve for unfunded commitments) totaled $206 million as of March 31, 2023, and was 1.0% of gross loans outstanding, as compared to $205 million, or 1.1% of gross loans outstanding, at September 30, 2022. Net charge-offs were $5.9 million for the second fiscal quarter of 2023, compared to net recoveries of $0.5 million for the prior year same quarter.

The Company recorded a $3.5 million provision for credit losses in the second fiscal quarter of 2023, compared to a $0.5 million release of allowance for credit losses in the same quarter of fiscal 2022. The provision in the quarter ended March 31, 2023 was primarily due to growth in net loans receivable combined with the changing economic outlook amid concerns around a looming recession and recent macro-economic events.

The Company paid a quarterly dividend on the 4.875% Series A preferred stock on January 15, 2023. On March 10, 2023, the Company paid a regular cash dividend on common stock of $0.25 per share, which represented the 160th consecutive quarterly cash dividend. Tangible common shareholders' equity per share increased by $1.36, or 5.3%, to $26.85 since September 30, 2022. The ratio of total tangible shareholders' equity to tangible assets was 9.4% as of March 31, 2023.

Net interest income was $175.0 million for the second fiscal quarter of 2023, an increase of $40.0 million or 29.6% from the same quarter in the prior year. The increase in net interest income was primarily due to an increase in the interest rate spread of 28 basis points. This was the result of the increase of 187 basis points in the average rate earned on interest-earning assets outpacing the 159 basis point increase in the average rate paid on interest-bearing liabilities. Net interest margin improved to 3.51% in the second fiscal quarter of 2023 compared to 2.90% for the prior year quarter.

Total other income was $10.1 million for the second fiscal quarter of 2023 compared to $15.7 million in the prior year same quarter. The decrease in other income was primarily due to unrealized gains of $1.2 million for certain equity investments which were recorded in the quarter ended March 31, 2022. There were unrealized losses of $4.0 million on the same investments in the quarter ended March 31, 2023. In addition, loan fee income decreased by $1.8 million when compared to the same quarter in the prior year due to a reduction in loan production. Originations for the second fiscal quarter of 2023 were $1.0 billion compared to $2.2 billion in the prior year same quarter.

Total other expense was $96.9 million in the second fiscal quarter of 2023, an increase of $8.5 million, or 9.6%, from the prior year's quarter. Compensation and benefits costs increased by $4.3 million, or 9.2%, over the prior year quarter primarily due to annual merit increases and investments in talent, strategic initiatives and a reduction in capitalized compensation as loan originations have decreased. Merger related expenses of $1.2 million were also included in total other expense. Despite these increases, the Company’s efficiency ratio in the second fiscal quarter of 2023 improved to 52.3%, compared to 58.7% for the same period one year ago as a result of income growth outpacing expense growth.

Income tax expense totaled $18.6 million for the second fiscal quarter of 2023, as compared to $13.6 million for the prior year same quarter. The effective tax rate for the quarter ended March 31, 2023 was 22.00% compared to 21.60% in the prior year same quarter and 21.23% for the year ended September 30, 2022. The Company’s effective tax rate varies from the statutory rate mainly due to state taxes, tax-exempt income, tax-credit investments and miscellaneous non-deductible expenses.

WaFd Bank is headquartered in Seattle, Washington, and has 199 branches in eight western states. To find out more about WaFd Bank, please visit our website www.wafdbank.com. The Company uses its website to distribute financial and other material information about the Company.

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2022 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 or current 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. Words such as “anticipate,” “believe,” “continue,” “expect,” “goal,” “intend,” “should,” “strategy,” “will,” or 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, including the following risks and uncertainties, and those risks and uncertainties more fully discussed under “Risk Factors” in the Company’s September 30, 2022 10-K, which could cause actual performance to differ materially from that anticipated by any forward-looking statements. In particular, any forward-looking statements are subject to risks and uncertainties related to (i) the effect of COVID-19 and other infectious illness outbreaks that may arise in the future and the resulting governmental and societal responses; (ii) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, and slowdowns in economic growth; (iii) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (iv) global economic trends, including developments related to Ukraine and Russia, and related negative financial impacts on our borrowers; (v) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin; (vi) risks related to the proposed merger with Luther Burbank; and (vii) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft. The Company undertakes no obligation to update or revise any forward-looking statement.

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

 

 

March 31, 2023

 

September 30, 2022

 

(In thousands, except share and ratio data)

ASSETS

 

 

 

Cash and cash equivalents

$

1,118,544

 

 

$

683,965

 

Available-for-sale securities, at fair value

 

2,006,286

 

 

 

2,051,037

 

Held-to-maturity securities, at amortized cost

 

445,222

 

 

 

463,299

 

Loans receivable, net of allowance for loan losses of $177,420 and $172,808

 

17,271,906

 

 

 

16,113,564

 

Interest receivable

 

79,069

 

 

 

63,872

 

Premises and equipment, net

 

236,054

 

 

 

243,062

 

Real estate owned

 

8,826

 

 

 

6,667

 

FHLB and FRB stock

 

147,078

 

 

 

95,073

 

Bank owned life insurance

 

239,840

 

 

 

237,931

 

Intangible assets, including goodwill of $303,457 and $303,457

 

308,524

 

 

 

309,009

 

Federal and state income tax assets, net

 

 

 

 

 

Other assets

 

463,862

 

 

 

504,652

 

 

$

22,325,211

 

 

$

20,772,131

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Liabilities

 

 

 

Transaction deposits

$

11,880,343

 

 

$

12,691,527

 

Time deposits

 

3,980,605

 

 

 

3,338,043

 

Total customer deposits

 

15,860,948

 

 

 

16,029,570

 

Borrowings

 

3,800,000

 

 

 

2,125,000

 

Advance payments by borrowers for taxes and insurance

 

44,312

 

 

 

50,051

 

Federal and state income tax liabilities, net

 

2,666

 

 

 

3,306

 

Accrued expenses and other liabilities

 

242,168

 

 

 

289,944

 

 

 

19,950,094

 

 

 

18,497,871

 

Shareholders’ equity

 

 

 

Preferred stock, $1.00 par value, 5,000,000 shares authorized; 300,000 and 300,000 shares issued; 300,000 and 300,000 shares outstanding

 

300,000

 

 

 

300,000

 

Common stock, $1.00 par value, 300,000,000 shares authorized; 136,412,977 and 136,270,886 shares issued; 65,793,099 and 65,330,126 shares outstanding

 

136,413

 

 

 

136,271

 

Additional paid-in capital

 

1,683,720

 

 

 

1,686,975

 

Accumulated other comprehensive income (loss), net of taxes

 

43,822

 

 

 

52,481

 

Treasury stock, at cost; 70,619,878 and 70,940,760 shares

 

(1,583,880

)

 

 

(1,590,207

)

Retained earnings

 

1,795,042

 

 

 

1,688,740

 

 

 

2,375,117

 

 

 

2,274,260

 

 

$

22,325,211

 

 

$

20,772,131

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

 

 

 

Common shareholders' equity per share

$

31.54

 

 

$

30.22

 

Tangible common shareholders' equity per share

 

26.85

 

 

 

25.49

 

Shareholders' equity to total assets

 

10.64

%

 

 

10.95

%

Tangible shareholders' equity to tangible assets

 

9.39

%

 

 

9.60

%

Tangible shareholders' equity + allowance for credit losses to tangible assets

 

10.19

%

 

 

10.45

%

Weighted average rates at period end

 

 

 

Loans

 

4.96

%

 

 

4.25

%

Loans and mortgage-backed securities

 

4.81

 

 

 

4.13

 

Combined loans, mortgage-backed securities and investments

 

4.45

 

 

 

4.04

 

Customer accounts

 

1.48

 

 

 

0.51

 

Borrowings

 

3.69

 

 

 

2.02

 

Combined cost of customer accounts and borrowings

 

1.91

 

 

 

0.68

 

Net interest spread

 

2.86

 

 

 

3.36

 

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

As of

SUMMARY FINANCIAL DATA

March 31,

2023

 

December 31,

2022

 

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

(In thousands, except share and ratio data)

Cash

$

1,118,544

 

 

$

645,862

 

 

$

683,965

 

 

$

607,421

 

 

$

1,947,504

 

Loans receivable, net

 

17,271,906

 

 

 

16,993,588

 

 

 

16,113,564

 

 

 

15,565,165

 

 

 

15,094,926

 

Allowance for credit losses ("ACL")

 

205,920

 

 

 

208,297

 

 

 

205,308

 

 

 

203,479

 

 

 

201,384

 

Available-for-sale securities, at fair value

 

2,006,286

 

 

 

2,059,837

 

 

 

2,051,037

 

 

 

2,150,732

 

 

 

1,909,605

 

Held-to-maturity securities, at amortized cost

 

445,222

 

 

 

453,443

 

 

 

463,299

 

 

 

477,884

 

 

 

301,221

 

Total assets

 

22,325,211

 

 

 

21,653,811

 

 

 

20,772,131

 

 

 

20,158,831

 

 

 

20,560,279

 

Transaction deposits

 

11,880,343

 

 

 

12,547,832

 

 

 

12,691,527

 

 

 

12,668,251

 

 

 

13,139,606

 

Time deposits

 

3,980,605

 

 

 

3,412,203

 

 

 

3,338,043

 

 

 

3,297,369

 

 

 

3,251,042

 

FHLB advances

 

3,425,000

 

 

 

3,075,000

 

 

 

2,125,000

 

 

 

1,700,000

 

 

 

1,720,000

 

Total shareholders' equity

 

2,375,117

 

 

 

2,324,381

 

 

 

2,274,260

 

 

 

2,220,111

 

 

 

2,191,701

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

Common shareholders' equity per share

 

31.54

 

 

 

30.96

 

 

 

30.22

 

 

 

29.39

 

 

 

28.97

 

Tangible common shareholders' equity per share

 

26.85

 

 

 

26.24

 

 

 

25.49

 

 

 

24.66

 

 

 

24.23

 

Shareholders' equity to total assets

 

10.64

%

 

 

10.73

%

 

 

10.95

%

 

 

11.01

%

 

 

10.66

%

Tangible shareholders' equity to tangible assets

 

9.39

%

 

 

9.44

%

 

 

9.60

%

 

 

9.63

%

 

 

9.29

%

Tangible shareholders' equity + ACL to tangible assets

 

10.19

%

 

 

10.27

%

 

 

10.45

%

 

 

10.65

%

 

 

10.29

%

Common shares outstanding

 

65,793,099

 

 

 

65,387,745

 

 

 

65,330,126

 

 

 

65,321,869

 

 

 

65,306,928

 

Preferred shares outstanding

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

Loans to customer deposits

 

108.90

%

 

 

106.48

%

 

 

100.52

%

 

 

97.49

%

 

 

92.09

%

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY

 

 

 

 

 

 

 

 

 

ACL to gross loans

 

1.02

%

 

 

1.03

%

 

 

1.06

%

 

 

1.08

%

 

 

1.13

%

ACL to non-accrual loans

 

595.04

%

 

 

713.83

%

 

 

594.51

%

 

 

554.76

%

 

 

598.66

%

Non-accrual loans to net loans

 

0.20

%

 

 

0.17

%

 

 

0.21

%

 

 

0.24

%

 

 

0.22

%

Non-accrual loans

 

34,606

 

 

 

29,180

 

 

 

34,534

 

 

 

36,679

 

 

 

33,639

 

Non-performing assets to total assets

 

0.21

%

 

 

0.18

%

 

 

0.21

%

 

 

0.25

%

 

 

0.23

%

Non-performing assets

 

46,785

 

 

 

38,650

 

 

 

44,554

 

 

 

50,430

 

 

 

47,243

 

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

2023

 

2022

 

2023

 

2022

 

(In thousands, except share and ratio data)

 

(In thousands, except share and ratio data)

INTEREST INCOME

 

 

 

 

 

 

 

Loans receivable

$

222,957

 

 

$

139,260

 

 

$

426,903

 

 

$

277,769

 

Mortgage-backed securities

 

10,422

 

 

 

4,659

 

 

 

21,035

 

 

 

9,451

 

Investment securities and cash equivalents

 

21,967

 

 

 

6,919

 

 

 

40,827

 

 

 

14,058

 

 

 

255,346

 

 

 

150,838

 

 

 

488,765

 

 

 

301,278

 

INTEREST EXPENSE

 

 

 

 

 

 

 

Customer accounts

 

52,123

 

 

 

8,225

 

 

 

83,769

 

 

 

16,686

 

FHLB advances and other borrowings

 

28,185

 

 

 

7,525

 

 

 

47,159

 

 

 

15,368

 

 

 

80,308

 

 

 

15,750

 

 

 

130,928

 

 

 

32,054

 

Net interest income

 

175,038

 

 

 

135,088

 

 

 

357,837

 

 

 

269,224

 

Provision (release) for credit losses

 

3,500

 

 

 

(500

)

 

 

6,000

 

 

 

 

Net interest income after provision (release)

 

171,538

 

 

 

135,588

 

 

 

351,837

 

 

 

269,224

 

OTHER INCOME

 

 

 

 

 

 

 

Gain (loss) on sale of investment securities

 

 

 

 

 

 

 

 

 

 

81

 

Gain (loss) on hedging derivatives

 

26

 

 

 

 

 

 

26

 

 

 

 

Prepayment penalty on long-term debt

 

 

 

 

 

 

 

 

 

 

 

Loan fee income

 

652

 

 

 

2,475

 

 

 

2,154

 

 

 

4,396

 

Deposit fee income

 

6,188

 

 

 

6,282

 

 

 

12,541

 

 

 

12,725

 

Other income

 

3,206

 

 

 

6,902

 

 

 

9,375

 

 

 

17,138

 

 

 

10,072

 

 

 

15,659

 

 

 

24,096

 

 

 

34,340

 

OTHER EXPENSE

 

 

 

 

 

 

 

Compensation and benefits

 

51,444

 

 

 

47,115

 

 

 

100,514

 

 

 

94,540

 

Occupancy

 

10,918

 

 

 

11,788

 

 

 

21,020

 

 

 

21,878

 

FDIC insurance premiums

 

4,000

 

 

 

2,100

 

 

 

7,675

 

 

 

5,200

 

Product delivery

 

5,316

 

 

 

5,044

 

 

 

9,937

 

 

 

9,765

 

Information technology

 

12,785

 

 

 

11,722

 

 

 

25,114

 

 

 

23,143

 

Other expense

 

12,418

 

 

 

10,648

 

 

 

24,899

 

 

 

23,504

 

 

 

96,881

 

 

 

88,417

 

 

 

189,159

 

 

 

178,030

 

Gain (loss) on real estate owned, net

 

(199

)

 

 

129

 

 

 

(311

)

 

 

691

 

Income before income taxes

 

84,530

 

 

 

62,959

 

 

 

186,463

 

 

 

126,225

 

Income tax provision

 

18,596

 

 

 

13,600

 

 

 

41,020

 

 

 

26,585

 

Net income

 

65,934

 

 

 

49,359

 

 

 

145,443

 

 

 

99,640

 

Dividends on preferred stock

 

3,656

 

 

 

3,656

 

 

 

7,312

 

 

 

7,312

 

Net income available to common shareholders

$

62,278

 

 

$

45,703

 

 

$

138,131

 

 

$

92,328

 

PER SHARE DATA

 

 

 

 

 

 

 

Basic earnings per common share

$

0.95

 

 

$

0.70

 

 

$

2.11

 

 

$

1.41

 

Diluted earnings per common share

 

0.95

 

 

 

0.70

 

 

 

2.11

 

 

 

1.41

 

Cash dividends per common share

 

0.25

 

 

 

0.24

 

 

 

0.49

 

 

 

0.47

 

Basic weighted average shares outstanding

 

65,511,131

 

 

 

65,301,171

 

 

 

65,425,623

 

 

 

65,253,991

 

Diluted weighted average shares outstanding

 

65,551,185

 

 

 

65,445,206

 

 

 

65,510,275

 

 

 

65,397,601

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

Return on average assets

 

1.21

%

 

 

0.98

%

 

 

1.36

%

 

 

1.00

%

Return on average common equity

 

12.01

 

 

 

9.80

 

 

 

13.55

 

 

 

9.96

 

Net interest margin

 

3.51

 

 

 

2.90

 

 

 

3.60

 

 

 

2.89

 

Efficiency ratio

 

52.34

 

 

 

58.65

 

 

 

49.53

 

 

 

58.65

 

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

Three Months Ended

 

March 31,

2023

 

December 31,

2022

 

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

(In thousands, except share and ratio data)

INTEREST INCOME

 

 

 

 

 

 

 

 

 

Loans receivable

$

222,957

 

 

$

203,946

 

 

$

174,710

 

 

$

149,113

 

 

$

139,260

 

Mortgage-backed securities

 

10,422

 

 

 

10,613

 

 

 

8,263

 

 

 

8,618

 

 

 

4,659

 

Investment securities and cash equivalents

 

21,967

 

 

 

18,860

 

 

 

14,960

 

 

 

9,417

 

 

 

6,919

 

 

 

255,346

 

 

 

233,419

 

 

 

197,933

 

 

 

167,148

 

 

 

150,838

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Customer accounts

 

52,123

 

 

 

31,646

 

 

 

17,071

 

 

 

9,284

 

 

 

8,225

 

FHLB advances and other borrowings

 

28,185

 

 

 

18,974

 

 

 

7,243

 

 

 

6,118

 

 

 

7,525

 

 

 

80,308

 

 

 

50,620

 

 

 

24,314

 

 

 

15,402

 

 

 

15,750

 

Net interest income

 

175,038

 

 

 

182,799

 

 

 

173,619

 

 

 

151,746

 

 

 

135,088

 

Provision (release) for credit losses

 

3,500

 

 

 

2,500

 

 

 

1,500

 

 

 

1,500

 

 

 

(500

)

Net interest income after provision (release)

 

171,538

 

 

 

180,299

 

 

 

172,119

 

 

 

150,246

 

 

 

135,588

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of investment securities

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

Gain (loss) on hedging derivatives

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan fee income

 

652

 

 

 

1,502

 

 

 

1,154

 

 

 

1,618

 

 

 

2,475

 

Deposit fee income

 

6,188

 

 

 

6,353

 

 

 

6,604

 

 

 

6,613

 

 

 

6,282

 

Other income

 

3,206

 

 

 

6,169

 

 

 

6,706

 

 

 

9,319

 

 

 

6,902

 

 

 

10,072

 

 

 

14,024

 

 

 

14,482

 

 

 

17,550

 

 

 

15,659

 

OTHER EXPENSE

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

51,444

 

 

 

49,070

 

 

 

51,304

 

 

 

48,073

 

 

 

47,115

 

Occupancy

 

10,918

 

 

 

10,102

 

 

 

10,568

 

 

 

10,053

 

 

 

11,788

 

FDIC insurance premiums

 

4,000

 

 

 

3,675

 

 

 

2,231

 

 

 

2,100

 

 

 

2,100

 

Product delivery

 

5,316

 

 

 

4,621

 

 

 

5,104

 

 

 

4,667

 

 

 

5,044

 

Information technology

 

12,785

 

 

 

12,329

 

 

 

12,228

 

 

 

11,831

 

 

 

11,722

 

Other expense

 

12,418

 

 

 

12,481

 

 

 

11,707

 

 

 

10,679

 

 

 

10,648

 

 

 

96,881

 

 

 

92,278

 

 

 

93,142

 

 

 

87,403

 

 

 

88,417

 

Gain (loss) on real estate owned, net

 

(199

)

 

 

(112

)

 

 

(488

)

 

 

448

 

 

 

129

 

Income before income taxes

 

84,530

 

 

 

101,933

 

 

 

92,971

 

 

 

80,841

 

 

 

62,959

 

Income tax provision

 

18,596

 

 

 

22,424

 

 

 

19,576

 

 

 

17,546

 

 

 

13,600

 

Net income

 

65,934

 

 

 

79,509

 

 

 

73,395

 

 

 

63,295

 

 

 

49,359

 

Dividends on preferred stock

 

3,656

 

 

 

3,656

 

 

 

3,656

 

 

 

3,656

 

 

 

3,656

 

Net income available to common shareholders

$

62,278

 

 

$

75,853

 

 

$

69,739

 

 

$

59,639

 

 

$

45,703

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.95

 

 

$

1.16

 

 

$

1.07

 

 

$

0.91

 

 

$

0.70

 

Diluted earnings per common share

 

0.95

 

 

 

1.16

 

 

 

1.07

 

 

 

0.91

 

 

 

0.70

 

Cash dividends per common share

 

0.25

 

 

 

0.24

 

 

 

0.24

 

 

 

0.24

 

 

 

0.24

 

Basic weighted average shares outstanding

 

65,511,131

 

 

 

65,341,974

 

 

 

65,326,706

 

 

 

65,315,481

 

 

 

65,301,171

 

Diluted weighted average shares outstanding

 

65,551,185

 

 

 

65,430,690

 

 

 

65,423,817

 

 

 

65,395,666

 

 

 

65,445,206

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

Return on average assets

 

1.21

%

 

 

1.50

%

 

 

1.44

%

 

 

1.25

%

 

 

0.98

%

Return on average common equity

 

12.01

 

 

 

15.15

 

 

 

14.22

 

 

 

12.50

 

 

 

9.80

 

Net interest margin

 

3.51

 

 

 

3.69

 

 

 

3.64

 

 

 

3.22

 

 

 

2.90

 

Efficiency ratio

 

52.34

 

 

 

46.78

 

 

 

49.52

 

 

 

51.63

 

 

 

58.65

 

 

Washington Federal Announces Quarterly Earnings Per Share of $0.95

Contacts

Washington Federal, Inc.

425 Pike Street, Seattle, WA 98101

Brad Goode, SVP, Chief Marketing Officer

206-626-8178

brad.goode@wafd.com

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