Washington Federal Inc. (WAFD): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

By Zacks Investment Research,

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Washington Federal's fourth-quarter fiscal 2014 (ended Sep 30) earnings outpaced the Zacks Consensus Estimate. Sustained top-line growth and a benefit from provisions enhanced the quarterly performance. However, mounting expenses acted as a headwind. Washington Federal's steady capital deployment activities continue to impress. Moreover, the company's efforts and focus to stay aligned with its inorganic growth strategy is expected to be further assisted by the rising demand for loans. Nonetheless, the persistent low interest rate environment and weak expense management make us apprehensive. Also, significant exposure to a risky loan portfolio remains a matter of concern.


Headquartered in Seattle, WA, Washington Federal Inc. operates as a non-diversified unitary savings and loan holding company. The company conducts operations through its federally insured savings and loan association subsidiary, Washington Federal Savings, with 251 offices across 8 western states.

Washington Federal's business primarily consists of attracting deposits from general public and investing these funds in various types of loans, including first-lien mortgages on single-family dwellings, construction loans, land acquisition and development loans, loans on multi-family and other income producing properties, home equity loans and business loans. It also invests in certain U.S. government and agency obligations, among others.

Washington Federal's deposit products include checking accounts, passbook and statement accounts, money market accounts and time deposits or certificate accounts. The company also engages in real estate investment and insurance brokerage activities.

In 2007, Washington Federal acquired First Federal Banc of the Southwest Inc. Further, in 2008, the company acquired First Mutual Bancshares Inc. In 2010, the company acquired all the deposits of Horizon Bank of Bellingham, Washington. In 2011, Washington Federal acquired six branches from Charter Bank in New Mexico and three branches of Phoenix, AZ-based failed Western National Bank.

In 2012, Washington Federal completed the divestiture of two of its branches located in El Paso, TX. Further, the company acquired Oregon-based South Valley Bancorp Inc.

In 2013, Washington Federal announced its conversion to a national bank charter after receiving approval from the Office of the Comptroller of the Currency (OCC). The company also received approval from the Federal Reserve Bank of San Francisco to become a bank holding company. In the same year, the company acquired 51 retail branches of Bank of America Corporation located in Washington, Idaho, Oregon and New Mexico for $39 million.

In May 2014, Washington Federal completed the acquisition of 23 branches from Bank of America. These branches are located in Arizona and Nevada.

Washington Federal operates with Sep 30 as its fiscal year-end. As of Sep 30, 2014, the company had total assets of $14.8 billion, cash and cash equivalents of $781.8 million and stockholders' equity of $2.0 billion.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Stocks
Referenced Stocks: OCC , WAFD

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