Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 8-K

____________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 14, 2023

____________________________________

WASHINGTON FEDERAL INC

(Exact name of registrant as specified in its charter)

____________________________________

Washington

001-34654

91-1661606

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

425 Pike Street

Seattle

Washington

98101

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (206) 624-7930

Not Applicable

(Former name or former address, if changed since last report)

____________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1.00 par value per share

WAFD

NASDAQ Stock Market

Depositary Shares, Each Representing a 1/40th Interest in a Share of 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock

WAFDP

NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02			Results of Operations and Financial Condition

On July 14, 2023, Washington Federal, Inc. (the "Company") announced by press release its earnings for the quarter ended June 30, 2023. A copy of the press release is attached to this filing as Exhibit 99.1. A copy of the June 30, 2023 Fact Sheet, which presents certain detailed financial information about the Company, is attached as Exhibit 99.2. This information is being furnished under Item 2.02 (Results of Operations and Financial Condition) of Form 8-K.


Item 9.01			Financial Statements and Exhibits

(a) Not applicable

(b) Not applicable

(d) The following exhibits are being furnished herewith:


99.1						Press release dated July 14, 2023
99.2						Fact Sheet as of June 30, 2023

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s 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, and Quarterly Reports on Form 10-Q 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) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, a potential recession, and slowdowns in economic growth; (ii) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin; (iii) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (iv) changes in deposit flows or loan demands; (v) the effect of COVID-19 and other infectious illness outbreaks that may arise in the future and the resulting governmental and societal responses; (vi) global economic trends, including developments related to Ukraine and Russia, and related negative financial impacts on our borrowers; (vii) risks related to the proposed merger with Luther Burbank Corporation; and (viii) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft; and (ix) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and service. The Company undertakes no obligation to update or revise any forward-looking statement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

July 17, 2023

WASHINGTON FEDERAL, INC.

By:

/s/ KELLI J. HOLZ

Kelli J. Holz

Executive Vice President
and Chief Financial Officer

Friday, July 14, 2023

FOR IMMEDIATE RELEASE

Washington Federal Announces Quarterly Earnings Per Share Of $0.89

SEATTLE, WASHINGTON – Washington Federal, Inc. (Nasdaq: WAFD) (the "Company"), parent company of Washington Federal Bank (the "Bank"), today announced quarterly earnings of $61,775,000 for the quarter ended June 30, 2023, a decrease of 2.4% from $63,295,000 for the quarter ended June 30, 2022. After the effect of dividends on preferred stock, net income available for common shareholders was $0.89 per diluted share for the quarter ended June 30, 2023, compared to $0.91 per diluted share for the quarter ended June 30, 2022, a $0.02 or 2.1% decrease in fully diluted earnings per common share. Return on common shareholders' equity for the quarter ended June 30, 2023 was 11.1% compared to 12.5% for the quarter ended June 30, 2022. Return on assets for the quarter ended June 30, 2023 was 1.1% compared to 1.3% for the same quarter in the prior year.

President and Chief Executive Officer Brent J. Beardall commented, "I am pleased to share that during the quarter we experienced net deposit inflows totaling $259 million, resulting in positive deposit growth for the fiscal year-to-date. This is a continued reflection of the confidence our clients place in WaFd. Net income is only slightly below the same quarter last year, even with the challenging interest rate environment and the turmoil in the banking industry over the last six months and we view the slowing pace of margin contraction to be a positive sign for our future. Specifically, our net interest margin contracted 42 basis points from 3.68% for the month of December 2022 compared with 3.26% for the month of March 2023. Using a consistent comparison, the contraction was only 5 basis points from March compared to 3.21% for the month of June 2023.

After nine consecutive years of net recoveries, during the last two quarters we have experienced net loan charge-offs. It is clear the rapid rise in interest rates is causing some

stress for a limited sub-set of borrowers, but taken in its entirety, credit quality remains a positive differentiator for the Bank. Over 85% of our loans are secured by real estate with an estimated average current loan to value ratio under 45%. While there will likely be further stress for certain segments, we believe the Bank's conservative underwriting will accrue to our long-term benefit.

While we cannot directly control market forces affecting the valuation of our stock, we can effect change in tangible book value per share. Over the past 12 months, we increased tangible book value per share by $2.92 or 11.8%. As of June 30, 2023, WaFd stock was trading at 7.4 times annualized quarterly earnings, which we believe trades below our intrinsic value. Ultimately, we will need to demonstrate to investors that our margin is sustainable over the long-term. In the meantime, the current environment is shaping up to be a "reset" for regional banks and we believe we are well positioned to capitalize on disruptions in the market."

Total assets were $22.6 billion as of June 30, 2023, compared to $20.8 billion at September 30, 2022, primarily due to the $1.3 billion, or 7.9%, increase in net loans. In addition, cash increased by $455.7 million while investment securities decreased by $43.9 million.

The Bank's held to maturity ("HTM") investments were $434 million as of June 30, 2023, with a net unrealized loss of $40 million. Although not permitted by U.S. Generally Accepted Accounting Principles ("GAAP"), including these unrealized losses in accumulated other comprehensive income would result in a ratio of shareholder's equity to total assets of 10.44% compared to 10.62%, as reported.

Customer deposits totaled $16.1 billion as of June 30, 2023, an increase of $90.9 million or 0.6% since September 30, 2022. Transaction accounts decreased by $1.4 billion or 11.3% during that period, while time deposits increased $1.5 billion or 45.7%. As of June 30, 2023, 69.8% of the Company’s deposits were held in 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 89.7% of deposits at June 30, 2023. Uninsured deposits were 25%

as of June 30, 2023, a decrease from 27% as of 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 June 30, 2023, an increase from $2.1 billion at September 30, 2022. The effective weighted average interest rate of borrowings was 3.93% as of June 30, 2023, an increase from 2.02% at September 30, 2022.

The Bank had loan originations of $0.9 billion for the third fiscal quarter of 2023, compared to $2.7 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 $1.7 billion, respectively. In addition to the slowing repayments, which are directly correlated with the rapid rise in interest rates, the Bank has intentionally slowed new loan production to temper net loan growth. Even so, net loans outstanding grew for the quarter due to the funding of construction loans previously originated. Commercial loans represented 63% of all loan originations during the third fiscal quarter of 2023 and consumer loans accounted for the remaining 37%. Commercial loans are preferable as they generally have floating interest rates and shorter durations. The weighted average interest rate on the loan portfolio was 5.11% at June 30, 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 continues to be monitored closely which is of particular importance in light of the shifting economic and monetary environment. As of June 30, 2023, non-performing assets increased to $67.0 million, or 0.3% of total assets as result of the deterioration of one large commercial loan. This compares to 0.3% of total assets at June 30, 2022 and 0.2% at September 30, 2022. Delinquent loans were 0.3% of total loans at June 30, 2023, compared to 0.3% at June 30, 2022 and 0.2% at September 30, 2022. The allowance for credit losses (including the reserve for unfunded commitments) totaled $204.6 million as of June 30, 2023, and was 1.03% of gross loans outstanding, as compared to $205.3 million, or 1.06% of gross loans outstanding, at September 30, 2022. Net charge-offs were $10.4 million

for the third fiscal quarter of 2023, compared to net recoveries of $0.6 million for the prior year same quarter.

The Bank recorded a $9.0 million provision for credit losses in the third fiscal quarter of 2023, compared to a $1.5 million provision in the same quarter of fiscal 2022. The provision in the quarter ended June 30, 2023 was primarily due to one charge-off, offset by reduced unfunded commitment balances combined with the uncertain economic outlook amid concerns around a possible recession and recent macro-economic events.

The Company paid a quarterly dividend on the 4.875% Series A preferred stock on April 15, 2023. On June 2, 2023, the Company paid a regular cash dividend on common stock of $0.25 per share, which represented the 161st consecutive quarterly cash dividend. During the quarter, the Company repurchased 1,116,649 shares of common stock at a weighted average price of $25.62 per share and has authorization to repurchase 2,559,611 additional shares. Tangible common shareholders' equity per share increased by $2.09, or 8.2%, to $27.58 since September 30, 2022. The ratio of total tangible shareholders' equity to tangible assets was 9.4% as of June 30, 2023.

Net interest income was $168.7 million for the third fiscal quarter of 2023, an increase of $17.0 million or 11.2% from the same quarter in the prior year. The increase in net interest income was primarily due to the $2.0 billion increase in average loans outstanding during the quarter despite a decrease in the interest rate spread of 34 basis points. The decrease in the spread was the result of an increase of 209 basis points in the average rate paid on interest-bearing liabilities outpacing a 174 basis point increase in the average rate earned on interest-earning assets. Net interest margin improved to 3.27% in the third fiscal quarter of 2023 compared to 3.22% for the prior year quarter.

Total other income was $13.8 million for the third fiscal quarter of 2023 compared to $17.6 million in the prior year same quarter. Loan fee income decreased by $0.6 million when compared to the same quarter in the prior year due to a reduction in loan production. In addition, a one-time loss of $0.9 million recorded on our client rate swap program due to the LIBOR rate transition completed this quarter. Other income decreased $2.3 million due to a

$2.7 million in unrealized gains on certain equity investments which were recorded in the quarter ended June 30, 2022.

Total other expense was $94.7 million in the third fiscal quarter of 2023, an increase of $7.3 million, or 8.3%, from the prior year's quarter. Compensation and benefits costs increased by $2.4 million, or 5.0%, over the prior year quarter primarily due to annual merit increases and investments in strategic initiatives combined with a reduction in capitalized compensation as loan originations have decreased. FDIC premiums increased by $3.3 million compared to the same period last year. Merger related expenses of $0.5 million were also included in total other expense. Despite these increases, the Company’s efficiency ratio in the third fiscal quarter of 2023 remained stable at 51.9%, compared to 51.6% for the same period one year ago.

Income tax expense totaled $17.7 million for the third fiscal quarter of 2023, as compared to $17.5 million for the prior year same quarter. The effective tax rate for the quarter ended June 30, 2023 was 22.29% compared to 21.70% 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.

Non-GAAP Financial Measures

The adjusted ratio of shareholders' equity to total assets on June 30, 2023, discussed above, is calculated by deducting the $40 million in unrealized losses on HTM investments from total GAAP equity of $2.4 billion, then dividing the adjusted equity by total assets of $22.6 billion to arrive at 10.44%. The unadjusted ratio as of June 30, 2023, was 10.62%.

Important Cautionary Statements

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, and Quarterly Reports on Form 10-Q 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) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, a potential recession, and slowdowns in economic growth; (ii) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin, (iii) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (iv) changes in deposit flows or loan demands; (v) the effect of COVID-19 and other infectious illness outbreaks that may arise in the future and the resulting governmental and societal responses; (vi) global economic trends, including developments related to Ukraine and Russia, and related negative financial impacts on our borrowers; (vii) risks related to the proposed merger with Luther Burbank Corporation; (viii) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft; and (ix) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services. The Company undertakes no obligation to update or revise any forward-looking statement.

# # #

Contact:

Washington Federal, Inc.

425 Pike Street, Seattle, WA 98101

Brad Goode, SVP, Chief Marketing Officer

206-626-8178

brad.goode@wafd.com

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)


	June 30, 2023			September 30, 2022
	(In thousands, except share and ratio data)
ASSETS
Cash and cash equivalents	$	1,139,643		$	683,965
Available-for-sale securities, at fair value	2,036,233			2,051,037
Held-to-maturity securities, at amortized cost	434,172			463,299
Loans receivable, net of allowance for loan losses of $178,069 and $172,808	17,384,188			16,113,564
Interest receivable	81,931			63,872
Premises and equipment, net	237,339			243,062
Real estate owned	8,371			6,667
FHLB and FRB stock	130,875			95,073
Bank owned life insurance	241,351			237,931
Intangible assets, including goodwill of $303,457 and $303,457	309,069			309,009

Other assets	549,416			504,652
	$	22,552,588		$	20,772,131
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Transaction deposits	$	11,256,575		$	12,691,527
Time deposits	4,863,849			3,338,043
Total customer deposits	16,120,424			16,029,570
Borrowings	3,750,000			2,125,000

Advance payments by borrowers for taxes and insurance	33,516			50,051
Federal and state income tax liabilities, net	1,091			3,306
Accrued expenses and other liabilities	253,491			289,944
	20,158,522			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; 136,457,717 and 136,270,886 shares issued; 64,721,190 and 65,330,126 shares outstanding	136,458			136,271
Additional paid-in capital	1,685,587			1,686,975
Accumulated other comprehensive income (loss), net of taxes	47,351			52,481
Treasury stock, at cost; 71,736,527 and 70,940,760 shares	(1,612,494)			(1,590,207)
Retained earnings	1,837,164			1,688,740
	2,394,066			2,274,260
	$	22,552,588		$	20,772,131
CONSOLIDATED FINANCIAL HIGHLIGHTS
Common shareholders' equity per share	$	32.36		$	30.22
Tangible common shareholders' equity per share	27.58			25.49
Shareholders' equity to total assets	10.62		%	10.95		%
Tangible shareholders' equity to tangible assets	9.37		%	9.60		%
Tangible shareholders' equity + allowance for credit losses to tangible assets	10.17		%	10.45		%
Weighted average rates at period end
Loans	5.11		%	4.25		%
Loans and mortgage-backed securities	4.97			4.13
Combined loans, mortgage-backed securities and investments	4.74			4.04
Customer accounts	1.82			0.51
Borrowings	3.93			2.02
Combined cost of customer accounts and borrowings	2.22			0.68
Net interest spread	2.72			3.36

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)


	As of
SUMMARY FINANCIAL DATA	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
	(In thousands, except share and ratio data)
Cash	$	1,139,643		$	1,118,544		$	645,862		$	683,965		$	607,421
Loans receivable, net	17,384,188			17,271,906			16,993,588			16,113,564			15,565,165
Allowance for credit losses ("ACL")	204,569			205,920			208,297			205,308			203,479
Available-for-sale securities, at fair value	2,036,233			2,006,286			2,059,837			2,051,037			2,150,732
Held-to-maturity securities, at amortized cost	434,172			445,222			453,443			463,299			477,884
Total assets	22,552,588			22,325,211			21,653,811			20,772,131			20,158,831
Transaction deposits	11,256,575			11,880,343			12,547,832			12,691,527			12,668,251
Time deposits	4,863,849			3,980,605			3,412,203			3,338,043			3,297,369
Borrowings	3,750,000			3,800,000			3,075,000			2,125,000			1,700,000
Total shareholders' equity	2,394,066			2,375,117			2,324,381			2,274,260			2,220,111

FINANCIAL HIGHLIGHTS
Common shareholders' equity per share	32.36			31.54			30.96			30.22			29.39
Tangible common shareholders' equity per share	27.58			26.85			26.24			25.49			24.66
Shareholders' equity to total assets	10.62		%	10.64		%	10.73		%	10.95		%	11.01		%
Tangible shareholders' equity to tangible assets	9.37		%	9.39		%	9.44		%	9.60		%	9.63		%
Tangible shareholders' equity + ACL to tangible assets	10.17		%	10.19		%	10.27		%	10.45		%	10.65		%
Common shares outstanding	64,721,190			65,793,099			65,387,745			65,330,126			65,321,869
Preferred shares outstanding	300,000			300,000			300,000			300,000			300,000
Loans to customer deposits	107.84		%	108.90		%	106.48		%	100.52		%	97.49		%

CREDIT QUALITY
ACL to gross loans	1.0		%	1.0		%	1.0		%	1.1		%	1.1		%
ACL to non-accrual loans	370.09		%	595.04		%	713.83		%	594.51		%	554.76		%
Non-accrual loans to net loans	0.32		%	0.20		%	0.17		%	0.21		%	0.24		%
Non-accrual loans	$	55,276		$	34,606		$	29,180		$	34,534		$	36,679
Non-performing assets to total assets	0.30		%	0.21		%	0.18		%	0.21		%	0.25		%
Non-performing assets	$	67,000		$	46,785		$	38,650		$	44,554		$	50,430

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2023			2022			2023			2022
	(In thousands, except share and ratio data)						(In thousands, except share and ratio data)
INTEREST INCOME
Loans receivable	$	232,167		$	149,113		$	659,070		$	426,882
Mortgage-backed securities	10,454			8,618			31,489			18,069
Investment securities and cash equivalents	29,859			9,417			70,686			23,475
	272,480			167,148			761,245			468,426
INTEREST EXPENSE
Customer accounts	70,062			9,284			153,831			25,970
FHLB advances and other borrowings	33,718			6,118			80,877			21,486
	103,780			15,402			234,708			47,456
Net interest income	168,700			151,746			526,537			420,970
Provision (release) for credit losses	9,000			1,500			15,000			1,500
Net interest income after provision (release)	159,700			150,246			511,537			419,470
OTHER INCOME
Gain (loss) on sale of investment securities	—			—			—			81
Gain (loss) on hedging derivatives	(926)			—			(900)			—
Prepayment penalty on long-term debt	—			—			—			—
Loan fee income	1,000			1,618			3,154			6,014
Deposit fee income	6,660			6,613			19,201			19,338
Other income	7,037			9,319			16,412			26,457
	13,771			17,550			37,867			51,890
OTHER EXPENSE
Compensation and benefits	50,456			48,073			150,970			142,613
Occupancy	10,444			10,053			31,464			31,931
FDIC insurance premiums	5,350			2,100			13,025			7,300
Product delivery	5,217			4,667			15,154			14,432
Information technology	11,661			11,831			36,775			34,974
Other expense	11,571			10,679			36,470			34,183
	94,699			87,403			283,858			265,433
Gain (loss) on real estate owned, net	722			448			411			1,139
Income before income taxes	79,494			80,841			265,957			207,066
Income tax provision	17,719			17,546			58,739			44,131
Net income	61,775			63,295			207,218			162,935
Dividends on preferred stock	3,656			3,656			10,969			10,969
Net income available to common shareholders	$	58,119		$	59,639		$	196,249		$	151,966
PER SHARE DATA
Basic earnings per common share	$	0.89		$	0.91		$	3.00		$	2.33
Diluted earnings per common share	0.89			0.91			3.00			2.32
Cash dividends per common share	0.25			0.24			0.74			0.71
Basic weighted average shares outstanding	65,194,880			65,315,481			65,348,709			65,274,488
Diluted weighted average shares outstanding	65,212,846			65,395,666			65,442,910			65,397,579
PERFORMANCE RATIOS
Return on average assets	1.12		%	1.25		%	1.28		%	1.08		%
Return on average common equity	11.09			12.50			12.72			10.82
Net interest margin	3.27			3.22			3.49			3.00
Efficiency ratio	51.90			51.63			50.29			56.13

WASHINGTON FEDERAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended
	June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
	(In thousands, except share and ratio data)
INTEREST INCOME
Loans receivable	$	232,167		$	222,957		$	203,946		$	174,710		$	149,113
Mortgage-backed securities	10,454			10,422			10,613			8,263			8,618
Investment securities and cash equivalents	29,859			21,967			18,860			14,960			9,417
	272,480			255,346			233,419			197,933			167,148
INTEREST EXPENSE
Customer accounts	70,062			52,123			31,646			17,071			9,284
FHLB advances and other borrowings	33,718			28,185			18,974			7,243			6,118
	103,780			80,308			50,620			24,314			15,402
Net interest income	168,700			175,038			182,799			173,619			151,746
Provision (release) for credit losses	9,000			3,500			2,500			1,500			1,500
Net interest income after provision (release)	159,700			171,538			180,299			172,119			150,246
OTHER INCOME
Gain (loss) on sale of investment securities	—			—			—			18			—
Gain (loss) on hedging derivatives	(926)			26			—			—			—

Loan fee income	1,000			652			1,502			1,154			1,618
Deposit fee income	6,660			6,188			6,353			6,604			6,613
Other income	7,037			3,206			6,169			6,706			9,319
	13,771			10,072			14,024			14,482			17,550
OTHER EXPENSE
Compensation and benefits	50,456			51,444			49,070			51,304			48,073
Occupancy	10,444			10,918			10,102			10,568			10,053
FDIC insurance premiums	5,350			4,000			3,675			2,231			2,100
Product delivery	5,217			5,316			4,621			5,104			4,667
Information technology	11,661			12,785			12,329			12,228			11,831
Other expense	11,571			12,418			12,481			11,707			10,679
	94,699			96,881			92,278			93,142			87,403
Gain (loss) on real estate owned, net	722			(199)			(112)			(488)			448
Income before income taxes	79,494			84,530			101,933			92,971			80,841
Income tax provision	17,719			18,596			22,424			19,576			17,546
Net income	61,775			65,934			79,509			73,395			63,295
Dividends on preferred stock	3,656			3,656			3,656			3,656			3,656
Net income available to common shareholders	$	58,119		$	62,278		$	75,853		$	69,739		$	59,639
PER SHARE DATA
Basic earnings per common share	$	0.89		$	0.95		$	1.16		$	1.07		$	0.91
Diluted earnings per common share	0.89			0.95			1.16			1.07			0.91
Cash dividends per common share	0.25			0.25			0.24			0.24			0.24
Basic weighted average shares outstanding	65,194,880			65,511,131			65,341,974			65,326,706			65,315,481
Diluted weighted average shares outstanding	65,212,846			65,551,185			65,430,690			65,423,817			65,395,666
PERFORMANCE RATIOS
Return on average assets	1.12		%	1.21		%	1.50		%	1.44		%	1.25		%
Return on average common equity	11.09			12.01			15.15			14.22			12.50
Net interest margin	3.27			3.51			3.69			3.64			3.22
Efficiency ratio	51.90			52.34			46.78			49.52			51.63

Washington Federal, Inc.

Fact Sheet

June 30, 2023

($ in Thousands)


													Exhibit 99.2

	As of 12/22						As of 03/23						As of 06/23
Allowance for Credit Losses (ACL) - Total	$	208,297					$	205,920					$	204,569
ACL - Loans	176,797						177,420						178,069
ACL - Unfunded Commitments	31,500						28,500						26,500
Total ACL as a % of Gross Loans	1.03		%				1.02		%				1.03		%







	12/22 QTR			12/22 YTD			03/23 QTR			03/23 YTD			06/23 QTR			06/23 YTD
Loan Originations - Total	$	2,042,678		$	2,042,678		$	1,039,722		$	3,082,400		$	870,963		$	3,953,363
Multi-Family	97,490			97,490			17,729			115,219			12,604			127,823
Commercial Real Estate	130,909			130,909			39,689			170,598			21,538			192,136
Commercial & Industrial	952,699			952,699			456,168			1,408,867			372,718			1,781,585
Construction	529,050			529,050			226,750			755,800			143,600			899,400
Land - Acquisition & Development	10,104			10,104			20,043			30,147			1,912			32,059
Single-Family Residential	150,721			150,721			149,774			300,495			168,532			469,027
Construction - Custom	114,191			114,191			74,005			188,196			77,210			265,406
Land - Consumer Lot Loans	4,390			4,390			6,315			10,705			4,894			15,599
HELOC	42,632			42,632			36,622			79,254			38,287			117,541
Consumer	10,492			10,492			12,627			23,119			29,668			52,787

Purchased Loans (including acquisitions)	$	80,015		$	80,015		$	—		$	80,015		$	—		$	80,015

Net Loan Fee and Discount Accretion	$	5,659		$	5,659		$	4,923		$	10,582		$	4,859		$	15,441

Repayments
Loans	$	1,233,319		$	1,233,319		$	1,109,433		$	2,342,752		$	1,103,238		$	3,445,990
MBS	48,310			48,310			33,354			81,664			43,639			125,303

MBS Premium Amortization	$	(157)		$	(157)		$	93		$	(64)		$	1,436		$	1,372

Efficiency
Operating Expenses/Average Assets	1.74		%	1.74		%	1.78		%	1.76		%	1.71		%	1.71		%
Efficiency Ratio (%)	46.78		%	46.78		%	52.34		%	49.53		%	51.90		%	50.29		%
Amortization of Intangibles	$	243		$	243		$	243		$	486		$	240		$	726

EOP Numbers
Shares Issued and Outstanding	65,387,745						65,793,099						64,721,190

Share repurchase information
Remaining shares authorized for repurchase	3,679,499						3,676,260						2,559,611
Shares repurchased	44,845			44,845			3,239			48,084			1,116,649			1,164,733
Average share repurchase price	$	38.53		$	38.53		$	33.48		$	38.19		$	25.62		$	26.14

Washington Federal, Inc.

Fact Sheet

June 30, 2023

($ in Thousands)


Tangible Common Shareholders' Book Value	As of 12/22			As of 03/23			As of 06/23
$ Amount	$	1,715,614		$	1,766,593		$	1,784,997
Per Share	26.24			26.85			27.58

# of Employees	2,144			2,110			2,115

Investments
Available-for-sale:
Agency MBS	$	911,835		$	899,744		$	950,210
Other	1,148,002			1,106,542			1,086,023
	$	2,059,837		$	2,006,286		$	2,036,233
Held-to-maturity:
Agency MBS	$	453,443		$	445,222		$	434,172
	$	453,443		$	445,222		$	434,172

	As of 12/22			As of 03/23			As of 06/23
Loans Receivable by Category	AMOUNT		%	AMOUNT		%	AMOUNT		%
Multi-Family	$	2,713,331	13.4%	$	2,894,567	14.3%	$	2,889,635	14.5%
Commercial Real Estate	3,237,073		16.0	3,283,151		16.3	3,239,387		16.3
Commercial & Industrial	2,628,131		13.0	2,590,700		12.8	2,496,778		12.5
Construction	4,055,474		20.0	3,735,821		18.5	3,578,430		17.9
Land - Acquisition & Development	253,682		1.2	231,990		1.1	216,185		1.1
Single-Family Residential	6,013,410		29.7	6,175,250		30.6	6,313,561		31.7
Construction - Custom	926,126		4.6	840,475		4.2	757,171		3.8
Land - Consumer Lot Loans	148,246		0.7	141,215		0.7	134,967		0.7
HELOC	212,123		1.0	218,179		1.1	224,917		1.1
Consumer	73,115		0.4	71,083		0.4	76,813		0.4
	20,260,711		100%	20,182,431		100%	19,927,844		100%
Less:
Allowance for Credit Losses (ACL)	176,797			177,420			178,069
Loans in Process	2,997,839			2,648,512			2,270,038
Net Deferred Fees, Costs and Discounts	92,487			84,593			95,549

Sub-Total	3,267,123			2,910,525			2,543,656
	$	16,993,588		$	17,271,906		$	17,384,188

Net Loan Portfolio by Category	AMOUNT		%	AMOUNT		%	AMOUNT		%
Multi-Family	$	2,683,435	15.8%	$	2,846,956	16.5%	$	2,845,457	16.4%
Commercial Real Estate	3,185,927		18.7	3,230,501		18.7	3,190,319		18.4
Commercial & Industrial	2,557,393		15.0	2,521,895		14.6	2,428,825		14.0
Construction	1,611,366		9.5	1,582,486		9.2	1,731,519		10.0
Land - Acquisition & Development	182,590		1.1	159,584		0.9	154,411		0.9
Single-Family Residential	5,942,203		35.0	6,107,105		35.3	6,231,509		35.8
Construction - Custom	405,063		2.4	400,327		2.3	372,824		2.1
Land - Consumer Lot Loans	142,936		0.9	136,195		0.8	130,224		0.7
HELOC	212,317		1.2	218,497		1.3	225,388		1.3
Consumer	70,358		0.4	68,360		0.4	73,712		0.4
	$	16,993,588	100%	$	17,271,906	100%	$	17,384,188	100%

Washington Federal, Inc.

Fact Sheet

June 30, 2023

($ in Thousands)


	As of 12/22					As of 03/23					As of 06/23
Loans by State	AMOUNT			%		AMOUNT			%		AMOUNT			%
Washington	$	5,585,335		32.5	%	$	5,609,172		32.1	%	$	5,549,532		31.6	%
Idaho	860,583			5.0		865,543			5.0		877,573			5.0
Oregon	2,310,548			13.5		2,303,843			13.2		2,306,181			13.1
Utah	1,649,462			9.6		1,758,831			10.1		1,849,187			10.5
Nevada	723,099			4.2		767,250			4.4		758,988			4.3
Texas	2,243,393			13.1		2,330,637			13.4		2,381,783			13.6
Arizona	2,381,143			13.9		2,398,029			13.7		2,435,541			13.9
New Mexico	705,213			4.1		720,320			4.1		728,140			4.2
Other	711,609			4.1		695,701			4.0		675,332			3.8
Total	$	17,170,385		100%		$	17,449,326		100%		$	17,562,257		100%

Non-Performing Assets	AMOUNT			%		AMOUNT			%		AMOUNT			%
Non-accrual loans:
Multi-Family	$	5,879		20.1%		$	5,844		16.9%		$	5,951		10.8%
Commercial Real Estate	4,635			15.9		4,519			13.0		1,087			2.0
Commercial & Industrial	906			3.1		7,681			22.2		31,686			57.3
Construction	—			—		—			—					—
Land - Acquisition & Development	—			—		—			—					—
Single-Family Residential	17,084			58.5		16,396			47.4		15,510			28.0
Construction - Custom	435			1.5		—			—		87			0.2
Land - Consumer Lot Loans	71			0.3		6			—		122			0.2
HELOC	134			0.5		128			0.4		801			1.4
Consumer	36			0.1		32			0.1		32			0.1
Total non-accrual loans	29,180			100%		34,606			100%		55,276			100%
Real Estate Owned	6,117					8,826					8,371
Other Property Owned	3,353					3,353					3,353
Total non-performing assets	$	38,650				$	46,785				$	67,000

Non-accrual loans as % of total net loans	0.17		%			0.20		%			0.32		%
Non-performing assets as % of total assets	0.18		%			0.21		%			0.30		%

Net Charge-offs (Recoveries) by Category	12/22 QTR			CO % (a)		03/23 QTR			CO % (a)		06/23 QTR			CO % (a)
Multi-Family	$	—		—%		$	—		—%		$	—		—%
Commercial Real Estate	(4)			—		(1)			—		—			—
Commercial & Industrial	50			0.01		6,012			0.93		10,459			1.68
Construction	—			—		—			—		—			—
Land - Acquisition & Development	(16)			(0.03)		(14)			(0.02)		(24)			(0.04)
Single-Family Residential	(430)			(0.03)		(70)			—		(18)			—
Construction - Custom	—			—		—			—		—			—
Land - Consumer Lot Loans	—			—		(5)			(0.01)		(9)			(0.03)
HELOC	(1)			—		—			—		—			—
Consumer	(88)			(0.48)		(45)			(0.25)		(57)			(0.30)
Total net charge-offs (recoveries)	$	(489)		(0.01)%		$	5,877		0.12%		$	10,351		0.21%
(a) Annualized Net Charge-offs (recoveries) divided by Gross Balance

Washington Federal, Inc.

Fact Sheet

June 30, 2023

($ in Thousands)



	As of 12/22					As of 03/23					As of 06/23
Deposits & Branches by State	AMOUNT		%		#	AMOUNT		%		#	AMOUNT		%		#
Washington	$	7,347,752	46.0	%	72	$	7,273,498	45.9	%	71	$	7,505,777	46.6	%	71
Idaho	1,015,195		6.4		22	1,020,154		6.4		22	1,047,730		6.5		22
Oregon	2,779,517		17.4		36	2,750,323		17.3		36	2,810,153		17.4		36
Utah	949,557		5.9		9	852,062		5.4		9	837,696		5.2		9
Nevada	504,855		3.2		9	527,449		3.3		8	496,316		3.1		8
Texas	518,773		3.3		5	410,972		2.6		6	363,460		2.2		6
Arizona	1,544,363		9.7		28	1,579,815		10.0		28	1,605,868		10.0		28
New Mexico	1,300,023		8.1		19	1,446,675		9.1		19	1,453,424		9.0		19
Total	$	15,960,035	100%		200	$	15,860,948	100%		199	$	16,120,424	100%		199

Deposits by Type	AMOUNT		%			AMOUNT		%			AMOUNT		%
Non-Interest Checking	$	3,070,895	19.2	%		$	2,856,165	18.0	%		$	2,729,888	16.9	%
Interest Checking	3,971,814		24.9			4,125,554		26.0			4,124,463		25.6
Savings	1,002,034		6.3			943,915		6.0			874,256		5.4
Money Market	4,503,089		28.2			3,954,709		24.9			3,527,968		21.9
Time Deposits	3,412,203		21.4			3,980,605		25.1			4,863,849		30.2
Total	$	15,960,035	100%			$	15,860,948	100%			$	16,120,424	100%

Uninsured Deposits - EOP	$	4,876,840	30.6	%		$	4,238,629	26.7	%		$	4,033,174	25.0	%

Time Deposit Repricing	Amount		Rate			Amount		Rate			Amount		Rate
Within 3 months	$	1,009,481	0.96	%		$	553,797	1.49	%		$	1,402,532	3.28	%
From 4 to 6 months	523,602		1.06	%		947,860		2.51	%		1,500,396		3.22	%
From 7 to 9 months	490,001		1.28	%		920,635		2.38	%		1,017,655		3.67	%
From 10 to 12 months	726,764		1.64	%		933,763		3.46	%		400,959		3.73	%

Borrowings (Effective Maturity)	Amount		Rate			Amount		Rate			Amount		Rate
Within 1 year	$	1,975,000	4.31	%		$	2,700,000	4.74	%		$	2,650,000	5.14	%
1 to 3 years	200,000		2.19	%		300,000		2.07	%		300,000		2.11	%
3 to 5 years	100,000		1.87	%		—		—	%		—		—	%
More than 5 years	800,000		0.65	%		800,000		0.76	%		800,000		0.61	%
Total	$	3,075,000				$	3,800,000				$	3,750,000

Interest Rate Risk

NPV post 200 bps shock (b)			11.2	%				9.9	%				9.9	%
Change in NII after 200 bps shock (b)			0.4	%				3.3	%				3.0	%
(b) Assumes no balance sheet management actions taken.

Washington Federal, Inc.

Fact Sheet

June 30, 2023

($ in Thousands)


Historical CPR Rates (c)
	WAFD		WAFD
Average for Quarter Ended:	SFR Mortgages		GSE MBS

6/30/2021	31.8	%	42.7	%
9/30/2021	28.4	%	38.3	%
12/31/2021	25.0	%	35.3	%
3/31/2022	18.4	%	28.6	%
6/30/2022	13.1	%	20.9	%
9/30/2022	8.1	%	14.7	%
12/31/2022	6.3	%	12.6	%
3/31/2023	5.8	%	8.9	%
6/30/2023	7.9	%	11.8	%

(c) 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

June 30, 2023

Average Balance Sheet

($ in Thousands)


	Quarter Ended
	December 31, 2022						March 31, 2023						June 30, 2023
	Average				Average		Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets
Loans receivable	$	16,580,235	$	203,946	4.88	%	$	17,097,130	$	222,957	5.29	%	$	17,307,298	$	232,167	5.38	%
Mortgage-backed securities	1,368,759		10,613		3.08		1,355,403		10,422		3.12		1,349,264		10,454		3.11
Cash & investments	1,592,201		17,486		4.36		1,657,027		19,786		4.84		1,879,893		27,249		5.81
FHLB & FRB Stock	117,899		1,374		4.62		139,484		2,181		6.34		131,191		2,610		7.98

Total interest-earning assets	19,659,094		233,419		4.71	%	20,249,044		255,346		5.11	%	20,667,646		272,480		5.29	%
Other assets	1,500,892						1,491,981						1,445,635
Total assets	$	21,159,986					$	21,741,025					$	22,113,281

Liabilities and Shareholders' Equity
Interest-bearing customer accounts	$	12,611,624	31,646		1.00	%	$	12,746,827	52,123		1.66	%	$	13,019,355	70,062		2.16	%
Borrowings	2,695,652		18,974		2.79		3,235,278		27,659		3.47		3,595,879		33,718		3.76


Total interest-bearing liabilities	15,307,276		50,620		1.31	%	16,028,772		80,308		2.03	%	16,615,234		103,780		2.51	%
Noninterest-bearing customer accounts	3,245,264						3,046,867						2,826,238
Other liabilities	304,240						290,702						275,522
Total liabilities	18,856,780						19,366,341						19,716,994
Stockholders’ equity	2,303,206						2,374,684						2,396,287
Total liabilities and equity	$	21,159,986					$	21,741,025					$	22,113,281

Net interest income/interest rate spread			$	182,799	3.40	%			$	175,038	3.08	%			$	168,700	2.78	%

Net interest margin (1)					3.69	%					3.51	%					3.27	%

(1) Annualized net interest income divided by average interest-earning assets

Washington Federal, Inc.

Fact Sheet

June 30, 2023

Delinquency Summary

($ in Thousands)


TYPE OF LOANS					# OF LOANS				% based				% based
	#LOANS	AVG Size	LOANS AMORTIZED COST		30	60	90	Total	on #		$ Delinquent		on $
June 30, 2023
Multi-Family	1,137	2,514	$	2,858,433	1	—	1	2	0.18	%	$	496	0.02	%
Commercial Real Estate	1,193	2,698	3,218,451		—	—	—	—	—		—		—
Commercial & Industrial	2,068	1,204	2,490,740		3	3	12	18	0.87		32,551		1.31
Construction	528	3,332	1,759,434		—	—	—	—	—		—		—
Land - Acquisition & Development	101	1,601	161,658		—	—	—	—	—		—		—
Single-Family Residential	19,630	319	6,258,592		29	9	49	87	0.44		19,086		0.30
Construction - Custom	804	468	376,045		1	—	1	2	0.25		711		0.19
Land - Consumer Lot Loans	1,173	114	133,994		2	2	1	5	0.43		264		0.20
HELOC	4,151	55	228,132		6	1	6	13	0.31		1,448		0.63
Consumer	1,729	44	76,778		8	1	16	25	1.45		540		0.70
	32,514	540	$	17,562,257	50	16	86	152	0.47	%	$	55,096	0.31	%

March 31, 2023
Multi-Family	1,147	2,493	$	2,859,994	1	—	—	1	0.09	%	$	132	—	%
Commercial Real Estate	1,210	2,693	3,258,304		2	—	2	4	0.33		2,011		0.06
Commercial & Industrial	2,171	1,191	2,585,196		18	2	11	31	1.43		4,199		0.16
Construction	576	2,793	1,608,513		1	—	—	1	0.17		505		0.03
Land - Acquisition & Development	109	1,533	167,080		—	—	—	—	—		—		—
Single-Family Residential	19,543	314	6,134,021		28	4	56	88	0.45		19,238		0.31
Construction - Custom	953	424	403,783		1	—	—	1	0.10		87		0.02
Land - Consumer Lot Loans	1,209	116	140,140		1	—	—	1	0.08		79		0.06
HELOC	4,070	54	221,159		8	4	4	16	0.39		1,348		0.61
Consumer	1,765	40	71,136		7	2	15	24	1.36		235		0.33
	32,753	533	$	17,449,326	67	12	88	167	0.51	%	$	27,834	0.16	%

December 31, 2022
Multi-Family	1,141	2,363	$	2,695,759				—	—	%	$	—	—	%
Commercial Real Estate	1,208	2,660	3,213,308		1	1	4	6	0.50		1,049		0.03
Commercial & Industrial	2,237	1,172	2,621,266		20	7	18	45	2.01		1,246		0.05
Construction	630	2,599	1,637,499		2			2	0.32		934		0.06
Land - Acquisition & Development	110	1,738	191,162					—	—		—		—
Single-Family Residential	19,375	308	5,967,678		30	9	57	96	0.50		21,296		0.36
Construction - Custom	1,091	374	408,563				1	1	0.09		435		0.11
Land - Consumer Lot Loans	1,238	119	147,078		1		1	2	0.16		109		0.07
HELOC	3,971	54	214,904		9		6	15	0.38		2,249		1.05
Consumer	1,951	38	73,168		10	5	15	30	1.54		391		0.53
	32,952	521	$	17,170,385	73	22	102	197	0.60	%	$	27,709	0.16	%

Document and Entity Information	Jul. 14, 2023
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Jul. 14, 2023
Entity Registrant Name	WASHINGTON FEDERAL INC
Entity Central Index Key	0000936528
Amendment Flag	false
Entity Incorporation, State or Country Code	WA
Entity File Number	001-34654
Entity Tax Identification Number	91-1661606
Entity Address, Address Line One	425 Pike Street
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98101
City Area Code	206
Local Phone Number	624-7930
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Series A Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock
Trading Symbol	WAFDP
Security Exchange Name	NASDAQ
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $1.00 par value per share
Trading Symbol	WAFD
Security Exchange Name	NASDAQ