Higher loan rates and expanded lending helped boost first-quarter profit Washington Federal in Seattle.
The $15.6 billion-asset company said Wednesday that its net income in the quarter increased 17% to $49.3 million from a year earlier. Earnings per share of 57 cents came in 2 cents below the mean estimate of analysts compiled by FactSet Research Systems.
“We are pleased with the continued strength of our core operations,” CEO Brent Beardall said in a news release. “Our balance sheet strength and the robust western markets we serve provide us with reasons to be optimistic about the future.”
Deposits climbed 3% to $11.1 billion from the fourth quarter of 2017, with about 58% of deposits held in less-costly transaction accounts. The bank did not provide a yearly comparison on deposit growth.
Net interest income after the loan-loss provision climbed 8% year over year to $118 million, as loan demand increased and yields on variable-rate loans widened due to rising interest rates. Average earning assets rose $759 million, or 5.5%, year over year, and the weighted average rate of all loans, securities and investments increased 12 basis points to 3.94%.
Noninterest income rose 24% to $12.6 million on higher deposit service fees, as more customers adopted the bank’s Green Checking product, which includes features such as identity-theft monitoring and accidental death and dismemberment insurance.
Noninterest expenses climbed 14% to $65.8 due to increased salaries and employee benefits.
Expenses also rose as Washington Federal spent more on technology and consulting to improve its Bank Secrecy Act compliance. The bank was forced last year to withdraw its regulatory application to acquire the $472 million-asset Anchor Bancorp in Lacey, Wash., after issues emerged with its BSA and anti-money-laundering compliance.