Washington Federal Inc. in Seattle said Thursday that profits in its fiscal-year fourth quarter nearly doubled from a year earlier as its volume of problem loans continued to shrink.
The $13.4 billion-asset company reported earnings of $30.7 million in the quarter that ended Sept. 30, up 92% from the same quarter last year. Earnings per share doubled, to 28 cents, a penny shy of estimates of analysts polled by Thomson Reuters.
Washington Federal attributed the gains largely to improved asset quality, which allowed it to reduce its provision for loan losses by 41% year over year. Nonperforming assets totaled $370 million at Sept. 30, down 5% from the same time last year and nearly 40% from its peak at June 30, 2009. Net loan chargeoffs declined by more than 46% year over year, to $98 million.
Still, the company said it increased its percentage of loan-loss reserves to total assets due to "uncertain economic conditions." The total allowance for loan losses at Sept, 30 was $157 million, or 1.94% of loans.
For the fiscal year that ended Sept. 30, earnings fell 6% from a year earlier, to $111.1 million, though last year's profits were aided by by two one-time tax gains. Excluding these two items, the bank said its income increased by $86.3 million. or 347%, from year to year.