Improving conditions in the real estate market are helping Washington Federal (WAFD) in Seattle, but tight margins and other challenges lie ahead.
Earnings at the $12.5 billion-asset company rose 16% to $35.5 million in its fiscal fourth quarter, compared with a year earlier, Washington Federal reported Thursday.
Credit costs, which include provision for loan losses and losses on real estate acquired, fell 84.8%, to $4.1 million compared with a year earlier. The lower charges were primarily responsible for the increase in its earnings, Washington Federal said.
Nonperforming assets fell 26% to $273 million, or 2.19% of total assets, compared with a year earlier. Real estate held for sale fell 37.8%, to $99.4 million, as Washington Federal continued to liquidate foreclosed properties.
The improvement in the loan portfolio continues a trend that started after the third quarter of 2009, when nonperforming assets peaked at $606 million, or 5.03% of total assets.
Net interest income was $92.1 million, down 11.9% from a year earlier. Net interest margin fell 17 basis points, to 3.18% for the year, because of declining yields on assets, the company said.
Noninterest expense rose 4.4% from a year earlier, to $35.7 million. Noninterest income fell 31.9%, to $3.2 million.
Shares of Washington Federal rose 8 cents, to $16.59, in trading early Thursday afternoon.
