Washington Federal (WAFD) in Seattle attributed its strong quarter to economic improvements in the eight states in which it operates.

The $13 billion-asset company reported earnings of $43 million for its fiscal fourth quarter ended Sept. 30, up 21% from the same period a year ago. Earnings stood at 41 cents per share, while analysts polled by Bloomberg had predicted quarterly earnings of 35 cents per share.

Washington Federal benefited from climbing real estate values and improving asset quality.

It recovered $2 million from loan-loss provisions last quarter, whereas it added $5 million to its loan-loss allowance in the same period last year.

Net loan chargeoffs fell from $11 million in the year-ago quarter to a net recovery of $0.9 million in the most recent quarter. Nonperforming loans decreased 24% to $131 million, and delinquencies fell 60 basis points to 1.97%.

Net interest income was $97 million, up 5% from a year earlier as interest expenses from customer accounts, Federal Home Loan bank advances and other borrowings fell. Net interest margin was 3.21%, up 14 basis points year over year.

Noninterest income increased 78% to $5.9 million. Noninterest expenses rose 21% to $43 million as occupancy, employee compensation and benefits and other costs rose slightly.

Washington Federal agreed in April to buy 51 branches and $1.8 billion in deposits from Bank of America (BAC). The addition would give Washington Federal a total of 236 branches in Washington, Idaho, Oregon, New Mexico, Nevada, Arizona, Texas and Utah. It converted from a thrift to a national bank in July.

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