A strengthening housing market lifted Washington Federal (WAFD) in Seattle in the first quarter.
Earnings at the $13.1 billion-asset thrift rose 5.9% from a year earlier, to $36 million.
Washington Federal made no provision for loan losses in the quarter, primarily because of increasing real estate values and improving asset quality. It made an $18 million provision a year earlier.
"Higher earnings during the quarter were largely due to improved asset quality driven by progress in housing and overall market conditions in our eight-state territory," Roy Whitehead, Washington Federal's chief executive, said in a press release. "Still, consumers and businesses remain cautious, and we expect earnings to be under pressure until loan demand improves or higher interest rates enable us to be more competitive with government mortgage sources."
Net interest income fell 11% year over year because of lower yields. Net interest margin shrank 19 basis points, to 3.1%. But other income rose 20% from a year earlier, to $6 million.
Noninterest expense rose 11.7% year over year, to $41.1 million, because of expenses related to Washington Federal's purchase in October of South Valley Bancorp of Klamath Falls, Ore.
Washington Federal's loan book decreased 8.8% from a year earlier, to $112.9 million.