Washington Federal, Inc. (WAFD), a unitary savings and loan holding company, reported Thursday a 16.7 percent increase in its third quarter profit on lower provision for loan losses, despite decline in net interest margin.
For the quarter, the parent company of Washington Federal said its earnings grew to $35.16 million or $0.33 per share from prior year's $30.12 million or $0.27 per share.
Higher net income is attributed primarily to the material decline in expenses related to problem assets, which more than offset a decline in net interest income, the company said.
Net interest income for the quarter was $97 million, down 9 percent from last year caused by the lower asset yields. Net interest margin was 3.05 percent, compared to 3.44 percent one year ago.
The provision for loan losses decreased to $10 million from $21 million in the prior year.
The company said its ratio of tangible common equity to tangible assets was 12.69 percent at quarter end and continues to be among the best of large regional financial institutions in the U.S.
Chairman, President & CEO Roy Whitehead said, "The quarter produced the ninth consecutive increase in quarterly earnings and the Company's best operating results since the beginning of the recession. Overall, it was another very solid quarter."
Looking ahead, Whitehead said, "Management and the Board expect further improvement in overall financial performance in the near term, but recognize the formidable challenges presented longer-term by extraordinarily low interest rates and muddled market conditions."
Consistent with its positive internal credit quality indicators and weak macro-economic conditions, the company decreased its specific loan loss reserve and increased its general loan loss reserve.
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