15 th Annual Financial Services Conference May 9, 2013

Transcription

1 15 th Annual Financial Services Conference May 9,

2 Forward Looking Statements: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Such statements are based upon the current beliefs and expectations of Washington Federal s management and are subject to significant risks and uncertainties. The forward-looking statements in this presentation speak only as of the date of the presentation, and Washington Federal assumes no duty, and does not undertake, to update them. Actual results or future events could differ, possibly materially, from those that we anticipated in these forward-looking statements. 2

3 Company Profile: Since Branches in Eight Western States Consumer Lending Commercial Real Estate Business Banking Strong Capital, High Asset Quality, Low-cost provider Portfolio Lender Profitable every year since 1982 IPO 17 Acquisitions since IPO Largest Bank Headquartered in Pacific Northwest 3

4 Market Area: 8 Western States 4

5 History of Acquisitions: 2007 $547M Bank in New Mexico 2010 $1.02B Bank in Bellingham WA 2011 $150M Bank in Scottsdale AZ 2008 $945M Bank in Bellevue WA 2011 $253M in Deposit in NM 2012 $634M Bank in Oregon Since going public in 1982, we have successfully integrated 17 acquisitions. 5

6 Market Updates: Current vs. Prior Year Unemployment Rate (UR) Median Home Price Source: DA Davidson Research Report 5/7/13 6

7 $14,000 $12,000 Total Assets (in millions) $13.1 $10,000 $8,000 $6,000 $4,000 $2,000 $0 7

8 Asset Composition As of September 30, 2008 Cash 0.70% Other Assets 3.50% Cash 6.00% Covered Assets 2.80% Other Assets 5.40% Asset Composition As of March 31, 2013 Investments 14.80% Loans 81.00% Investments 27.80% Loans 57.80% 8

9 High Quality Bonds, $420 FHLB Stock, $152 Investments As of March 31, 2013 (in millions) Agency Obligations, $485 AFS Gain, $19 Agency MBS, $2,574 Cash, $782 9

10 $10,000 Net Loans (in millions) $9,502 $9,000 $8,000 $7,830 $7,000 $6,000 $5,388 $5,000 $4,000 $3,000 $2,000 $1,000 $0 10

11 3/31/2013 9/30/2008 Gross Loan Portfolio by Category AMOUNT % AMOUNT % $ Change % Change Single-Family Residential $ 5,454, % $ 6,868, % $ (1,414,149) -20.6% Construction - Speculative 124, % 439, % (315,576) -71.8% Construction - Custom 218, % 317, % (99,348) -31.3% Land - Acquisition & Development 135, % 724, % (588,590) -81.2% Land - Consumer Lot Loans 134, % 210, % (76,004) -36.1% Multi-Family 765, % 683, % 81, % Commercial Real Estate 878, % 282, % 596, % Commercial & Industrial 332, % 151, % 180, % HELOC 156, % 80, % 75, % Consumer 66, % 153, % (86,099) -56.2% 8,267, % 9,912, % (1,645,375) -16.6% 11

12 2.50% 2.00% Net Loan Charge Offs As a % of Loans Outstanding $ % $ % 0.50% 0.00% 12

13 Accounting Guidance: A modification is a Troubled Debt Restructuring if: 1) Borrower is experiencing financial difficulties. 2) A concession is made. Most importantly Current GAAP says once a TDR, always a TDR. Total TDR's as of 03/31/13 Balance Performing TDR's $ 379,637, % Perf. Del 30 to 90 days 15,439, % Non-Performing TDR's 21,760, % Total TDR's 416,837, % Performing TDR's Months since Modification 3 Mo 51,150, % 6 Mo 24,702, % 9 Mo 40,884, % 12 Mo 56,220, % 15 Mo 41,696, % 18 Mo 41,042, % Over 18 Mo 123,940, % Total Current TDR's 379,637, % 13

14 Non-Performing Assets & Allowance Trends: 6.00% 5.00% 4.00% 5.03% Non-Performing Assets Non-Performing Loans ALLL to Loans 3.00% 2.00% 1.88% NPA Ratio 1.00% 0.00% 14

15 $10,000 $9,000 Deposit Composition & Weighted Rate (in Millions) 5.00% 4.50% $8, % $7, % $6, % $5, % $4, % $3,000 $2,000 DDA MM & SAVINGS TIME WTD RATE 1.50% 1.00% $1, % $0 0.00% 15

16 Deposit Compostion As of 03/31/2008 Deposit Composition As of 03/31/2013 Time Deposits $5,304 75% Transaction Accounts $1,782 25% Time Deposits $5,628 61% Transaction Accounts $3,525 39% 16

17 Capital Market Comparison: (in Billions) Company Name Total Assets Asset Rank Tangible Assets Tang Common Eqty/ Tang Assts (%) TCE / TA RANK JPMorgan Chase & Co. 2, , Bank of America Corp. 2, , Citigroup Inc. 1, , Wells Fargo & Co. 1, , Bank of New York Mellon Corp U.S. Bancorp Capital One Financial Corp PNC Financial Services Group State Street Corp HSBC USA Inc Washington Federal, Inc Source: SNL as of March

18 Potential earnings power provided by excess capital Earning Power Incremental Hypothetical Return on Incremental Assets TCE Ratio Total Assets Assets 0.90% 1.00% 1.10% 11.00% 15,193,600 2,077,767 18,700 20,778 22, % 16,712,960 3,597,127 32,374 35,971 39, % 18,569,956 5,454,123 49,087 54,541 59, % 20,891,200 7,775,367 69,978 77,754 85,529 Earning Power % Change in Earnings 0.90% 1.00% 1.10% 13% 15% 16% 23% 25% 28% 34% 38% 42% 49% 55% 60% 18

19 5.00% Net Interest Spread 4.50% 4.00% 3.81% 4.14% 3.50% 3.00% 3.01% 3.13% 2.50% 2.57% 2.72% 2.00% 2.16% 2.17% 2.04% 2.05% 1.50% 1.00% Net Interest Spread is the difference between the weighted averaged rate earned on assets and the weighted average rate paid on liabilities. 19

20 $450 Net Interest Income (in millions) $400 $350 $300 $250 Our objective in managing interest rate risk is to consistently grow net interest income through the various interest rate cycles, acknowledging there will be periods of decline. $200 $150 $100 $50 $0 20

21 Potential Impact of Rising Rates $370 $360 $350 $340 $330 $320 $310 NII Base (no changes) NII Up 200 This assumes immediate increases in rates and no change is size or composition of balance sheet. Investing cash, lagging deposit or lending rates are a few options that would be available. $300 Year 1 Year 2 Year 3 21

22 Efficiency: Peer Group Average* Washington Federal Efficiency Ratio 61.77% 41.55% Operating Expenses to Average Assets 1.49% 1.26% *100 Largest Public Banks and Thrifts - Source: SNL Financial 22

23 $160 Net Income (in millions) $148 $138 $140 $120 $100 $80 $ 72 YTD $60 $40 $20 $0 23

24 $40 $35 Net Income -Last 8 Quarters and EPS (in Millions) Net Income EPS $0.35 $0.30 $30 $0.25 $25 $20 $15 $0.20 $0.15 $10 $0.10 $5 $0.05 $- Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 $- 24

25 Performance Ratios: Peer Group Average* Washington Federal Return on Average Equity (ROE) 8.56% 7.49%.97% Return on Average Assets (ROA) 1.10% *100 Largest Public Banks and Thrifts - Source: SNL Financial 25

26 Returning Capital to Shareholders: WAFD has paid 121 consecutive quarterly cash dividends. Increased cash dividend $.01 or 12.5% in March. Current cash dividend of $.09 provides a yield of 2.11% based on recent prices. Year to date through March 31 the Company has returned 100% of net income to shareholders. For the 3 rd Quarter through May 2, we have repurchased 975,000 shares at a wtd avg price of $

27 Application to Convert to National Bank: No meaningful change in the way we do business today. Why are we making the change: 1. National bank charter aligns best with our business plan 2. Perception in the market place 3. Regulation 27

28 $30 Stock Price per Share and Book Value per Share $25 $20 Stock Price Book Value $15 $10 $5 Book Value per Share $18.42 Tangible Book Value per Share $15.92 $0 28

29 NASDAQ: WAFD 29