1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended.......................December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to __________________
For Quarter Ended December 31, 2002 Commission file number 0-25454
WASHINGTON FEDERAL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 91-1661606
-------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Pike Street Seattle, Washington 98101
-----------------------------------------------------
(Address of principal executive offices and Zip Code)
(206) 624-7930
----------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
(1) Yes [X]. No [ ].
(2) Yes [X]. No [ ].
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
TITLE OF CLASS: AT FEBRUARY 1, 2003
Common stock, $1.00 par value 63,192,739
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I
Item 1. Financial Statements
The Consolidated Financial Statements of Washington Federal,Inc. and
Subsidiaries filed as a part of the report are as follows:
Consolidated Statements of Financial Condition
as of December 31, 2002 and September 30, 2002 ............................ Page 3
Consolidated Statements of Operations for the three
months ended December 31, 2002 and 2001 ................................... Page 4
Consolidated Statements of Cash Flows for the
three months ended December 31, 2002 and 2001 ............................. Page 5
Notes to Consolidated Financial Statements ................................ Page 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .......................................... Page 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk ...................... Page 12
Item 4. Controls and Procedures ......................................................... Page 12
PART II
Item 1. Legal Proceedings ............................................................ Page 14
Item 2. Changes in Securities and Use of Proceeds .................................... Page 14
Item 3. Defaults Upon Senior Securities .............................................. Page 14
Item 4. Submission of Matters to a Vote of Security Holders .......................... Page 14
Item 5. Other Information ............................................................ Page 14
Item 6. Exhibits and Reports on Form 8-K ............................................. Page 14
Signatures ................................................................. Page 15
Certifications.............................................................. Page 16
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
December 31, 2002 September 30, 2002
----------------- ------------------
(In thousands, except per share data)
ASSETS
Cash and cash equivalents ......................................... $ 1,324,402 $ 975,153
Available-for-sale securities, including encumbered
securities of $112,389.......................................... 782,246 918,776
Held-to-maturity securities, including encumbered
securities of $3,580........................................... 141,793 168,925
Securitized assets subject to repurchase, net ..................... 572,751 755,961
Loans receivable, net ............................................. 4,259,478 4,292,003
Interest receivable ............................................... 34,862 39,503
Premises and equipment, net ....................................... 57,418 55,119
Real estate held for sale ......................................... 16,351 17,587
FHLB stock ........................................................ 134,571 132,320
Costs in excess of net assets acquired ............................ 35,703 35,703
Other assets ...................................................... 314 1,391
----------- -----------
$ 7,359,889 $ 7,392,441
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Customer accounts
Savings and demand accounts ................................... $ 4,399,472 $ 4,452,250
Repurchase agreements with customers .......................... 76,814 69,672
----------- -----------
4,476,286 4,521,922
FHLB advances ..................................................... 1,650,000 1,650,000
Other borrowings................................................... 100,000 100,000
Advance payments by borrowers for taxes and insurance ............. 9,557 22,704
Federal and state income taxes .................................... 97,965 84,235
Accrued expenses and other liabilities ............................ 54,665 52,862
----------- -----------
6,388,473 6,431,723
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value, 100,000,000 shares authorized;
76,277,659 and 76,212,040 shares issued; 63,192,739
and 63,540,820 shares outstanding ............................ 76,278 76,212
Paid-in capital ................................................... 969,768 968,858
Accumulated other comprehensive income, net of taxes .............. 52,000 56,000
Treasury stock, at cost; 13,084,920 and 12,671,220 shares ......... (207,128) (198,279)
Retained earnings ................................................. 80,498 57,927
----------- -----------
971,416 960,718
----------- -----------
$ 7,359,889 $ 7,392,441
=========== ===========
CONSOLIDATED FINANCIAL HIGHLIGHTS
Stockholders' equity per share .................................... $ 15.37 $ 15.12
Stockholders' equity to total assets .............................. 13.20% 13.00%
Weighted average rates at period end:
Loans and mortgage-backed securities* ........................... 7.10% 7.26%
Investment securities** ......................................... 2.29 2.82
Combined rate on loans, mortgage-backed securities...............
and investment securities ....................................... 6.06 6.53
Customer accounts ............................................... 2.65 2.94
Borrowings ...................................................... 5.03 5.03
Combined cost of customer accounts and borrowings ............. 3.32 3.52
Interest rate spread ............................................ 2.74 3.01
* Includes securitized assets subject to repurchase
** Includes municipal bonds at tax-equivalent yields and cash equivalents
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Quarter Ended December 31,
--------------------------
2002 2001
-------- --------
(In thousands, except per share data)
INTEREST INCOME
Loans and securitized assets subject to repurchase ........ $ 96,116 $106,952
Mortgage-backed securities ................................. 18,215 20,403
Investment securities and cash equivalents ................. 8,295 4,557
-------- --------
122,626 131,912
INTEREST EXPENSE
Customer accounts .......................................... 31,295 44,488
FHLB advances and other borrowings ......................... 22,408 20,869
-------- --------
53,703 65,357
-------- --------
NET INTEREST INCOME ........................................ 68,923 66,555
Provision for loan losses .................................. 1,250 2,000
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES ........ 67,673 64,555
OTHER INCOME
Gains on sale of securities, net ........................... - 765
OTHER ...................................................... 2,193 2,217
-------- --------
2,193 2,982
OTHER EXPENSE
Compensation and fringe benefits ........................... 8,230 8,588
Occupancy .................................................. 1,309 1,187
Other ...................................................... 2,672 3,130
-------- --------
12,211 12,905
Gain(loss) on real estate acquired through foreclosure, net. (327) 20
-------- --------
INCOME BEFORE INCOME TAXES ................................. 57,328 54,652
Income taxes ............................................... 20,210 19,267
-------- --------
NET INCOME ................................................. $ 37,118 $ 35,385
======== ========
PER SHARE DATA
Basic earnings per share ................................... $ .59 $ .55
Diluted earnings per share ................................. .58 .55
Cash dividends ............................................. .23 .22
Weighted average number of shares outstanding,
including dilutive stock options ......................... 63,710,898 63,940,027
Return on average assets ................................... 2.03% 2.04%
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
----------------------------
December 2002 December 2001
------------- -------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income ............................................................. $ 37,118 $ 35,385
Adjustments to reconcile net income to net cash provided by
operating activities
Amortization of fees, discounts and premiums, net .................... (4,375) (949)
Depreciation ......................................................... 945 838
Provision for loan losses ............................................ 1,250 2,000
Loss(gain) on investment securities and real estate held for sale .... 327 (556)
Decrease in accrued interest receivable .............................. 4,641 4,407
Increase in income taxes payable ..................................... 14,730 5,014
FHLB stock dividends ................................................. (2,251) (2,195)
Decrease in other assets ............................................. 1,077 199
Increase in accrued expenses and other liabilities ................... 1,803 18,834
--------- ---------
Net cash provided by operating activities .............................. 55,265 62,977
CASH FLOWS FROM INVESTING ACTIVITIES
Loans and contracts originated
Loans on existing property ........................................... (250,455) (204,345)
Construction loans ................................................... (110,475) (68,302)
Land loans ........................................................... (31,011) (24,003)
Loans refinanced ..................................................... (28,776) (36,291)
--------- ---------
(420,717) (332,941)
Savings account loans originated ....................................... (418) (2,067)
Loan principal repayments .............................................. 698,490 474,666
Decrease in undisbursed loans in process ............................... (4,506) (43,469)
Loans purchased ........................................................ (59,731) (4,406)
Available-for-sale securities purchased ................................ (10,000) (27,633)
Principal payments and maturities of available-for-sale securities ..... 145,758 88,269
Available-for-sale securities sold ..................................... - 10,000
Principal payments and maturities of held-to-maturity securities ....... 27,421 21,031
Proceeds from sales of real estate held for sale ....................... 2,134 5,100
Premises and equipment purchased, net .................................. (3,244) (987)
--------- ---------
Net cash provided by investing activities .............................. 375,187 187,563
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in customer accounts ........................... (45,636) 70,943
Net decrease in borrowings ............................................. - (117,500)
Proceeds from exercise of common stock options ......................... 632 819
Dividends paid ......................................................... (14,203) (13,794)
Treasury stock purchased, net .......................................... (8,849) (6,453)
Decrease in advance payments by borrowers for taxes and insurance ...... (13,147) (12,322)
--------- ---------
Net cash used by financing activities .................................. (81,203) (78,307)
INCREASE IN CASH AND CASH EQUIVALENTS................................... 349,249 172,233
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................... 975,153 30,331
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................. $1,324,402 $ 202,564
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
NON-CASH INVESTING ACTIVITIES
Real estate acquired through foreclosure ............................. $ 1,225 $ 5,794
CASH PAID DURING THE PERIOD FOR
Interest ............................................................. 55,496 70,886
Income taxes ......................................................... 5,500 15,000
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 2002
(Unaudited)
NOTE A - Basis of Presentation
The consolidated interim financial statements included in this report have
been prepared by Washington Federal, Inc. ("Company") without audit. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect amounts reported in
the financial statements. Actual results could differ from these estimates.
In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation are reflected in the
interim financial statements. The September 30, 2002 Consolidated Statement
of Financial Condition was derived from audited financial statements.
The information included in this Form 10-Q should be read in conjunction
with Washington Federal, Inc.'s 2002 Annual Report on Form 10-K to the
Securities and Exchange Commission. Interim results are not necessarily
indicative of results for a full year.
NOTE B - Dividends
Dividends per share increased to 23 cents for the quarter ended December 31,
2002 compared with 22 cents for the same period one year ago. On January
17, 2003 the Company paid its 80th consecutive quarterly cash dividend.
On January 21, 2003, the Board of Directors of the Company declared an
eleven-for-ten stock split in the form of a 10% stock dividend to stockholders
of record on February 7, 2003, which was distributed on February 21, 2003.
Shares outstanding and per share amounts included herein have not been
adjusted, as the press release for the quarter ended December 31, 2002 was
previously released to the public.
NOTE C - Comprehensive Income
The Company's comprehensive income includes all items which comprise net
income plus the unrealized holding gains (losses) on available-for-sale
securities and forward commitments to purchase or sell mortgage-backed
securities. Total comprehensive income for the quarters ended December 31,
2002 and December 31, 2001 totaled $33,118,000 and $25,806,000, respectively.
The difference between the Company's net income and total comprehensive
income equals the change in the net unrealized gain or loss, net of tax, on
securities available-for-sale and forward commitments to purchase or sell
mortgage-backed securities during the applicable periods.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 2002
(Unaudited)
Note D - Allowance for Losses on Loans and Securitized Assets Subject
to Repurchase
The following table summarizes the activity in the allowance for loan losses
(including securitized assets subject to repurchase) for the three months
ended December 31, 2002 and 2001:
Three Months Ended December,
2002 2001
---------- ----------
(in thousands)
Balance at beginning of period...... $ 23,912 $ 19,683
Provision for loan losses........... 1,250 2,000
Charge-offs......................... (612) (1,219)
Recoveries.......................... - 288
--------- ----------
Balance at end of period............ $ 24,550 $ 20,752
========= ==========
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
Washington Federal, Inc. ("Company") is a savings and loan holding company.
The Company's primary operating subsidiary is Washington Federal Savings
("Association").
INTEREST RATE RISK
The Company assumes a high level of interest rate risk as a result of
its policy to originate fixed-rate single family home loans, which are
longer-term in nature than the short-term characteristics of its
liabilities of customer accounts and borrowed money. At December 31,
2002, the Company had a negative one-year maturity gap of approximately
21% of total assets, compared to a 36% negative one-year maturity gap as
of December 31, 2001. The decrease in interest rate risk is the result
of the Company building its short-term assets and lengthening the
maturity of its borrowings.
The interest rate spread decreased to 2.74% at December 31, 2002 from
3.01% at September 30, 2002. The decrease was primarily due to the
continued build up of cash and cash equivalents (totaling $1.3 billion)
invested at overnight rates (1.25%). During this phase of the interest
rate cycle (record low rates for 30 year fixed-rate loans) the Company
chose to position its balance sheet for increasing rates in the future by
building cash and reducing the amount of loans and mortgage-backed
investments. As of December 31, 2002, the Company had accumulated $1.3
billion in cash and cash equivalents, an increase of $349 million from
September 30, 2002. This liquidity, which represents 18% of total assets,
provides management with flexibility in managing interest rate risk going
forward.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net worth at December 31, 2002 was $971,416,000, or 13.20% of
total assets. This was an increase of $10,698,000 from September 30, 2002
when net worth was $960,718,000, or 13.00% of total assets. The increase
in the Company's net worth included $37,118,000 from net income. Net worth
was reduced by $14,203,000 of cash dividends paid and a $4,000,000 decrease
in accumulated other comprehensive income. During the three months ended
December 31, 2002, 413,700 shares were repurchased under the Company's
ongoing common stock repurchase program at an average price of $21.39,
which left a total of 2.61 million shares currently authorized by the Board
of Directors as available for repurchase.
The Company's percentage of net worth to total assets is among the highest
in the nation and is over three times the minimum required under Office of
Thrift Supervision ("OTS") regulations. Management believes this strong
net worth position will help protect earnings against interest rate risk
and enable it to compete more effectively for controlled growth through
acquisitions, de novo expansion and increased customer deposits.
The Company's cash and investment securities amounted to $1,449,935,000,
a $357,364,000 increase from September 30, 2002. This increase was the
result of higher than normal repayment levels on loans and mortgage-backed
securities during the first three months of fiscal 2003, stemming from
record low mortgage rates.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management has elected to keep these funds invested short term to take
advantage of expected rising interest rates in the future (see Interest
Rate Risk above).
CHANGES IN FINANCIAL CONDITION
Available-for-sale and held-to-maturity securities: Available-for-sale
securities decreased $136,530,000 or 14.9% during the three months ended
December 31, 2002, due to unusually high prepayments, resulting from
extremely low interest rates on mortgage loans and the underlying
collateral for mortgage-backed securities. The Company purchased
$10,000,000 of investment securities during the quarter ended December
31, 2002, all of which were categorized as available-for-sale. There
were no purchases of held-to-maturity securities during the quarter ended
December 31, 2002. As of December 31, 2002, the Company had unrealized
gains on available-for-sale securities of $52,000,000, net of tax,
which were recorded as part of stockholders' equity.
Loans receivable and securitized assets subject to repurchase: During the
three months ended December 31, 2002, the combined total of loans receivable
and securitized assets subject to repurchase decreased 4.3% to $4,832,229,000
compared to $5,047,964,000 at September 30, 2002. The decrease resulted
from Management's unwillingness to aggressively compete during this period of
increased refinancing activity caused by near record low home mortgage rates.
Non-performing assets: Non-performing assets decreased 0.7% during the
three months ended December 31, 2002 to $33,648,000 from $33,876,000
at September 30, 2002.
Costs in excess of net assets acquired: Costs in excess of fair value of
net assets acquired in business combinations are reviewed at least annually
to determine that no impairment of the assets has occurred; there was no
impairment at December 31, 2002. The Company will continue to evaluate
these assets and, if appropriate, provide for any diminution in value.
Customer accounts: Customer accounts decreased $45,636,000, or 1.00%,
to $4,476,286,000 at December 31, 2002 compared with $4,521,922,000 at
September 30, 2002.
FHLB advances and other borrowings: Total borrowings remained unchanged at
$1,750,000,000 during the three months ending December 31, 2002. See
Interest Rate Risk above.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net Income: The quarter ended December 31, 2002 produced net income of
$37,118,000 compared to $35,385,000 for the same quarter one year ago,
a 4.9% increase. Net income increased primarily as a result of an
increase in net interest income.
Net Interest Income: The largest component of the Company's
earnings is net interest income, which is the difference between
the interest and dividends earned on loans and other investments
and the interest paid on customer deposits and borrowings. Net
interest income is impacted primarily by two factors; first, the
volume of earning assets and liabilities and second, the rate
earned on those assets or the rate paid on those liabilities.
The following table sets forth certain information explaining
changes in interest income and interest expense of the Company
for the periods indicated. For each category of interest-earning
asset and interest-bearing liability, information is provided on
changes attributable to (1) changes in volume (changes in volume
multiplied by old rate) and (2) changes in rate (changes in rate
multiplied by old volume). The change in interest income and
interest expense attributable to change in both volume and rate
has been allocated proportionately to the change due to volume
and the change due to rate.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Rate / Volume Analysis:
Three Months Ended
December 31, 2002
Volume Rate Total
------- ------- -------
Interest Income:
Loan Portfolio $(8,695) $(2,141) $(10,836)
Mortgaged-backed securities (5,476) 3,288 (2,188)
Investments (1) 7,890 (4,152) 3,738
------- ------- -------
All interest-earning assets (6,281) (3,005) (9,286)
Interest Expense:
Customer Accounts 1,516 (14,709) (13,193)
FHLB advances and other
borrowings 2,259 (720) 1,539
------- ------- -------
All interest-bearing liabilities 3,775 (15,429) (11,654)
Change in net interest income $(10,056) $12,424 $ 2,368
======== ======= =======
(1) Includes interest on cash equivalents and dividends on stock of
the FHLB of Seattle
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Interest income for the quarter benefitted from additional accretion of
discounts on mortgage-backed securities and deferred loan fees of
approximately $6,000,000, caused from the record prepayment activity
experienced during the quarter. If prepayments return to historical levels,
this additional accretion from discounts on mortgage-backed securities
and deferred loan fees would subside.
The Company provided $1,250,000 for loan losses during the quarter, compared
to $2,000,000 for the same quarter last year. This decrease was due to the
continued decline in the amount of the loan portfolio, combined with strong
asset quality indicators. Non-performing assets amounted to $33,648,000
or .46% of total assets at December 31, 2002 compared to $37,054,000 or
..53% of total assets one year ago. Delinquencies on permanent loans have
decreased from $32.9 million at December 31, 2001, to $29.1 million at
December 31, 2002. These factors, with others, resulted in a decrease in
charge-offs for the quarter ended December 31, 2002 by $319,000 over the
comparable period in fiscal 2002. Weak economic conditions, including high
unemployment, continue in the Company's primary markets.
Total other income decreased $789,000 (26.5%) to $2,193,000 for the three
months ended December 31, 2002 from $2,982,000 for the three months ended
December 31, 2001. There were no sales of securities during the first
quarter; as a result, the decrease in other income was attributable
primarily to the reduction in gains realized from the sales of securities.
Total other expense decreased $694,000 (5.4%) for the quarter ended
December 31, 2002, compared to the December 31, 2001 quarter. Total other
expense for the quarter ended December 31, 2002 equaled .67% of average
assets, compared to .75% for the quarter ended December 31, 2001,
respectively. The number of staff, including part-time employees on a
full-time equivalent basis, was 725 at December 31, 2002 and 723 at
December 31, 2001.
Income taxes increased $943,000 (4.9%) for the quarter ended December 31,
2002, which corresponds to the increase in pre-tax income. The effective
tax rates were 35.25% for both the quarter ended December 31, 2002 and the
same period one year ago.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have not been any material changes in quantitative and qualitative
information about market risk since September 30, 2002.
Item 4. Controls and Procedures
Within the 90 days prior to the date of this report, the Company carried out
an evaluation, under the supervision and with the participartion of the
Company's management, including the Company's President and Chief Executive
Officer along with the Company's Vice President Finance and principal
financial officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to the Securities
Exchange Act of 1934 ("Exchange Act") Rule 13a-14. Based upon that evaluation,
the Company's President and Chief Executive Officer along with the Company's
Vice President Finance and principal financial officer concluded that the
Company's disclosure controls and procedures are effective in timely alerting
them to material information relating to the Company (including its consolidated
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
subsidiaries) required to be included in the Company's periodic Securities and
Exchange Commission ("SEC") filings. There have been no significant changes in
the Company's internal controls or in other factors which could significantly
affect these controls subsequent to the date the Company carried out its
evaluation.
Disclosure controls and procedures are Company controls and other procedures
that are designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files under the
Exchange Act is accumulated and communicated to the Company's management,
including its President and Chief Executive Officer and Vice President Finance
and principal financial officer, as appropriate, to allow timely decisions
regarding required disclosure.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings
From time to time the Company or its subsidiaries are engaged in legal
proceedings in the ordinary course of business, none of which are
considered to have a material impact on the Company's financial
position or results of operations.
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
1. Report filed December 26, 2002. Item included: Item 9.
Regulation FD Disclosure. The report included written statements
by Roy M. Whitehead, Vice Chairman, President and Chief
Executive Officer and Ronald L. Saper, Executive Vice President
and Chief Financial Officer of Washington Federal, Inc., pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
2. Report filed December 26, 2002. Item included: Item 5. Other
Events. The report included a press release announcing the
retirement of Ronald L. Saper, Executive Vice President and
Chief Financial Officer, effective February 15, 2003.
Responsibility for his duties will pass to the Company's Vice
President Finance and Controller, Brent J. Beardall.
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WASHINGTON FEDERAL, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
/s/ Roy M. Whitehead
February 14, 2003 ----------------------------------------
ROY M. WHITEHEAD
Vice Chairman, President and Chief
Executive Officer
/s/ Brent J. Beardall
February 14, 2003 ----------------------------------------
BRENT J. BEARDALL
Vice President Finance & Controller
(principal financial and accounting
officer)
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CERTIFICATIONS
I, Roy M. Whitehead, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Washington
Federal, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statements of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented
in this quarterly report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant
and we have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the Registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(b) Evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the "Evaluation
Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors
and to the audit committee of the Registrant's board of directors
(or persons performing the equivalent function):
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls;
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant's internal controls; and
6. The Registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Roy M. Whitehead
Date: February 14, 2003 -----------------------------------
ROY M. WHITEHEAD
Vice Chairman, President and Chief
Executive Officer
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I, Brent J. Beardall, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Washington
Federal, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statements of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented
in this quarterly report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant
and we have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the Registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
(b) Evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the "Evaluation
Date"); and
(c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors
and to the audit committee of the Registrant's board of directors
(or persons performing the equivalent function):
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
Registrant's ability to record, process, summarize and report
financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls;
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
Registrant's internal controls; and
6. The Registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
/s/ Brent J. Beardall
Date: February 14, 2003 -----------------------------------
BRENT J. BEARDALL
Vice President Finance and
Controller (principal financial
and accounting officer)
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