Filed by Washington Federal, Inc. pursuant
to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934

Subject Company: Anchor Bancorp
Commission File No.: 001-34965

Explanatory Note: On April 13, 2017, the Company announced by press release its earnings for the quarter ended March 31, 2017.


EXHIBIT991LOGOA02.GIF                     

Thursday, April 13, 2017
FOR IMMEDIATE RELEASE


Washington Federal Announces 4% Increase In Quarterly Earnings



SEATTLE, WASHINGTON – Washington Federal, Inc. (Nasdaq: WAFD), parent company of Washington Federal, National Association, today announced quarterly earnings of $42,070,000 or $0.47 per diluted share for the quarter ended March 31, 2017 compared to $41,723,000 or $0.45 per diluted share for the quarter ended March 31, 2016 , a $0.02 or 4% increase. Return on equity for the quarter ended March 31, 2017 was 8.37% compared to 8.51% for the quarter ended March 31, 2016 . Return on assets for the quarter ended March 31, 2017 was 1.13% compared to 1.14% for the same quarter in the prior year.
President & Chief Executive Officer Brent Beardall commented, “Washington Federal had a strong quarter and is positioned well for future growth. Operating metrics improved as we benefited from continued strong macro economic factors in our key markets. The Company had loan originations of $944 million during the quarter, a 24% increase from the prior year. Commercial loans represented two-thirds of total originations for the quarter. As announced earlier this week, we have entered into a merger agreement with Anchor Bancorp. This transaction will enhance our presence in southwestern Washington and is expected to be immediately accretive to tangible book value per share as well as accretive to earnings per share once fully integrated. It is important to recognize a milestone event that will occur on Monday April 24, 2017. That date marks the centennial anniversary for Washington Federal. We thank our clients, shareholders and employees for building one of the





strongest banks in the United States. We look forward with optimism to the next 100 years as we strive to fulfill the changing needs of our clients while staying true to the values that made us who we are today.”
Total assets were $15.0 billion as of March 31, 2017 compared to $14.9 billion as of September 30, 2016 . The Company continued to shift its asset mix from cash and investment securities to loans receivable. Since September 30, 2016 , available-for-sale securities decreased $534 million or 27.8% , held-to-maturity securities increased $280 million or 19.8% and cash and cash equivalents decreased $184 million or 40.8% . During that same period net loans receivable increased by $ 552 million or 5.6% .
Customer deposits increased by $30 million or 0.3% since September 30, 2016 and totaled $10.6 billion as of March 31, 2017 . Transaction accounts increased by $207 million or 3.4% during that period while time deposits decreased $177 million or 3.9% . The mix of customer deposits has continued to shift over the last several years as the Company focuses on growing transaction accounts to lessen sensitivity to rising interest rates and reduce interest expense. As of March 31, 2017 , 58.4% of the Company’s deposits were in transaction accounts. Core deposits, defined as all transaction accounts and time deposits less than $250,000, totaled 94.8% of deposits at March 31, 2017 .
Borrowings from the Federal Home Loan Bank totaled $2.2 billion as of March 31, 2017 and $2.1 billion at September 30, 2016 .
Loan originations totaled $944 million for the 2 nd fiscal quarter 2017 , a $181 million or 24% increase over the $763 million of originations in the same quarter one year ago. Partially offsetting loan originations in each of these respective quarters were loan repayments of $711 million and $581 million . Commercial loans represented 66% of all loan originations during the 2 nd fiscal quarter 2017 with consumer loans accounting for the remaining 34% . The Company views organic loan growth as the highest and best use of its capital and prefers commercial loans in this low rate environment because of their shorter duration. The weighted average interest rate on loans decreased to 4.25% as of March 31, 2017 from 4.26% at September 30, 2016 as new loans continue to be originated at interest rates lower than the average of the overall portfolio.
Asset quality remains strong and the ratio of non-performing assets to total assets was 0.53% as of March 31, 2017 compared to 0.56% at December 31, 2016 and 0.48% at September 30, 2016 . Since September 30, 2016 , real estate owned decreased by $6 million , or 22% , and non-accrual loans increased by $15 million , or 35% . Delinquent loans represented 0.65% of total loans at March 31, 2017 compared to 0.74% at December 31, 2016 and 0.68% at September 30, 2016 . The allowance for loan losses and reserve for unfunded commitments totaled $127 million as of March 31, 2017 and was 1.09% of gross loans outstanding, as compared to $117 million or 1.07% of gross loans outstanding at September 30, 2016 . The slight increase in the ratio of the total allowance and reserve to gross loans since our fiscal year end reflects the continued





shift in the mix of the loan portfolio to include a greater proportion of commercial loans outstanding, which generally require a higher level of reserves.
On February 10, 2017 , the Company paid a regular dividend on common stock of $0.15 per share, which represented the 136th consecutive quarterly cash dividend, as well as a special cash dividend on common stock of $0.25 per share. Since September 30, 2016 , tangible common stockholders’ equity per share increased by $0.50 or 2.7% to $19.22 and the ratio of tangible common equity to tangible assets remained strong at 11.72% as of March 31, 2017 .
Net interest income was $108 million for the quarter, an increase of $1.4 million or 1.3% from the same quarter in the prior year. The increase in net interest income was due to average earning assets increasing by $230 million . Net interest margin decreased to 3.15% in the 2 nd fiscal quarter of 2017 from 3.16% for same quarter in the prior year. The decrease in net interest margin is primarily due to a decline in yield on loans as the low rate environment has led to new loan originations having lower yields than the loans that repaid.
The Company recorded a release of loan loss allowance of $1.6 million in the 2 nd fiscal quarter of 2017 compared with a release of $1.5 million in the same quarter of 2016 as net recoveries in both quarters were offset by strong growth in the loan portfolio. Net recoveries were $5.2 million in the 2 nd fiscal quarter of 2017 and $3.5 million for the prior year quarter.
Total other income was $10.1 million for the 2 nd fiscal quarter 2017 , a decrease of $0.6 million from $10.7 million in the same quarter of the prior year. The decrease this quarter was primarily related to $0.4 million less of deposit fee income.
Total operating expenses were $57.5 million in the 2 nd fiscal quarter 2017 , a decrease of $1.8 million or 3.0% from the prior year quarter. Information technology costs decreased by $0.8 million and product delivery costs declined $0.8 million from the prior year quarter and this was largely attributable to the system conversion and resulting efficiency gains since 2016 . The Company’s efficiency ratio was 48.8% in the 2 nd fiscal quarter 2017 and is lower than the 50.6% for the same period one year ago due primarily to the decrease in operating expenses noted above.
Net gain on real estate owned was $0.8 million for 2 nd fiscal quarter 2017 compared to a net gain of $3.9 million for the same quarter last year. Net gain or loss on real estate owned is expected to be somewhat volatile as it includes gains and losses on sales, ongoing maintenance expenses and any additional net valuation adjustments.
For the quarter ended March 31, 2017 , the Company recorded federal and state income tax expense of $20.7 million , which equates to a 33.00% effective tax rate. This compares to an effective tax rate of 33.89% for the fiscal year ended September 30, 2016 . The decline in the effective tax rate from the prior year is due primarily to increased investments in bank owned life insurance, low income housing tax credits and tax exempt loans.





Washington Federal, a national bank with headquarters in Seattle, Washington, has 236 branches in eight western states. To find out more about Washington Federal, please visit our website www.washingtonfederal.com . Washington Federal uses its website to distribute financial and other material information about the Company.
Important Cautionary Statements
The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s 2016 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
This press release contains statements about the Company’s future that are not statements of historical fact. These statements are “forward looking statements” for purposes of applicable securities laws, and are based on current information and/or management's good faith belief as to future events. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. By their nature, forward-looking statements involve inherent risk and uncertainties, which change over time; and actual performance, could differ materially from those anticipated by any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement.
# # #



Contact:

Washington Federal, Inc.
425 Pike Street, Seattle, WA 98101
Brad Goode, SVP, Director of Communications
206-626-8178
brad.goode@wafd.com















Washington Federal, Inc.
Fact Sheet
March 31, 2017
($ in Thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 As of 09/16
 
 
 
 As of 12/16
 
 
 
As of 03/17
 
 
Loan Loss Reserve - Total
$
116,729

 
 
 
$
123,356

 
 
 
$
126,972

 
 
     General and Specific Allowance
113,494

 
 
 
118,456

 
 
 
121,922

 
 
     Commitments Reserve
3,235

 
 
 
4,900

 
 
 
5,050

 
 
    Allowance as a % of Gross Loans
1.07
%
 
 
 
1.09
%
 
 
 
1.09
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
09/16 QTR
 
09/16 YTD
 
 12/16 QTR
 
 12/16 YTD
 
03/17 QTR
 
03/17 YTD
Loan Originations - Total
$
1,190,431

 
$
3,948,534

 
$
1,241,046

 
$
1,241,046

 
$
944,083

 
$
2,185,129

     Single-Family Residential
236,184

 
692,575

 
215,241

 
215,241

 
170,547

 
385,788

     Construction
230,597

 
900,649

 
338,599

 
338,599

 
167,422

 
506,021

     Construction - Custom
144,095

 
421,816

 
122,955

 
122,955

 
120,646

 
243,601

     Land - Acquisition & Development
25,956

 
59,511

 
16,229

 
16,229

 
10,336

 
26,565

     Land - Consumer Lot Loans
10,405

 
29,661

 
9,065

 
9,065

 
8,158

 
17,223

     Multi-Family
63,280

 
361,261

 
111,959

 
111,959

 
93,279

 
205,238

     Commercial Real Estate
88,770

 
353,265

 
164,098

 
164,098

 
77,949

 
242,047

     Commercial & Industrial
370,481

 
1,051,950

 
243,924

 
243,924

 
277,676

 
521,600

     HELOC
19,882

 
74,538

 
18,391

 
18,391

 
17,221

 
35,612

     Consumer
781

 
3,308

 
585

 
585

 
849

 
1,434

 
 
 
 
 
 
 
 
 
 
 
 
Purchased Loans (including acquisitions)
$
53,774

 
$
105,420

 
$

 
$

 
$
72,856

 
$
72,856

 
 
 
 
 
 
 
 
 
 
 
 
Net Loan Fee and Discount Accretion
$
6,730

 
$
29,898

 
$
6,762

 
$
6,762

 
$
5,764

 
$
12,526

 
 
 
 
 
 
 
 
 
 
 
 
Repayments
 
 
 
 
 
 
 
 
 
 
 
Loans
$
851,578

 
$
2,935,167

 
$
896,109

 
$
896,109

 
$
710,691

 
$
1,606,800

MBS
142,329

 
462,973

 
178,169

 
178,169

 
96,900

 
275,069

 
 
 
 
 
 
 
 
 
 
 
 
MBS Premium Amortization
$
3,962

 
$
12,920

 
$
5,039

 
$
5,039

 
$
2,992

 
$
8,031

 
 
 
 
 
 
 
 
 
 
 
 
Efficiency
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses/Average Assets
1.49
%
 
1.60
%
 
1.46
%
 
1.46
%
 
1.55
%
 
1.50
%
Efficiency Ratio (%)
48.54
%
 
50.80
%
 
47.23
%
 
47.23
%
 
48.76
%
 
48.00
%
Amortization of Intangibles
$
548

 
$
2,369

 
$
521

 
$
521

 
$
398

 
$
919

 
 
 
 
 
 
 
 
 
 
 
 
EOP Numbers
 
 
 
 
 
 
 
 
 
 
 
Shares Issued and Outstanding
89,680,847

 
 
 
89,272,268

 
 
 
89,438,563

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share repurchase information
 
 
 
 
 
 
 
 
 
 
 
Remaining shares authorized for repurchase
5,039,310

 
 
 
4,231,553

 
 
 
4,157,081

 
 
Shares repurchased
707,642

 
3,867,563

 
757,768

 
757,768

 
477

 
758,245

Average share repurchase price
$
25.20

 
$
22.72

 
$
26.90

 
$
26.90

 
$
33.55

 
$
26.91










Tangible Common Book Value
As of 09/16
 
 
 
As of 12/16
 
 
 
As of 03/17
 
 
$ Amount
$
1,678,742

 
 
 
$
1,703,133

 
 
 
$
1,718,625

 
 
Per Share
18.72

 
 
 
19.08

 
 
 
19.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
# of Employees
1,806

 
 
 
1,813

 
 
 
1,797

 
 
Investments
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
     Agency MBS
$
1,072,912

 
 
 
$
959,661

 
 
 
$
916,006

 
 
     Other
849,982

 
 
 
482,274

 
 
 
472,776

 
 
 
$
1,922,894

 
 
 
$
1,441,935

 
 
 
$
1,388,782

 
 
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
     Agency MBS
$
1,417,599

 
 
 
$
1,752,010

 
 
 
$
1,697,650

 
 
 
$
1,417,599

 
 
 
$
1,752,010

 
 
 
$
1,697,650

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of 09/16
 
 
 
As of 12/16
 
 
 
As of 03/17
 
 
Loans Receivable by Category (a)
 AMOUNT
 
 %
 
 AMOUNT
 
 %
 
 AMOUNT
 
 %
     Single-Family Residential
$
5,658,830

 
51.7%
 
$
5,624,263

 
49.6%
 
$
5,693,072

 
48.9%
     Construction
1,110,411

 
10.1
 
1,265,747

 
11.2
 
1,311,635

 
11.3
     Construction - Custom
473,069

 
4.3
 
494,447

 
4.4
 
527,319

 
4.5
     Land - Acquisition & Development
118,497

 
1.1
 
119,085

 
1.1
 
118,726

 
1.0
     Land - Consumer Lot Loans
104,567

 
1.0
 
101,104

 
0.9
 
101,227

 
0.9
     Multi-Family
1,124,290

 
10.3
 
1,217,594

 
10.7
 
1,266,911

 
10.9
     Commercial Real Estate
1,093,639

 
10.0
 
1,207,573

 
10.7
 
1,296,039

 
11.1
     Commercial & Industrial
978,589

 
8.9
 
1,025,821

 
9.1
 
1,071,629

 
9.2
     HELOC
149,716

 
1.4
 
148,452

 
1.3
 
146,172

 
1.3
     Consumer
139,000

 
1.3
 
124,547

 
1.1
 
107,759

 
0.9
 
10,950,608

 
100%
 
11,328,633

 
100%
 
11,640,489

 
100%
     Less:
 
 
 
 
 
 
 
 
 
 
 
        ALL
113,494

 
 
 
118,456

 
 
 
121,922

 
 
        Loans in Process
879,484

 
 
 
1,027,168

 
 
 
1,009,937

 
 
        Net Deferred Fees, Costs and Discounts
46,710

 
 
 
46,698

 
 
 
45,608

 
 
        Sub-Total
1,039,688

 
 
 
1,192,322

 
 
 
1,177,467

 
 
 
$
9,910,920

 
 
 
$
10,136,311

 
 
 
$
10,463,022

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Loan Portfolio by Category (a)
 AMOUNT
 
 %
 
 AMOUNT
 
 %
 
 AMOUNT
 
 %
     Single-Family Residential
$
5,601,350

 
56.5%
 
$
5,565,673

 
54.9%
 
$
5,632,558

 
53.8%
     Construction
475,022

 
4.8
 
486,784

 
4.8
 
564,133

 
5.4
     Construction - Custom
227,348

 
2.3
 
233,867

 
2.3
 
248,878

 
2.4
     Land - Acquisition & Development
88,408

 
0.9
 
95,997

 
0.9
 
96,330

 
0.9
     Land - Consumer Lot Loans
101,435

 
1.0
 
98,118

 
1.0
 
98,252

 
0.9
     Multi-Family
1,113,661

 
11.2
 
1,205,737

 
11.9
 
1,254,499

 
12.0
     Commercial Real Estate
1,074,146

 
10.8
 
1,188,637

 
11.7
 
1,278,189

 
12.2
     Commercial & Industrial
945,150

 
9.5
 
992,261

 
9.8
 
1,039,309

 
9.9
     HELOC
147,737

 
1.5
 
146,790

 
1.4
 
144,642

 
1.4
     Consumer
136,663

 
1.4
 
122,447

 
1.2
 
106,232

 
1.0
 
$
9,910,920

 
100%
 
$
10,136,311

 
100%
 
$
10,463,022

 
100%
 
 
 
 
 
 
 
 
 
 
 
 
   (a) Some loans have been reclassified by loan type as a result of system conversion in 1Q16, primarily impacting Construction, Multi-family and Commercial Real Estate.





 
As of 09/30/16
 
 
 
As of 12/31/16
 
 
 
As of 03/31/17
 
 
Deposits by State
 AMOUNT
 
%
 
#
 
 AMOUNT
 
%
 
#
 
 AMOUNT
 
%
 
#
     Washington (WA)
$
5,100,754

 
48.1
%
 
81

 
$
5,196,140

 
48.8
%
 
81

 
$
5,146,140

 
48.4
%
 
81

     Idaho (ID)
782,413

 
7.4

 
25

 
768,704

 
7.2

 
24

 
785,092

 
7.4

 
24

     Oregon (OR)
1,964,173

 
18.5

 
48

 
1,952,655

 
18.3

 
48

 
1,946,137

 
18.3

 
47

     Utah (UT)
285,234

 
2.7

 
10

 
280,457

 
2.6

 
10

 
272,804

 
2.6

 
10

     Nevada (NV)
340,324

 
3.2

 
11

 
333,789

 
3.1

 
11

 
335,266

 
3.2

 
11

     Texas (TX)
94,113

 
0.9

 
5

 
97,276

 
0.9

 
5

 
94,656

 
0.9

 
5

     Arizona (AZ)
1,188,335

 
11.2

 
31

 
1,173,538

 
11.0

 
31

 
1,193,459

 
11.2

 
31

     New Mexico (NM)
845,506

 
8.0

 
27

 
845,016

 
7.9

 
27

 
857,253

 
8.1

 
27

     Total
$
10,600,852

 
100%
 
238

 
$
10,647,575

 
100%
 
237

 
$
10,630,807

 
100%
 
236

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits by Type
 AMOUNT
 
%
 
 
 
 AMOUNT
 
%
 
 
 
 AMOUNT
 
%
 
 
Checking (non-interest)
$
1,091,738

 
10.3
%
 
 
 
$
1,124,169

 
10.6
%
 
 
 
$
1,142,372

 
10.7
%
 
 
NOW (interest)
1,629,983

 
15.4

 
 
 
1,732,836

 
16.3

 
 
 
1,731,737

 
16.3

 
 
Savings (passbook/statement)
820,980

 
7.7

 
 
 
844,849

 
7.9

 
 
 
871,722

 
8.2

 
 
Money Market
2,462,891

 
23.2

 
 
 
2,492,483

 
23.4

 
 
 
2,466,868

 
23.2

 
 
Time Deposits
4,595,260

 
43.3

 
 
 
4,453,238

 
41.8

 
 
 
4,418,108

 
41.6

 
 
Total
$
10,600,852

 
100%
 
 
 
$
10,647,575

 
100%
 
 
 
$
10,630,807

 
100%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits greater than $250,000 - EOP
$
2,250,622

 
 
 
 
 
$
2,410,863

 
 
 
 
 
$
2,426,837

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time Deposit Repricing
Amount
 
Rate
 
 
 
Amount
 
Rate
 
 
 
Amount
 
Rate
 
 
Within 3 months
$
824,019

 
0.82
%
 
 
 
$
933,770

 
0.76
%
 
 
 
$
930,544

 
0.71
%
 
 
From 4 to 6 months
896,484

 
0.80
%
 
 
 
896,254

 
0.74
%
 
 
 
852,702

 
0.67
%
 
 
From 7 to 9 months
618,180

 
0.89
%
 
 
 
532,682

 
0.81
%
 
 
 
429,013

 
0.79
%
 
 
From 10 to 12 months
508,732

 
0.83
%
 
 
 
391,159

 
0.80
%
 
 
 
442,072

 
0.84
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Performing Assets
 AMOUNT
 
 %
 
 
 
 AMOUNT
 
 %
 
 
 
 AMOUNT
 
 %
 
 
Non-accrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
$
33,148

 
78.2%
 
 
 
$
38,568

 
63.5%
 
 
 
$
34,373

 
60.1%
 
 
     Construction

 
 
 
 

 
 
 
 

 
 
 
     Construction - Custom

 
 
 
 

 
 
 
 
240

 
0.4
 
 
     Land - Acquisition & Development
58

 
0.1
 
 
 
603

 
1.0
 
 
 
80

 
0.1
 
 
     Land - Consumer Lot Loans
510

 
1.2
 
 
 
969

 
1.6
 
 
 
1,129

 
2.0
 
 
     Multi-Family
776

 
1.8
 
 
 
1,160

 
1.9
 
 
 
1,364

 
2.4
 
 
     Commercial Real Estate
7,100

 
16.7
 
 
 
9,660

 
15.9
 
 
 
10,507

 
18.4
 
 
     Commercial & Industrial
583

 
1.4
 
 
 
9,230

 
15.2
 
 
 
8,864

 
15.5
 
 
     HELOC
239

 
0.6
 
 
 
480

 
0.8
 
 
 
583

 
1.0
 
 
     Consumer

 
 
 
 
45

 
0.1
 
 
 
55

 
0.1
 
 
        Total non-accrual loans
42,414

 
100%
 
 
 
60,715

 
100%
 
 
 
57,195

 
100%
 
 
Real Estate Owned
29,027

 
 
 
 
 
22,637

 
 
 
 
 
22,543

 
 
 
 
Total non-performing assets
$
71,441

 
 
 
 
 
$
83,352

 
 
 
 
 
$
79,738

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accrual loans as % of total net loans
0.43
%
 
 
 
 
 
0.60
%
 
 
 
 
 
0.55
%
 
 
 
 
Non-performing assets as % of total assets
0.48
%
 
 
 
 
 
0.56
%
 
 
 
 
 
0.53
%
 
 
 
 






 
As of 9/30/16
 
As of 12/31/16
 
As of 03/31/17
 
 AMOUNT
 
%
 
 AMOUNT
 
%
 
 AMOUNT
 
%
Restructured loans:
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
$
228,186

 
87.3%
 
$
217,943

 
87.2%
 
$
204,955

 
87.6%
     Construction

 
 

 
 

 
     Construction - Custom

 
 

 
 

 
     Land - Acquisition & Development
1,154

 
0.4
 
1,139

 
0.5
 
594

 
0.3
     Land - Consumer Lot Loans
9,630

 
3.7
 
9,619

 
3.8
 
9,410

 
4.0
     Multi-Family
1,505

 
0.6
 
1,496

 
0.6
 
1,131

 
0.5
     Commercial Real Estate
19,434

 
7.4
 
18,179

 
7.3
 
16,290

 
7.0
     Commercial & Industrial

 
 

 
 

 
     HELOC
1,506

 
0.6
 
1,461

 
0.6
 
1,414

 
0.6
     Consumer
116

 
 
113

 
 
107

 
        Total restructured loans
$
261,531

 
100%
 
$
249,950

 
100%
 
$
233,901

 
100%
 
 
 
 
 
 
 
 
 
 
 
 
Restructured loans were as follows:
 
 
 
 
 
 
 
 
 
 
 
     Performing
$
251,583

 
96.2%
 
$
235,503

 
94.2%
 
$
222,208

 
95.0%
     Non-performing (b)
9,948

 
3.8
 
14,447

 
5.8
 
11,693

 
5.0
     Total restructured loans
$
261,531

 
100%
 
$
249,950

 
100%
 
$
233,901

 
100%
     (b) Included in "Total non-accrual loans" above
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AMOUNT
 
CO % (c)
 
AMOUNT
 
CO % (c)
 
AMOUNT
 
CO % (c)
Net Charge-offs (Recoveries) by Category
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
$
(204
)
 
(0.01)%
 
$
3

 
—%
 
$
157

 
0.01%
     Construction
(388
)
 
(0.14)
 

 
 

 
     Construction - Custom

 
 

 
 
3

 
     Land - Acquisition & Development
(2,063
)
 
(6.96)
 
(3,985
)
 
(13.39)
 
(4,168
)
 
(14.04)
     Land - Consumer Lot Loans
29

 
0.11
 
(53
)
 
(0.21)
 
(180
)
 
(0.71)
     Multi-Family

 
 

 
 

 
     Commercial Real Estate
(172
)
 
(0.06)
 
(339
)
 
(0.11)
 
(1,164
)
 
(0.36)
     Commercial & Industrial
(2,123
)
 
(0.87)
 
(667
)
 
(0.26)
 
(112
)
 
(0.04)
     HELOC

 
 
36

 
0.10
 
53

 
0.15
     Consumer
(657
)
 
(1.89)
 
(291
)
 
(0.93)
 
195

 
0.72
        Total net charge-offs (recoveries)
$
(5,578
)
 
(0.20)%
 
$
(5,296
)
 
(0.19)%
 
$
(5,216
)
 
(0.18)%
     (c) Annualized Net Charge-offs (recoveries) divided by Gross Balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Risk
 
 
 
 
 
 
 
 
 
 
 
One Year GAP
 
 
(10.1
)%
 
 
 
(15.3
)%
 
 
 
(14.7
)%
NPV post 200 bps shock (d)
 
 
14.8
 %
 
 
 
13.9
 %
 
 
 
13.9
 %
Change in NII after 200 bps shock (d)
 
 
3.2
 %
 
 
 
1.7
 %
 
 
 
1.3
 %
(d) Assumes no balance sheet management actions taken






Historical CPR Rates (e)
 
WAFD
 
WAFD
Average for Quarter Ended:
SFR Mortgages
 
GSE MBS
 
 
 
 
9/30/2014
14.6
%
 
13.4
%
12/31/2014
15.9
%
 
12.1
%
3/31/2015
16.4
%
 
13.9
%
6/30/2015
18.7
%
 
15.9
%
9/30/2015
17.8
%
 
14.5
%
12/31/2015
16.7
%
 
13.4
%
3/31/2016
13.9
%
 
12.0
%
6/30/2016
17.3
%
 
17.5
%
9/30/2016
17.7
%
 
20.0
%
12/31/2016
19.3
%
 
24.8
%
3/31/2017
13.6
%
 
13.5
%
 
 
 
 
(e) The CPR Rate (conditional payment rate) is the rate that is equal to the proportion of the principal of a pool of loans that is paid off prematurely in each period.


























Washington Federal, Inc.
Fact Sheet
March 31, 2017
Average Balance Sheet
($ in Thousands)

 
Three Months Ended
 
September 30, 2016
 
December 31, 2016
 
March 31, 2017
 
Average
 
 
 
Average
 
Average
 
 
 
Average
 
Average
 
 
 
Average
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
 
Balance
 
Interest
 
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable
$
9,756,353

 
$
114,283

 
4.65
%
 
$
10,013,798

 
$
114,835

 
4.55
%
 
$
10,267,530

 
$
116,034

 
4.58
%
Mortgage-backed securities
2,568,917

 
13,820

 
2.13

 
2,537,585

 
12,789

 
2.00

 
2,664,959

 
16,226

 
2.47

Cash & investments
1,218,195

 
4,029

 
1.31

 
1,010,299

 
4,246

 
1.67

 
632,114

 
3,068

 
1.97

FHLB & FRB Stock
117,205

 
740

 
2.50

 
117,210

 
894

 
3.03

 
118,092

 
870

 
2.99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-earning assets
13,660,670

 
132,872

 
3.86
%
 
13,678,892

 
132,764

 
3.85
%
 
13,682,695

 
136,198

 
4.04
%
Other assets
1,210,388

 
 
 
 
 
1,197,304

 
 
 
 
 
1,161,023

 
 
 
 
Total assets
$
14,871,058

 
 
 
 
 
$
14,876,196

 
 
 
 
 
$
14,843,718

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer accounts
10,610,740

 
13,423

 
0.50
%
 
10,610,314

 
13,017

 
0.49
%
 
10,578,631

 
12,392

 
0.48
%
FHLB advances
2,080,000

 
16,633

 
3.17

 
2,080,000

 
16,595

 
3.17

 
2,102,556

 
16,079

 
3.10

Other borrowings
33

 

 

 

 

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total interest-bearing liabilities
12,690,773

 
30,056

 
0.94
%
 
12,690,314

 
29,612

 
0.93
%
 
12,681,187

 
28,471

 
0.91
%
Other liabilities
205,817

 
 
 
 
 
201,233

 
 
 
 
 
153,105

 
 
 
 
Total liabilities
12,896,590

 
 
 
 
 
12,891,547

 
 
 
 
 
12,834,292

 
 
 
 
Stockholders’ equity
1,974,468

 
 
 
 
 
1,984,649

 
 
 
 
 
2,009,426

 
 
 
 
Total liabilities and equity
$
14,871,058

 
 
 
 
 
$
14,876,196

 
 
 
 
 
$
14,843,718

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
102,816

 
 
 
 
 
$
103,152

 
 
 
 
 
$
107,727

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest margin (1)
 
 
 
 
3.01
%
 
 
 
 
 
3.02
%
 
 
 
 
 
3.15
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized net interest income divided by average interest-earning assets






Washington Federal, Inc.
Fact Sheet
March 31, 2017
Delinquency Summary
($ in Thousands)
 
 
 
 
 
 
 AMOUNT OF LOANS
 
# OF LOANS
 
% based
 
 
 
% based
TYPE OF LOANS
 
 #LOANS
 
AVG Size
 
NET OF LIP & CHG-OFFs
 
30
 
60
 
90
 
Total
 
on #
 
$ Delinquent
 
on $
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
 
25,999

 
219

 
$
5,692,305

 
74

 
36

 
163

 
273

 
1.05
%
 
$
53,147

 
0.93
%
     Construction
 
633

 
938

 
593,479

 
4

 

 

 
4

 
0.63

 
601

 
0.10

     Construction - Custom
 
1,149

 
219

 
251,906

 

 

 
2

 
2

 
0.17

 
240

 
0.10

     Land - Acquisition & Development
 
122

 
847

 
103,280

 
1

 

 
3

 
4

 
3.28

 
262

 
0.25

     Land - Consumer Lot Loans
 
1,187

 
85

 
101,168

 
3

 
2

 
12

 
17

 
1.43

 
1,261

 
1.25

     Multi-Family
 
968

 
1,309

 
1,266,845

 

 

 
4

 
4

 
0.41

 
1,224

 
0.10

     Commercial Real Estate
 
1,067

 
1,215

 
1,296,019

 
7

 
1

 
10

 
18

 
1.69

 
6,342

 
0.49

     Commercial & Industrial
 
1,836

 
584

 
1,071,622

 
13

 
2

 
32

 
47

 
2.56

 
4,964

 
0.46

     HELOC
 
2,939

 
50

 
146,169

 
5

 
2

 
32

 
39

 
1.33

 
814

 
0.56

     Consumer
 
4,542

 
24

 
107,759

 
70

 
19

 
75

 
164

 
3.61

 
601

 
0.56

 
 
40,442

 
263

 
$
10,630,552

 
177

 
62

 
333

 
572

 
1.41
%
 
$
69,456

 
0.65
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
 
26,259

 
214

 
$
5,623,668

 
88

 
53

 
165

 
306

 
1.17
%
 
$
60,201

 
1.07
%
     Construction
 
638

 
804

 
513,046

 
3

 

 
1

 
4

 
0.63

 
341

 
0.07

     Construction - Custom
 
1,079

 
219

 
236,668

 
2

 
1

 

 
3

 
0.28

 
157

 
0.07

     Land - Acquisition & Development
 
126

 
819

 
103,148

 
1

 

 
4

 
5

 
3.97

 
1,262

 
1.22

     Land - Consumer Lot Loans
 
1,204

 
84

 
101,045

 
4

 
2

 
15

 
21

 
1.74

 
1,076

 
1.06

     Multi-Family
 
959

 
1,270

 
1,217,594

 
3

 
1

 
2

 
6

 
0.63

 
1,868

 
0.15

     Commercial Real Estate
 
1,040

 
1,130

 
1,175,475

 
6

 
2

 
12

 
20

 
1.92

 
7,766

 
0.66

     Commercial & Industrial
 
1,843

 
574

 
1,057,826

 
4

 
6

 
34

 
44

 
2.39

 
1,108

 
0.10

     HELOC
 
2,931

 
51

 
148,448

 
7

 

 
32

 
39

 
1.33

 
1,375

 
0.93

     Consumer
 
4,842

 
26

 
124,547

 
78

 
30

 
79

 
187

 
3.86

 
1,063

 
0.85

 
 
40,921

 
252

 
$
10,301,465

 
196

 
95

 
344

 
635

 
1.55
%
 
$
76,217

 
0.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     Single-Family Residential
 
26,508

 
213

 
$
5,658,122

 
93

 
39

 
173

 
305

 
1.15
%
 
$
56,665

 
1.00
%
     Construction
 
640

 
779

 
498,450

 

 

 
1

 
1

 
0.16

 

 

     Construction - Custom
 
1,041

 
221

 
229,957

 
2

 

 

 
2

 
0.19

 
538

 
0.23

     Land - Acquisition & Development
 
132

 
719

 
94,928

 

 

 
3

 
3

 
2.27

 

 

     Land - Consumer Lot Loans
 
1,229

 
85

 
104,534

 
5

 
6

 
13

 
24

 
1.95

 
2,061

 
1.97

     Multi-Family
 
944

 
1,191

 
1,124,290

 
2

 
1

 
3

 
6

 
0.64

 
1,983

 
0.18

     Commercial Real Estate
 
1,074

 
1,018

 
1,093,549

 
1

 
2

 
10

 
13

 
1.21

 
4,868

 
0.45

     Commercial & Industrial
 
1,832

 
534

 
978,582

 

 
3

 
32

 
35

 
1.91

 
42

 

     HELOC
 
2,924

 
51

 
149,713

 
11

 
3

 
26

 
40

 
1.37

 
1,200

 
0.80

     Consumer
 
5,094

 
27

 
139,000

 
93

 
34

 
66

 
193

 
3.79

 
922

 
0.66

 
 
41,418

 
243

 
$
10,071,125

 
207

 
88

 
327

 
622

 
1.50
%
 
$
68,279

 
0.68
%


Forward Looking Statements

This filing may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks, uncertainties and contingencies, many of which are difficult to predict and are generally beyond the control of the Company, Anchor and the combined company. A number of important





factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties for the Company, Anchor and the combined company include, but are not limited to, the following factors: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; governmental approval of the merger may not be obtained or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; conditions to the closing of the merger may not be satisfied; the shareholders of Anchor may fail to approve the consummation of the merger; delay in closing the merger; the integration of the combined company, including personnel changes/retention, might not proceed as planned; the combined company might not perform as well as expected; business disruption following the proposed transaction; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the reaction to the transaction of the companies’ customers, employees and counterparties; the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms; and the other risks described in the Company’s and Anchor’s reports filed with the SEC, including the Company’s Annual Report on Form 10-K for the year ended September 30, 2016 and Anchor’s Annual Report on Form 10-K for the year ended June 30, 2016.  All forward-looking statements included in this Report are based on information available at the time of the communication. The Company and Anchor undertake no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect new information, future events or circumstances or otherwise that occur after the date on which such statements were made.

Additional Information
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will contain a proxy statement/prospectus to be distributed to the shareholders of Anchor in connection with their vote on the Merger. Each party will also file other documents regarding the proposed transaction with the SEC. Before making any voting or investment decision regarding the transaction, shareholders of Anchor are encouraged to read the registration statement and any other relevant documents filed with the SEC, including the proxy statement/prospectus that will be part of the registration statement, as well as any amendments or supplements to these documents, when they become available, because they will contain important information about the Merger. The final proxy statement/prospectus will be mailed to shareholders of Anchor. Investors and security holders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov . In addition, documents filed with the SEC by the Company will be available free of charge by accessing the Company’s website at www.washingtonfederal.com or by writing the Company at 425 Pike Street, Seattle, WA 98101, Attention: Investor Relations or calling (206) 626-8178, or by writing Anchor at 601 Woodland Square Loop SE, Lacey, WA 98503, Attention: Corporate Secretary or calling (360) 537-1388.

Participants in this Transaction
The Company, Anchor, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from Anchor shareholders in favor of the approval of the merger. Information about the directors and executive officers of the Company and their ownership of Company stock is included in the proxy statement for its 2017 annual meeting of shareholders, which was filed with the SEC on December 9, 2016. Information about the directors and executive officers of Anchor and their ownership of Anchor stock is set forth in the proxy statement for its 2016 annual meeting of shareholders, which was filed with the SEC on September 9, 2016, and also will be included in the proxy statement/prospectus for the merger. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the registration statement and the proxy statement/prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.




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