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On March 24, 2014, we issued an updated research report on Washington Federal Inc. (WAFD - Analyst Report). The company has been growing and enhancing its market share inorganically.

Earlier this year, Washington Federal announced a deal to acquire 23 branches in Arizona and Nevada from Bank of America Corporation (BAC - Analyst Report). Further, in 2013, it completed the acquisition of 51 branches from BofA located in Eastern Washington, Idaho, Oregon and New Mexico for $39 million. Given its strong balance sheet position, we believe that Washington Federal is poised to continue inorganic growth.

Moreover, the company reported better-than-expected first-quarter fiscal 2014 results (ended Dec 31), based on improvement in top line and lower provisions. Further, consistent improvement in asset quality and strong profitability ratios were the other highlights.

Additionally, Washington Federal is an asset for yield-seeking investors. The company has been increasing its quarterly dividend every year and has a steady share repurchase program in place as well.

Continuous improvement in credit quality is a strong catalyst for Washington Federal. Since fiscal 2010, credit costs (including provision for loan losses and gains/losses on sales of REO) have declined significantly.

Over the last 60 days, the Zacks Consensus Estimate for fiscal 2014 has remained stable at $1.58 per share and the Zacks Consensus Estimate for fiscal 2015 increased 1.2% to $1.69 per share.

Washington Federal now has a Zacks Rank #2 (Buy).

Stocks That Warrant a Look

Some better-ranked stocks in the same sector include Meridian Interstate Bancorp, Inc. (EBSB - Snapshot Report) and West Bancorp., Inc. (WTBA - Snapshot Report). Both of these sport a Zacks Rank #1 (Strong Buy).

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