Washington Federal Holding Steady

Headquartered in Seattle, Washington Federal, Inc. (WFSL - Analyst Report) operates as a non-diversified unitary savings and loan holding company. The company conducts its operations through its federally insured savings and loan association subsidiary, Washington Federal Savings, which operates 135 offices in 8 western states.

Washington Federal's diluted operating earnings for 4Q08 (ended September 30), came in at $0.19 per share, substantially short of estimates. The miss stemmed from a huge increase in provision for loan losses in response to a deteriorating housing market, though the expansion in the interest margin was impressive, owing to WFSL's liability sensitivity. Credit quality significantly worsened during the quarter, a trend that we expect to continue in the coming quarters.

Recently, the company participated in the Treasury's Capital Purchase Program, which helped the company to strengthen its capital position. After reviewing the results, we maintain our Hold recommendation on the stock, with a six-month price target of $17.50 per share.

Kalyan Nandy contributed to this report.

Read the full analyst report on WFSL