x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2018. |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Washington | 91-1661606 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each Class | Name of each exchange on which registered | |
Common Stock, $1.00 par value per share | NASDAQ Stock Market |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
Emerging growth company | o |
• | a deterioration in economic conditions, including declines in the real estate market and home sale volumes and financial stress on borrowers (consumers and businesses) as a result of the uncertain economic environment; |
• | the effects of a severe economic downturn, including high unemployment rates and declines in housing prices and property values, in the Company's primary market areas; |
• | the effects of and changes in monetary and fiscal policies of the Board of Governors of the Federal Reserve System and the U.S. Government; |
• | fluctuations in interest rate risk and changes in market interest rates; |
• | the Company's ability to make accurate assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and the value of the assets securing these loans; |
• | the Company's ability to successfully complete merger and acquisition activities and realize expected strategic and operating efficiencies associated with such activities; |
• | legislative and regulatory limitations, including those arising under the Dodd-Frank Act and potential limitations in the manner in which the Company conducts its business and undertake new investments and activities; |
• | the ability of the Company to obtain external financing to fund its operations or obtain this financing on favorable terms; |
• | changes in other economic, competitive, governmental, regulatory and technological factors affecting the Company's markets, operations, pricing, products, services and fees; |
• | the success of the Company at managing the risks involved in the remediation efforts associated with its Bank Secrecy Act program, costs of enhancements to the Bank’s BSA program are greater than anticipated; and governmental authorities undertake enforcement actions or legal proceedings with respect to the Bank’s BSA program beyond those contemplated by the Consent Order, and the potential impact of such matters on the success, timing and ability to pursue the Company’s growth or other business initiatives; |
• | the success of the Company at managing the risks involved in the foregoing and managing its business; and |
• | the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond the Company's control. |
Item 1. | Business |
Average Statements of Financial Condition | ||||||||||||||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Loans receivable (1) | $ | 11,202,129 | $ | 515,807 | 4.60 | % | $ | 10,402,346 | $ | 470,523 | 4.52 | % | $ | 9,511,351 | $ | 454,085 | 4.77 | % | ||||||||||||||
Mortgage-backed securities | 2,543,796 | 70,407 | 2.77 | 2,561,400 | 60,612 | 2.37 | 2,737,947 | 62,949 | 2.30 | |||||||||||||||||||||||
Cash and other investment securities (2) | 584,145 | 15,456 | 2.65 | 719,175 | 14,187 | 1.97 | 1,167,596 | 16,282 | 1.39 | |||||||||||||||||||||||
FHLB & FRB stock | 129,382 | 5,413 | 4.18 | 120,725 | 3,596 | 2.98 | 113,664 | 3,477 | 3.06 | |||||||||||||||||||||||
Total interest-earning assets | 14,459,452 | 607,083 | 4.20 | % | 13,803,646 | 548,918 | 3.98 | % | 13,530,558 | 536,793 | 3.97 | % | ||||||||||||||||||||
Other assets | 1,155,819 | 1,161,408 | 1,181,975 | |||||||||||||||||||||||||||||
Total assets | $ | 15,615,271 | $ | 14,965,054 | $ | 14,712,533 | ||||||||||||||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||||||||||||||
Customer accounts | $ | 11,068,461 | 72,492 | 0.65 | % | $ | 10,615,511 | 52,023 | 0.49 | % | $ | 10,589,817 | 52,485 | 0.50 | % | |||||||||||||||||
FHLB advances | 2,384,795 | 62,452 | 2.62 | 2,167,986 | 64,969 | 3.00 | 1,992,434 | 64,059 | 3.22 | |||||||||||||||||||||||
Total interest-bearing liabilities | 13,453,256 | 134,944 | 1.00 | % | 12,783,497 | 116,992 | 0.92 | % | 12,582,251 | 116,544 | 0.93 | % | ||||||||||||||||||||
Other liabilities | 155,950 | 173,495 | 161,446 | |||||||||||||||||||||||||||||
Total liabilities | 13,609,206 | 12,956,992 | 12,743,697 | |||||||||||||||||||||||||||||
Stockholders’ equity | 2,006,065 | 2,008,062 | 1,968,836 | |||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 15,615,271 | $ | 14,965,054 | $ | 14,712,533 | ||||||||||||||||||||||||||
Net interest income/Interest rate spread | $ | 472,139 | 3.20 | % | $ | 431,926 | 3.06 | % | $ | 420,249 | 3.04 | % | ||||||||||||||||||||
Net interest margin (3) | 3.27 | % | 3.13 | % | 3.11 | % |
(1) | Interest income includes net amortization-accretion of deferred loan fees, costs, discounts and premiums of $15.2 million, $19.1 million and $29.9 million for year ended 2018, 2017 and 2016, respectively. |
(2) | Includes cash equivalents and non-mortgage backed security investments, such as U.S. agency obligations, mutual funds, corporate bonds, and municipal bonds. |
(3) | Net interest income divided by average interest-earning assets. |
September 30, 2018 | September 30, 2017 | September 30, 2016 | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Gross loans by category | |||||||||||||||||||||||||
Single-family residential | $ | 5,798,966 | 45.1 | % | $ | 5,711,004 | 46.8 | % | $ | 5,658,830 | 51.7 | % | $ | 5,700,780 | 58.0 | % | $ | 5,618,730 | 63.3 | % | |||||
Construction | 1,890,668 | 14.7 | 1,597,996 | 13.1 | 1,110,411 | 10.1 | 200,509 | 2.0 | 140,241 | 1.6 | |||||||||||||||
Construction - custom | 624,479 | 4.9 | 602,631 | 4.9 | 473,069 | 4.3 | 396,307 | 4.0 | 385,824 | 4.3 | |||||||||||||||
Land - acquisition & development | 155,204 | 1.2 | 124,308 | 1.0 | 118,497 | 1.1 | 98,282 | 1.0 | 87,313 | 1.0 | |||||||||||||||
Land - consumer lot loans | 102,036 | 0.8 | 104,405 | 0.9 | 104,567 | 1.0 | 106,815 | 1.1 | 111,698 | 1.3 | |||||||||||||||
Multi-family | 1,385,125 | 10.8 | 1,303,148 | 10.7 | 1,124,290 | 10.3 | 1,129,437 | 11.5 | 929,109 | 10.5 | |||||||||||||||
Commercial real estate | 1,452,168 | 11.3 | 1,434,610 | 11.8 | 1,093,639 | 10.0 | 1,186,551 | 12.1 | 874,167 | 9.8 | |||||||||||||||
Commercial & industrial | 1,140,874 | 8.9 | 1,093,360 | 9.0 | 978,589 | 8.9 | 657,581 | 6.7 | 448,475 | 5.0 | |||||||||||||||
HELOC | 130,852 | 1.0 | 144,850 | 1.2 | 149,716 | 1.4 | 149,526 | 1.5 | 148,590 | 1.7 | |||||||||||||||
Consumer | 173,306 | 1.3 | 85,075 | 0.7 | 139,000 | 1.3 | 197,482 | 2.0 | 138,773 | 1.6 | |||||||||||||||
Total gross loans | 12,853,678 | 100 | % | 12,201,387 | 100 | % | 10,950,608 | 100 | % | 9,823,270 | 100 | % | 8,882,920 | 100 | % | ||||||||||
Less: | |||||||||||||||||||||||||
Allowance for probable losses | 129,257 | 123,073 | 113,494 | 106,829 | 114,591 | ||||||||||||||||||||
Loans in process | 1,195,506 | 1,149,934 | 879,484 | 476,796 | 346,172 | ||||||||||||||||||||
Net deferred fees, costs and discounts | 51,834 | 45,758 | 46,710 | 69,011 | 97,359 | ||||||||||||||||||||
Total loan contra accounts | 1,376,597 | 1,318,765 | 1,039,688 | 652,636 | 558,122 | ||||||||||||||||||||
Net loans | $ | 11,477,081 | $ | 10,882,622 | $ | 9,910,920 | $ | 9,170,634 | $ | 8,324,798 |
September 30, 2018 | Total | Less than 1 Year | 1 to 5 Years | After 5 Years | |||||||||||
(In thousands) | |||||||||||||||
Single-family residential | $ | 5,798,966 | $ | 117,416 | $ | 292,873 | $ | 5,388,677 | |||||||
Construction | 1,890,668 | 1,513,196 | 114,201 | 263,271 | |||||||||||
Construction – custom | 624,479 | — | 1,142 | 623,337 | |||||||||||
Land – acquisition and development | 155,204 | 84,494 | 66,898 | 3,812 | |||||||||||
Land – consumer lot loans | 102,036 | 12,460 | 18,739 | 70,837 | |||||||||||
Multi-family | 1,385,125 | 215,423 | 633,236 | 536,466 | |||||||||||
Commercial real estate | 1,452,168 | 601,359 | 401,886 | 448,923 | |||||||||||
Commercial & industrial | 1,140,874 | 402,159 | 475,566 | 263,149 | |||||||||||
HELOC | 130,852 | 121,061 | 4,870 | 4,921 | |||||||||||
Consumer | 173,306 | 26,011 | 19,200 | 128,095 | |||||||||||
$ | 12,853,678 | $ | 3,093,579 | $ | 2,028,611 | $ | 7,731,488 |
September 30, 2018 | ||||||||
Fixed-Rate | Adjustable-Rate | |||||||
Term To Maturity | Gross Loans | Term To Rate Adjustment | Gross Loans | |||||
(In thousands) | (In thousands) | |||||||
Within 1 year | $ | 90,107 | Less than 1 year | $ | 3,003,472 | |||
1 to 3 years | 205,442 | 1 to 3 years | 873,078 | |||||
3 to 5 years | 280,760 | 3 to 5 years | 669,331 | |||||
5 to 10 years | 1,069,783 | 5 to 10 years | 395,157 | |||||
10 to 20 years | 1,137,196 | 10 to 20 years | 45,603 | |||||
Over 20 years | 5,061,088 | Over 20 years | 22,661 | |||||
$ | 7,844,376 | $ | 5,009,302 |
Twelve Months Ended September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||||
Loans originated (1): | |||||||||||||||||||
Single-family residential | $ | 621,431 | $ | 757,116 | $ | 692,575 | $ | 705,741 | $ | 696,999 | |||||||||
Construction | 1,068,443 | 1,081,464 | 900,649 | 263,532 | 170,539 | ||||||||||||||
Construction – custom | 523,951 | 530,435 | 421,816 | 365,220 | 359,073 | ||||||||||||||
Land – acquisition & development | 85,208 | 79,876 | 59,511 | 78,818 | 53,960 | ||||||||||||||
Land – consumer lot loans | 33,820 | 39,151 | 29,661 | 21,422 | 12,441 | ||||||||||||||
Multi-family | 272,046 | 299,359 | 361,261 | 349,442 | 239,352 | ||||||||||||||
Commercial real estate | 274,242 | 443,687 | 353,265 | 600,610 | 258,367 | ||||||||||||||
Commercial & industrial | 869,337 | 931,840 | 1,051,950 | 642,309 | 332,871 | ||||||||||||||
HELOC | 82,508 | 72,913 | 74,538 | 74,455 | 47,054 | ||||||||||||||
Consumer | 3,008 | 3,137 | 3,308 | 1,966 | 1,359 | ||||||||||||||
Total loans originated | 3,833,994 | 4,238,978 | 3,948,534 | 3,103,515 | 2,172,015 | ||||||||||||||
Loans purchased (2) | 143,605 | 72,856 | 105,420 | 279,936 | 211,228 | ||||||||||||||
Loan principal repayments | (3,335,896 | ) | (3,099,851 | ) | (2,935,167 | ) | (2,418,547 | ) | (1,857,597 | ) | |||||||||
Net change in loans in process, discounts, etc. (3) | (47,244 | ) | (240,281 | ) | (378,501 | ) | (119,068 | ) | (24,825 | ) | |||||||||
Net loan activity increase (decrease) | $ | 594,459 | $ | 971,702 | $ | 740,286 | $ | 845,836 | $ | 500,821 | |||||||||
Beginning balance | $ | 10,882,622 | $ | 9,910,920 | $ | 9,170,634 | $ | 8,324,798 | $ | 7,823,977 | |||||||||
Ending balance | $ | 11,477,081 | $ | 10,882,622 | $ | 9,910,920 | $ | 9,170,634 | $ | 8,324,798 |
(1) | Includes undisbursed loan in process and for years prior to 2016 does not include savings account loans, which were not material during the periods indicated. |
(2) | Includes non-covered loans acquired through acquisitions and whole loan purchases. |
(3) | Includes non-cash transactions. |
September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||||
Performing restructured loans | $ | 150,667 | $ | 202,272 | $ | 251,583 | $ | 289,587 | $ | 350,653 | |||||||||
Non-performing restructured loans | 6,191 | 5,105 | 9,948 | 13,126 | 24,090 | ||||||||||||||
Total restructured loans | 156,858 | 207,377 | 261,531 | 302,713 | 374,743 | ||||||||||||||
Non-accrual loans: | |||||||||||||||||||
Single-family residential | 27,643 | 27,930 | 33,148 | 59,074 | 74,067 | ||||||||||||||
Construction | 2,427 | — | — | 754 | 1,477 | ||||||||||||||
Construction – custom | — | 91 | — | 732 | — | ||||||||||||||
Land – acquisition & development | 920 | 296 | 58 | — | 811 | ||||||||||||||
Land – consumer lot loans | 787 | 605 | 510 | 1,273 | 2,637 | ||||||||||||||
Multi-family | — | 139 | 776 | 2,558 | 1,742 | ||||||||||||||
Commercial real estate | 8,971 | 11,815 | 7,100 | 2,176 | 5,106 | ||||||||||||||
Commercial & industrial | 14,394 | 8,082 | 583 | — | 7 | ||||||||||||||
HELOC | 523 | 531 | 239 | 563 | 795 | ||||||||||||||
Consumer | 21 | 91 | — | 680 | 789 | ||||||||||||||
Total non-accrual loans (1) | 55,686 | 49,580 | 42,414 | 67,810 | 87,431 | ||||||||||||||
Real estate owned | 11,298 | 20,658 | 29,027 | 61,098 | 59,880 | ||||||||||||||
Other property owned | 3,109 | — | — | — | — | ||||||||||||||
Total non-performing assets | 70,093 | 70,238 | 71,441 | 128,908 | 147,311 | ||||||||||||||
Total non-performing assets and performing restructured loans | $ | 220,760 | $ | 272,510 | $ | 323,024 | $ | 418,495 | $ | 497,964 | |||||||||
Total non-performing assets and restructured loans as a percent of total assets | 1.39 | % | 1.79 | % | 2.17 | % | 2.87 | % | 3.37 | % | |||||||||
Total non-performing assets to total assets | 0.44 | % | 0.46 | % | 0.48 | % | 0.88 | % | 1.00 | % |
(1) | For the year ended September 30, 2018, the Company recognized $5,191,000 in interest income on cash payments received from borrowers on non-accrual loans. The Company would have recognized interest income of $2,364,000 for the same period had these loans performed according to their original contract terms. The recognized interest income may include more than twelve months of interest for some of the non-accrual loans that were brought current or paid off. In addition to the non-accrual loans reflected in the above table, the Company had $42,258,000 of loans that were less than 90 days delinquent at September 30, 2018 but were classified as substandard for one or more reasons. If these loans were deemed non-performing, the Company's ratio of total non-performing assets and performing restructured loans as a percent of total assets would have increased to 1.66% at September 30, 2018. For a discussion of the Company's policy for placing loans on nonaccrual status, see Note A to the Consolidated Financial Statements included in Item 8 hereof. |
Twelve Months Ended September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
(In thousands) | |||||||||||||||||||
Beginning balance | $ | 123,073 | $ | 113,494 | $ | 106,829 | $ | 114,591 | $ | 116,741 | |||||||||
Charge-offs: | |||||||||||||||||||
Single-family residential | 1,142 | 1,229 | 3,106 | 5,524 | 8,529 | ||||||||||||||
Construction | — | — | — | 388 | 949 | ||||||||||||||
Construction – custom | 50 | 16 | 60 | — | — | ||||||||||||||
Land – Acquisition & development | 13 | 280 | 42 | 38 | 541 | ||||||||||||||
Land – consumer lot loans | 67 | 17 | 732 | 459 | 658 | ||||||||||||||
Multi-family | — | — | — | — | — | ||||||||||||||
Commercial real estate | 36 | 11 | 103 | 1,711 | 105 | ||||||||||||||
Commercial & industrial loans | 3,574 | 173 | 941 | 3,354 | 826 | ||||||||||||||
HELOC | 668 | 90 | 54 | 66 | 48 | ||||||||||||||
Consumer | 382 | 884 | 962 | 3,060 | 3,443 | ||||||||||||||
5,932 | 2,700 | 6,000 | 14,600 | 15,099 | |||||||||||||||
Recoveries: | |||||||||||||||||||
Single-family residential | 757 | 653 | 3,251 | 13,403 | 17,684 | ||||||||||||||
Construction | — | — | 745 | 120 | 97 | ||||||||||||||
Construction – custom | — | — | 60 | — | — | ||||||||||||||
Land – Acquisition & development | 14,223 | 11,038 | 8,220 | 207 | 3,071 | ||||||||||||||
Land – consumer lot loans | 35 | 481 | 5 | 221 | 22 | ||||||||||||||
Multi-family | — | — | — | 220 | — | ||||||||||||||
Commercial real estate | 189 | 1,684 | 1,812 | 735 | 33 | ||||||||||||||
Commercial & industrial loans | 714 | 1,833 | 2,933 | 1,374 | 5,043 | ||||||||||||||
HELOC | 71 | 21 | 21 | 2 | — | ||||||||||||||
Consumer | 993 | 1,297 | 2,018 | 3,688 | 3,513 | ||||||||||||||
16,982 | 17,007 | 19,065 | 19,970 | 29,463 | |||||||||||||||
Net charge-offs (recoveries) | (11,050 | ) | (14,307 | ) | (13,065 | ) | (5,370 | ) | (14,364 | ) | |||||||||
Provision (release) for loan losses and transfers | (4,866 | ) | (4,728 | ) | (6,400 | ) | (13,132 | ) | (16,514 | ) | |||||||||
Ending balance (1) | $ | 129,257 | $ | 123,073 | $ | 113,494 | $ | 106,829 | $ | 114,591 | |||||||||
Ratio of net charge-offs (recoveries) to average loans outstanding | (0.10 | )% | (0.14 | )% | (0.14 | )% | (0.06 | )% | (0.18 | )% |
September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||||||||||||||||||||||
ALLL Amount | Loans to Total Loans (1) | Coverage Ratio (2) | ALLL Amount | Loans to Total Loans (1) | Coverage Ratio (2) | ALLL Amount | Loans to Total Loans (1) | Coverage Ratio (2) | ALLL Amount | Loans to Total Loans (1) | Coverage Ratio (2) | ALLL Amount | Loans to Total Loans (1) | Coverage Ratio (2) | ||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Allowance allocation: | ||||||||||||||||||||||||||||||||||||||||||||
Single-family residential | $ | 33,033 | 49.7 | % | 0.6 | % | $ | 36,892 | 51.8 | % | 0.6 | % | $ | 37,796 | 51.5 | % | 0.7 | % | $ | 47,347 | 57.8 | % | 0.8 | % | $ | 62,067 | 62.6 | % | 0.8 | % | ||||||||||||||
Construction | 31,317 | 9.1 | 3.0 | 24,556 | 7.2 | 3.1 | 19,838 | 10.1 | 4.0 | 6,680 | 2.0 | 5.1 | 6,742 | 1.6 | 5.1 | |||||||||||||||||||||||||||||
Construction – custom | 1,842 | 2.5 | 0.6 | 1,944 | 2.5 | 0.7 | 1,080 | 4.3 | 0.5 | 990 | 4.0 | 0.5 | 1,695 | 4.3 | 50.0 | |||||||||||||||||||||||||||||
Land – acquisition & development | 7,978 | 1.1 | 6.5 | 6,829 | 1.0 | 6.5 | 6,023 | 1.1 | 6.6 | 5,781 | 1.0 | 7.7 | 5,592 | 0.9 | 7.7 | |||||||||||||||||||||||||||||
Land – consumer lot loans | 2,164 | 0.8 | 2.2 | 2,649 | 0.9 | 2.7 | 2,535 | 1.0 | 2.7 | 2,946 | 1.1 | 2.8 | 3,077 | 1.3 | 2.8 | |||||||||||||||||||||||||||||
Multi-family | 8,329 | 11.9 | 0.6 | 7,862 | 11.8 | 0.6 | 6,925 | 10.3 | 0.6 | 5,304 | 11.6 | 0.5 | 4,248 | 10.4 | 0.5 | |||||||||||||||||||||||||||||
Commercial real estate | 11,852 | 12.5 | 0.8 | 11,818 | 12.8 | 0.8 | 8,588 | 10.0 | 0.9 | 8,960 | 11.7 | 1.0 | 7,548 | 8.5 | 1.0 | |||||||||||||||||||||||||||||
Commercial & industrial | 28,702 | 9.8 | 2.5 | 28,524 | 9.9 | 2.6 | 28,008 | 8.9 | 2.9 | 24,980 | 6.7 | 3.9 | 17,223 | 4.9 | 3.9 | |||||||||||||||||||||||||||||
HELOC | 781 | 1.1 | 0.6 | 855 | 1.3 | 0.6 | 813 | 1.3 | 0.6 | 902 | 1.4 | 0.7 | 928 | 1.5 | 0.7 | |||||||||||||||||||||||||||||
Consumer | 3,259 | 1.5 | 1.9 | 1,144 | 0.8 | 1.4 | 1,888 | 1.3 | 1.4 | 2,939 | 2.0 | 1.5 | 3,227 | 1.6 | 1.5 | |||||||||||||||||||||||||||||
Covered loans | — | — | — | — | — | 0.2 | — | 0.7 | 2,244 | 2.4 | ||||||||||||||||||||||||||||||||||
Total allowance for loan losses (3) | $ | 129,257 | 100 | % | $ | 123,073 | 100 | % | $ | 113,494 | 100 | % | $ | 106,829 | 100 | % | $ | 114,591 | 100 | % |
(1) | Represents the gross loan amount (less LIP and discounted loans) for each respective loan category as a % of total gross loans (less LIP and discounted loans). |
(2) | Represents the allocated allowance for each respective loan category as a % of gross loans for that same category, excluding acquired loans outstanding that are not subject to the allowance for loan loss. |
(3) | This does not include a reserve for unfunded commitments of $7,250,000, $7,750,000, $3,235,000, $3,085,000 and $2,910,000 as of September 30, 2018, 2017, 2016, 2015 and 2014, respectively. |
September 30, | 2018 | 2017 | 2016 | ||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
U.S. government and agency securities | $ | 208,971 | $ | 207,293 | $ | 212,032 | $ | 211,077 | $ | 263,946 | $ | 259,351 | |||||||||||
Equity securities | 500 | 488 | 500 | 522 | 100,422 | 101,824 | |||||||||||||||||
Corporate debt securities | 183,727 | 184,695 | 183,582 | 185,298 | 461,530 | 461,138 | |||||||||||||||||
Municipal bonds | 21,721 | 22,978 | 24,054 | 26,624 | 24,013 | 27,670 | |||||||||||||||||
Agency pass-through certificates | 2,518,512 | 2,429,783 | 2,474,925 | 2,470,210 | 2,396,554 | 2,434,597 | |||||||||||||||||
Commercial MBS | 18,460 | 18,490 | 8,350 | 8,391 | 80,318 | 79,870 | |||||||||||||||||
$ | 2,951,891 | $ | 2,863,727 | $ | 2,903,443 | $ | 2,902,122 | $ | 3,326,783 | $ | 3,364,450 |
September 30, 2018 | Amortized Cost | Weighted Average Yield | ||||
(In thousands) | ||||||
Due in less than 1 year | $ | 3,460 | 4.36 | % | ||
Due after 1 year through 5 years | 156,046 | 3.33 | ||||
Due after 5 years through 10 years | 130,838 | 2.91 | ||||
Due after 10 years | 2,661,547 | 3.23 | ||||
$ | 2,951,891 | 3.22 | % |
September 30, | 2018 | 2017 | 2016 | ||||||||||||||||
Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||
(In thousands) | |||||||||||||||||||
Balance by interest rate: | |||||||||||||||||||
Checking accounts | $3,179,746 | 0.28 | % | $3,019,095 | 0.13 | % | $2,721,721 | 0.06 | % | ||||||||||
Savings accounts | 836,501 | 0.11 | 888,881 | 0.11 | 820,980 | 0.10 | |||||||||||||
Money market accounts | 2,566,096 | 0.65 | 2,453,182 | 0.19 | 2,462,891 | 0.15 | |||||||||||||
6,582,343 | 6,361,158 | 6,005,592 | |||||||||||||||||
Fixed-rate time deposit accounts: | |||||||||||||||||||
Under 1.00% | 629,589 | 2,204,756 | 3,268,272 | ||||||||||||||||
1.00% to 1.99% | 3,761,543 | 2,099,841 | 1,292,612 | ||||||||||||||||
2.00% to 2.99% | 413,671 | 169,253 | 34,376 | ||||||||||||||||
4,804,803 | 4,473,850 | 4,595,260 | |||||||||||||||||
$ | 11,387,146 | $ | 10,835,008 | $ | 10,600,852 |
Maturing in | |||||||||||||||||||||||||||
September 30, 2018 | 1 to 3 Months | 4 to 6 Months | 7 to 12 Months | 13 to 24 Months | 25 to 36 Months | 37 to 60 Months | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Fixed-rate time deposits: | |||||||||||||||||||||||||||
Under 1.00% | $ | 622,633 | $ | 2,140 | $ | 4,490 | $ | — | $ | 326 | $ | — | $ | 629,589 | |||||||||||||
1.00 to 1.99% | 421,164 | 618,182 | 1,097,510 | 1,181,028 | 295,400 | 148,259 | 3,761,543 | ||||||||||||||||||||
2.00% to 2.99% | 721 | 3,649 | 30,489 | 154,214 | 512 | 224,086 | 413,671 | ||||||||||||||||||||
Total | $ | 1,044,518 | $ | 623,971 | $ | 1,132,489 | $ | 1,335,242 | $ | 296,238 | $ | 372,345 | $ | 4,804,803 |
Twelve Months Ended September 30, | 2018 | 2017 | 2016 | ||||||||
(In thousands) | |||||||||||
FHLB advances: | |||||||||||
Average balance outstanding | $ | 2,384,795 | $ | 2,167,986 | $ | 1,992,434 | |||||
Maximum amount outstanding at any month-end during the period | 2,620,000 | 2,350,000 | 2,080,000 | ||||||||
Weighted-average interest rate, net of cash flow hedges, during the period (1) | 2.62 | % | 3.00 | % | 3.22 | % | |||||
Securities sold to customers under agreements to repurchase: | |||||||||||
Average balance outstanding | $ | 60,933 | $ | 59,361 | $ | 49,885 | |||||
Maximum amount outstanding at any month-end during the period | 84,919 | 74,104 | 56,310 | ||||||||
Weighted-average interest rate during the period (1) | 0.31 | % | 0.20 | % | 0.22 | % | |||||
Total average borrowings: | $ | 2,445,728 | $ | 2,227,347 | $ | 2,042,319 | |||||
Weighted-average interest rate, net of cash flow hedges, on total average borrowings (1) | 2.56 | % | 2.92 | % | 3.14 | % |
(1) | Interest expense divided by average daily balances. |
Twelve Months Ended September 30, | ||||||||
2018 | 2017 | 2016 | ||||||
Return on assets (1) | 1.31 | % | 1.16 | % | 1.12 | % | ||
Return on equity (2) | 10.16 | 8.64 | 8.33 | |||||
Average equity to average assets | 12.59 | 13.15 | 13.27 | |||||
Dividend payout ratio (3) | 27.47 | 42.94 | 30.43 |
(1) | Net income divided by average total assets. |
(2) | Net income divided by average equity. |
(3) | Dividends paid per share divided by net income per share. |
Twelve Months Ended September 30, | |||||||||||||||||||||||||||||||||||
2018 vs. 2017 Increase (Decrease) Due to | 2017 vs. 2016 Increase (Decrease) Due to | 2016 vs. 2015 Increase (Decrease) Due to | |||||||||||||||||||||||||||||||||
Volume | Rate | Total | Volume | Rate | Total | Volume | Rate | Total | |||||||||||||||||||||||||||
(In thousands) | (In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||||||||||||
Loan portfolio | $ | 36,820 | $ | 8,464 | $ | 45,284 | $ | 40,942 | $ | (24,504 | ) | $ | 16,438 | $ | 44,395 | $ | (27,312 | ) | $ | 17,083 | |||||||||||||||
Mortgage-backed securities | (418 | ) | 10,213 | 9,795 | (4,192 | ) | 1,855 | (2,337 | ) | (7,824 | ) | (619 | ) | (8,443 | ) | ||||||||||||||||||||
Investments (1) | (2,970 | ) | 6,056 | 3,086 | (8,050 | ) | 6,074 | (1,976 | ) | (7,283 | ) | 4,883 | (2,400 | ) | |||||||||||||||||||||
All interest-earning assets | 33,432 | 24,733 | 58,165 | 28,700 | (16,575 | ) | 12,125 | 29,288 | (23,048 | ) | 6,240 | ||||||||||||||||||||||||
Interest expense: | |||||||||||||||||||||||||||||||||||
Customer accounts | 2,371 | 18,098 | 20,469 | 180 | (642 | ) | (462 | ) | (370 | ) | 1,801 | 1,431 | |||||||||||||||||||||||
FHLB advances and other borrowings | 6,160 | (8,677 | ) | (2,517 | ) | 3,518 | (2,608 | ) | 910 | 3,900 | (5,859 | ) | (1,959 | ) | |||||||||||||||||||||
All interest-bearing liabilities | 8,531 | 9,421 | 17,952 | 3,698 | (3,250 | ) | 448 | 3,530 | (4,058 | ) | (528 | ) | |||||||||||||||||||||||
Change in net interest income | $ | 24,901 | $ | 15,312 | $ | 40,213 | $ | 25,002 | $ | (13,325 | ) | $ | 11,677 | $ | 25,758 | $ | (18,990 | ) | $ | 6,768 |
(1) | Includes interest on cash equivalents and dividends on stock of the FHLB of Des Moines and FRB of San Francisco. |
September 30, 2018 | Repricing Period | ||||||||||||||
Within One Year | After 1 year - before 6 Years | Thereafter | Total | ||||||||||||
(In thousands) | |||||||||||||||
Earning assets (1) | $ | 5,728,733 | $ | 5,131,215 | $ | 3,617,982 | $ | 14,477,930 | |||||||
Paying liabilities | (7,433,148 | ) | (3,899,724 | ) | (2,474,307 | ) | (13,807,179 | ) | |||||||
Excess (liabilities) assets | $ | (1,704,415 | ) | $ | 1,231,491 | $ | 1,143,675 | ||||||||
Excess as % of total assets | (10.7 | )% |
Potential Impact on Net Interest Income | |||||||||||
Basis Point Increase in Interest Rates | September 30, 2018 | September 30, 2017 | |||||||||
(In thousands, except percentages) | |||||||||||
100 | $ | (2,885 | ) | (0.64 | )% | $ | 9,274 | 1.95 | % | ||
200 | (8,623 | ) | (1.91 | )% | 14,157 | 2.97 | % | ||||
300 | (16,712 | ) | (3.71 | )% | 16,884 | 3.55 | % |
September 30, 2018 | ||||||||||||
Change in Interest Rates | Estimated NPV Amount | Estimated (Decrease) in NPV Amount | NPV as % of Assets | |||||||||
(Basis Points) | (In thousands) | (In thousands) | ||||||||||
300 | $ | 1,625,034 | $ | (676,994 | ) | 11.53 | % | |||||
200 | 1,883,904 | (418,124 | ) | 12.89 | % | |||||||
100 | 2,114,828 | (187,200 | ) | 13.96 | % | |||||||
No change | 2,302,028 | — | 14.71 | % |
September 30, 2017 | ||||||||||||
Change in Interest Rates | Estimated NPV Amount | Estimated (Decrease) in NPV Amount | NPV as % of Assets | |||||||||
(Basis Points) | (In thousands) | (In thousands) | ||||||||||
300 | $ | 1,781,509 | $ | (765,057 | ) | 12.98 | % | |||||
200 | 2,083,962 | (462,604 | ) | 14.60 | % | |||||||
100 | 2,347,755 | (198,811 | ) | 15.85 | % | |||||||
No change | 2,546,566 | — | 16.62 | % |
• | the total dividends for the applicable calendar year exceed the sum of the institution's net income for that year to date plus the institution's retained net income for the preceding two years; |
• | Prohibiting federal banking regulators from imposing higher capital standards on High Volatility Commercial Real Estate (“HVCRE”) exposures unless they are for acquisition, development or construction (“ADC”), and clarifying ADC status; |
• | Requiring the federal banking agencies to amend the Liquidity Coverage Ratio Rule such that all qualifying investment-grade, liquid and readily-marketable municipal securities are treated as level 2B liquid assets, making them more attractive investment alternatives; |
• | Exempting from appraisal requirements certain transactions involving real property in rural areas and valued at less than $400,000; and |
• | Directing the Bureau of Consumer Financial Protection to provide guidance on the applicability of the TILA-RESPA Integrated Disclosure rule to mortgage assumption transactions and construction-to-permanent home loans, as well the extent to which lenders can rely on model disclosures that do not reflect recent regulatory changes. |
• | The state of Idaho has a corporate income tax with a statutory rate of 7.4% of apportionable income. |
• | The state of Oregon has a corporate excise tax with a statutory rate of 6.6% on the first $1 million of apportionable income and then 7.6% on any excess over $1 million. |
• | The state of Utah has a corporate franchise tax with a statutory rate of 5.0% of apportionable income. |
• | The state of Arizona has a corporate income tax with a statutory rate of 4.9% of apportionable income. |
• | The state of Texas has a corporate franchise tax with a statutory rate of 0.75% on apportionable taxable margin. |
• | The state of New Mexico has a corporate income tax with graduated statutory rates. For our fiscal year beginning October 1, 2017, the applicable tax rate is 4.8% on the first $500,000 of apportionable income, and 6.2% on any excess over $500,000. For our fiscal year beginning October 1, 2018, the applicable tax rate is 4.8% on the first $500,000 of apportionable income, and 5.9% on any excess over $500,000. |
Item 1A. | Risk Factors |
▪ | Ineffective monetary policy or other market conditions could cause rapid changes in interest rates and asset values that would have a materially adverse impact on the Company's profitability and overall financial condition. |
• | Market developments may affect consumer confidence levels and may cause adverse changes in payment patterns, resulting in increased delinquencies and default rates on loans and other credit facilities. |
• | The processes the Company uses to estimate the allowance for loan losses and other reserves may prove to be unreliable. Such estimates rely upon complex modeling inputs and judgments, including forecasts of economic conditions, which may be rendered inaccurate and/or no longer subject to accurate forecasting. |
• | The Company's ability to assess the creditworthiness of its borrowers may be impaired if the models and approaches it uses to select, manage, and underwrite loans become less predictive of future charge-offs. |
• | Regulatory scrutiny of the industry could increase, leading to harsh regulation of the industry that could lead to a higher cost of compliance, limit the Company's ability to pursue business opportunities and increase its exposure to the judicial system and the plaintiff’s bar. |
• | Further erosion in the fiscal condition of the U.S. Treasury could lead to new taxes that would limit the ability of the Company to pursue growth and return profits to shareholders. |
• | Loan delinquencies may increase. |
• | Problem assets and foreclosures may increase. |
• | Demand for the Bank's products and services may decline. |
• | Collateral for loans made by the Bank, especially real estate, may decline in value, in turn reducing a customer's borrowing power and reducing the value of assets and collateral associated with the loans. |
• | variations in the operating results of the Company and its competitors |
• | changes in securities analysts' estimates of the Company's future performance and the future performance of its competitors |
• | announcements by the Company or its competitors of mergers, acquisitions and strategic partnerships |
• | additions or departure of key personnel |
• | events affecting other companies that the market deems comparable to the Company |
• | general conditions in the financial markets and real estate markets |
• | general conditions in the United States |
• | the presence or absence of short selling of the Company's common stock |
• | future sales of the Company's common stock or debt securities |
▪ | the prohibited transaction or the acquiring person's purchase of shares was approved by a majority of the members of the target corporation's board of directors prior to the acquiring person's share acquisition; or |
▪ | the prohibited transaction was both approved by the majority of the members of the target corporation's board and authorized at a shareholder meeting by at least two-thirds of the outstanding voting shares (excluding the acquiring person's shares) at or subsequent to the acquiring person's share acquisition. An acquiring person is defined as a person or group of persons that beneficially own 10% or more of the voting securities of the target corporation. Such prohibited transactions include, among other things: |
* | certain mergers, or consolidations with, disposition of assets to, or issuances of stock to or redemption of stock from, the acquiring person; |
* | termination of 5% or more of the employees of the target corporation as a result of the acquiring person's acquisition of 10% or more of the shares; |
* | allowing the acquiring person to receive any disproportionate benefit as a shareholder; and |
* | liquidating or dissolving the target corporation. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
September 30, 2018 | Property | |||||||||||
Location | Number of Offices | Owned | Leased (1) | Net Book Value (2) | ||||||||
(In thousands) | ||||||||||||
Washington | 80 | 67 | 13 | $ | 149,480 | |||||||
Idaho | 24 | 21 | 3 | 19,175 | ||||||||
Oregon | 46 | 37 | 9 | 36,512 | ||||||||
Utah | 10 | 5 | 5 | 7,274 | ||||||||
Arizona | 31 | 25 | 6 | 21,538 | ||||||||
Texas | 6 | 2 | 4 | 5,547 | ||||||||
New Mexico | 27 | 24 | 3 | 23,122 | ||||||||
Nevada | 11 | 7 | 4 | 5,347 | ||||||||
Total | 235 | 188 | 47 | $ | 267,995 |
(1) | The leases have varying terms expiring from 2018 through 2070, including renewal options. |
(2) | Amount represents the net book value of all land, property and equipment owned by the Company and the book value of leasehold improvements, where applicable. |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Item 5. | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (1) | Maximum Number of Shares That May Yet Be Purchased Under the Plan at the End of the Period (2) | ||||||||
July 1, 2018 to July 31, 2018 | 205,790 | $ | 33.89 | 205,790 | 2,649,975 | |||||||
August 1, 2018 to August 31, 2018 | 106,515 | 33.66 | 106,515 | 2,543,460 | ||||||||
September 1, 2018 to September 30, 2018 | 510,862 | 32.78 | 510,862 | 2,032,598 | ||||||||
Total | 823,167 | $ | 33.17 | 823,167 | 2,032,598 |
Item 6. | Selected Financial Data |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk |
Item 8. | Financial Statements and Supplementary Data |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
Item 13. | Certain Relationships and Related Transactions and Director Independence |
Item 14. | Principal Accounting Fees and Services |
Item 15. | Exhibits and Financial Statement Schedules |
No. | Exhibit | Page/ Footnote |
(1) | ||
(2) | ||
(3) | ||
(4) | ||
(5) | ||
(5) | ||
(5) | ||
(6) | ||
(7) | ||
101 | Financial Statements from the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2018 formatted in XBRL |
* | Management contract or compensation plan |
(1) | Incorporated by reference from the Registrant's Form 10-Q filed with the SEC on May 3, 2016. |
(2) | Incorporated by reference from the Registrant's Form 8-K filed with the SEC on January 22, 2016. |
(3) | Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed with the SEC on November 8, 2005. |
(4) | Incorporated by reference from the Registrant's Form 10-K filed with the SEC on November 21, 2016. |
(5) | Incorporated by reference from the Registrant's Form 8-K filed with the SEC on October 24, 2016. |
(6) | Incorporated by reference from the Registrant's Form 8-K filed with the SEC on August 19, 2015. |
(7) | Incorporated by reference from the Registrant's Form 8-K filed with the SEC on January 24, 2017. |
WASHINGTON FEDERAL, INC. | ||
November 19, 2018 | By: | /S/ BRENT J. BEARDALL |
Brent J. Beardall, President and Chief Executive Officer |
/s/ Brent J. Beardall | November 19, 2018 |
Brent J. Beardall Director, President and Chief Executive Officer (Principal Executive Officer) | |
/s/ Vincent L. Beatty | November 19, 2018 |
Vincent L. Beatty Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
/s/ Cory D. Stewart | November 19, 2018 |
Cory D. Stewart Senior Vice President and Principal Accounting Officer (Principal Accounting Officer) | |
/s/ Thomas J. Kelley | November 19, 2018 |
Thomas J. Kelley, Chairman of the Board | |
/s/ Roy M. Whitehead | November 19, 2018 |
Roy M. Whitehead, Director | |
/s/ David K. Grant | November 19, 2018 |
David K. Grant, Director | |
/s/ Anna C. Johnson | November 19, 2018 |
Anna C. Johnson, Director | |
/s/ S. Steven Singh | November 19, 2018 |
S. Steven Singh, Director | |
/s/ Barbara L. Smith | November 19, 2018 |
Barbara L. Smith, Director | |
/s/ Mark N. Tabbutt | November 19, 2018 |
Mark N. Tabbutt, Director | |
/s/ Randall H. Talbot | November 19, 2018 |
Randall H. Talbot, Director |
As of and for the year end September 30, | 2018 | 2017 | % Change | ||||
(In thousands, except per share and ratio data) | |||||||
Assets | $ | 15,865,724 | $ | 15,253,580 | +4.0% | ||
Cash and cash equivalents | 268,650 | 313,070 | (14.2) | ||||
Investment securities | 415,454 | 423,521 | (1.9) | ||||
Loans receivable, net | 11,477,081 | 10,882,622 | +5.5 | ||||
Mortgage-backed securities | 2,524,923 | 2,489,544 | +1.4 | ||||
Customer deposits | 11,387,146 | 10,835,008 | +5.1 | ||||
FHLB advances and other borrowings | 2,330,000 | 2,225,000 | +4.7 | ||||
Stockholders’ equity | 1,996,908 | 2,005,688 | (0.4) | ||||
Net income | 203,850 | 173,532 | +17.5 | ||||
Diluted earnings per share | 2.40 | 1.94 | +23.7 | ||||
Dividends per share | 0.67 | 0.84 | (20.2) | ||||
Stockholders’ equity per share | 24.14 | 23.00 | +5.0 | ||||
Shares outstanding | 82,711 | 87,193 | (5.1) | ||||
Return on average stockholders’ equity | 10.16 | % | 8.64 | % | +17.6 | ||
Return on average assets | 1.31 | 1.16 | 12.9 | ||||
Efficiency ratio (1) (2) | 50.37 | 47.82 | +5.3 |
(1) | Calculated as total operating costs divided by net interest income, plus other income (excluding non-operating gains) |
(2) | Efficiency ratio for the year ended September 30, 2018 excludes the impact of $8.55 million reduction to non-interest income related to FDIC loss share valuation adjustments. |
• | a deterioration in economic conditions, including declines in the real estate market and home sale volumes and financial stress on borrowers as a result of the uncertain economic environment; |
• | the effects of a severe economic downturn, including high unemployment rates and declines in housing prices and property values, in the Company's primary market areas; |
• | the effects of and changes in monetary and fiscal policies of the Board of Governors of the Federal Reserve System and the U.S. Government; |
• | fluctuations in interest rate risk and changes in market interest rates; |
• | the Company's ability to make accurate assumptions and judgments about the collectability of its loan portfolio, including the creditworthiness of its borrowers and the value of the assets securing these loans; |
• | the Company's ability to successfully complete merger and acquisition activities and realize expected strategic and operating efficiencies associated with such activities; |
• | legislative and regulatory limitations, including those arising under the Dodd-Frank Act and potential limitations in the manner in which the Company conducts its business and undertakes new investments and activities; |
• | the ability of the Company to obtain external financing to fund its operations or obtain this financing on favorable terms; |
• | changes in other economic, competitive, governmental, regulatory, and technological factors affecting the Company's markets, operations, pricing, products, services and fees; |
• | the success of the Company at managing the risks involved in the remediation efforts associated with its Bank Secrecy Act program, costs of enhancements to the Bank’s BSA program are greater than anticipated; and governmental authorities undertake enforcement actions or legal proceedings with respect to the Bank’s BSA program beyond those contemplated by the Consent Order, and the potential impact of such matters on the success, timing and ability to pursue the Company’s growth or other business initiatives; |
• | the success of the Company at managing the risks involved in the foregoing and managing its business; and |
• | the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond the Company's control. |
Repricing Period | |||||||||||||||
September 30, 2018 | Within One Year | After 1 Year - Before 6 Years | Thereafter | Total | |||||||||||
(In thousands) | |||||||||||||||
Earning assets (1) | $ | 5,728,733 | $ | 5,131,215 | $ | 3,617,982 | $ | 14,477,930 | |||||||
Paying liabilities (2) | (7,433,148 | ) | (3,899,724 | ) | (2,474,307 | ) | (13,807,179 | ) | |||||||
Excess (liabilities) assets | $ | (1,704,415 | ) | $ | 1,231,491 | $ | 1,143,675 | ||||||||
Excess as % of total assets | (10.74 | )% |
SEP 2018 | JUN 2018 | MAR 2018 | DEC 2017 | SEP 2017 | JUN 2017 | MAR 2017 | DEC 2016 | ||||||||||||||||
Interest rate on loans and mortgage-backed securities | 4.19 | % | 4.13 | % | 4.06 | % | 3.99 | % | 3.96 | % | 3.93 | % | 3.88 | % | 3.84 | % | |||||||
Interest rate on cash and investment securities | 2.44 | 2.30 | 2.16 | 1.87 | 1.85 | 1.79 | 1.73 | 1.43 | |||||||||||||||
Combined earning assets | 4.07 | 4.01 | 3.94 | 3.85 | 3.82 | 3.77 | 3.73 | 3.65 | |||||||||||||||
Interest rate on customer accounts | 0.87 | 0.75 | 0.65 | 0.57 | 0.54 | 0.50 | 0.47 | 0.48 | |||||||||||||||
Interest rate on borrowings | 2.66 | 2.64 | 2.62 | 2.56 | 2.80 | 2.88 | 2.97 | 3.15 | |||||||||||||||
Combined cost of funds | 1.17 | 1.08 | 0.99 | 0.93 | 0.92 | 0.92 | 0.89 | 0.92 | |||||||||||||||
Interest rate spread | 2.90 | % | 2.93 | % | 2.95 | % | 2.92 | % | 2.90 | % | 2.85 | % | 2.84 | % | 2.73 | % |
Twelve Months Ended September 30, 2018 | Twelve Months Ended September 30, 2017 | ||||||||||||||||||||
Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | ||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||
Assets | |||||||||||||||||||||
Loans receivable | $ | 11,202,129 | $ | 515,807 | 4.60 | % | $ | 10,402,346 | $ | 470,523 | 4.52 | % | |||||||||
Mortgaged-backed securities | 2,543,796 | 70,407 | 2.77 | 2,561,400 | 60,612 | 2.37 | |||||||||||||||
Cash & investments | 584,145 | 15,456 | 2.65 | 719,175 | 14,187 | 1.97 | |||||||||||||||
FHLB & FRB stock | 129,382 | 5,413 | 4.18 | 120,725 | 3,596 | 2.98 | |||||||||||||||
Total interest-earning assets | 14,459,452 | 607,083 | 4.20 | % | 13,803,646 | 548,918 | 3.98 | % | |||||||||||||
Other assets | 1,155,819 | 1,161,408 | |||||||||||||||||||
Total assets | $ | 15,615,271 | $ | 14,965,054 | |||||||||||||||||
Liabilities and Equity | |||||||||||||||||||||
Customer accounts | $ | 11,068,461 | $ | 72,492 | 0.65 | % | $ | 10,615,511 | $ | 52,023 | 0.49 | % | |||||||||
FHLB advances | 2,384,795 | 62,452 | 2.62 | 2,167,986 | 64,969 | 3.00 | |||||||||||||||
Total interest-bearing liabilities | 13,453,256 | 134,944 | 1.00 | % | 12,783,497 | 116,992 | 0.92 | % | |||||||||||||
Other liabilities | 155,950 | 173,495 | |||||||||||||||||||
Total liabilities | 13,609,206 | 12,956,992 | |||||||||||||||||||
Stockholders' equity | 2,006,065 | 2,008,062 | |||||||||||||||||||
Total liabilities and equity | $ | 15,615,271 | $ | 14,965,054 | |||||||||||||||||
Net interest income | $ | 472,139 | $ | 431,926 | |||||||||||||||||
Net interest margin | 3.27 | % | 3.13 | % |
September 30, | |||||||||||||||
Non-Performing Assets | 2018 | 2017 | $ Change | % Change | |||||||||||
(In thousands) | |||||||||||||||
Non-accrual loans: | |||||||||||||||
Single-family residential | $ | 27,643 | $ | 27,930 | $ | (287 | ) | (1.0 | )% | ||||||
Construction | 2,427 | — | 2,427 | N/M | |||||||||||
Construction – custom | — | 91 | (91 | ) | (100.0 | ) | |||||||||
Land – acquisition & development (A&D) | 920 | 296 | 624 | 210.8 | |||||||||||
Land – consumer lot loans | 787 | 605 | 182 | 30.1 | |||||||||||
Multi-Family | — | 139 | (139 | ) | (100.0 | ) | |||||||||
Commercial real estate | 8,971 | 11,815 | (2,844 | ) | (24.1 | ) | |||||||||
Commercial & industrial | 14,394 | 8,082 | 6,312 | 78.1 | |||||||||||
HELOC | 523 | 531 | (8 | ) | (1.5 | ) | |||||||||
Consumer | 21 | 91 | (70 | ) | (76.9 | ) | |||||||||
Total non-accrual loans | 55,686 | 49,580 | 6,106 | 12.3 | |||||||||||
Real estate owned | 11,298 | 20,658 | (9,360 | ) | (45.3 | ) | |||||||||
Other property owned | 3,109 | — | 3,109 | N/M | |||||||||||
Total non-performing assets | $ | 70,093 | $ | 70,238 | $ | (145 | ) | (0.2 | )% |
September 30, 2018 | September 30, 2017 | Change | ||||||||||||||
(In thousands) | (In thousands) | $ | % | |||||||||||||
Gross loans by category | ||||||||||||||||
Single-family residential | $ | 5,798,966 | 45.1 | % | $ | 5,711,004 | 46.8 | % | $ | 87,962 | 1.5% | |||||
Construction | 1,890,668 | 14.7 | 1,597,996 | 13.1 | 292,672 | 18.3 | ||||||||||
Construction - custom | 624,479 | 4.9 | 602,631 | 4.9 | 21,848 | 3.6 | ||||||||||
Land - acquisition & development | 155,204 | 1.2 | 124,308 | 1.0 | 30,896 | 24.9 | ||||||||||
Land - consumer lot loans | 102,036 | 0.8 | 104,405 | 0.9 | (2,369 | ) | (2.3) | |||||||||
Multi-family | 1,385,125 | 10.8 | 1,303,148 | 10.7 | 81,977 | 6.3 | ||||||||||
Commercial real estate | 1,452,168 | 11.3 | 1,434,610 | 11.8 | 17,558 | 1.2 | ||||||||||
Commercial & industrial | 1,140,874 | 8.9 | 1,093,360 | 9.0 | 47,514 | 4.3 | ||||||||||
HELOC | 130,852 | 1.0 | 144,850 | 1.2 | (13,998 | ) | (9.7) | |||||||||
Consumer | 173,306 | 1.3 | 85,075 | 0.7 | 88,231 | 103.7 | ||||||||||
Total gross loans | 12,853,678 | 100 | % | 12,201,387 | 100 | % | 652,291 | 5.3% | ||||||||
Less: | ||||||||||||||||
Allowance for probable losses | 129,257 | 123,073 | 6,184 | 5.0 | ||||||||||||
Loans in process | 1,195,506 | 1,149,934 | 45,572 | 4.0 | ||||||||||||
Net deferred fees, costs and discounts | 51,834 | 45,758 | 6,076 | 13.3 | ||||||||||||
Total loan contra accounts | 1,376,597 | 1,318,765 | 57,832 | 4.4 | ||||||||||||
Net loans | $ | 11,477,081 | $ | 10,882,622 | $ | 594,459 | 5.5% |
September 30, | 2018 | 2017 | Change | |||
Washington | 43.6 | % | 45.8 | % | (2.2 | ) |
Oregon | 16.3 | 15.6 | 0.7 | |||
Arizona | 12.4 | 11.4 | 1.0 | |||
Utah | 7.8 | 7.9 | (0.1 | ) | ||
Texas | 6.0 | 4.6 | 1.4 | |||
New Mexico | 5.1 | 4.9 | 0.2 | |||
Idaho | 4.5 | 4.5 | — | |||
Nevada | 2.1 | 2.4 | (0.3 | ) | ||
Other (1) | 2.2 | 2.9 | (0.7 | ) | ||
100 | % | 100 | % |
($ in thousands) | September 30, 2018 | September 30, 2017 | |||||||||||||||||
Deposit Account Balance | As a % of Total Deposits | Weighted Average Rate | Deposit Account Balance | As a % of Total Deposits | Weighted Average Rate | ||||||||||||||
Non-interest checking | $ | 1,401,226 | 12.4 | % | — | % | $ | 1,258,274 | 11.6 | % | — | % | |||||||
Interest checking | 1,778,520 | 15.6 | 0.50 | 1,760,821 | 16.3 | 0.23 | |||||||||||||
Savings | 836,501 | 7.3 | 0.11 | 888,881 | 8.2 | 0.11 | |||||||||||||
Money market | 2,566,096 | 22.5 | 0.65 | 2,453,182 | 22.6 | 0.19 | |||||||||||||
Time deposits | 4,804,803 | 42.2 | 1.50 | 4,473,850 | 41.3 | 1.09 | |||||||||||||
Total | $ | 11,387,146 | 100 | % | 0.87 | % | $ | 10,835,008 | 100 | % | 0.54 | % |
(In thousands) | September 30, 2018 | September 30, 2017 | $ Change | ||||||||||
Washington | $ | 5,967,219 | 52.4 | % | $ | 5,383,764 | 49.7 | % | $ | 583,455 | |||
Oregon | 1,835,782 | 16.1 | 1,964,490 | 18.1 | (128,708 | ) | |||||||
Arizona | 1,205,696 | 10.6 | 1,164,743 | 10.7 | 40,953 | ||||||||
New Mexico | 869,478 | 7.6 | 843,214 | 7.8 | 26,264 | ||||||||
Idaho | 801,473 | 7.0 | 786,974 | 7.3 | 14,499 | ||||||||
Nevada | 340,204 | 3.0 | 326,436 | 3.0 | 13,768 | ||||||||
Utah | 266,934 | 2.3 | 267,717 | 2.5 | (783 | ) | |||||||
Texas | 100,360 | 0.9 | 97,670 | 0.9 | 2,690 | ||||||||
$ | 11,387,146 | 100 | % | $ | 10,835,008 | 100 | % | $ | 552,138 |
September 30, 2018 | Total | Less than 1 Year | 1 to 5 Years | Over 5 Years | ||||||||||||
(In thousands) | ||||||||||||||||
Customer accounts (1) | $ | 11,387,146 | $ | 9,383,322 | $ | 1,997,016 | $ | 6,808 | ||||||||
Debt obligations (2) | 2,330,000 | 1,680,000 | 500,000 | 150,000 | ||||||||||||
Operating lease obligations | 37,295 | 5,582 | 17,935 | 13,778 | ||||||||||||
$ | 13,754,441 | $ | 11,068,904 | $ | 2,514,951 | $ | 170,586 |
Comparison of Year Ended September 30, 2018 and September 30, 2017 | |||||||||
($ in thousands) | Volume | Rate | Total | ||||||
Interest income: | |||||||||
Loans receivable | $ | 36,820 | $ | 8,464 | $ | 45,284 | |||
Mortgaged-backed securities | (418 | ) | 10,213 | 9,795 | |||||
Investments (1) | (2,970 | ) | 6,056 | 3,086 | |||||
All interest-earning assets | 33,432 | 24,733 | 58,165 | ||||||
Interest expense: | |||||||||
Customer accounts | 2,371 | 18,098 | 20,469 | ||||||
FHLB advances and other borrowings | 6,160 | (8,677 | ) | (2,517 | ) | ||||
All interest-bearing liabilities | 8,531 | 9,421 | 17,952 | ||||||
Change in net interest income | $ | 24,901 | $ | 15,312 | $ | 40,213 |
Comparison of Year Ended September 30, 2017 and September 30, 2016 | |||||||||
($ in thousands) | Volume | Rate | Total | ||||||
Interest income: | |||||||||
Loans receivable | $ | 40,942 | $ | (24,504 | ) | $ | 16,438 | ||
Mortgaged-backed securities | (4,192 | ) | 1,855 | (2,337 | ) | ||||
Investments (1) | (8,050 | ) | 6,074 | (1,976 | ) | ||||
All interest-earning assets | 28,700 | (16,575 | ) | 12,125 | |||||
Interest expense: | |||||||||
Customer accounts | 180 | (642 | ) | (462 | ) | ||||
FHLB advances and other borrowings | 3,518 | (2,608 | ) | 910 | |||||
All interest-bearing liabilities | 3,698 | (3,250 | ) | 448 | |||||
Change in net interest income | $ | 25,002 | $ | (13,325 | ) | $ | 11,677 |
Year ended September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
(In thousands, except per share data) | |||||||||||||||
Interest income | $ | 607,083 | $ | 548,918 | $ | 536,793 | $ | 530,553 | $ | 533,697 | |||||
Interest expense | 134,944 | 116,992 | 116,544 | 117,072 | 128,077 | ||||||||||
Net interest income | 472,139 | 431,926 | 420,249 | 413,481 | 405,620 | ||||||||||
Provision (reversal) for loan losses | (5,450 | ) | (2,100 | ) | (6,250 | ) | (11,162 | ) | (15,401 | ) | |||||
Other income | 43,976 | 53,709 | 57,082 | 49,727 | 27,916 | ||||||||||
Other expense | 264,322 | 231,519 | 235,447 | 224,851 | 204,009 | ||||||||||
Income before income taxes | 257,243 | 256,216 | 248,134 | 249,519 | 244,928 | ||||||||||
Income taxes | 53,393 | 82,684 | 84,085 | 89,203 | 87,564 | ||||||||||
Net income | $ | 203,850 | $ | 173,532 | $ | 164,049 | $ | 160,316 | $ | 157,364 | |||||
Per share data | |||||||||||||||
Basic earnings | $ | 2.40 | $ | 1.95 | $ | 1.79 | $ | 1.68 | $ | 1.56 | |||||
Diluted earnings | 2.40 | 1.94 | 1.78 | 1.67 | 1.55 | ||||||||||
Cash dividends | 0.67 | 0.84 | 0.55 | 0.54 | 0.41 | ||||||||||
September 30, | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||
Total assets | $ | 15,865,724 | $ | 15,253,580 | $ | 14,888,063 | $ | 14,568,324 | $ | 14,756,041 | |||||
Loans receivable, net | 11,477,081 | 10,882,622 | 9,910,920 | 9,170,634 | 8,324,798 | ||||||||||
Mortgage-backed securities | 2,524,923 | 2,489,544 | 2,490,510 | 2,906,440 | 3,231,691 | ||||||||||
Investment securities | 415,454 | 423,521 | 849,983 | 1,117,339 | 1,366,018 | ||||||||||
Cash and cash equivalents | 268,650 | 313,070 | 450,368 | 284,049 | 781,843 | ||||||||||
Customer accounts | 11,387,146 | 10,835,008 | 10,600,852 | 10,631,703 | 10,716,928 | ||||||||||
FHLB advances | 2,330,000 | 2,225,000 | 2,080,000 | 1,830,000 | 1,930,000 | ||||||||||
Stockholders’ equity | 1,996,908 | 2,005,688 | 1,975,731 | 1,955,679 | 1,973,283 | ||||||||||
Number of | |||||||||||||||
Customer accounts | 449,339 | 449,793 | 491,098 | 517,871 | 548,872 | ||||||||||
Loans | 37,992 | 39,688 | 41,418 | 41,036 | 43,569 | ||||||||||
Offices | 235 | 237 | 238 | 247 | 251 |
September 30, 2018 | September 30, 2017 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 268,650 | $ | 313,070 | |||
Available-for-sale securities, at fair value | 1,314,957 | 1,266,209 | |||||
Held-to-maturity securities, at amortized cost | 1,625,420 | 1,646,856 | |||||
Loans receivable, net of allowance for loan losses of $129,257 and $123,073 | 11,477,081 | 10,882,622 | |||||
Interest receivable | 47,295 | 41,643 | |||||
Premises and equipment, net | 267,995 | 263,694 | |||||
Real estate owned | 11,298 | 20,658 | |||||
FHLB & FRB stock | 127,190 | 122,990 | |||||
Bank owned life insurance | 216,254 | 211,330 | |||||
Intangible assets, including goodwill of $301,368 and $293,153 | 311,286 | 298,682 | |||||
Federal and state income tax assets, net | 1,804 | — | |||||
Other assets | 196,494 | 185,826 | |||||
$ | 15,865,724 | $ | 15,253,580 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Liabilities | |||||||
Customer accounts | |||||||
Transaction deposit accounts | $ | 6,582,343 | $ | 6,361,158 | |||
Time deposit accounts | 4,804,803 | 4,473,850 | |||||
11,387,146 | 10,835,008 | ||||||
FHLB advances | 2,330,000 | 2,225,000 | |||||
Advance payments by borrowers for taxes and insurance | 57,417 | 56,631 | |||||
Accrued expenses and other liabilities | 94,253 | 131,253 | |||||
13,868,816 | 13,247,892 | ||||||
Stockholders’ equity | |||||||
Common stock, $1.00 par value, 300,000,000 shares authorized; 135,343,417 and 134,957,511 shares issued; 82,710,911 and 87,193,362 shares outstanding | 135,343 | 134,958 | |||||
Paid-in capital | 1,666,609 | 1,660,885 | |||||
Accumulated other comprehensive income (loss), net of taxes | 8,294 | 5,015 | |||||
Treasury stock, at cost; 52,632,506 and 47,764,149 shares | (1,002,309 | ) | (838,060 | ) | |||
Retained earnings | 1,188,971 | 1,042,890 | |||||
1,996,908 | 2,005,688 | ||||||
$ | 15,865,724 | $ | 15,253,580 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands, except share data) | |||||||||
INTEREST INCOME | |||||||||
Loans receivable | $ | 515,807 | $ | 470,523 | $ | 454,085 | |||
Mortgage-backed securities | 70,407 | 60,612 | 62,949 | ||||||
Investment securities and cash equivalents | 20,869 | 17,783 | 19,759 | ||||||
607,083 | 548,918 | 536,793 | |||||||
INTEREST EXPENSE | |||||||||
Customer accounts | 72,492 | 52,023 | 52,485 | ||||||
FHLB advances | 62,452 | 64,969 | 64,059 | ||||||
134,944 | 116,992 | 116,544 | |||||||
Net interest income | 472,139 | 431,926 | 420,249 | ||||||
Provision (release) for loan losses | (5,450 | ) | (2,100 | ) | (6,250 | ) | |||
Net interest income after provision (release) for loan losses | 477,589 | 434,026 | 426,499 | ||||||
OTHER INCOME | |||||||||
Gain on sale of investment securities | — | 3,499 | — | ||||||
FDIC loss share termination valuation adjustments | (8,550 | ) | — | — | |||||
Loan fee income | 3,804 | 4,290 | 5,548 | ||||||
Deposit fee income | 25,904 | 22,643 | 21,738 | ||||||
Other income | 22,920 | 21,783 | 19,750 | ||||||
44,078 | 52,215 | 47,036 | |||||||
OTHER EXPENSE | |||||||||
Compensation and benefits | 123,554 | 112,257 | 112,884 | ||||||
Occupancy | 36,453 | 35,260 | 33,568 | ||||||
FDIC insurance premiums | 11,592 | 11,410 | 11,824 | ||||||
Product delivery | 16,372 | 13,972 | 17,060 | ||||||
Information technology | 34,643 | 28,859 | 30,982 | ||||||
Other expense | 41,708 | 29,761 | 29,129 | ||||||
264,322 | 231,519 | 235,447 | |||||||
Gain (loss) on real estate owned, net | (102 | ) | 1,494 | 10,046 | |||||
Income before income taxes | 257,243 | 256,216 | 248,134 | ||||||
Income tax expense (benefit) | |||||||||
Current | 44,557 | 92,795 | 60,773 | ||||||
Deferred | 8,836 | (10,111 | ) | 23,312 | |||||
53,393 | 82,684 | 84,085 | |||||||
NET INCOME | $ | 203,850 | $ | 173,532 | $ | 164,049 | |||
PER SHARE DATA | |||||||||
Basic earnings per share | $ | 2.40 | $ | 1.95 | $ | 1.79 | |||
Diluted earnings per share | 2.40 | 1.94 | 1.78 | ||||||
Dividends paid on common stock per share | 0.67 | 0.84 | 0.55 | ||||||
Basic weighted average number of shares outstanding | 85,008,040 | 88,905,457 | 91,399,038 | ||||||
Diluted weighted average number of shares outstanding | 85,109,843 | 89,224,207 | 91,912,918 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||
(In thousands) | |||||||||||
Net income | $ | 203,850 | $ | 173,532 | $ | 164,049 | |||||
Other comprehensive income (loss) net of tax: | |||||||||||
Net unrealized gains (losses) on available-for-sale securities | (21,136 | ) | (7,587 | ) | (1,403 | ) | |||||
Reclassification adjustment of net gains from sale of available-for-sale securities included in net income | — | 3,499 | — | ||||||||
Related tax benefit (expense) | 6,156 | 1,503 | 516 | ||||||||
(14,980 | ) | (2,585 | ) | (887 | ) | ||||||
Net unrealized gain (loss) on long-term borrowing hedges | 23,943 | 29,653 | (16,793 | ) | |||||||
Related tax benefit (expense) | (5,684 | ) | (10,897 | ) | 6,171 | ||||||
18,259 | 18,756 | (10,622 | ) | ||||||||
Other comprehensive income (loss) | 3,279 | 16,171 | (11,509 | ) | |||||||
Comprehensive income | $ | 207,129 | $ | 189,703 | $ | 152,540 |
(In thousands) | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total | ||||||||||||
Balance at September 30, 2015 | $ | 133,696 | $ | 1,643,712 | $ | 829,754 | $ | 353 | $ | (651,836 | ) | $ | 1,955,679 | |||||
Net income | 164,049 | 164,049 | ||||||||||||||||
Other comprehensive income (loss) | (11,509 | ) | (11,509 | ) | ||||||||||||||
Dividends on common stock | (49,926 | ) | (49,926 | ) | ||||||||||||||
Compensation expense related to common stock options | 90 | 90 | ||||||||||||||||
Proceeds from exercise of common stock options | 433 | 8,850 | 9,283 | |||||||||||||||
Restricted stock expense | 179 | 3,480 | 3,659 | |||||||||||||||
Repurchase of stock warrants | (7,744 | ) | (7,744 | ) | ||||||||||||||
Treasury stock purchased | (87,850 | ) | (87,850 | ) | ||||||||||||||
Balance at September 30, 2016 | 134,308 | 1,648,388 | 943,877 | (11,156 | ) | (739,686 | ) | 1,975,731 | ||||||||||
Net income | 173,532 | 173,532 | ||||||||||||||||
Other comprehensive income (loss) | 16,171 | 16,171 | ||||||||||||||||
Dividends on common stock | (74,519 | ) | (74,519 | ) | ||||||||||||||
Proceeds from exercise of common stock options | 317 | 6,921 | 7,238 | |||||||||||||||
Restricted stock expense | 105 | 5,804 | 5,909 | |||||||||||||||
Repurchase of stock warrants | 228 | (228 | ) | — | ||||||||||||||
Treasury stock purchased | (98,374 | ) | (98,374 | ) | ||||||||||||||
Balance at September 30, 2017 | 134,958 | 1,660,885 | 1,042,890 | 5,015 | (838,060 | ) | 2,005,688 | |||||||||||
Adjustment pursuant to adoption of ASU 2018-02 | (1,772 | ) | 1,772 | — | ||||||||||||||
Net income | 203,850 | 203,850 | ||||||||||||||||
Other comprehensive income (loss) | 1,507 | 1,507 | ||||||||||||||||
Dividends on common stock | (55,997 | ) | (55,997 | ) | ||||||||||||||
Proceeds from exercise of common stock options | 63 | 1,275 | 1,338 | |||||||||||||||
Restricted stock expense | 209 | 4,562 | 4,771 | |||||||||||||||
Repurchase of stock warrants | 113 | (113 | ) | — | ||||||||||||||
Treasury stock purchased | (164,249 | ) | (164,249 | ) | ||||||||||||||
Balance at September 30, 2018 | $ | 135,343 | $ | 1,666,609 | $ | 1,188,971 | $ | 8,294 | $ | (1,002,309 | ) | $ | 1,996,908 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||
(In thousands) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income | $ | 203,850 | $ | 173,532 | $ | 164,049 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation, amortization and accretion expense | 46,735 | 41,680 | 19,509 | ||||||||
Cash received from (paid to) FDIC under loss share | 1,595 | 584 | 1,730 | ||||||||
Stock compensation expense | 4,771 | 5,909 | 3,569 | ||||||||
Provision (release) for loan losses | (5,450 | ) | (2,100 | ) | (6,250 | ) | |||||
Loss (gain) on sale of investment securities | — | (3,499 | ) | — | |||||||
Decrease (increase) in accrued interest receivable | (5,652 | ) | (3,974 | ) | 2,760 | ||||||
Decrease (increase) in federal and state income tax receivable | (1,804 | ) | 16,047 | 5,153 | |||||||
Decrease (increase) in cash surrender value of bank owned life insurance | (5,992 | ) | (6,498 | ) | (5,627 | ) | |||||
Gain on bank owned life insurance | (2,416 | ) | (6,805 | ) | — | ||||||
Net realized (gain) loss on sales of premises and equipment and real estate owned | (1,450 | ) | (1,673 | ) | (20,039 | ) | |||||
Decrease (increase) in other assets | (6,876 | ) | 7,974 | (14,204 | ) | ||||||
Increase (decrease) in accrued expenses and other liabilities | (36,609 | ) | (41,477 | ) | 71,071 | ||||||
Net cash provided (used) by operating activities | 190,702 | 179,700 | 221,721 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Origination of loans and principal repayments, net | (459,183 | ) | (896,450 | ) | (619,046 | ) | |||||
Loans purchased | (143,605 | ) | (72,856 | ) | (105,420 | ) | |||||
FHLB & FRB stock purchase | (530,000 | ) | (183,609 | ) | (36,347 | ) | |||||
FHLB & FRB stock redeemed | 525,800 | 177,824 | 26,340 | ||||||||
Available-for-sale securities purchased | (272,780 | ) | (76,367 | ) | (137,591 | ) | |||||
Principal payments and maturities of available-for-sale securities | 199,008 | 367,713 | 537,255 | ||||||||
Proceeds from sales of available-for-sale investment securities | — | 362,829 | 50,741 | ||||||||
Held-to-maturity securities purchased | (170,836 | ) | (466,058 | ) | — | ||||||
Principal payments and maturities of held-to-maturity securities | 187,812 | 229,716 | 218,958 | ||||||||
Proceeds from sales of real estate owned | 15,192 | 16,248 | 61,132 | ||||||||
Proceeds from settlements of bank owned life insurance | 3,484 | 10,096 | — | ||||||||
Purchase of bank owned life insurance | — | — | (100,000 | ) | |||||||
Net cash received (paid) in business combinations | (2,211 | ) | (3,370 | ) | — | ||||||
Proceeds from sales of premises and equipment | 1 | 5,209 | 14,685 | ||||||||
Premises and equipment purchased and REO improvements | (27,127 | ) | (15,461 | ) | (41,771 | ) | |||||
Net cash provided (used) by investing activities | (674,445 | ) | (544,536 | ) | (131,064 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Net increase (decrease) in customer accounts | 552,445 | 234,460 | (30,775 | ) | |||||||
Proceeds from borrowings | 13,250,000 | 4,590,000 | 1,118,000 | ||||||||
Repayments of borrowings | (13,145,000 | ) | (4,445,000 | ) | (868,000 | ) | |||||
Proceeds from exercise of common stock options and related tax benefit | 1,338 | 7,238 | 9,283 | ||||||||
Dividends paid on common stock | (55,997 | ) | (74,519 | ) | (49,926 | ) | |||||
Repurchase of warrants | — | — | (7,744 | ) | |||||||
Treasury stock purchased | (164,249 | ) | (98,374 | ) | (87,850 | ) | |||||
Increase (decrease) in advance payments by borrowers for taxes and insurance | 786 | 13,733 | (7,326 | ) | |||||||
Net cash provided (used) by financing activities | 439,323 | 227,538 | 75,662 | ||||||||
Increase (decrease) in cash and cash equivalents | (44,420 | ) | (137,298 | ) | 166,319 | ||||||
Cash and cash equivalents at beginning of year | 313,070 | 450,368 | 284,049 | ||||||||
Cash and cash equivalents at end of year | $ | 268,650 | $ | 313,070 | $ | 450,368 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||
(In thousands) | |||||||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||
Non-cash investing activities | |||||||||||
Real estate acquired through foreclosure | $ | 4,032 | $ | 3,266 | $ | 12,697 | |||||
Other personal property acquired through foreclosure | 3,109 | — | — | ||||||||
Non-cash financing activities | |||||||||||
Stock issued upon exercise of warrants | 3,914 | 7,632 | — | ||||||||
Cash paid during the year for | |||||||||||
Interest | 133,722 | 111,333 | 114,506 | ||||||||
Income taxes | 44,260 | 54,078 | 68,507 |
Goodwill | Core Deposit and Other Intangibles | Total | |||||||||
(In thousands) | |||||||||||
Balance at September 30, 2016 | $ | 291,503 | $ | 5,486 | $ | 296,989 | |||||
Additions | 1,650 | 1,720 | 3,370 | ||||||||
Amortization | — | (1,677 | ) | (1,677 | ) | ||||||
Balance at September 30, 2017 | 293,153 | 5,529 | 298,682 | ||||||||
Additions (1) | 8,215 | 6,595 | 14,810 | ||||||||
Amortization (2) | — | (2,206 | ) | (2,206 | ) | ||||||
Balance at September 30, 2018 | $ | 301,368 | $ | 9,918 | $ | 311,286 |
Fiscal Year | Expense | |||
(In thousands) | ||||
2019 | $ | 2,033 | ||
2020 | 1,990 | |||
2021 | 1,140 | |||
2022 | 804 | |||
2023 | 775 |
September 30, 2018 | Amortized Cost | Gross Unrealized | Fair Value | Yield | ||||||||||||||
Gains | Losses | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||
U.S. government and agency securities due | ||||||||||||||||||
5 to 10 years | $ | 60,872 | $ | — | $ | (1,473 | ) | $ | 59,399 | 2.55 | % | |||||||
Over 10 years | 148,099 | 109 | (314 | ) | 147,894 | 3.05 | ||||||||||||
Equity securities | ||||||||||||||||||
1 to 5 years | 500 | — | (12 | ) | 488 | 1.80 | ||||||||||||
Corporate debt securities due | ||||||||||||||||||
1 to 5 years | 113,762 | 1,875 | (13 | ) | 115,624 | 3.59 | ||||||||||||
5 to 10 years | 69,965 | 35 | (929 | ) | 69,071 | 3.23 | ||||||||||||
Municipal bonds due | ||||||||||||||||||
1 to 5 years | 1,398 | — | (24 | ) | 1,374 | 2.05 | ||||||||||||
Over 10 years | 20,323 | 1,281 | — | 21,604 | 6.45 | |||||||||||||
Mortgage-backed securities | ||||||||||||||||||
Agency pass-through certificates | 908,092 | 1,383 | (13,434 | ) | 896,041 | 3.29 | ||||||||||||
Commercial MBS | 3,460 | 2 | — | 3,462 | 4.36 | |||||||||||||
1,326,471 | 4,685 | (16,199 | ) | 1,314,957 | 3.30 | |||||||||||||
Held-to-maturity securities | ||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||
Agency pass-through certificates | 1,610,420 | 305 | (76,983 | ) | 1,533,742 | 3.16 | ||||||||||||
Other Commercial MBS | 15,000 | 28 | — | 15,028 | 3.03 | |||||||||||||
1,625,420 | 333 | (76,983 | ) | 1,548,770 | 3.16 | |||||||||||||
$ | 2,951,891 | $ | 5,018 | $ | (93,182 | ) | $ | 2,863,727 | 3.22 | % |
September 30, 2017 | Amortized Cost | Gross Unrealized | Fair Value | Yield | ||||||||||||||
Gains | Losses | |||||||||||||||||
(In thousands) | ||||||||||||||||||
Available-for-sale securities | ||||||||||||||||||
U.S. government and agency securities due | ||||||||||||||||||
Within 1 year | $ | 9,300 | $ | 146 | $ | — | $ | 9,446 | 10.38 | % | ||||||||
1 to 5 years | 5,688 | 2 | — | 5,690 | 1.51 | |||||||||||||
5 to 10 years | 69,108 | — | (1,238 | ) | 67,870 | 1.93 | ||||||||||||
Over 10 years | 127,936 | 353 | (218 | ) | 128,071 | 1.92 | ||||||||||||
Equity securities | ||||||||||||||||||
1 to 5 years | 500 | 22 | — | 522 | 1.80 | |||||||||||||
Corporate debt securities due | ||||||||||||||||||
1 to 5 years | 63,622 | 2,083 | — | 65,705 | 2.96 | |||||||||||||
5 to 10 years | 119,960 | 210 | (577 | ) | 119,593 | 2.62 | ||||||||||||
Municipal bonds due | ||||||||||||||||||
Within 1 year | 2,344 | 10 | — | 2,354 | 1.23 | |||||||||||||
1 to 5 years | 1,367 | 55 | — | 1,422 | 2.05 | |||||||||||||
Over 10 years | 20,343 | 2,505 | — | 22,848 | 6.45 | |||||||||||||
Mortgage-backed securities | ||||||||||||||||||
Agency pass-through certificates | 828,069 | 8,402 | (2,174 | ) | 834,297 | 2.96 | ||||||||||||
Commercial MBS | 8,350 | 41 | — | 8,391 | 3.31 | |||||||||||||
1,256,587 | 13,829 | (4,207 | ) | 1,266,209 | 2.86 | |||||||||||||
Held-to-maturity securities | ||||||||||||||||||
Mortgage-backed securities | ||||||||||||||||||
Agency pass-through certificates | 1,646,856 | 7,143 | (18,086 | ) | 1,635,913 | 3.14 | ||||||||||||
1,646,856 | 7,143 | (18,086 | ) | 1,635,913 | 3.14 | |||||||||||||
$ | 2,903,443 | $ | 20,972 | $ | (22,293 | ) | $ | 2,902,122 | 3.02 | % |
September 30, 2018 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||
Unrealized Gross Losses | Fair Value | Unrealized Gross Losses | Fair Value | Unrealized Gross Losses | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||||
Corporate debt securities | $ | (929 | ) | $ | 49,072 | $ | (14 | ) | $ | 24,988 | $ | (943 | ) | $ | 74,060 | |||
Municipal bonds | (24 | ) | 1,374 | — | — | (24 | ) | 1,374 | ||||||||||
U.S. government and agency securities | (141 | ) | 37,565 | (1,645 | ) | 76,499 | (1,786 | ) | 114,064 | |||||||||
Equity securities | (12 | ) | 488 | — | — | $ | (12 | ) | 488 | |||||||||
Agency pass-through certificates | (28,748 | ) | 1,035,754 | (61,669 | ) | 1,183,017 | (90,417 | ) | 2,218,771 | |||||||||
$ | (29,854 | ) | $ | 1,124,253 | $ | (63,328 | ) | $ | 1,284,504 | $ | (93,182 | ) | $ | 2,408,757 |
September 30, 2017 | ||||||||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||
Unrealized Gross Losses | Fair Value | Unrealized Gross Losses | Fair Value | Unrealized Gross Losses | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||||
Corporate debt securities | $ | — | $ | — | $ | (577 | ) | $ | 49,423 | $ | (577 | ) | $ | 49,423 | ||||
U.S. government and agency securities | (759 | ) | 24,400 | (697 | ) | 96,195 | (1,456 | ) | 120,595 | |||||||||
Agency pass-through certificates | (17,683 | ) | 1,163,358 | (2,577 | ) | 249,304 | (20,260 | ) | 1,412,662 | |||||||||
$ | (18,442 | ) | $ | 1,187,758 | $ | (3,851 | ) | $ | 394,922 | $ | (22,293 | ) | $ | 1,582,680 |
September 30, 2018 | September 30, 2017 | ||||||||||
(In thousands) | (In thousands) | ||||||||||
Gross loans by category | |||||||||||
Single-family residential | $ | 5,798,966 | 45.1 | % | $ | 5,711,004 | 46.8 | % | |||
Construction | 1,890,668 | 14.7 | 1,597,996 | 13.1 | |||||||
Construction - custom | 624,479 | 4.9 | 602,631 | 4.9 | |||||||
Land - acquisition & development | 155,204 | 1.2 | 124,308 | 1.0 | |||||||
Land - consumer lot loans | 102,036 | 0.8 | 104,405 | 0.9 | |||||||
Multi-family | 1,385,125 | 10.8 | 1,303,148 | 10.7 | |||||||
Commercial real estate | 1,452,168 | 11.3 | 1,434,610 | 11.8 | |||||||
Commercial & industrial | 1,140,874 | 8.9 | 1,093,360 | 9.0 | |||||||
HELOC | 130,852 | 1.0 | 144,850 | 1.2 | |||||||
Consumer | 173,306 | 1.3 | 85,075 | 0.7 | |||||||
Total gross loans | 12,853,678 | 100 | % | 12,201,387 | 100 | % | |||||
Less: | |||||||||||
Allowance for probable losses | 129,257 | 123,073 | |||||||||
Loans in process | 1,195,506 | 1,149,934 | |||||||||
Net deferred fees, costs and discounts | 51,834 | 45,758 | |||||||||
Total loan contra accounts | 1,376,597 | 1,318,765 | |||||||||
Net loans | $ | 11,477,081 | $ | 10,882,622 |
September 30, 2018 | ||||||||||||
Fixed-Rate | Adjustable-Rate | |||||||||||
Term To Maturity | Gross Loans | % of Gross Loans | Term To Rate Adjustment | Gross Loans | % of Gross Loans | |||||||
(In thousands) | (In thousands) | |||||||||||
Within 1 year | $ | 90,107 | 0.7 | % | Less than 1 year | $ | 3,003,472 | 23.4 | % | |||
1 to 3 years | 205,442 | 1.6 | 1 to 3 years | 873,078 | 6.8 | |||||||
3 to 5 years | 280,760 | 2.2 | 3 to 5 years | 669,331 | 5.2 | |||||||
5 to 10 years | 1,069,783 | 8.3 | 5 to 10 years | 395,157 | 3.1 | |||||||
10 to 20 years | 1,137,196 | 8.8 | 10 to 20 years | 45,603 | 0.4 | |||||||
Over 20 years | 5,061,088 | 39.4 | Over 20 years | 22,661 | 0.2 | |||||||
$ | 7,844,376 | 61.0 | % | $ | 5,009,302 | 39.0 | % |
September 30, 2018 | Single - family residential | Multi- family | Land - A & D | Land - lot loans | Construction - custom | Construction | Commercial real estate | Commercial and industrial | Consumer | HELOC | Total | ||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||
Washington | $ | 3,090,079 | $ | 341,695 | $ | 63,706 | $ | 63,268 | $ | 353,475 | $ | 593,536 | $ | 414,817 | $ | 483,288 | $ | 122,653 | $ | 76,276 | $ | 5,602,793 | |||||||||||
Oregon | 678,072 | 376,679 | 31,143 | 13,773 | 68,897 | 390,169 | 283,945 | 251,028 | 1,622 | 12,156 | 2,107,484 | ||||||||||||||||||||||
Arizona | 581,099 | 367,192 | 12,083 | 10,662 | 73,476 | 205,420 | 259,280 | 65,638 | 180 | 12,842 | 1,587,872 | ||||||||||||||||||||||
Utah | 523,402 | 40,678 | 156 | 4,208 | 62,414 | 301,747 | 30,622 | 37,271 | 15 | 8,710 | 1,009,223 | ||||||||||||||||||||||
Texas | 176,887 | 58,618 | 6,858 | 413 | 6,297 | 290,064 | 117,160 | 98,961 | 464 | — | 755,722 | ||||||||||||||||||||||
New Mexico | 197,107 | 131,290 | 20,920 | 2,312 | 28,797 | 62,818 | 174,385 | 19,560 | 748 | 11,695 | 649,632 | ||||||||||||||||||||||
Idaho | 311,613 | 42,509 | 20,338 | 4,429 | 24,514 | 42,554 | 91,202 | 37,327 | 103 | 7,160 | 581,749 | ||||||||||||||||||||||
Nevada | 198,007 | 26,260 | — | 2,895 | 6,609 | — | 20,488 | 17,865 | 24 | 1,962 | 274,110 | ||||||||||||||||||||||
Other | 42,700 | 204 | — | 76 | — | 4,360 | 60,269 | 129,936 | 47,497 | 51 | 285,093 | ||||||||||||||||||||||
$ | 5,798,966 | $ | 1,385,125 | $ | 155,204 | $ | 102,036 | $ | 624,479 | $ | 1,890,668 | $ | 1,452,168 | $ | 1,140,874 | $ | 173,306 | $ | 130,852 | $ | 12,853,678 |
Percentage by geographic area | ||||||||||||||||||||||
September 30, 2018 | Single - family residential | Multi- family | Land - A & D | Land - lot loans | Construction - custom | Construction | Commercial real estate | Commercial and industrial | Consumer | HELOC | Total | |||||||||||
As % of total gross loans | ||||||||||||||||||||||
Washington | 24.1 | % | 2.7 | % | 0.4 | % | 0.6 | % | 2.8 | % | 4.7 | % | 3.2 | % | 3.7 | % | 0.9 | % | 0.5 | % | 43.6 | % |
Oregon | 5.3 | 2.9 | 0.2 | 0.1 | 0.5 | 3.0 | 2.2 | 2.0 | — | 0.1 | 16.3 | |||||||||||
Arizona | 4.5 | 2.9 | 0.1 | 0.1 | 0.6 | 1.6 | 2.0 | 0.5 | — | 0.1 | 12.4 | |||||||||||
Utah | 4.1 | 0.3 | — | — | 0.5 | 2.3 | 0.2 | 0.3 | — | 0.1 | 7.8 | |||||||||||
Texas | 1.4 | 0.5 | 0.1 | — | — | 2.3 | 0.9 | 0.8 | — | — | 6.0 | |||||||||||
New Mexico | 1.5 | 1.0 | 0.2 | — | 0.2 | 0.5 | 1.4 | 0.2 | — | 0.1 | 5.1 | |||||||||||
Idaho | 2.4 | 0.3 | 0.2 | — | 0.2 | 0.3 | 0.7 | 0.3 | — | 0.1 | 4.5 | |||||||||||
Nevada | 1.5 | 0.2 | — | — | 0.1 | — | 0.2 | 0.1 | — | — | 2.1 | |||||||||||
Other | 0.3 | — | — | — | — | — | 0.5 | 1.0 | 0.4 | — | 2.2 | |||||||||||
45.1 | % | 10.8 | % | 1.2 | % | 0.8 | % | 4.9 | % | 14.7 | % | 11.3 | % | 8.9 | % | 1.3 | % | 1.0 | % | 100 | % |
Percentage by geographic area as a % of each loan type | ||||||||||||||||||||
September 30, 2018 | Single - family residential | Multi- family | Land - A & D | Land - lot loans | Construction - custom | Construction | Commercial real estate | Commercial and industrial | Consumer | HELOC | ||||||||||
As % of total gross loans | ||||||||||||||||||||
Washington | 53.3 | % | 24.7 | % | 41.0 | % | 62.0 | % | 56.6 | % | 31.4 | % | 28.6 | % | 42.4 | % | 70.8 | % | 58.3 | % |
Oregon | 11.7 | 27.2 | 20.1 | 13.5 | 11.0 | 20.6 | 19.6 | 22.0 | 0.9 | 9.3 | ||||||||||
Arizona | 10.0 | 26.5 | 7.8 | 10.4 | 11.8 | 10.9 | 17.9 | 5.8 | 0.1 | 9.8 | ||||||||||
Utah | 9.0 | 2.9 | 0.1 | 4.1 | 10.0 | 16.0 | 2.1 | 3.3 | — | 6.7 | ||||||||||
Texas | 3.1 | 4.2 | 4.4 | 0.4 | 1.0 | 15.3 | 8.1 | 8.7 | 0.3 | — | ||||||||||
New Mexico | 3.4 | 9.5 | 13.5 | 2.3 | 4.6 | 3.3 | 12.0 | 1.7 | 0.4 | 8.9 | ||||||||||
Idaho | 5.4 | 3.1 | 13.1 | 4.3 | 3.9 | 2.3 | 6.3 | 3.3 | 0.1 | 5.5 | ||||||||||
Nevada | 3.4 | 1.9 | — | 2.8 | 1.1 | — | 1.4 | 1.6 | — | 1.5 | ||||||||||
Other | 0.7 | — | — | 0.1 | — | 0.2 | 4.2 | 11.4 | 27.4 | — | ||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
September 30, 2018 | September 30, 2017 | ||||||
(In thousands) | |||||||
Recorded investment in impaired loans | $ | 199,545 | $ | 251,274 | |||
TDRs included in impaired loans | 156,858 | 207,377 | |||||
Specific reserves on impaired loans | 517 | 126 | |||||
Average balance of impaired loans for year ended | 228,398 | 274,530 | |||||
Interest income from impaired loans for year ended | 10,232 | 11,736 | |||||
Outstanding fixed-rate origination commitments | 400,426 | 425,130 | |||||
Gross loans serviced for others | 77,958 | 77,119 |
September 30, 2018 | September 30, 2017 | ||||||||||||
(In thousands) | (In thousands) | ||||||||||||
Non-accrual loans: | |||||||||||||
Single-family residential | $ | 27,643 | 49.6 | % | $ | 27,930 | 56.3 | % | |||||
Construction | 2,427 | 4.4 | — | — | |||||||||
Construction - custom | — | — | 91 | 0.2 | |||||||||
Land - acquisition & development | 920 | 1.7 | 296 | 0.6 | |||||||||
Land - consumer lot loans | 787 | 1.4 | 605 | 1.2 | |||||||||
Multi-family | — | — | 139 | 0.3 | |||||||||
Commercial real estate | 8,971 | 16.1 | 11,815 | 23.8 | |||||||||
Commercial & industrial | 14,394 | 25.8 | 8,082 | 16.3 | |||||||||
HELOC | 523 | 0.9 | 531 | 1.1 | |||||||||
Consumer | 21 | — | 91 | 0.2 | |||||||||
Total non-accrual loans | $ | 55,686 | 100 | % | $ | 49,580 | 100 | % | |||||
Non-accrual loans as % of total loans | 0.49 | % | 0.46 | % |
September 30, 2018 | Amount of Loans | Days Delinquent Based on $ Amount of Loans | % based on $ | |||||||||||||||||||||||
Loan type | Net of Loans in Process | Current | 30 | 60 | 90 | Total | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Single-family residential | $ | 5,798,353 | $ | 5,768,253 | $ | 7,983 | $ | 3,562 | $ | 18,555 | $ | 30,100 | 0.52 | % | ||||||||||||
Construction | 1,062,855 | 1,060,428 | — | — | 2,427 | 2,427 | 0.23 | |||||||||||||||||||
Construction - custom | 289,192 | 289,192 | — | — | — | — | — | |||||||||||||||||||
Land - acquisition & development | 123,560 | 122,620 | — | 270 | 670 | 940 | 0.76 | |||||||||||||||||||
Land - consumer lot loans | 101,908 | 101,294 | 144 | 117 | 353 | 614 | 0.60 | |||||||||||||||||||
Multi-family | 1,385,103 | 1,385,103 | — | — | — | — | — | |||||||||||||||||||
Commercial real estate | 1,452,169 | 1,448,946 | 316 | 1,767 | 1,140 | 3,223 | 0.22 | |||||||||||||||||||
Commercial & industrial | 1,140,874 | 1,130,836 | — | — | 10,038 | 10,038 | 0.88 | |||||||||||||||||||
HELOC | 130,852 | 129,510 | 567 | 469 | 306 | 1,342 | 1.03 | |||||||||||||||||||
Consumer | 173,306 | 172,777 | 172 | 328 | 29 | 529 | 0.31 | |||||||||||||||||||
Total Loans | $ | 11,658,172 | $ | 11,608,959 | $ | 9,182 | $ | 6,513 | $ | 33,518 | $ | 49,213 | 0.42 | % | ||||||||||||
Delinquency % | 99.58% | 0.08% | 0.06% | 0.29% | 0.42% |
September 30, 2017 | Amount of Loans | Days Delinquent Based on $ Amount of Loans | % based on $ | |||||||||||||||||||||||
Loan type | Net of Loans in Process | Current | 30 | 60 | 90 | Total | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Single-family residential | $ | 5,709,690 | $ | 5,671,933 | $ | 10,925 | $ | 4,810 | $ | 22,022 | $ | 37,757 | 0.66 | % | ||||||||||||
Construction | 793,959 | 793,959 | — | — | — | — | — | |||||||||||||||||||
Construction - custom | 277,599 | 277,508 | — | — | 91 | 91 | 0.03 | |||||||||||||||||||
Land - acquisition & development | 104,856 | 104,526 | — | — | 330 | 330 | 0.31 | |||||||||||||||||||
Land - consumer lot loans | 104,335 | 103,389 | 112 | 680 | 154 | 946 | 0.91 | |||||||||||||||||||
Multi-family | 1,303,119 | 1,302,720 | 5 | 255 | 139 | 399 | 0.03 | |||||||||||||||||||
Commercial real estate | 1,434,610 | 1,432,052 | 507 | — | 2,051 | 2,558 | 0.18 | |||||||||||||||||||
Commercial & industrial | 1,093,360 | 1,092,735 | — | 51 | 574 | 625 | 0.06 | |||||||||||||||||||
HELOC | 144,850 | 143,974 | 221 | 342 | 313 | 876 | 0.60 | |||||||||||||||||||
Consumer | 85,075 | 84,644 | 245 | 107 | 79 | 431 | 0.51 | |||||||||||||||||||
Total Loans | $ | 11,051,453 | $ | 11,007,440 | $ | 12,015 | $ | 6,245 | $ | 25,753 | $ | 44,013 | 0.40 | % | ||||||||||||
Delinquency % | 99.60% | 0.11% | 0.06% | 0.23% | 0.40% |
Twelve Months Ended September 30, 2018 | Twelve Months Ended September 30, 2017 | ||||||||||||||||||||
Pre-Modification | Post-Modification | Pre-Modification | Post-Modification | ||||||||||||||||||
Outstanding | Outstanding | Outstanding | Outstanding | ||||||||||||||||||
Number of | Recorded | Recorded | Number of | Recorded | Recorded | ||||||||||||||||
Troubled Debt Restructurings: | Contracts | Investment | Investment | Contracts | Investment | Investment | |||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||
Single-family residential | 27 | $ | 5,070 | $ | 5,070 | 38 | $ | 7,115 | $ | 7,115 | |||||||||||
Land - acquisition & development | 1 | 107 | 107 | — | — | — | |||||||||||||||
Land - consumer lot loans | — | — | — | 2 | 211 | 211 | |||||||||||||||
Commercial real estate | 1 | 120 | 120 | — | — | — | |||||||||||||||
Commercial & industrial | 4 | 7,739 | 7,739 | — | — | — | |||||||||||||||
HELOC | 2 | 95 | 95 | 4 | 552 | 552 | |||||||||||||||
Consumer | 1 | — | — | — | — | — | |||||||||||||||
36 | $ | 13,131 | $ | 13,131 | 44 | $ | 7,878 | $ | 7,878 |
Twelve Months Ended September 30, 2018 | Twelve Months Ended September 30, 2017 | ||||||||||||
Number of | Recorded | Number of | Recorded | ||||||||||
TDRs That Subsequently Defaulted: | Contracts | Investment | Contracts | Investment | |||||||||
(In thousands) | (In thousands) | ||||||||||||
Single-family residential | 4 | $ | 433 | 24 | $ | 4,214 | |||||||
Commercial real estate | — | — | 2 | 267 | |||||||||
HELOC | 1 | 77 | — | — | |||||||||
5 | $ | 510 | 26 | $ | 4,481 |
Twelve Months Ended September 30, 2018 | Beginning Allowance | Charge-offs | Recoveries | Provision & Transfers | Ending Allowance | ||||||||||||||
(In thousands) | |||||||||||||||||||
Single-family residential | $ | 36,892 | $ | (1,142 | ) | $ | 757 | $ | (3,474 | ) | $ | 33,033 | |||||||
Construction | 24,556 | — | — | 6,761 | 31,317 | ||||||||||||||
Construction - custom | 1,944 | (50 | ) | — | (52 | ) | 1,842 | ||||||||||||
Land - acquisition & development | 6,829 | (13 | ) | 14,223 | (13,061 | ) | 7,978 | ||||||||||||
Land - consumer lot loans | 2,649 | (67 | ) | 35 | (453 | ) | 2,164 | ||||||||||||
Multi-family | 7,862 | — | — | 467 | 8,329 | ||||||||||||||
Commercial real estate | 11,818 | (36 | ) | 189 | (119 | ) | 11,852 | ||||||||||||
Commercial & industrial | 28,524 | (3,574 | ) | 714 | 3,038 | 28,702 | |||||||||||||
HELOC | 855 | (668 | ) | 71 | 523 | 781 | |||||||||||||
Consumer | 1,144 | (382 | ) | 993 | 1,504 | 3,259 | |||||||||||||
$ | 123,073 | $ | (5,932 | ) | $ | 16,982 | $ | (4,866 | ) | $ | 129,257 |
Twelve Months Ended September 30, 2017 | Beginning Allowance | Charge-offs | Recoveries | Provision & Transfers | Ending Allowance | ||||||||||||||
(In thousands) | |||||||||||||||||||
Single-family residential | $ | 37,796 | $ | (1,229 | ) | $ | 653 | $ | (328 | ) | $ | 36,892 | |||||||
Construction | 19,838 | — | — | 4,718 | 24,556 | ||||||||||||||
Construction - custom | 1,080 | (16 | ) | — | 880 | 1,944 | |||||||||||||
Land - acquisition & development | 6,023 | (280 | ) | 11,038 | (9,952 | ) | 6,829 | ||||||||||||
Land - consumer lot loans | 2,535 | (17 | ) | 481 | (350 | ) | 2,649 | ||||||||||||
Multi-family | 6,925 | — | — | 937 | 7,862 | ||||||||||||||
Commercial real estate | 8,588 | (11 | ) | 1,684 | 1,557 | 11,818 | |||||||||||||
Commercial & industrial | 28,008 | (173 | ) | 1,833 | (1,144 | ) | 28,524 | ||||||||||||
HELOC | 813 | (90 | ) | 21 | 111 | 855 | |||||||||||||
Consumer | 1,888 | (884 | ) | 1,297 | (1,157 | ) | 1,144 | ||||||||||||
$ | 113,494 | $ | (2,700 | ) | $ | 17,007 | $ | (4,728 | ) | $ | 123,073 |
September 30, 2018 | Loans Collectively Evaluated for Impairment | Loans Individually Evaluated for Impairment | |||||||||||||||||||
General Reserve Allocation | Recorded Investment of Loans | Ratio | Specific Reserve Allocation | Recorded Investment of Loans | Ratio | ||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||
Single-family residential | $ | 33,033 | $ | 5,782,870 | 0.6 | % | $ | — | $ | 21,345 | — | % | |||||||||
Construction | 31,317 | 1,060,428 | 3.0 | — | 2,427 | — | |||||||||||||||
Construction - custom | 1,842 | 289,192 | 0.6 | — | — | — | |||||||||||||||
Land - acquisition & development | 7,969 | 122,639 | 6.5 | 9 | 920 | 1.0 | |||||||||||||||
Land - consumer lot loans | 2,164 | 96,583 | 2.2 | — | 507 | — | |||||||||||||||
Multi-family | 8,325 | 1,384,655 | 0.6 | 4 | 448 | 1.0 | |||||||||||||||
Commercial real estate | 11,702 | 1,432,791 | 0.8 | 150 | 19,378 | 0.8 | |||||||||||||||
Commercial & industrial | 28,348 | 1,126,438 | 2.5 | 354 | 14,437 | 2.5 | |||||||||||||||
HELOC | 781 | 128,715 | 0.6 | — | 1,162 | — | |||||||||||||||
Consumer | 3,259 | 173,181 | 1.9 | — | 56 | — | |||||||||||||||
$ | 128,740 | $ | 11,597,492 | 1.1 | % | $ | 517 | $ | 60,680 | 0.9 | % |
September 30, 2017 | Loans Collectively Evaluated for Impairment | Loans Individually Evaluated for Impairment | |||||||||||||||||||
General Reserve Allocation | Recorded Investment of Loans | Ratio | Specific Reserve Allocation | Recorded Investment of Loans | Ratio | ||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||
Single-family residential | $ | 36,892 | $ | 5,713,576 | 0.7 | % | $ | — | $ | 5,552 | — | % | |||||||||
Construction | 24,556 | 793,958 | 3.1 | — | — | — | |||||||||||||||
Construction - custom | 1,944 | 277,495 | 0.7 | — | 105 | — | |||||||||||||||
Land - acquisition & development | 6,828 | 104,767 | 6.5 | 1 | 89 | 1.0 | |||||||||||||||
Land - consumer lot loans | 2,649 | 96,337 | 2.8 | — | 171 | — | |||||||||||||||
Multi-family | 7,857 | 1,302,625 | 0.6 | 5 | 493 | 1.0 | |||||||||||||||
Commercial real estate | 11,698 | 1,391,668 | 0.8 | 120 | 21,765 | 0.6 | |||||||||||||||
Commercial & industrial | 28,524 | 1,093,210 | 2.6 | — | 81 | — | |||||||||||||||
HELOC | 855 | 141,689 | 0.6 | — | 215 | — | |||||||||||||||
Consumer | 1,144 | 84,887 | 1.4 | — | 82 | — | |||||||||||||||
$ | 122,947 | $ | 11,000,212 | 1.1 | % | $ | 126 | $ | 28,553 | 0.4 | % |
• | Pass – the credit does not meet one of the definitions defined below. |
• | Special mention – A special mention credit is considered to be currently protected from loss but is potentially weak. No loss of principal or interest is foreseen; however, proper supervision and management attention is required to deter further deterioration in the credit. Assets in this category constitute some undue and unwarranted credit risk but not to the point of justifying a risk rating of substandard. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset. |
• | Substandard – A substandard credit is an unacceptable credit. Additionally, repayment in the normal course is in jeopardy due to the existence of one or more well-defined weaknesses. In these situations, loss of principal is likely if the weakness is not corrected. A substandard asset is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Assets so classified will have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets risk rated substandard. |
• | Doubtful – A credit classified doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The probability of loss is high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. |
• | Loss – Credits classified loss are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are identified as uncollectible. Partial charge-off versus full charge-off may be taken if the collateral offers some identifiable protection. |
September 30, 2018 | Internally Assigned Grade | Total | |||||||||||||||||||||
Pass | Special mention | Substandard | Doubtful | Loss | Gross Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Loan type | |||||||||||||||||||||||
Single-family residential | $ | 5,766,096 | $ | — | $ | 32,870 | $ | — | $ | — | $ | 5,798,966 | |||||||||||
Construction | 1,886,304 | 1,937 | 2,427 | — | — | 1,890,668 | |||||||||||||||||
Construction - custom | 624,479 | — | — | — | — | 624,479 | |||||||||||||||||
Land - acquisition & development | 152,984 | — | 2,220 | — | — | 155,204 | |||||||||||||||||
Land - consumer lot loans | 101,249 | — | 787 | — | — | 102,036 | |||||||||||||||||
Multi-family | 1,378,803 | 1,633 | 4,689 | — | — | 1,385,125 | |||||||||||||||||
Commercial real estate | 1,421,602 | 7,114 | 23,452 | — | — | 1,452,168 | |||||||||||||||||
Commercial & industrial | 1,093,405 | 16,513 | 30,956 | — | — | 1,140,874 | |||||||||||||||||
HELOC | 130,330 | — | 522 | — | — | 130,852 | |||||||||||||||||
Consumer | 173,285 | — | 21 | — | — | 173,306 | |||||||||||||||||
Total gross loans | $ | 12,728,537 | $ | 27,197 | $ | 97,944 | $ | — | $ | — | $ | 12,853,678 | |||||||||||
Total grade as a % of total gross loans | 99.0 | % | 0.2 | % | 0.8 | % | — | % | — | % |
September 30, 2017 | Internally Assigned Grade | Total | |||||||||||||||||||||
Pass | Special mention | Substandard | Doubtful | Loss | Gross Loans | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Loan type | |||||||||||||||||||||||
Single-family residential | $ | 5,671,229 | $ | — | $ | 39,775 | $ | — | $ | — | $ | 5,711,004 | |||||||||||
Construction | 1,594,926 | — | 3,070 | — | — | 1,597,996 | |||||||||||||||||
Construction - custom | 602,540 | — | 91 | — | — | 602,631 | |||||||||||||||||
Land - acquisition & development | 123,028 | 207 | 1,073 | — | — | 124,308 | |||||||||||||||||
Land - consumer lot loans | 103,787 | — | 618 | — | — | 104,405 | |||||||||||||||||
Multi-family | 1,295,261 | 5,795 | 2,092 | — | — | 1,303,148 | |||||||||||||||||
Commercial real estate | 1,391,996 | 5,944 | 36,670 | — | — | 1,434,610 | |||||||||||||||||
Commercial & industrial | 1,054,972 | 14,814 | 23,574 | — | — | 1,093,360 | |||||||||||||||||
HELOC | 144,229 | — | 621 | — | — | 144,850 | |||||||||||||||||
Consumer | 84,984 | — | 91 | — | — | 85,075 | |||||||||||||||||
Total gross loans | $ | 12,066,952 | $ | 26,760 | $ | 107,675 | $ | — | $ | — | $ | 12,201,387 | |||||||||||
Total grade as a % of total gross loans | 98.9 | % | 0.2 | % | 0.9 | % | — | % | — | % |
September 30, 2018 | Performing Loans | Non-Performing Loans | |||||||||||
Amount | % of Total Gross Loans | Amount | % of Total Gross Loans | ||||||||||
(In thousands) | (In thousands) | ||||||||||||
Single-family residential | $ | 5,771,323 | 99.5 | % | $ | 27,643 | 0.5 | % | |||||
Construction | 1,888,241 | 99.9 | 2,427 | 0.1 | |||||||||
Construction - custom | 624,479 | 100.0 | — | — | |||||||||
Land - acquisition & development | 154,284 | 99.4 | 920 | 0.6 | |||||||||
Land - consumer lot loans | 101,249 | 99.2 | 787 | 0.8 | |||||||||
Multi-family | 1,385,125 | 100.0 | — | — | |||||||||
Commercial real estate | 1,443,197 | 99.4 | 8,971 | 0.6 | |||||||||
Commercial & industrial | 1,126,480 | 98.7 | 14,394 | 1.3 | |||||||||
HELOC | 130,329 | 99.6 | 523 | 0.4 | |||||||||
Consumer | 173,285 | 100.0 | 21 | — | |||||||||
$ | 12,797,992 | 99.6 | % | $ | 55,686 | 0.4 | % |
September 30, 2017 | Performing Loans | Non-Performing Loans | |||||||||||
Amount | % of Total Gross Loans | Amount | % of Total Gross Loans | ||||||||||
(In thousands) | (In thousands) | ||||||||||||
Single-family residential | $ | 5,683,074 | 99.5 | % | $ | 27,930 | 0.5 | % | |||||
Construction | 1,597,996 | 100.0 | — | — | |||||||||
Construction - custom | 602,540 | 99.9 | 91 | 0.1 | |||||||||
Land - acquisition & development | 124,012 | 99.8 | 296 | 0.2 | |||||||||
Land - consumer lot loans | 103,800 | 99.4 | 605 | 0.6 | |||||||||
Multi-family | 1,303,009 | 99.9 | 139 | 0.1 | |||||||||
Commercial real estate | 1,422,795 | 99.2 | 11,815 | 0.8 | |||||||||
Commercial & industrial | 1,085,278 | 99.3 | 8,082 | 0.7 | |||||||||
HELOC | 144,319 | 99.6 | 531 | 0.4 | |||||||||
Consumer | 84,984 | 99.9 | 91 | 0.1 | |||||||||
$ | 12,151,807 | 99.6 | % | $ | 49,580 | 0.4 | % |
September 30, 2018 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | |||||||||||
(In thousands) | |||||||||||||||
Impaired loans with no related allowance recorded: | |||||||||||||||
Single-family residential | $ | 18,872 | $ | 20,050 | $ | — | $ | 20,097 | |||||||
Construction | 2,698 | 2,818 | — | 1,349 | |||||||||||
Construction - custom | — | — | — | 74 | |||||||||||
Land - acquisition & development | 814 | 814 | — | 572 | |||||||||||
Land - consumer lot loans | 311 | 336 | — | 260 | |||||||||||
Multi-family | — | — | — | 70 | |||||||||||
Commercial real estate | 9,425 | 14,035 | — | 11,158 | |||||||||||
Commercial & industrial | 10,137 | 10,146 | — | 9,208 | |||||||||||
HELOC | 410 | 1,170 | — | 450 | |||||||||||
Consumer | 20 | 56 | — | 54 | |||||||||||
42,687 | 49,425 | — | 43,292 | ||||||||||||
Impaired loans with an allowance recorded: | |||||||||||||||
Single-family residential | 139,796 | 143,099 | 2,871 | 161,729 | |||||||||||
Land - acquisition & development | 107 | 157 | — | 39 | |||||||||||
Land - consumer lot loans | 4,916 | 5,290 | 9 | 6,449 | |||||||||||
Multi-family | 448 | 448 | 4 | 471 | |||||||||||
Commercial real estate | 6,254 | 7,733 | 150 | 10,445 | |||||||||||
Commercial & industrial | 4,291 | 7,506 | 354 | 4,495 | |||||||||||
HELOC | 976 | 984 | — | 1,395 | |||||||||||
Consumer | 70 | 70 | — | 83 | |||||||||||
156,858 | 165,287 | 3,388 | (1) | 185,106 | |||||||||||
Total: | |||||||||||||||
Single-family residential | 158,668 | 163,149 | 2,871 | 181,826 | |||||||||||
Construction | 2,698 | 2,818 | — | 1,349 | |||||||||||
Construction - custom | — | — | — | 74 | |||||||||||
Land - acquisition & development | 921 | 971 | — | 611 | |||||||||||
Land - consumer lot loans | 5,227 | 5,626 | 9 | 6,709 | |||||||||||
Multi-family | 448 | 448 | 4 | 541 | |||||||||||
Commercial real estate | 15,679 | 21,768 | 150 | 21,603 | |||||||||||
Commercial & industrial | 14,428 | 17,652 | 354 | 13,703 | |||||||||||
HELOC | 1,386 | 2,154 | — | 1,845 | |||||||||||
Consumer | 90 | 126 | — | 137 | |||||||||||
$ | 199,545 | $ | 214,712 | $ | 3,388 | (1) | $ | 228,398 |
(1) | Includes $517,000 of specific reserves and $2,871,000 included in the general reserves. |
September 30, 2017 | Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | |||||||||||
(In thousands) | |||||||||||||||
Impaired loans with no related allowance recorded: | |||||||||||||||
Single-family residential | $ | 21,325 | $ | 23,880 | $ | — | $ | 19,371 | |||||||
Construction - custom | 148 | 165 | — | 231 | |||||||||||
Land - acquisition & development | 330 | 8,208 | — | 176 | |||||||||||
Land - consumer lot loans | 208 | 330 | — | 431 | |||||||||||
Multi-family | 139 | 3,231 | — | 748 | |||||||||||
Commercial real estate | 12,890 | 22,487 | — | 11,466 | |||||||||||
Commercial & industrial | 8,279 | 14,321 | — | 7,425 | |||||||||||
HELOC | 490 | 1,212 | — | 487 | |||||||||||
Consumer | 88 | 1,433 | — | 57 | |||||||||||
43,897 | 75,267 | — | 40,392 | ||||||||||||
Impaired loans with an allowance recorded: | |||||||||||||||
Single-family residential | 181,941 | 186,167 | 4,030 | 204,723 | |||||||||||
Land - acquisition & development | 90 | 90 | 1 | 576 | |||||||||||
Land - consumer lot loans | 7,949 | 8,526 | — | 8,976 | |||||||||||
Multi-family | 493 | 493 | 5 | 1,024 | |||||||||||
Commercial real estate | 15,079 | 16,707 | 120 | 16,991 | |||||||||||
Commercial & industrial | — | — | — | 297 | |||||||||||
HELOC | 1,728 | 1,806 | — | 1,451 | |||||||||||
Consumer | 97 | 284 | — | 100 | |||||||||||
207,377 | 214,073 | 4,156 | (1) | 234,138 | |||||||||||
Total: | |||||||||||||||
Single-family residential | 203,266 | 210,047 | 4,030 | 224,094 | |||||||||||
Construction - custom | 148 | 165 | — | 231 | |||||||||||
Land - acquisition & development | 420 | 8,298 | 1 | 752 | |||||||||||
Land - consumer lot loans | 8,157 | 8,856 | — | 9,407 | |||||||||||
Multi-family | 632 | 3,724 | 5 | 1,772 | |||||||||||
Commercial real estate | 27,969 | 39,194 | 120 | 28,457 | |||||||||||
Commercial & industrial | 8,279 | 14,321 | — | 7,722 | |||||||||||
HELOC | 2,218 | 3,018 | — | 1,938 | |||||||||||
Consumer | 185 | 1,717 | — | 157 | |||||||||||
$ | 251,274 | $ | 289,340 | $ | 4,156 | (1) | $ | 274,530 |
(1) | Includes $126,000 of specific reserves and $4,030,000 included in the general reserves. |
September 30, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In thousands) | |||||||||||||||
Available-for-sale securities | |||||||||||||||
Equity securities | $ | 488 | $ | — | $ | — | $ | 488 | |||||||
U.S. government and agency securities | — | 207,293 | — | 207,293 | |||||||||||
Municipal bonds | — | 22,978 | — | 22,978 | |||||||||||
Corporate debt securities | — | 184,695 | — | 184,695 | |||||||||||
Mortgage-backed securities | |||||||||||||||
Agency pass-through certificates | — | 896,041 | — | 896,041 | |||||||||||
Commercial MBS | — | 3,462 | — | 3,462 | |||||||||||
Total Available-for-sale securities | 488 | 1,314,469 | — | 1,314,957 | |||||||||||
Interest rate contracts | — | 12,731 | — | 12,731 | |||||||||||
Commercial loan hedges | — | 3,857 | — | 3,857 | |||||||||||
Borrowing hedges | — | 22,250 | — | 22,250 | |||||||||||
Total Financial Assets | $ | 488 | $ | 1,353,307 | $ | — | $ | 1,353,795 | |||||||
Financial Liabilities | |||||||||||||||
Interest rate contracts | $ | — | $ | 12,731 | $ | — | $ | 12,731 | |||||||
Total Financial Liabilities | $ | — | $ | 12,731 | $ | — | $ | 12,731 |
September 30, 2017 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(In thousands) | |||||||||||||||
Available-for-sale securities | |||||||||||||||
Equity securities | $ | 522 | $ | — | $ | — | $ | 522 | |||||||
U.S. government and agency securities | — | 211,077 | — | 211,077 | |||||||||||
Municipal bonds | — | 26,624 | — | 26,624 | |||||||||||
Corporate debt securities | — | 185,298 | — | 185,298 | |||||||||||
Mortgage-backed securities | |||||||||||||||
Agency pass-through certificates | — | 834,297 | — | 834,297 | |||||||||||
Commercial MBS | — | 8,391 | — | 8,391 | |||||||||||
Total Available-for-sale securities | 522 | 1,265,687 | — | 1,266,209 | |||||||||||
Interest rate contracts | — | 1,139 | — | 1,139 | |||||||||||
Total Financial Assets | $ | 522 | $ | 1,266,826 | $ | — | $ | 1,267,348 | |||||||
Financial Liabilities | |||||||||||||||
Interest rate contracts | $ | — | $ | 1,139 | $ | — | $ | 1,139 | |||||||
Commercial loan hedges | — | 174 | — | 174 | |||||||||||
Borrowing hedges | — | 1,693 | — | 1,693 | |||||||||||
Total Financial Liabilities | $ | — | $ | 3,006 | $ | — | $ | 3,006 |
September 30, 2018 | Three Months Ended September 30, 2018 | Twelve Months Ended September 30, 2018 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Total Gains (Losses) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Impaired loans (1) | $ | — | $ | — | $ | 16,500 | $ | 16,500 | $ | (707 | ) | $ | (4,800 | ) | |||||||||
Real estate owned (2) | — | — | 7,455 | 7,455 | (126 | ) | (782 | ) | |||||||||||||||
Balance at end of period | $ | — | $ | — | $ | 23,955 | $ | 23,955 | $ | (833 | ) | $ | (5,582 | ) |
(1) | The gains (losses) represent remeasurements of collateral-dependent impaired loans. |
(2) | The gains (losses) represent aggregate writedowns and charge-offs on real estate owned. |
September 30, 2017 | Three Months Ended September 30, 2017 | Twelve Months Ended September 30, 2017 | |||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Total Gains (Losses) | |||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Impaired loans (1) | $ | — | $ | — | $ | 9,088 | $ | 9,088 | $ | (250 | ) | $ | (1,916 | ) | |||||||||
Real estate owned (2) | — | — | 12,662 | 12,662 | (376 | ) | (1,463 | ) | |||||||||||||||
Balance at end of period | $ | — | $ | — | $ | 21,750 | $ | 21,750 | $ | (626 | ) | $ | (3,379 | ) |
(1) | The gains (losses) represent remeasurements of collateral-dependent impaired loans. |
(2) | The gains (losses) represent aggregate writedowns and charge-offs on real estate owned. |
• | The fair value of the collateral, which may take the form of real estate or personal property, is based on internal estimates, field observations, assessments provided by third-party appraisers and other valuation models. The Company performs or reaffirms valuations of collateral-dependent impaired loans at least annually. Adjustments are made if management believes that more recent information is available and relevant with respect to the fair value of the collateral. |
• | The present value of the expected future cash flows of the loans is used for measurement of non collateral-dependent loans to test for impairment. The Company estimates the future cash flows and then discounts those using the contractual interest rate. |
September 30, 2018 | September 30, 2017 | |||||||||||||
Level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||
(In thousands) | ||||||||||||||
Financial assets | ||||||||||||||
Cash and cash equivalents | 1 | $ | 268,650 | $ | 268,650 | $ | 313,070 | $ | 313,070 | |||||
Available-for-sale securities: | ||||||||||||||
Equity securities | 1 | 488 | 488 | 522 | 522 | |||||||||
U.S. government and agency securities | 2 | 207,293 | 207,293 | 211,077 | 211,077 | |||||||||
Municipal bonds | 2 | 22,978 | 22,978 | 26,624 | 26,624 | |||||||||
Corporate debt securities | 2 | 184,695 | 184,695 | 185,298 | 185,298 | |||||||||
Mortgage-backed securities | ||||||||||||||
Agency pass-through certificates | 2 | 896,041 | 896,041 | 834,297 | 834,297 | |||||||||
Commercial MBS | 2 | 3,462 | 3,462 | 8,391 | 8,391 | |||||||||
Total available-for-sale securities | 1,314,957 | 1,314,957 | 1,266,209 | 1,266,209 | ||||||||||
Held-to-maturity securities: | ||||||||||||||
Mortgage-backed securities | ||||||||||||||
Agency pass-through certificates | 2 | 1,610,420 | 1,533,742 | 1,646,856 | 1,635,913 | |||||||||
Other debt securities | 15,000 | 15,028 | — | — | ||||||||||
Total held-to-maturity securities | 1,625,420 | 1,548,770 | 1,646,856 | 1,635,913 | ||||||||||
Loans receivable | 3 | 11,477,081 | 11,556,326 | 10,882,622 | 11,247,586 | |||||||||
FHLB and FRB stock | 2 | 127,190 | 127,190 | 122,990 | 122,990 | |||||||||
Other assets - interest rate contracts | 2 | 12,731 | 12,731 | 1,139 | 1,139 | |||||||||
Other assets - commercial loan hedges | 2 | 3,857 | 3,857 | — | — | |||||||||
Other assets - borrowing hedges | 2 | 22,250 | 22,250 | — | — | |||||||||
Financial liabilities | ||||||||||||||
Customer accounts | 2 | 11,387,146 | 10,882,862 | 10,835,008 | 10,411,686 | |||||||||
FHLB advances and other borrowings | 2 | 2,330,000 | 2,316,964 | 2,225,000 | 2,266,791 | |||||||||
Other liabilities - interest rate contracts | 2 | 12,731 | 12,731 | 1,139 | 1,139 | |||||||||
Other liabilities - commercial loan hedges | 2 | — | — | 174 | 174 | |||||||||
Other liabilities - long term borrowing hedges | 2 | — | — | 1,693 | 1,693 |
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
September 30, 2018 | September 30, 2017 | September 30, 2018 | September 30, 2017 | |||||||||||||||||||||
(In thousands) | Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | ||||||||||||||||
Interest rate contracts | Other assets | $ | 12,731 | Other assets | $ | 1,139 | Other liabilities | $ | 12,731 | Other liabilities | $ | 1,139 | ||||||||||||
Commercial loan hedges | Other assets | 3,857 | Other assets | — | Other liabilities | — | Other liabilities | 174 | ||||||||||||||||
Borrowing hedges | Other assets | 22,250 | Other assets | — | Other liabilities | — | Other liabilities | 1,693 | ||||||||||||||||
$ | 38,838 | $ | 1,139 | $ | 12,731 | $ | 3,006 |
September 30, 2018 | September 30, 2017 | ||||||
(In thousands) | |||||||
Loans receivable | $ | 39,176 | $ | 33,688 | |||
Mortgage-backed securities | 6,404 | 6,049 | |||||
Investment securities | 1,715 | 1,906 | |||||
$ | 47,295 | $ | 41,643 |
September 30, 2018 | September 30, 2017 | |||||||
Estimated Useful Life | (In thousands) | |||||||
Land | — | $ | 110,251 | $ | 102,381 | |||
Buildings | 25 - 40 | 156,803 | 149,805 | |||||
Leasehold improvements | 7 - 15 | 22,887 | 18,587 | |||||
Furniture, software and equipment | 2 - 10 | 126,979 | 119,518 | |||||
416,920 | 390,291 | |||||||
Less accumulated depreciation and amortization | (148,925 | ) | (126,597 | ) | ||||
$ | 267,995 | $ | 263,694 |
September 30, 2018 | September 30, 2017 | ||||||||||||||||||
Deposit Account Balance | As a % of Total Deposits | Weighted Average Rate | Deposit Account Balance | As a % of Total Deposits | Weighted Average Rate | ||||||||||||||
($ in thousands) | |||||||||||||||||||
Non-interest checking | $ | 1,401,226 | 12.4 | % | — | % | $ | 1,258,274 | 11.6 | % | — | % | |||||||
Interest checking | 1,778,520 | 15.6 | 0.50 | 1,760,821 | 16.3 | 0.23 | |||||||||||||
Savings | 836,501 | 7.3 | 0.11 | 888,881 | 8.2 | 0.11 | |||||||||||||
Money market | 2,566,096 | 22.5 | 0.65 | 2,453,182 | 22.6 | 0.19 | |||||||||||||
Time deposits | 4,804,803 | 42.2 | 1.50 | 4,473,850 | 41.3 | 1.09 | |||||||||||||
Total | $ | 11,387,146 | 100 | % | 0.87 | % | $ | 10,835,008 | 100 | % | 0.54 | % |
Time deposits by rate band are as follows: | September 30, 2018 | September 30, 2017 | ||||
(In thousands) | ||||||
Time deposit accounts | ||||||
Less than 1.00% | $ | 629,589 | $ | 2,204,756 | ||
1.00% to 1.99% | 3,761,543 | 2,099,841 | ||||
2.00% to 2.99% | 413,671 | 169,253 | ||||
Total time deposits | $ | 4,804,803 | $ | 4,473,850 | ||
Time deposits by maturity band are as follows: | September 30, 2018 | September 30, 2017 | ||||
(In thousands) | ||||||
Within 1 year | $ | 2,800,978 | $ | 2,553,712 | ||
1 to 2 years | 1,335,242 | 975,351 | ||||
2 to 3 years | 296,238 | 386,763 | ||||
Over 3 years | 372,345 | 558,024 | ||||
$ | 4,804,803 | $ | 4,473,850 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands) | |||||||||
Checking accounts | $ | 6,072 | $ | 2,721 | $ | 1,491 | |||
Savings accounts | 920 | 978 | 734 | ||||||
Money market accounts | 7,788 | 3,592 | 3,285 | ||||||
Time deposit accounts | 58,468 | 45,256 | 47,425 | ||||||
73,248 | 52,547 | 52,935 | |||||||
Less early withdrawal penalties | (756 | ) | (524 | ) | (450 | ) | |||
$ | 72,492 | $ | 52,023 | $ | 52,485 | ||||
Weighted average interest rate at end of year | 0.87 | % | 0.54 | % | 0.50 | % | |||
Weighted daily average interest rate during the year | 0.65 | % | 0.49 | % | 0.50 | % |
September 30, 2018 | September 30, 2017 | |||||
(In thousands) | ||||||
FHLB advances | ||||||
Within 1 year | $ | 1,680,000 | $ | 1,395,000 | ||
1 to 3 years | 300,000 | 430,000 | ||||
3 to 5 years | 200,000 | 400,000 | ||||
More than 5 years | 150,000 | — | ||||
$ | 2,330,000 | $ | 2,225,000 |
2018 | 2017 | 2016 | |||||||
(In thousands) | |||||||||
Weighted average interest rate, including cash flow hedges, at end of year | 2.66 | % | 2.80 | % | 3.15 | % | |||
Weighted daily average interest rate, including cash flow hedges, during the year | 2.62 | % | 3.00 | % | 3.22 | % | |||
Daily average of FHLB advances during the year | $ | 2,384,795 | $ | 2,167,986 | $ | 1,992,434 | |||
Maximum amount of FHLB advances at any month end | $ | 2,620,000 | $ | 2,350,000 | $ | 2,080,000 | |||
Interest expense during the year (including swap interest income and expense) | $ | 62,452 | $ | 64,969 | $ | 64,059 |
September 30, 2018 | September 30, 2017 | |||||
(In thousands) | ||||||
Deferred tax assets | ||||||
Loan loss reserves | $ | 31,055 | $ | 50,411 | ||
REO reserves | 518 | 1,693 | ||||
Non-accrual loan interest | 877 | 2,262 | ||||
FDIC assisted transactions | — | 12,236 | ||||
Federal and state tax credits | 1,074 | 3,939 | ||||
Deferred compensation | 3,165 | 3,037 | ||||
Stock based compensation | 1,677 | 2,259 | ||||
Other | 1,747 | 1,274 | ||||
Total deferred tax assets | 40,113 | 77,111 | ||||
Deferred tax liabilities | ||||||
FHLB stock dividends | 14,941 | 24,135 | ||||
Valuation adjustment on available-for-sale securities and cash flow hedges | 2,442 | 2,914 | ||||
Loan origination fees and costs | 9,285 | 13,643 | ||||
Premises and equipment | 23,429 | 35,950 | ||||
Other | 1,828 | 2,145 | ||||
Total deferred tax liabilities | 51,925 | 78,787 | ||||
Net deferred tax asset (liability) | (11,812 | ) | (1,676 | ) | ||
Current tax asset (liability) | 13,616 | (3,920 | ) | |||
Net tax asset (liability) | $ | 1,804 | $ | (5,596 | ) |
Year ended September 30, | 2018 | 2017 | 2016 | |||
Statutory income tax rate | 25 | % | 35 | % | 35 | % |
State income tax | 2 | 1 | 1 | |||
Impact of change in Federal income tax rate | (2 | ) | — | — | ||
Other differences | (4 | ) | (4 | ) | (2 | ) |
Effective income tax rate | 21 | % | 32 | % | 34 | % |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands) | |||||||||
Federal: | |||||||||
Current | $ | 40,314 | $ | 87,804 | $ | 57,173 | |||
Deferred | 8,952 | (10,142 | ) | 21,961 | |||||
49,266 | 77,662 | 79,134 | |||||||
State: | |||||||||
Current | $ | 4,243 | $ | 4,991 | $ | 3,600 | |||
Deferred | (116 | ) | 31 | 1,351 | |||||
4,127 | 5,022 | 4,951 | |||||||
Total | |||||||||
Current | 44,557 | 92,795 | 60,773 | ||||||
Deferred | 8,836 | (10,111 | ) | 23,312 | |||||
$ | 53,393 | $ | 82,684 | $ | 84,085 |
Options | Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (In thousands) | |||||
Outstanding at September 30, 2017 | 122,530 | $ | 18.64 | 2 | $1,839 | ||||
Exercised | (63,455 | ) | 21.07 | ||||||
Forfeited | (8,015 | ) | 21.02 | ||||||
Outstanding at September 30, 2018 | 51,060 | $ | 15.25 | 2 | $ | 855 | |||
Exercisable at at September 30, 2018 | 51,060 | $ | 15.25 | 2 | $ | 855 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands, except fair value of options granted) | |||||||||
Compensation cost for stock options | $ | — | $ | — | $ | 89 | |||
Weighted average grant date fair value per stock option | 3.15 | 3.06 | 2.73 | ||||||
Total intrinsic value of options exercised | 908 | 2,605 | 1,651 | ||||||
Grant date fair value of options exercised | 285 | 1,328 | 1,422 | ||||||
Cash received from option exercises | 1,338 | 7,238 | 9,283 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||||||||
Non-vested Stock Options | Options Outstanding | Weighted Average Grant Date Fair Value | Options Outstanding | Weighted Average Grant Date Fair Value | Options Outstanding | Weighted Average Grant Date Fair Value | |||||||||||
Outstanding at beginning of period | — | $ | — | — | $ | — | 69,287 | $ | 3.85 | ||||||||
Vested | — | — | — | — | (62,227 | ) | 3.91 | ||||||||||
Forfeited | — | — | — | — | (7,060 | ) | 3.89 | ||||||||||
Outstanding at end of period | — | $ | — | — | $ | — | — | $ | — |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||||||||
Non-vested Restricted Stock | Outstanding | Weighted Average Fair Value | Outstanding | Weighted Average Fair Value | Outstanding | Weighted Average Fair Value | |||||||||||
Outstanding at beginning of period | 466,681 | $ | 18.56 | 490,363 | $ | 16.00 | 521,302 | $ | 15.03 | ||||||||
Granted | 205,100 | 26.11 | 238,450 | $ | 18.89 | 229,450 | 17.20 | ||||||||||
Vested | (198,620 | ) | 16.65 | (116,878 | ) | 20.95 | (165,965 | ) | 15.96 | ||||||||
Forfeited | (12,162 | ) | 27.00 | (145,254 | ) | 8.56 | (94,424 | ) | 13.64 | ||||||||
Outstanding at end of period | 460,999 | $ | 22.52 | 466,681 | $ | 18.56 | 490,363 | $ | 16.00 |
Actual | Capital Adequacy Guidelines | Categorized as Well Capitalized Under Prompt Corrective Action Provisions | ||||||||
Capital | Ratio | Ratio | Ratio | |||||||
September 30, 2018 | (In thousands) | |||||||||
Common Equity Tier 1 risk-based capital ratio: | ||||||||||
The Company | $ | 1,678,475 | 14.71 | % | 4.50 | % | NA | |||
The Bank | 1,661,628 | 14.55 | 4.50 | 6.50 | % | |||||
Tier 1 risk-based capital ratio: | ||||||||||
The Company | 1,678,475 | 14.71 | 6.00 | NA | ||||||
The Bank | 1,661,628 | 14.55 | 6.00 | 8.00 | ||||||
Total risk-based capital ratio: | ||||||||||
The Company | 1,814,981 | 15.91 | 8.00 | NA | ||||||
The Bank | 1,798,135 | 15.75 | 8.00 | 10.00 | ||||||
Tier 1 leverage ratio: | ||||||||||
The Company | 1,678,475 | 10.85 | 4.00 | NA | ||||||
The Bank | 1,661,628 | 10.74 | 4.00 | 5.00 | ||||||
September 30, 2017 | ||||||||||
Common Equity Tier 1 risk-based capital ratio: | ||||||||||
The Company | $ | 1,701,327 | 15.99 | % | (1) | 4.50 | % | NA | ||
The Bank | 1,668,314 | 15.68 | (1) | 4.50 | 6.50 | % | ||||
Tier 1 risk-based capital ratio: | ||||||||||
The Company | 1,701,327 | 15.99 | (1) | 6.00 | NA | |||||
The Bank | 1,668,314 | 15.68 | (1) | 6.00 | 8.00 | |||||
Total risk-based capital ratio: | ||||||||||
The Company | 1,828,935 | 17.22 | (1) | 8.00 | NA | |||||
The Bank | 1,795,929 | 16.91 | (1) | 8.00 | 10.00 | |||||
Tier 1 leverage ratio: | ||||||||||
The Company | 1,701,327 | 11.49 | 4.00 | NA | ||||||
The Bank | 1,668,314 | 11.27 | 4.00 | 5.00 |
Year ended September 30, | 2018 | 2017 | 2016 | ||||||||
Weighted average shares outstanding | 85,008,040 | 88,905,457 | 91,399,038 | ||||||||
Weighted average dilutive warrants | 63,079 | 242,979 | 440,366 | ||||||||
Weighted average dilutive options | 38,724 | 75,771 | 73,514 | ||||||||
Weighted average diluted shares | 85,109,843 | 89,224,207 | 91,912,918 | ||||||||
Net income (In thousands) | $ | 203,850 | $ | 173,532 | $ | 164,049 | |||||
Basic EPS | $ | 2.40 | $ | 1.95 | $ | 1.79 | |||||
Diluted EPS | 2.40 | 1.94 | 1.78 |
Condensed Statements of Financial Condition | ||||||
September 30, 2018 | September 30, 2017 | |||||
(In thousands) | ||||||
Assets | ||||||
Cash | $ | 20,334 | $ | 33,077 | ||
Investment in subsidiary | 1,980,062 | 1,972,675 | ||||
Total assets | $ | 2,000,396 | $ | 2,005,752 | ||
Liabilities | ||||||
Other liabilities | $ | 3,488 | $ | 64 | ||
Total liabilities | 3,488 | 64 | ||||
Stockholders’ equity | ||||||
Total stockholders’ equity | 1,996,908 | 2,005,688 | ||||
Total liabilities and stockholders’ equity | $ | 2,000,396 | $ | 2,005,752 |
Condensed Statements of Operations | |||||||||
Twelve Months Ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands) | |||||||||
Income | |||||||||
Dividends from subsidiary | $ | 198,294 | $ | 171,500 | $ | 148,000 | |||
Total Income | 198,294 | 171,500 | 148,000 | ||||||
Expense | |||||||||
Miscellaneous | 439 | 435 | 435 | ||||||
Total expense | 439 | 435 | 435 | ||||||
Net income (loss) before equity in undistributed net income (loss) of subsidiary | 197,855 | 171,065 | 147,565 | ||||||
Equity in undistributed net income (loss) of subsidiaries | 5,880 | 2,326 | 16,336 | ||||||
Income before income taxes | 203,735 | 173,391 | 163,901 | ||||||
Income tax benefit (expense) | 115 | 141 | 148 | ||||||
Net income | $ | 203,850 | $ | 173,532 | $ | 164,049 |
Condensed Statements of Cash Flows | |||||||||
Twelve Months Ended September 30, | 2018 | 2017 | 2016 | ||||||
(In thousands) | |||||||||
Cash Flows From Operating Activities | |||||||||
Net income | $ | 203,850 | $ | 173,532 | $ | 164,049 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Equity in undistributed net income (loss) of subsidiaries | (5,880 | ) | (2,326 | ) | (16,336 | ) | |||
Stock based compensation expense | 4,771 | 5,910 | 3,659 | ||||||
Decrease (increase) in other assets | — | 15 | (15 | ) | |||||
Increase (decrease) in other liabilities | 3,424 | (2,699 | ) | 1,552 | |||||
Net cash provided by (used in) operating activities | 206,165 | 174,432 | 152,909 | ||||||
Cash Flows From Financing Activities | |||||||||
Proceeds from exercise of common stock options and related tax benefit | 1,338 | 7,238 | 9,283 | ||||||
Warrants purchased | — | — | (7,744 | ) | |||||
Treasury stock purchased | (164,249 | ) | (98,374 | ) | (87,850 | ) | |||
Dividends paid on common stock | (55,997 | ) | (74,519 | ) | (49,926 | ) | |||
Net cash provided by (used in) financing activities | (218,908 | ) | (165,655 | ) | (136,237 | ) | |||
Increase (decrease) in cash | (12,743 | ) | 8,777 | 16,672 | |||||
Cash at beginning of year | 33,077 | 24,300 | 7,628 | ||||||
Cash at end of year | $ | 20,334 | $ | 33,077 | $ | 24,300 |
Twelve Months Ended September 30, 2018 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||
(In thousands, except per share data) | ||||||||||||
Interest income | $ | 145,780 | $ | 149,079 | $ | 155,072 | $ | 157,152 | ||||
Interest expense | 30,045 | 31,778 | 35,220 | 37,901 | ||||||||
Net interest income | 115,735 | 117,301 | 119,852 | 119,251 | ||||||||
Provision (release) for loan losses | — | (950 | ) | 1,000 | (5,500 | ) | ||||||
Other operating income (including REO gain (loss), net) | 6,841 | 12,309 | 12,619 | 12,207 | ||||||||
Other operating expense | 61,941 | 65,787 | 66,977 | 69,617 | ||||||||
Income before income taxes | 60,635 | 64,773 | 64,494 | 67,341 | ||||||||
Income tax expense | 8,965 | 15,502 | 13,100 | 15,826 | ||||||||
Net income | $ | 51,670 | $ | 49,271 | $ | 51,394 | $ | 51,515 | ||||
Basic earnings per share | $ | 0.59 | $ | 0.58 | $ | 0.61 | $ | 0.62 | ||||
Diluted earnings per share | 0.59 | 0.57 | 0.61 | 0.62 | ||||||||
Cash dividends paid per share | 0.15 | 0.17 | 0.17 | 0.18 |
Twelve Months Ended September 30, 2017 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||
(In thousands, except per share data) | ||||||||||||
Interest income | $ | 132,764 | $ | 136,198 | $ | 137,716 | $ | 142,240 | ||||
Interest expense | 29,612 | 28,471 | 29,101 | 29,808 | ||||||||
Net interest income | 103,152 | 107,727 | 108,615 | 112,432 | ||||||||
Provision (release) for loan losses | — | (1,600 | ) | — | (500 | ) | ||||||
Other operating income (including REO gain (loss), net) | 12,294 | 10,931 | 13,798 | 16,686 | ||||||||
Other operating expense | 54,341 | 57,467 | 57,062 | 62,649 | ||||||||
Income before income taxes | 61,105 | 62,791 | 65,351 | 66,969 | ||||||||
Income tax expense | 19,859 | 20,721 | 21,239 | 20,865 | ||||||||
Net income | $ | 41,246 | $ | 42,070 | $ | 44,112 | $ | 46,104 | ||||
Basic earnings per share | $ | 0.46 | $ | 0.47 | $ | 0.49 | $ | 0.53 | ||||
Diluted earnings per share | 0.46 | 0.47 | 0.49 | 0.52 | ||||||||
Cash dividends paid per share | 0.14 | 0.40 | 0.15 | 0.15 |
Corporate | 425 Pike Street |
Headquarters | Seattle, Washington 98101 |
(206) 624-7930 | |
Independent | Deloitte & Touche LLP |
Auditors | Seattle, Washington |
Transfer Agent, | Shareholder inquiries regarding transfer |
Registrar and | requirements, cash or stock dividends, lost |
Dividend | certificates, consolidating records, correcting |
Disbursing | a name or changing an address should be |
Agent | directed to the transfer agent: |
American Stock Transfer & Trust Company | |
59 Maiden Lane | |
Plaza Level | |
New York, NY 10038 | |
Telephone: 1-888-888-0315 | |
www.amstock.com | |
Annual Meeting | The annual meeting of shareholders will be held at the Company's headquarters, 425 Pike Street, Seattle, Washington 98101 on January 16, 2019, at 2 p.m., Pacific Time. |
Available | |
Information | To find out more about the Company, please visit our website. The Company uses its website to distribute financial and other material information about the Company. Our annual report on Form 10-K, our quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports and other SEC filings of the Company are available through the Company's website: |
www.washingtonfederal.com | |
Stock | |
Information | Washington Federal, Inc. is traded on the NASDAQ Global Select Market. The common stock symbol is WAFD. At September 30, 2018, there were approximately 1,200 shareholders of record. |
Stock Prices | |||||||||
Quarter Ended | High | Low | Dividends | ||||||
December 31, 2016 | $ | 35.30 | $ | 26.38 | $ | 0.14 | |||
March 31, 2017 | 35.15 | 31.70 | 0.40 | ||||||
June 30, 2017 | 34.85 | 31.55 | 0.15 | ||||||
September 30, 2017 | 34.40 | 29.85 | 0.15 | ||||||
December 31, 2017 | 35.40 | 32.95 | 0.15 | ||||||
March 31, 2018 | 37.35 | 33.65 | 0.17 | ||||||
June 30, 2018 | 34.55 | 31.45 | 0.17 | ||||||
September 30, 2018 | 35.20 | 31.85 | 0.18 |
BOARD OF DIRECTORS | EXECUTIVE MANAGEMENT COMMITTEE | ||
THOMAS J. KELLEY Chairman of the Board Retired Partner, Arthur Andersen LLP | BRENT J. BEARDALL President and Chief Executive Officer | ||
BRENT J. BEARDALL President and Chief Executive Officer | VINCENT L. BEATTY Executive Vice President Chief Financial Officer | ||
DAVID K. GRANT Managing Partner of Catalyst Storage Partners. | CATHY E. COOPER Executive Vice President Retail Banking | ||
ANNA C. JOHNSON Senior Partner Scan East West Travel | ROBERT D. PETERS Executive Vice President Commercial Banking | ||
S. STEVEN SINGH CEO and Chairman of the Board, Docker | KIM E. ROBISON Executive Vice President Operations | ||
BARBARA L. SMITH, PhD. Owner, B. Smith Consulting Group | MARK A. SCHOONOVER Executive Vice President Chief Credit Officer | ||
MARK N. TABBUTT Chairman of Saltchuk Resources | |||
RANDALL H. TALBOT Managing Director of Talbot Financial, LLC. | |||
ROY M. WHITEHEAD Former Chairman of the Board and former President and Chief Executive Officer | |||
DIRECTOR EMERITUS | |||
W. ALDEN HARRIS |
1. | I have reviewed this annual report on Form 10-K of Washington Federal, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 19, 2018 | /s/ Brent J. Beardall | |
BRENT J. BEARDALL President and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Washington Federal, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement 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 report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 19, 2018 | /s/ Vincent L. Beatty | |
VINCENT L. BEATTY | |||
Executive Vice President and Chief Financial Officer |
(a) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(b) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Washington Federal, Inc. | |
(Company) | |
/s/ Brent J. Beardall | |
BRENT J. BEARDALL | |
President and Chief Executive Officer | |
/s/ Vincent L. Beatty | |
VINCENT L. BEATTY | |
Executive Vice President and Chief Financial Officer |
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