v2.3.0.11
Document and Entity Information (USD $)
 12 Months Ended
Sep. 30, 2011
Nov. 11, 2011
Mar. 31, 2011
Entity Information [Line Items]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Sep. 30, 2011
Document Fiscal Year Focus 2011    
Document Fiscal Period Focus FY    
Trading Symbol WFSL    
Entity Registrant Name WASHINGTON FEDERAL INC    
Entity Central Index Key 0000936528    
Current Fiscal Year End Date --09-30    
Entity Filer Category Large Accelerated Filer    
Entity Common Stock, Shares Outstanding   107,620,110  
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Public Float     $ 1,873,300,509
v2.3.0.11
Consolidated Statements of Financial Condition (USD $)
In Thousands
Sep. 30, 2011
Sep. 30, 2010
ASSETS    
Cash and cash equivalents $ 816,002 $ 888,622
Available-for-sale securities, including encumbered securities of $965,927 and $933,315, at fair value 3,255,144 2,481,093
Held-to-maturity securities, including encumbered securities of $45,086 and $60,970, at amortized cost 47,036 80,107
Loans receivable, net 7,935,877 8,423,703
Covered loans, net 382,183 534,474
Interest receivable 52,332 49,020
Premises and equipment, net 166,593 162,721
Real estate held for sale 159,829 188,998
Covered real estate held for sale 56,383 44,155
FDIC indemnification asset 98,871 131,128
FHLB stock 151,755 151,748
Intangible assets, including goodwill of $251,653 256,271 257,718
Federal and state income taxes, net 0 8,093
Other assets 62,473 84,799
Assets 13,440,749 13,486,379
Customer accounts    
Transaction deposit accounts 2,662,188 2,554,762
Time deposit accounts 6,003,715 6,297,778
Savings and Demand Accounts and Repurchase Agreements with Customers 8,665,903 8,852,540
FHLB advances 1,962,066 1,865,548
Other borrowings 800,000 800,000
Advance payments by borrowers for taxes and insurance 39,548 39,504
Federal and State income taxes, including net deferred liabilities of $17,075 and $21,951 1,535 0
Accrued expenses and other liabilities 65,164 87,640
Liabilities 11,534,216 11,645,232
Stockholders’ equity    
Common stock, $1.00 par value, 300,000,000 shares authorized;129,853,534 and 129,555,956 shares issued; 108,976,410 and 112,483,632 shares outstanding 129,854 129,556
Paid-in capital 1,582,843 1,578,527
Accumulated other comprehensive income, net of taxes 85,789 49,682
Treasury stock, at cost; 20,877,124 and 17,072,324 shares (268,665) (208,985)
Retained earnings 376,712 292,367
Stockholders' Equity 1,906,533 1,841,147
Liabilities and Equity $ 13,440,749 $ 13,486,379
v2.3.0.11
Consolidated Statements of Financial Condition (Parentheticals) (USD $)
In Thousands, except Share data
Sep. 30, 2011
Sep. 30, 2010
Available-for-sales securities, encumbered securities $ 965,927 $ 933,315
Held-to-maturity securities, encumbered securities 45,086 60,970
Intangible assets, goodwill 251,653 251,653
Federal and state income taxes, deferred liabilities $ 17,075 $ 21,951
Common stock, par value $ 1 $ 1
Common stock, shares authorized 300,000,000 300,000,000
Common stock, shares issued 129,853,534 129,555,956
Common stock, shares outstanding 108,976,410 112,483,632
Treasury stock, shares 20,877,124 17,072,324
v2.3.0.11
Consolidated Statements of Operations (USD $)
In Thousands, except Share data
 12 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
INTEREST INCOME      
Loans $ 522,230 $ 561,069 $ 579,244
Mortgage-backed securities 108,207 91,775 109,486
Investment securities and cash equivalents 14,198 10,716 3,044
Interest and Dividend Income, Operating 644,635 663,560 691,774
INTEREST EXPENSE      
Customer accounts 115,835 146,360 191,435
FHLB advances and other borrowings 111,861 122,741 127,192
Interest Expense 227,696 269,101 318,627
Net interest income 416,939 394,459 373,147
Provision for loan losses 93,104 179,909 193,000
Net interest income after provision for loan losses 323,835 214,550 180,147
OTHER INCOME      
Gain on FDIC-assisted transaction 0 85,608 0
Prepayment penalty on FHLB advance 0 (8,150) 0
Gain on sale of investments 8,147 22,409 0
Other 17,786 20,563 19,009
Noninterest Income 25,933 120,430 19,009
OTHER EXPENSE      
Compensation and benefits 72,034 69,879 57,097
Amortization of intangibles 1,447 2,140 3,331
Occupancy 14,480 13,933 13,049
FDIC insurance premiums 20,582 18,626 10,688
Other 29,496 28,830 25,105
Deferred loan origination costs (1,980) (1,928) (2,210)
Noninterest Expense 136,059 131,480 107,060
Loss on real estate acquired through foreclosure, net (40,050) (80,475) (16,354)
Income before income taxes 173,659 123,025 75,742
Income taxes      
Current 88,373 (19,890) 56,075
Deferred (25,855) 24,262 (28,505)
Income tax provision (benefit) 62,518 4,372 27,570
NET INCOME 111,141 118,653 48,172
Preferred dividends accrued 0 0 7,488
Net income available to common shareholders $ 111,141 $ 118,653 $ 40,684
PER SHARE DATA      
Basic earnings $ 1.00 $ 1.06 $ 0.46
Diluted earnings $ 1.00 $ 1.05 $ 0.46
Cash dividends per share $ 0.24 $ 0.20 $ 0.20
Basic weighted average number of shares outstanding 111,383,877 112,438,059 88,689,553
Diluted weighted average number of shares outstanding, including dilutive stock options 111,460,106 112,745,261 88,711,694
v2.3.0.11
Consolidated Statement of Equity (USD $)
In Thousands
Total
Common Stock [Member]
Preferred Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Treasury Stock [Member]
Balance, Beginning of period at Sep. 30, 2008 $ 1,332,674 $ 105,093 $ 0 $ 1,261,032 $ 174,327 $ 2,472 $ (210,250)
Comprehensive income:              
Net income 48,172       48,172    
Other comprehensive income, net of tax              
Unrealized gains on securities 51,273         51,273  
Reclassification adjustment (686)         (686)  
Total comprehensive income 100,131            
Preferred stock issuance 197,873   197,873        
Preferred stock discount and accretion 0   (2,127)   (2,127)    
Dividends paid on common stock (18,847)       (18,847)    
Dividends paid on preferred stock (5,361)       (5,361)    
Preferred stock redemption (200,000)   (200,000)        
Compensation expense related to common stock 1,327     1,327      
Proceeds from excercise of common stock options 158 13   145      
Proceeds from issuance of common stock 333,177 24,150   309,027      
Tax benefit related to exercise of common stock options 22     22      
Restricted stock 863 64   799      
Issuance of Warrants 2,127     2,127      
Proceeds from Employee Stock Ownership Plan 1,341     76     1,265
Balance, End of period at Sep. 30, 2009 1,745,485 129,320 0 1,574,555 196,164 54,431 (208,985)
Comprehensive income:              
Net income 118,653       118,653    
Other comprehensive income, net of tax              
Unrealized gains on securities (19,203)         (19,203)  
Reclassification adjustment 14,454         14,454  
Total comprehensive income 113,904            
Dividends paid on common stock (22,450)       (22,450)    
Compensation expense related to common stock 1,213     1,213      
Proceeds from excercise of common stock options 1,759 145   1,614      
Tax benefit related to exercise of common stock options 181     181      
Restricted stock 1,055 91   964      
Balance, End of period at Sep. 30, 2010 1,841,147 129,556 0 1,578,527 292,367 49,682 (208,985)
Comprehensive income:              
Net income 111,141       111,141    
Other comprehensive income, net of tax              
Unrealized gains on securities 30,852         30,852  
Reclassification adjustment 5,255         5,255  
Total comprehensive income 147,248            
Dividends paid on common stock (26,796)       (26,796)    
Compensation expense related to common stock 1,087     1,087      
Proceeds from excercise of common stock options 1,631 104   1,527      
Tax benefit related to exercise of common stock options 55     55      
Restricted stock 1,841 194   1,647      
Treasury stock (59,680)           (59,680)
Balance, End of period at Sep. 30, 2011 $ 1,906,533 $ 129,854 $ 0 $ 1,582,843 $ 376,712 $ 85,789 $ (268,665)
v2.3.0.11
Consolidated Statement of Stockholders' Equity (Parentheticals) (USD $)
In Thousands
 12 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
Other comprehensive income, tax $ 19,873 $ 2,614 $ 28,598
v2.3.0.11
Consolidated Statements of Cash Flows (USD $)
In Thousands
 12 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2009
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income $ 111,141 $ 118,653 $ 48,172
Adjustments to reconcile net income to net cash provided by operating activities:      
Amortization (accretion) of fees, discounts, premiums and intangible assets, net 20,663 21,624 4,813
Cash received from FDIC under loss share 32,828 92,551 0
Depreciation 6,667 5,766 5,153
Stock option compensation expense 1,087 1,213 1,327
Provision for loan losses 93,104 179,909 193,000
Loss on investment securities and real estate held for sale, net 23,315 58,066 15,101
Gain on FDIC-assisted transaction 0 (85,608) 0
Decrease (increase) in accrued interest receivable (3,312) 7,999 1,077
Increase in FDIC loss share receivable (7,707) 0 0
Decrease in income taxes payable/receivable (11,351) (23,408) (45,831)
FHLB stock dividends (7) (6) (15)
Decrease (increase) in other assets 18,844 (51,635) (16,156)
Decrease in accrued expenses and other liabilities (23,575) (74,243) (22,399)
Net cash provided by operating activities 261,697 250,881 184,242
CASH FLOWS FROM INVESTING ACTIVITIES      
Net principal collections (loan originations) 400,054 281,826 71,509
FHLB stock redeemed 0 0 394
Available-for-sale securities purchased (1,585,945) (1,774,343) (1,175,321)
Principal payments and maturities of available-for-sale securities 727,379 1,052,545 513,218
Available-for-sale securities sold 131,361 496,024 18,453
Principal payments and maturities of held-to-maturity securities 33,874 23,128 21,691
Net cash received from acquisition 0 111,684 0
Proceeds from sales of real estate held for sale 110,400 129,447 98,822
Covered REO purchased 29,383 0 0
Premises and equipment purchased (10,539) (13,027) (5,273)
Net cash provided (used) by investing activities (164,033) 307,284 (456,507)
CASH FLOWS FROM FINANCING ACTIVITIES      
Net increase (decrease) in customer accounts (186,637) 190,702 672,771
Net decrease in short-term borrowings 0 0 (377,000)
Proceeds from long-term borrowings 200,000 200,000 100,000
Repayments of long-term borrowings (100,000) (539,034) (19,378)
Proceeds from exercise of common stock options and related tax benefit 1,686 1,940 180
Dividends paid on common stock (25,697) (22,450) (18,847)
Dividends paid on preferred stock 0 0 (5,361)
Net proceeds from follow on stock offering 0 0 333,177
Proceeds from issuance of preferred stock and warrants 0 0 200,000
Redemption of preferred stock 0 0 (200,000)
Proceeds from Employee Stock Ownership Plan 0 0 1,341
Treasury stock purchased (59,680) 0 0
Decrease in advance payments by borrowers for taxes and insurance 44 911 1,170
Net cash provided (used) by financing activities (170,284) (167,931) 688,053
Increase (decrease) in cash and cash equivalents (72,620) 390,234 415,788
Cash and cash equivalents at beginning of period 888,622 498,388 82,600
Cash and cash equivalents at ending of period 816,002 888,622 498,388
Non-cash investing activities      
Non-covered real estate acquired through foreclosure 112,693 222,057 254,742
Covered real estate acquired through foreclosure 54,638 34,536 0
Cash paid during the period for      
Interest 228,444 269,478 325,157
Income taxes 73,798 27,503 77,761
Noncash or Part Noncash Acquisition, Value of Assets Acquired 0 1,091,629 0
Fair value of liabilities assumed 0 (1,047,981) 0
Net fair value of assets (liabilities) $ 0 $ 43,648 $ 0
v2.3.0.11
Significant Accounting Policies
 12 Months Ended
Sep. 30, 2011
Summary of Significant Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation. The consolidated financial statements include the accounts of Washington Federal, Inc. (Company or Washington Federal) and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated.
Description of business. Washington Federal is a unitary thrift holding company. The Company's principal operating subsidiary is Washington Federal (Bank). The Bank is principally engaged in the business of attracting deposits from the general public and investing these funds, together with borrowings and other funds, in one-to-four family residential real estate loans, multi-family real estate loans and commercial loans. The Bank conducts its activities through a network of 160 offices located in Washington, Oregon, Idaho, Utah, Arizona, Nevada, New Mexico, and Texas.
The Company's fiscal year end is September 30th. All references to 2011, 2010 and 2009 represent balances as of September 30, 2011, September 30, 2010 and September 30, 2009, or activity for the fiscal years then ended. References to net income in this document refer to net income available to common shareholders.

Effective January 8, 2010, the Bank acquired certain assets and liabilities, including most of the loans and deposits, of Horizon Bank, headquartered in Bellingham, Washington (“Horizon”) from the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Horizon (the “Acquisition”).

The Bank acquired certain assets with a book value of $1.19 billion, including $968 million in loans and $32 million in foreclosed real estate, and selected liabilities with a book value of $1.03 billion, including $820 million in deposits.
The loans and foreclosed real estate purchased are covered by two loss share agreements between the FDIC and the Bank (one for single family loans and the other for all other loans and foreclosed real estate), which affords the Bank significant loss protection. Under the loss share agreements, the FDIC will cover 80% of covered loan and foreclosed real estate losses up to $536 million and 95% of losses in excess of that amount. The term for loss sharing on residential real estate loans is ten years, while the term for loss sharing on non-residential real estate loans is five years with respect to losses and eight years with respect to loss recoveries. The losses reimbursable by the FDIC are based on the book value of the relevant loan as determined by the FDIC at the date of the transaction. New loans made after that date are not covered by the loss share agreements. To account for the transaction, the balance sheet now has three new line items, as follows:

“Covered loans” represents the loans acquired from Horizon recorded at their estimated fair market value.

“Covered real estate held for sale” represents the estimated fair market value of the repossessed real estate acquired in the transaction. The covered loans and covered real estate held for sale are collectively referred to as “covered assets”.

The “FDIC indemnification asset” represents the estimated fair value of the guarantee provided by the FDIC on the covered assets.

Loans that were classified as non-performing loans by Horizon are no longer classified as non-performing because, at acquisition, the carrying value of these loans was adjusted to reflect fair value and are covered under the FDIC loss sharing agreements. Management believes that the new book value reflects an amount that will ultimately be collected.

Effective October 14, 2011, subsequent to the end of the fiscal year, the Company acquired six branch locations, four in Albuquerque, New Mexico, and two in Santa Fe, New Mexico, from Charter Bank. $254,821,000 of deposits were acquired for a premium of $1,061,000.
Cash and cash equivalents. Cash and cash equivalents include cash on hand, amounts due from banks, overnight investments and repurchase agreements with an initial maturity of three months or less.
Investments and mortgage-backed securities. The Company accounts for investments and mortgage-backed securities in two categories: held-to-maturity and available-for-sale.
Held-to-maturity securities - Securities classified as held-to-maturity are accounted for at amortized cost, but the Company must have both the positive intent and the ability to hold those securities to maturity. There are very limited circumstances under which securities in the held-to-maturity category can be sold without jeopardizing the cost basis of accounting for the remainder of the securities in this category.
Available-for-sale securities - Securities not classified as held-to-maturity are considered to be available-for-sale. Gains and losses realized on the sale of these securities are accounted for based on the specific identification method. Unrealized gains and losses for available-for-sale securities are excluded from earnings and reported as a net amount in the accumulated other comprehensive income component of stockholders' equity.
Management evaluates debt and equity securities for other than temporary impairment on a quarterly basis based on the securities' current credit quality, interest rates, term to maturity and management's intent and ability to hold the securities until the net book value is recovered. Any other than temporary declines in fair value are recognized in the statements of operations.
Premiums and discounts on investments are deferred and recognized over the life of the asset, using the effective interest method.
Realized gains and losses on securities sold as well as other than temporary impairment charges, are shown on the Consolidated Statements of Operations under the Other Income (Loss) heading.
Loans receivable - When a borrower fails to make a required payment on a loan, the Company attempts to cure the deficiency by contacting the borrower. Contact is made after a payment is 30 days past its grace period. In most cases, deficiencies are cured promptly. If the delinquency is not cured within 90 days, the Company may institute appropriate action to foreclose on the property. If foreclosed, the property is sold at a public sale and may be purchased by the Company.
The Company will consider modifying the interest rates and terms of a loan if it determines that a modification is a better alternative to foreclosure.
Loans are placed on nonaccrual status when, in the judgment of management, the probability of collection of interest is deemed to be insufficient to warrant further accrual. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. The Company does not accrue interest on loans 90 days or more past due. If payment is made on a loan so that the loan becomes less than 90 days past due, and the Company expects full collection of principal and interest, the loan is returned to full accrual status. Any interest ultimately collected is credited to income in the period of recovery. A loan is charged-off when the loss is estimable and it is confirmed that the borrower will not be able to meet contractual obligations.
The Company maintains an allowance for loan losses to absorb losses inherent in the loan portfolio. The allowance is based on ongoing, quarterly assessments of the probable and estimable losses inherent in the loan portfolio. The Company's methodology for assessing the appropriateness of the allowance consists of two components, which include the general allowance and specific allowances.
The general loan loss allowance is established by applying a loss percentage factor to the different loan types. Management believes loan types are the most relevant factor to group loans for the allowance calculation as the risk characteristics in these groups are similar. The loss percentage factor is made up of two parts - the historical loss factor (“HLF”) and the qualitative loss factor (“QLF”). The HLF takes into account historical charge-offs, while the QLF is determined by loan type and allows management to augment reserve levels to reflect the current environment and portfolio performance trends including recent charge-off trends. Allowances are provided based on management's continuing evaluation of the pertinent factors underlying the quality of the loan portfolio, including changes in the size and composition of the loan portfolio, actual loan loss experience, current economic conditions, collateral values, geographic concentrations, seasoning of the loan portfolio, specific industry conditions, and the duration of the current business cycle. The recovery of the carrying value of loans is susceptible to future market conditions beyond the Company's control, which may result in losses or recoveries differing from those provided.
Specific allowances are established for loans which are individually evaluated, in cases where management has identified significant conditions or circumstances related to a loan that management believes indicate the probability that a loss has been incurred.
Impaired loans consist of loans receivable that are not expected to have their principal and interest repaid in accordance with their contractual terms. Collateral dependent impaired loans are measured using the fair value of the collateral, less selling costs. Non-collateral dependent loans are measured at the present value of expected future cash flows.
The Company receives fees for originating loans in addition to various fees and charges related to existing loans, which may include prepayment charges, late charges and assumption fees. Deferred loan fees and costs are recognized over the life of the loans using the effective interest method.
Covered loans. Covered loans are the loans acquired from Horizon in 2010 recorded at their estimated fair market value. Loans that were classified as non-performing loans by Horizon are no longer classified as non-performing because, at acquisition, the carrying value of these loans was adjusted to reflect fair value and are covered under the FDIC loss sharing agreements. Management believes that the new book value reflects an amount that will ultimately be collected.
Covered real estate held for sale. Covered real estate held for sale represents the foreclosed properties that were originally Horizon loans. Covered real estate held for sale is carried at the estimated fair market value of the repossessed real estate. The covered loans and covered real estate held for sale are collectively referred to as “covered assets”.
FDIC indemnification asset. FDIC indemnification asset is the receivable recorded from due to guarantee provided by the FDIC on the covered assets.
Premises and equipment. Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method over the estimated useful lives of the respective assets. Expenditures are capitalized for betterments and major renewals. Charges for ordinary maintenance and repairs are expensed to operations as incurred.
Real estate held for sale. Properties acquired in settlement of loans or acquired for development are recorded at the lower of cost or fair value less selling costs. Subsequent declines in valuation are recorded as additional expense in gain (loss) on real estate acquired through foreclosure line item.
Intangible assets. Goodwill represents the excess of the cost of businesses acquired over the fair value of the net assets acquired. The core deposit intangibles and non-compete agreement intangible are acquired assets that lack physical substance but can be distinguished from goodwill. Goodwill is evaluated for impairment on an annual basis. Other intangible assets are amortized over their estimated lives and are subject to impairment testing when events or circumstances change. If circumstances indicate that the carrying value of the assets may not be recoverable, an impairment charge could be recorded. No impairment of intangible assets has ever been identified. The Company amortizes the two core deposit intangibles on a straight line basis over their estimated lives of 7 and 8 years; the non-compete agreement intangible, which was fully amortized as of September 30, 2010, was amortized on a straight-line basis over its life of five years.
The balance of the Company's intangible assets was as follows, which includes the additional goodwill discussed above:

 
Goodwill
 
Servicing Rights Intangible
 
Core Deposit Intangible
 
Total
 
(In thousands)
 
 
 
 
 
 
 
 
Balance at September 30, 2009
$
251,653

 
$
2,469

 
$
2,675

 
$
256,797

Additions
—

 
—

 
3,064

 
3,064

Amortization
—

 
(694
)
 
(1,449
)
 
(2,143
)
Balance at September 30, 2010
251,653

 
1,775

 
4,290

 
257,718

Additions
—

 
—

 
—

 
—

Amortization
—

 
(529
)
 
(918
)
 
(1,447
)
Balance at September 30, 2011
$
251,653

 
$
1,246

 
$
3,372

 
$
256,271


The table below presents the estimated core deposit intangible asset amortization expense for the next five years:
Year End
 
Expense
(in thousands)
 
 
 
2012
 
$
918

2013
 
918

2014
 
918

2015
 
618

2016
 
—


Deferred fees and discounts on loans. Loan discounts and loan fees are deferred and recognized over the life of the loans using the effective interest method.
Accounting for stock-based compensation. The Company records an expense for the estimated fair value of equity awards over the vesting period. See Note L for additional information. Stock options that were not dilutive but were outstanding as of September 30, 2011, 2010 and 2009 were 2,190,123, 1,941,633 and 2,401,764, respectively.
Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates reported in the financial statements include the allowance for loan losses, intangible assets, deferred taxes and contingent liabilities. Actual results could differ from these estimates.
New accounting pronouncements. In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This ASU simplifies how entities, both public and nonpublic, test goodwill for impairment by permitting an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Previous guidance under Topic 350 required an entity to test goodwill for impairment, on at least an annual basis, by comparing the fair value of a reporting unit with its carrying amount, including goodwill (step one). If the fair value of a reporting unit is less than its carrying amount, then the second step of the test must be performed to measure the amount of the impairment loss, if any. Under the amendments in this Update, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The Company does not anticipate ASU and the guidance will have a material impact on the Company's financial condition and results of operations.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220) - Presentation of Comprehensive Income.  ASU 2011-05 attempts to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income.  The effective date of ASU 2011-05 will be the first interim or fiscal period beginning after December 15, 2011 and should be applied retrospectively to transactions or modifications of existing transactions that occur on or after the effective date.  Early adoption is permitted.  The Company is evaluating the impact this ASU will have on its financial condition and results of operations.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 developed common requirements between U.S. GAAP and IFRSs for measuring fair value and for disclosing information about fair value measurements.  The effective date of ASU 2011-04 will be during interim or annual period beginning after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date.  Early adoption is not permitted.  The Company is evaluating the impact this ASU will have on its financial condition and results of operations.

In April 2011, the FASB issued ASU No. 2011-03, Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements. This ASU removes from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control are not changed by the amendments in this ASU. The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company intends to comply with this new guidance.

In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310) - A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The amendments in this ASU clarify the guidance on a creditor's evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. This guidance will be effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption (i.e., October 1, 2010, for the Company). As a result of this guidance, receivables previously measured under loss contingency guidance that are newly considered impaired should be disclosed, along with the related allowance for credit losses, as of the end of the period of adoption. The adoption of this guidance resulted in $7.6 million of loan modifications being classified as troubled debt restructurings that previously would not have been so classified. The incremental impact on the allowance for loan losses was not significant.
In December 2010, the FASB issued ASU 2010-28, Intangibles - Goodwill and Other (Topic 350) - When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The amendments in this ASU affect all entities that have recognized goodwill and have one or more reporting units whose carrying amount for purposes of performing Step 1 of the goodwill impairment test is zero or negative. As the Company has only one reporting unit with a carrying amount greater than zero, this ASU has no impact on the financial statements.
In December 2010, the FASB issued ASU 2010-29, Business Combinations (Topic 805) - Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This ASU also expands the supplemental pro forma disclosures under Topic 805 to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. This guidance will be effective for any business combinations entered into by the Company for which the acquisition date is after October 1, 2011.
Business segments. As the Company manages its business and operations on a consolidated basis, management has determined that there is one reportable business segment.
Reclassifications. Certain reclassifications have been made to the financial statements for years prior to September 30, 2011 to conform to current year classifications.
v2.3.0.11
Investment Securities
 12 Months Ended
Sep. 30, 2011
Investment Securities [Abstract]  
Investment Securities
INVESTMENT SECURITIES
 
September 30,
2011
 
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
$
500

 
$
34

 
$
—

 
$
534

 
4.00
%
1 to 5 years
—

 
—

 
—

 
—

 
—

5 to 10 years
9,300

 
4,547

 
—

 
13,847

 
10.38
%
Over 10 years
175,515

 
631

 
—

 
176,146

 
2.57
%
Corporate bonds due

 

 

 

 

5 to 10 years
30,000

 
284

 
(325
)
 
29,959

 
4.00
%
Municipal bonds due

 

 

 

 

  Over 10 years
20,461

 
3,107

 
—

 
23,568

 
6.45
%
Mortgage-backed securities

 

 

 

 

Agency pass-through certificates
2,883,734

 
127,356

 
—

 
3,011,090

 
4.72
%
 
3,119,510

 
135,959

 
(325
)
 
3,255,144

 
4.62
%
Held-to-maturity securities
 
 
 
 
 
 
 
 
 
Tax-exempt municipal bonds due
 
 
 
 
 
 
 
 
 
1 to 5 years
405

 
5

 
—

 
410

 
6.52
%
5 to 10 years
1,545

 
68

 
—

 
1,613

 
5.60
%
Over 10 years
—

 
—

 
—

 
—

 
—
%
U.S. government and agency securities due

 

 

 

 

1 to 5 years
—

 
—

 
—

 
—

 
—
%
Mortgage-backed securities

 

 

 

 

Agency pass-through certificates
45,086

 
3,507

 
—

 
48,593

 
5.31
%
 
47,036

 
3,580

 
—

 
50,616

 
5.33
%
 
$
3,166,546

 
$
139,539

 
$
(325
)
 
$
3,305,760

 
4.63
%
 
 
 
 
 
 
 
 
 
 
September 30,
2010
 
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
$
500

 
$
26

 
$
—

 
$
526

 
4.00
%
1 to 5 years
25,000

 
180

 
—

 
25,180

 
3.25
%
5 to 10 years
158,915

 
5,344

 
(105
)
 
164,154

 
3.59
%
Over 10 years
150,000

 
1,161

 
(15
)
 
151,146

 
3.50
%
Corporate bonds due
 
 
 
 
 
 
 
 
 
5 to 10 years
10,000

 
—

 
—

 
10,000

 
6.00
%
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
2,058,130

 
72,853

 
(896
)
 
2,130,087

 
5.26
%
 
2,402,545

 
79,564

 
(1,016
)
 
2,481,093

 
5.02
%
Held-to-maturity securities
 
 
 
 
 
 
 
 
 
Tax-exempt municipal bonds due
 
 
 
 
 
 
 
 
 
1 to 5 years
1,105

 
65

 
—

 
1,170

 
6.11
%
5 to 10 years
1,940

 
115

 
—

 
2,055

 
5.67
%
Over 10 years
4,010

 
34

 
—

 
4,044

 
5.60
%
U.S. government and agency securities due
 
 
 
 
 
 
 
 
 
1 to 5 years
—

 
—

 
—

 
—

 
—
%
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
73,052

 
4,579

 
—

 
77,631

 
5.59
%
 
80,107

 
4,793

 
—

 
84,900

 
5.60
%
 
$
2,482,652

 
$
84,357

 
$
(1,016
)
 
$
2,565,993

 
5.04
%

 
$131,361,000 of available-for-sale securities were sold in 2011, resulting in a gain of $8,147,000. $496,024,000 of available-for-sale securities were sold in 2010, resulting in a net gain of $22,409,000. $18,453,000 of available-for-sale securities were sold in 2009, resulting in a net gain of $1,063,000.

Substantially all mortgage-backed securities have contractual due dates that exceed ten years.

The following table shows the unrealized gross losses and fair value of securities at September 30, 2011, by length of time that individual securities in each category have been in a continuous loss position. The Company had no securities in a continuous loss position for 12 or more months at September 30, 2011, which consisted of mortgage-backed securities. Management believes that the declines in fair value of these investments are not an other than temporary impairment.
 
As of September 30,
2011
  
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)
U.S. agency securities
$
(325
)
$
9,675

$
—

$
—

$
(325
)
$
9,675

Agency pass-through certificates
—

—

—

—

—

—

 
$
(325
)
$
9,675

$
—

$
—

$
(325
)
$
9,675
v2.3.0.11
Loans Receivable (excluding Covered Loans)
 12 Months Ended
Sep. 30, 2011
Loans Receivable [Abstract]  
Loans Receivable (excluding Covered Loans)
Loans Receivable (excluding Covered Loans)
 
September 30,
2011
 
2010
 
$
%
 
$
%
 
(In thousands)
 
 
(In thousands)
 
Single-family residential
$
6,218,878

74.9
%
 
6,551,837

74.8
%
Construction - speculative
140,459

1.7

 
169,712

1.9

Construction - custom
279,851

3.4

 
256,384

2.9

Land - acquisition & development
200,692

2.4

 
307,230

3.5

Land - consumer lot loans
163,146

2.0

 
186,840

2.1

Multi-family
700,673

8.4

 
697,351

7.9

Commercial real estate
303,442

3.7

 
315,915

3.6

Commercial & industrial
109,332

1.3

 
83,070

0.9

HELOC
115,092

1.4

 
116,143

1.3

Consumer
67,509

0.8

 
92,624

1.1

 
8,299,074

100.0
%
 
8,777,106

100.0
%
 
 
 
 
 
 
Less:
 
 
 
 
 
Allowance for loan losses
157,160

 
 
163,094

 
Loans in process
170,229

 
 
154,171

 
Deferred net origination fees
35,808

 
 
36,138

 
 
363,197

 
 
353,403

 
 
$
7,935,877

 
 
$
8,423,703

 



The Company originates fixed and adjustable interest rate loans, which at September 30, 2011 consisted of the following:

Fixed-Rate
 
Adjustable-Rate
Term To Maturity
Book Value
 
Term To Rate Adjustment
Book Value
 
(In thousands)
 
 
(In thousands)
Within 1 year
$
336,641

 
Less than 1 year
$
289,814

1 to 3 years
199,620

 
1 to 3 years
197,107

3 to 5 years
168,798

 
3 to 5 years
43,515

5 to 10 years
626,142

 
5 to 10 years
158,636

10 to 20 years
616,212

 
10 to 20 years
26,972

Over 20 years
5,493,260

 
Over 20 years
142,357

 
$
7,440,673

 
 
$
858,401



At September 30, 2011 and 2010, approximately $67,542,000 and $79,871,000 of fixed-rate loan origination commitments were outstanding, respectively. Loans serviced for others at September 30, 2011 and 2010 were approximately $102,775,000 and $130,874,000, respectively.

Gross loans by geographic concentration were as follows:
 
September 30, 2011
Single -
family
residential
Multi-
family
Land -
A & D
Land -
lot loans
Construction - custom
Construction - speculative
Commercial
real estate
Commercial
and industrial
Consumer
HELOC
Total
 
(In thousands)
Washington
$
2,720,997

$
220,819

$
114,852

$
80,332

$
168,463

$
89,983

$
238,446

$
101,278

$
65,140

$
74,049

$
3,874,359

Oregon
1,003,289

299,839

17,013

33,152

45,784

18,441

13,744

—

—

7,484

1,438,746

Other
419,202

7,343

—

—

—

—

—

745

—

—

427,290

Idaho
465,420

31,417

8,457

16,251

9,421

10,886

882

—

—

5,423

548,157

Arizona
633,860

59,993

19,463

14,090

18,687

4,720

—

219

—

6,559

757,591

Utah
502,585

59,445

14,656

11,576

26,803

4,305

496

118

—

6,001

625,985

New Mexico
182,375

14,284

22,909

5,178

3,135

9,345

49,399

6,972

2,369

15,438

311,404

Texas
151,178

2,835

3,342

998

6,373

2,000

475

—

—

—

167,201

Nevada
139,972

4,698

—