SEATTLE, WA -- (Marketwire) -- 12/29/08 -- On December 22, 2008, Washington Federal (NASDAQ: WFSL) announced a decrease in its quarterly cash dividend from 21 cents per share to 5 cents per share. In this release, the Company stated that due to continued deterioration in the general economy and the housing market specifically, it expects to record a provision for loan losses of approximately $35 million and believes that total non-performing assets will be approximately $300 million or 2.43% of total assets for the quarter ending December 31, 2008.

The release restated Washington Federal's philosophy of managing the dividend payout ratio to 50% of earnings or less in the long term. This statement should not be interpreted to mean that earnings for the first fiscal quarter ending December 31, 2008 will be $.10 per share. At this point, we estimate earnings available to common shareholders for the quarter will be approximately $20 million or $.22 per share, as our net interest margin continues to improve, partially offsetting higher credit costs.

After the quarterly results are recorded, all of Washington Federal Savings' capital measures will remain significantly above industry standards and regulatory guidelines. The Company's Tangible Capital Ratio will be approximately 11.1% at December 31, 2008, more than double the 5.0% requirement to be viewed as "well capitalized" by the Office of Thrift Supervision.

Chairman, President & CEO Roy M. Whitehead stated that, "Washington Federal is well positioned to weather the current downturn and take advantage of what likely will be unprecedented opportunities thereafter. Nonetheless, given the seriousness of the current economic contraction, it seems only prudent to do what virtually every household in America is doing right now, and that is to trim discretionary outflows and conserve resources. The dividend reduction will retain more capital within the company, where it will still accrue to the benefit of shareholders and provide added insurance that management will have the resources necessary to deliver good returns to shareholders well into the future.

"One of our fundamental corporate values is financial conservatism, by which we mean that financial decisions will be made with the long-term view, even when short-term consequences are painful. We're as disappointed as anyone in the dividend reduction, but given the financial landscape, management and the board felt it was important to act decisively. The board will review the dividend quarterly and will consider an increase when there is more clarity and confidence in future business conditions."

Washington Federal Savings operates 149 offices in Washington, Oregon, Idaho, Utah, Nevada, Arizona, Texas and New Mexico.