Washington Federal (NASDAQ:WFSL) Driven by NIM Expansion, Shrinking Credit Costs

Commenting on Washington Federal (NASDAQ:WFSL) beating the Street in their latest quarter, FBR said the company is being driven at this time by the fall in credit costs and NIM expansion.

FBR says, "We reiterate our rating and our price target on WFSL following 1Q11 (December) earnings, in which Washington Federal reported EPS of $0.22, which beat the Street's $0.21 estimate and just missed FBR's $0.24 estimate. Washington Federal posted a strong bottom line driven by lower overall credit costs and strong NIM expansion. Credit was a mixed bag as NPAs increased to $443M and provision expense remained at $26M compared to our expectations for about $20M. That said, NCOs dropped to $30M and the company continued to release reserves. REO expense fell to $10.5M in 1Q11 after falling 35% last quarter as the company continues to dispose of foreclosed properties."

FBR Capital maintains an "Outperform" rating on Washington Federal, which closed Friday at $17.79, gaining $0.40, or 2.30 percent. FBR has a price target of $20 on them.