WFSL Washington Federal, Inc. (MM)

Washington Federal Inc.(WFSL) is geared up to acquire $253 million deposits and six branches of Albuquerque, New Mexico-based Charter Bank. The transaction is still subject to various regulatory approvals.

Of the six branches that WFSL is going to acquire as a part of the deal, three are located in Albuquerque, two in Santa Fe and the remaining one in Rio Rancho. With the new additions, WFSL’s total branch count will increase to 166.

WFSL is already an established name in New Mexico, with about 11 branches located in Albuquerque, Alamogordo, Artesia, Capitan, Farmington, Gallup, Las Cruces, Roswell and Ruidoso.

As of March 31, 2011, WFSL’s total deposits stood at $8.8 million. Hence, following the completion of the acquisition, the company will have total deposits of $9.1 billion in its kitty.

Albuquerque-based Charter Bank, from which WFSL is acquiring these deposits and branches, is a subsidiary of Beal Financial Corporation, Plano, Texas. This bank had acquired all the assets and deposits of the failed Charter Bank based in Santa Fe, New Mexico from the Federal Deposit Insurance Corporation (FDIC) in January 2010.

The FDIC insures deposits in banks and savings associations in the country, as well as promotes the safety and soundness of these institutions. When a bank fails, the agency reimburses customer deposits of up to $250,000 per account.

In January 2010, WFSL acquired all of the deposits of Horizon Bank of Bellingham, Washington, which had been shuttered by the U.S. regulators as part of the serial bank failures.

The addition of a new customer base and extra branches would definitely boost WFSL’s financials over the near term.

WFSL currently retains a Zacks #4 Rank, which translates into a short-term ‘Sell’ rating. However, Astoria Financial Corporation (AF), one of WFSL’s competitors, retains a Zacks #3 Rank (a short-term Hold rating).

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