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<SEC-DOCUMENT>0001193125-10-117099.txt : 20100719
<SEC-HEADER>0001193125-10-117099.hdr.sgml : 20100719
<ACCEPTANCE-DATETIME>20100512112358
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-10-117099
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20100512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WASHINGTON FEDERAL INC
		CENTRAL INDEX KEY:			0000936528
		STANDARD INDUSTRIAL CLASSIFICATION:	SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035]
		IRS NUMBER:				911661606
		STATE OF INCORPORATION:			WA
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		425 PIKE STREET
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98101
		BUSINESS PHONE:		2066247930

	MAIL ADDRESS:	
		STREET 1:		425 PIKE ST
		CITY:			SEATTLE
		STATE:			WA
		ZIP:			98101
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<TITLE>Correspondence</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">May&nbsp;11, 2010 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Via Edgar </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Christian Windsor </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Division of Corporation Finance </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Securities and
Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington, D.C. 20549 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Re:</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Washington Federal, Inc. </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;Form 10-K for September&nbsp;30, 2009 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;&nbsp;&nbsp;&nbsp;File Number 0-25454 </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dear Mr.&nbsp;Windsor: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We have received your
letter dated April&nbsp;27, 2010 and provide below the responses of Washington Federal, Inc. (&#147;Company&#148; or &#147;Washington Federal&#148;) to the comments of the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission (&#147;Commission&#148;). In addition to these responses, Washington Federal will provide additional information in future filings with the Commission as requested in your letter. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">For your reference, we have included the Commission&#146;s comments and the Company&#146;s responses thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Form 10-K for the Fiscal Year Ended September&nbsp;30, 2009 </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Exhibit 13-Annual Report 2009 </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations Asset Quality and Allowance for Loan Losses, Pages 6-7
</U></B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note your response to comment 1 from our letter dated March&nbsp;2, 2010. Please confirm that you will expand future filings disclosure to include discussion
concerning the appraisal process and how you measure impairment on collateral dependent loans similar to the discussion included in your response to comment 1. Further, please tell us and revise your future filings to describe specifically any
adjustments you make to the appraised values, including those made as a result of outdated appraisals. Discuss how you consider the potential for outdated appraisal values in your determination of the allowance for loan losses.
</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Washington Federal&#146;s response: </U></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will expand future filings disclosure to include discussion concerning the appraisal process and how we measure impairment on collateral similar to
our discussion included in our response to your comment 1 from your letter dated March&nbsp;2, 2010. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is our Policy to obtain new
appraisals from qualified third party appraisers for non-homogeneous Land Acquisition/Development and Speculative Construction loans at least every 24 months or more often as market conditions may dictate. Each appraisal is then reviewed by
qualified internal review appraisers to ensure compliance with USPAP and OTS regulations and that values are supported by market data. </FONT></P>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Recently, based on deteriorating property values, we have been obtaining new appraisals annually or more
often. As a result, adjustments to outdated appraisals are rare. Such adjustments may be based on technical errors found in the appraisal, comparison to a more recent appraisal on similar property, or other market information. Adjustments may also
be made to newly dated appraisals if the reviewer finds inadequate support for the value estimate and can determine better support for a lower value. We will expand future filings disclosure to include discussion of our practices related to
adjustments to appraised values. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The potential for outdated appraisal values is included as a qualitative factor in our determination of the
allowance for loan losses; however, we believe the risk of outdated appraisals is mitigated by the frequency in which updated appraisals are being received. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Form 10-Q for the Quarterly Period Ended December&nbsp;31, 2009 </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><U>Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations, page 19 </U></B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We note your response to comment 3 from our letter dated March&nbsp;2, 2010. We further note from the table on page 19 in the 10-Q for the period ended
December&nbsp;31, 2009 that you do not consider many restructured loans in your determination of non-accrual loans. Tell us and revise future filings to provide the following disclosures: </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Clarify why you do not include such loans as non-accrual; </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Discuss how you identify loans to be restructured; </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Quantify the types of concessions you have made (e.g. reduction of interest rate, payment extensions, forgiveness of principal, forbearance or other
actions) and discuss your success with the different types of concessions (qualitatively and quantitatively) for these accruing restructured loans; and </FONT></P></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Disclose your policy regarding how many payments the borrower needs to make on the restructured loans before you return the loan to accrual status.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Washington Federal&#146;s response: </U></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Most of our restructured loans are accruing and performing loans where the borrower has proactively approached us about modifications due to temporary
financial difficulties. Each request is individually evaluated for merit and likelihood of success. We do not otherwise identify loans to be restructured. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Single Family Residential loans comprised 78% of restructured loans as of March&nbsp;31, 2010. The concession for these loans is typically a payment
reduction through a rate reduction of from 200 to 250 bps for a specific term, usually six to twelve months. Interest-only payments may also be approved during the modification period. The subsequent default rate on restructured Single Family
Mortgage Loans has been approximately 15% since inception of the program in November 2008. Concessions for Construction (4.8%)&nbsp;Land Acquisition&nbsp;&amp; Development (13.7%)&nbsp;and Multi-Family Loans (0.6%) are typically an extension of
maturity combined with a rate reduction of normally 100 bps. The subsequent default rate on restructured Commercial Loans has been less than 10% since December 2009. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">For commercial loans, six consecutive payments on newly restructured loan terms are required prior to
returning the loan to accrual status. In some instances after the required six consecutive payments are made, a management assessment will conclude that collection of the entire principal balance is still in doubt. In those instances, the loan will
remain on non-accrual. Homogeneous loans may or may not be on accrual status at the time of restructuring, but all are placed on accrual status upon the restructuring of the loan. Homogenous loans are restructured only if the borrower can
demonstrate the ability to meet the restructured payment terms; otherwise, collection is pursued and the loan remains on non-accrual status until liquidated. If the homogenous restructured loan does not perform it will be placed in non-accrual
status when it is 90 days delinquent. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will expand future filings disclosure to include our practices related to restructured loans.
</FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Very truly yours, </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Brent J. Beardall </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Brent J. Beardall
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">EVP/CFO </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Washington Federal
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">206-777-8331 (Phone) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">206-777-8341
(Fax) </FONT></P>
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