Although there have been many changes in the financial services industry, some things have remained the same. We are happy to report that Washington Federal remains the largest locally owned and managed financial institution headquartered in Washington County. Also unchanged is Washington Federal's commitment to providing exceptional service and the most comprehensive and competitive financial products in the market place. In addition to our dedication to our customers, we continue our commitment to the communities we serve.

During this past year, we devoted considerable time and energy to deepening our understanding of our customers' needs. We've conducted customer surveys, focus groups and utilized advanced technology in our efforts to truly understand our customers. As a result, we are much better prepared to anticipate and exceed their financial expectations.

With an understanding of the time constraints that today's fast-paced lifestyles place on our personal time, we remain committed to providing the utmost in convenience banking services anytime, 24 hours a day, 7 days a week, from any location. Our Online Banking customers have "real-time" access to their accounts and can transact business, apply for mortgage and consumer loans, or find out about the latest specials any time. With extended office hours, telephone banking and access to ATM machines, our customers can take care of banking at their convenience.

In May of this year, we began offering Remote Deposit service so that our business customers can enjoy the convenience of making deposits from their offices on their time schedule.

The past fiscal year reflected exceptionally strong activity in the Bank's traditional loan and deposit product lines, each reaching record levels with deposits at $500 million and loans at $448 million at June 30, 2007. In addition to traditional banking services, Washington Federal also provides investment, insurance and real estate settlement services. These non-traditional financial services reported solid growth for the year as well.

Significant time and resources were expended making physical improvements to our branch offices to ensure that our customers enjoy an inviting and comfortable atmosphere when they visit. We have completed renovations to our McMurray 19, Canonsburg, Hickory and Tylerdale offices. We are also pleased that Washington Settlement Services has relocated to the first floor of our headquarters office at 190 North Main Street, making it more convenient to serve their clients.

Once again, we begin a new fiscal year encouraged by past progress and excited at the prospects for the future. We look forward to continuing to provide you with exceptional service and superior financial products.

Brian J. Smith
President and CEO

William M. Campbell
Chairman of the Board of Directors

WFSB Mutual Holding Company and Washington Federal Savings Bank