SEATTLE ( TheStreet) -- Washington Federal ( WFSL) on Thursday reported fourth-quarter earnings of $24.5 million, or 22 cents a share. The fourth-quarter results matched the consensus estimate of analysts polled by Thomson Reuters and the company's shares were down 1% in afternoon trading to $17.34. In comparison, Washington Federal earned $16 million, or 14 cents a share, in the third quarter, and $7.9 million, or 7 cents a share, during the fourth quarter of 2009. The quarter-over-quarter improvement mainly reflected a $4.4 million increase in net interest income to $104.7 million, as the company prepaid debt. The net interest margin -- essentially a bank's average yield on loans and investments minus its cost of deposits and borrowings -- was 3.41% during the fourth quarter, improving from 3.18% in the third quarter and 3.08% a year earlier. The year-over-year earnings improvement was driven by a reduction in credit costs, as the fourth-quarter provision for loan losses was $26 million, the same level as the third quarter but sharply down from $69.8 million in the fourth quarter of 2009. The company reported that nonperforming assets totaled $443 million, or 3.30% of total assets as of Dec. 31, up slightly from 3.22% in the previous quarter but much-improved from 4.37% at the end of 2009. Washington Federal's fourth-quarter return on average assets was 0.73% and its tangible common equity ratio was a strong 12.01% as of Dec. 31, increasing slightly from 11.97% in September and 11.91% at the end of 2009. CEO Roy Whitehead called the improvement in Washington Federal's net interest income "encouraging," and said the company had "a notably positive earnings trend going despite soft housing and the slow economy," adding that "investors are advised that while credit losses are expected to continue at an elevated level, the Company seems well positioned to absorb them and still post reasonably good profits." Washington Federal's fourth-quarter efficiency ratio was 31.4%, improving from 32.19% the previous quarter, which was third-best among publicly traded U.S. banks and thrifts according to data supplied by SNL Financial, bested only by Hudson City Bancorp ( HCBK) which had a third-quarter efficiency ratio of 22.55% and Bank of Utica ( BKUT), with a third-quarter efficiency ratio of 23.25%. Please see TheStreet's10 Efficient, Stable and Profitable U.S. Banks for a complete discussion on the efficiency ratio and all three companies.