Core Viewpoint - WaFd, Inc. (WAFD) reported better-than-expected quarterly results, with adjusted earnings of 73 cents per share, surpassing the Zacks Consensus Estimate of 67 cents, although this represented a 3.9% year-over-year decline [1][9] Financial Performance - The company's net income available to common shareholders was $58.3 million, down 4.3% from the prior-year quarter, while the estimate was $51.9 million [2] - Quarterly net revenues were $186.261 million, a decrease of 4.2% year over year, but exceeded the Zacks Consensus Estimate of $185.7 million [3] - Net interest income (NII) was $160.9 million, declining 5.2% year over year, primarily due to a lower loan balance, while net interest margin (NIM) increased by 13 basis points to 2.69% [3] - Total non-interest income rose 5.9% to $18.3 million, surpassing the estimate of $17.2 million, while total non-interest expenses fell 5.2% to $104.3 million [4] Efficiency and Returns - The efficiency ratio improved to 56.01%, down from 56.61% in the prior-year quarter, indicating enhanced profitability [5] - Return on average common equity was 8.54%, down from 9.20%, while return on average assets increased to 0.92% from 0.87% [5] Loans and Deposits - As of June 30, 2025, net loans receivable were $20.28 billion, down 3.1% from the prior quarter, while total customer deposits were $21.39 billion, showing a slight decline [6] Credit Quality - The allowance for credit losses increased to 1.03% of gross loans outstanding, up from 1.00% in the prior-year quarter, with non-performing assets to total assets ratio rising to 0.36% from 0.24% [7] - Provision for credit losses was $2 million, a significant increase of 33.3% from the year-ago quarter [7] Share Repurchase Activity - During the reported quarter, WAFD repurchased 1.66 million shares at an average price of $29.08 per share [10] Strategic Outlook - The company is expected to benefit from relatively higher interest rates, business restructuring, and a strong balance sheet, with the acquisition of Luther Burbank Corporation enhancing its presence in California [11]

Core Viewpoint - WaFd (WAFD) is anticipated to report a year-over-year decline in earnings due to lower revenues, with a consensus EPS estimate of $0.67, reflecting an 11.8% decrease compared to the previous year, and revenues expected to be $188.7 million, down 3% from the same quarter last year [1][3]. Earnings Expectations - The earnings report could lead to a stock price increase if the actual results exceed expectations, while a miss could result in a decline [2]. - Management's discussion during the earnings call will significantly influence the sustainability of any immediate price changes and future earnings expectations [2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from covering analysts [4]. - WaFd's Most Accurate Estimate is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.00%, suggesting a bullish sentiment among analysts [12]. Historical Performance - In the last reported quarter, WaFd was expected to post earnings of $0.60 per share but actually delivered $0.65, resulting in a positive surprise of +8.33% [13]. - Over the past four quarters, WaFd has beaten consensus EPS estimates three times [14]. Investment Considerations - While WaFd is seen as a compelling earnings-beat candidate, investors should consider other factors that may influence stock performance beyond earnings results [17]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 indicates a likelihood of beating the consensus EPS estimate [12].

Company Overview - As of March 31, 2025, WaFd Bank has total assets of $27.6 billion, total loans held for investment (HFI) of $20.9 billion, total deposits of $21.4 billion, and stockholder equity of $3.0 billion[7] - The bank's efficiency ratio is 58.3%, and the adjusted efficiency ratio is 58.4%[7] - WaFd Bank has 209 branches across 9 western states[7] Market Demographics - WaFd Bank's deposit market share in Washington is 3.97% with deposits of $8,723,693,000[12] - In California, the deposit market share is 0.27% with deposits of $4,073,942,000[12] - The total deposits across all states amount to $21,427,426,000[12] Loan Portfolio - As of March 31, 2025, multifamily loans constitute 23% of the net loan portfolio, with a net balance of $4,840,784,000 and a weighted average current loan-to-value (LTV) of 56%[52] - Single-family residence (SFR) loans make up 39% of the net loan portfolio, with a net balance of $8,223,356,000 and a weighted average current LTV of 38%[52] - Commercial Real Estate (CRE) - Office loans represent 4% of the net loan portfolio, with a net balance of $775,564,000 and a weighted average current LTV of 69%[52] Financial Performance - For the quarter ended March 31, 2025, net income available to common shareholders was $52,596,000, a 330% increase compared to $12,232,000 for the quarter ended March 31, 2024[76] - Net interest income for the quarter ended March 31, 2025, was $160,910,000, a 1% increase compared to $158,597,000 for the quarter ended March 31, 2024[75] - Non-interest income for the quarter ended March 31, 2025, was $18,881,000, a 41% increase compared to $13,392,000 for the quarter ended March 31, 2024[76] Capital Management - In 2025 YTD, $67,293,000 was returned to shareholders through dividends, representing 70% of net income[106] - 815,610 shares were repurchased in 2025 YTD at a weighted price of $30.35, representing 1.3% of outstanding shares at the beginning of the year[108] - The current cash dividend of $0.27 provides a yield of 3.79% based on the current stock price as of April 30[112]

Financial Position - As of March 31, 2025, the company reported total assets of $27,644,637,000, a decrease of $415,693,000 from $28,060,330,000 at September 30, 2024[221]. - Cash and cash equivalents amounted to $1,231,461,000 as of March 31, 2025, providing management with flexibility in managing interest rate risk[222]. - Total borrowings decreased to $2,763,758,000 as of March 31, 2025, down from $3,267,589,000 at September 30, 2024[227]. - Cash and cash equivalents decreased by $1,149,641,000, or 48.3%, to $1,231,461,000 at March 31, 2025[236]. - The Company's shareholders' equity increased by $32,320,000 to $3,032,620,000, or 10.97% of total assets, as of March 31, 2025[228]. - The ratio of tangible capital to tangible assets was 9.51% as of March 31, 2025, indicating a strong equity position[228]. Loan and Asset Performance - The average balance of loans receivable increased to $20,918,986,000 for the three months ended March 31, 2025, compared to $19,696,515,000 for the same period in 2024[219]. - Total gross loans reached $21,122,710,000 as of March 31, 2025, with significant contributions from Washington ($4,867,340,000) and California ($2,979,107,000)[245]. - Loans receivable increased by $3,647,000 to $20,920,001,000 at March 31, 2025, compared to $20,916,354,000 at September 30, 2024[240]. - Non-performing assets decreased by $6,534,000 to $70,884,000, representing 0.26% of total assets, down from 0.28%[249]. - Non-accrual loans totaled $59,886,000, with the largest share in commercial real estate at $29,320,000, accounting for 49.0% of non-accrual loans[251]. - Loans less than 90 days delinquent amounted to $506,938,000, which, if classified as non-performing, would increase the non-performing assets ratio to 2.09%[253]. - The company’s single-family residential loans accounted for 39.1% of total gross loans, indicating a strong focus on this segment[246]. Income and Expenses - The company recorded net income of $56,252,000 for the three months ended March 31, 2025, compared to $15,888,000 for the same period last year, reflecting significant growth due to the effects of the merger[263]. - Net interest income for the three months ended March 31, 2025, was $160,910,000, an increase of $2,313,000 from the prior year, with a net interest margin of 2.55% compared to 2.73% in the same quarter last year[264]. - Non-interest income for the three months ended March 31, 2025, was $18,881,000, an increase of $5,489,000 from the same period last year, primarily due to higher prepayment fees and commission income[270]. - Non-interest expense decreased to $104,832,000 for the three months ended March 31, 2025, down by $28,880,000 from $133,712,000 in the prior year quarter, largely due to reduced merger-related expenses[271]. Capital and Risk Management - The common equity tier 1 capital ratio for the Company was 11.51% as of March 31, 2025, exceeding the minimum requirement of 4.50%[235]. - The total risk-based capital ratio for the Company was 14.49% as of March 31, 2025, above the minimum requirement of 8.00%[235]. - The provision for credit losses was $2,750,000 for the three months ended March 31, 2025, compared to $16,000,000 for the same period last year, reflecting a stable loan receivable balance[269]. - Total allowance for credit losses decreased to $222,709,000 as of March 31, 2025, from $225,253,000 as of September 30, 2024, representing a decline of 1.1%[257]. - The company’s allowance for credit losses composition reflects a proactive approach to managing credit risk amid changing market conditions[256]. Market and Operational Insights - The net interest margin for the quarter ended March 31, 2025, was 2.55%, down from 2.73% for the same quarter in 2024[216]. - The yield on interest-earning assets decreased by 18 basis points to 5.32% for the quarter ended March 31, 2025[216]. - The conditional payment rate (CPR) for single-family mortgages increased to 8.10% as of March 31, 2025, up from 4.80% the previous year[215]. - Commercial loan originations accounted for 74% of total originations during the period[240]. - The effective tax rate for the three months ended March 31, 2025, was 21.88%, down from 24.21% for the same period last year[273]. Legal and Regulatory Matters - There have been no material changes in the Company's quantitative and qualitative information about market risk since September 30, 2024[278]. - No changes in the Company's internal control over financial reporting that have materially affected, or are likely to materially affect, such controls[280]. - The Company and its consolidated subsidiaries are involved in legal proceedings that are believed to be immaterial to the financial statements[282].

Loan Originations and Portfolio - Total loan originations for Q1 2025 reached $1,008,874,000, a year-to-date total of $1,939,563,000[2] - The net loan portfolio as of March 2025 is $20,920,001,000, with single-family residential loans comprising 39.3% of the total[4] - Multi-family loans increased to $4,967,125,000, accounting for 22.4% of the total loan receivables as of March 2025[4] - The total loans receivable as of March 2025 is $22,158,727,000[4] - Total loans as of March 2025 amount to $21,122,710, with a slight decrease from $21,265,022 in December 2024[6] - As of March 31, 2025, the total number of loans reached 41,380 with an average size of $510, resulting in an amortized cost of $21,122,710[17] - The total number of loans decreased from 40,825 on December 31, 2024, to 41,380 on March 31, 2025[17] Loan Performance and Delinquency - The allowance for credit losses (ACL) for loans as of March 2025 is $202,709,000, representing 1.01% of gross loans[2] - Non-performing assets total $70,884, representing 0.26% of total assets as of March 2025, down from 0.29% in December 2024[6] - Total non-accrual loans decreased to $59,886 in March 2025, down from $72,487 in December 2024[6] - Non-accrual loans as a percentage of total net loans decreased to 0.29% in March 2025, compared to 0.34% in December 2024[6] - The delinquency rate for the total loan portfolio was 0.66%, with $57,947 classified as delinquent[17] - The overall delinquency amount increased from $64,442 on December 31, 2024, to $57,947 on March 31, 2025[17] Financial Metrics and Ratios - The weighted average rate on loan originations for Q1 2025 is 7.12%[2] - Efficiency ratio improved to 58.31% in March 2025, compared to 65.04% in December 2024[8] - Tangible common shareholders' book value per share increased to $28.31 as of March 2025, up from $27.93 in December 2024[8] - Operating expenses as a percentage of average assets improved to 1.53% in March 2025, down from 1.62% in December 2024[8] - The net interest margin for the quarter ended March 31, 2025, was 2.55%, compared to 2.39% for the previous quarter[15] - The company reported a net interest income of $160,910 for the quarter ended March 31, 2025[15] Deposits and Funding - Total deposits as of March 31, 2025, amounted to $21,427,426, a slight decrease from $21,438,777 as of December 31, 2024, and $21,373,970 as of September 30, 2024[11] - Non-interest checking deposits were $2,400,172, representing 11.2% of total deposits as of March 31, 2025, down from 11.6% in December 2024[11] - Interest checking deposits increased to $4,625,596, accounting for 21.6% of total deposits, up from 21.2% in December 2024[11] - The company’s uninsured and non-collateralized deposits at the end of the period were $5,490,142, representing 25.6% of total deposits[11] Shareholder Actions and Company Operations - The company repurchased 726,082 shares at an average price of $29.39 during the quarter ending March 2025[8] - The number of employees decreased to 2,018 as of March 2025, down from 2,175 in December 2024[8] Asset Management - The total assets as of March 31, 2025, were $27,371,320, a decrease from $27,504,576 as of December 31, 2024[15] - Agency MBS investments increased to $2,074,672 as of March 2025, up from $1,600,089 in December 2024[9] - The company’s NPV post a 100 bps shock was 9.4% as of March 31, 2025, down from 9.5% in December 2024[13] Loan Segmentation - Single-Family Residential loans accounted for 21,516 loans, averaging $384, with a total amortized cost of $8,264,318[17] - The Commercial & Industrial loan segment had 2,057 loans, averaging $1,159, with a delinquency rate of 1.02%[17] - The Multi-Family loan segment saw an increase in loans to 1,901, with an average size of $2,560 and a delinquency rate of 0.79%[17] - The total number of HELOC loans was 4,473, with an average size of $64 and a delinquency rate of 0.54%[17] - The total amortized cost for Commercial Real Estate loans was $3,639,477, with a delinquency rate of 0.39%[17] - The Consumer loan segment had 8,463 loans, averaging $11, with a delinquency rate of 0.97%[17]

Core Viewpoint - WaFd, Inc. reported strong adjusted earnings for the second quarter of fiscal 2025, exceeding expectations and showing significant year-over-year growth [1][3]. Financial Performance - Adjusted earnings per share were 65 cents, surpassing the Zacks Consensus Estimate of 60 cents, and up from 17 cents in the prior-year quarter [1][3]. - Quarterly net revenues reached $179.8 million, a 4.5% increase from the previous year, although below the consensus estimate of $184 million [4]. - Net interest income (NII) was $160.9 million, growing 1.5% year over year, while the net interest margin (NIM) contracted by 18 basis points to 2.55% [4]. - Total non-interest income rose significantly by 41% to $18.9 million, exceeding the estimate of $16.6 million [4]. Expense Management - Total non-interest expenses decreased by 21.6% year over year to $104.8 million, attributed to reductions across most components [5]. - The efficiency ratio improved to 58.31%, down from 77.74% in the prior-year quarter, indicating enhanced profitability [5]. Credit Quality - The allowance for credit losses was 1.01% of gross loans, slightly up from 1.00% year over year, while the ratio of non-performing assets to total assets increased to 0.26% [8]. - The provision for credit losses was $2.8 million, significantly lower than $16 million in the year-ago quarter [8]. Loan and Deposit Trends - As of March 31, 2025, net loans receivable were $20.92 billion, a slight decline from the previous quarter, while total customer deposits remained stable at $21.43 billion [7]. Share Repurchase Activity - During the reported quarter, the company repurchased 0.73 million shares at an average price of $29.39 per share [9]. Strategic Outlook - The company is expected to benefit from relatively higher interest rates, business restructuring, and a strong balance sheet, with the acquisition of Luther Burbank Corporation enhancing its presence in California [11].

Financial Performance - For the quarter ended March 2025, WaFd reported revenue of $179.79 million, which is an increase of 4.5% compared to the same period last year [1] - The EPS for the quarter was $0.65, down from $0.73 in the year-ago quarter [1] - The reported revenue was below the Zacks Consensus Estimate of $184.17 million, resulting in a surprise of -2.38% [1] - The company delivered an EPS surprise of +8.33%, with the consensus EPS estimate being $0.60 [1] Key Metrics - Total Non-performing Assets were reported at $70.88 million, which is better than the two-analyst average estimate of $85.18 million [4] - The average balance of Total interest-earning assets was $25.63 billion, slightly below the estimated $25.64 billion [4] - The Efficiency Ratio was 58.3%, outperforming the average estimate of 61.4% [4] - The Net Interest Margin was reported at 2.6%, matching the average estimate [4] - Total Non-accrual loans were $59.89 million, significantly lower than the average estimate of $78.56 million [4] - Total noninterest income was $18.88 million, exceeding the average estimate of $16.06 million [4] - Net Interest Income was $160.91 million, slightly below the average estimate of $164.28 million [4] Stock Performance - Shares of WaFd have returned -11.9% over the past month, compared to the Zacks S&P 500 composite's -6.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Company Performance - WaFd reported quarterly earnings of $0.65 per share, exceeding the Zacks Consensus Estimate of $0.60 per share, but down from $0.73 per share a year ago, representing an earnings surprise of 8.33% [1] - The company posted revenues of $179.79 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.38%, compared to year-ago revenues of $171.99 million [2] - Over the last four quarters, WaFd has surpassed consensus EPS estimates three times and topped consensus revenue estimates only once [2] Stock Performance - WaFd shares have declined approximately 24.1% since the beginning of the year, while the S&P 500 has decreased by 10.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $194.36 million, and for the current fiscal year, it is $2.48 on revenues of $755.03 million [7] Industry Outlook - The Zacks Industry Rank for Banks - West is currently in the bottom 46% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

Group 1 - The focus is on income investing through common shares, preferred shares, or bonds, with occasional insights on the broader economy or specific company situations [1] - The author has a background in history/political science and an MBA specializing in Finance and Economics, indicating a strong analytical foundation [1] - The author has been investing since 2000 and currently serves as the CEO of an independent living retirement community in Illinois, suggesting practical experience in both investment and management [1] Group 2 - The author holds a beneficial long position in the shares of WAFDP, indicating confidence in the stock's performance [2] - The article expresses the author's personal opinions and is not influenced by compensation from any company mentioned, ensuring an independent perspective [2] - There is no business relationship with any company whose stock is mentioned, reinforcing the impartiality of the analysis [2]

Dividend Increase - WaFd, Inc. (WAFD) increased its quarterly cash dividend by 3.8% to 27 cents per share, payable on March 7, 2025, to shareholders of record as of February 21 [1] - Prior to this increase, WAFD raised its dividend by 4% to 26 cents per share in February 2024, marking the fourth increase in the past five years with an average growth rate of 4.1% [1] Capital Distribution Activities - WaFd has an ongoing share repurchase program, extended in May 2024, increasing the authorization by 10 million shares with no expiration date; approximately 11.5 million shares remain available under the current authorization as of December 31, 2024 [3] - The repurchase plan was initially announced in 1995 and has been extended multiple times, including a previous extension in January 2021 for an additional 10 million shares [3] Financial Position - As of December 31, 2024, WAFD reported total borrowings of $2.9 billion, cash and cash equivalents of $1.5 billion, net loans receivable of $21.1 billion, and total deposits of $2.9 billion [4] - The common equity Tier-1 capital ratio was 11.45%, and the total capital ratio was 14.43%, both exceeding regulatory requirements [4] Shareholder Value - Given its solid capital and liquidity positions, WaFd is expected to maintain its current capital distribution activities and enhance shareholder value [5] - Over the past year, WaFd's shares have increased by 12.6%, compared to the industry's growth of 35.6% [5]