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]

Financial Performance - For the three months ended December 31, 2024, the company recorded net income of $47,267,000, a decrease from $58,453,000 in the prior year quarter[256]. - Net interest income for the same period was $155,431,000, which is $3,194,000 lower than the same quarter of the prior year, with a net interest margin of 2.39% compared to 2.91% a year ago[257]. - Total non-interest income rose to $15,702,000, an increase of $1,535,000 from $14,167,000 in the same period last year[261]. - Total non-interest expense for the three months ended December 31, 2024, was $111,311,000, an increase of $14,771,000 from $96,540,000 in the prior year quarter, primarily due to increased occupancy and compensation costs post-merger[262]. - The effective tax rate for the three months ended December 31, 2024, was 21.55%, compared to 18.46% for the prior year quarter[264]. Interest Rates and Margins - As of December 31, 2024, the net interest margin was 2.39%, down from 2.91% for the same quarter in 2023[210]. - The yield on interest-earning assets decreased by 16 basis points to 5.31%, while the cost of interest-bearing liabilities decreased by 32 basis points to 3.48%[210]. - The potential increase in net interest income for a 200 basis point decrease in interest rates is estimated at $26,825,000 as of December 31, 2024[208]. - The potential decrease in net present value (NPV) for a 200 basis point increase in interest rates is estimated at $(848,408,000) as of December 31, 2024[209]. Assets and Liabilities - Total assets decreased by $375,876,000 to $27,684,454,000 from $28,060,330,000 at September 30, 2024[213]. - Cash and cash equivalents decreased by $873,367,000, or 36.7%, to $1,507,735,000 since September 30, 2024[229]. - Total borrowings decreased to $2,863,675,000 from $3,267,589,000 at September 30, 2024[219]. - The Company has $537,348,000 of mortgage-backed securities designated as HTM, with a net unrealized loss of $52,242,000 as of December 31, 2024[203]. - The Company has $2,743,731,000 of AFS securities carried at fair value, with a net unrealized loss of $69,036,000 as of December 31, 2024[203]. Loans and Credit Quality - Loans receivable increased by $144,147,000 to $21,060,501,000 at December 31, 2024, with commercial loans accounting for 68% of total originations[233]. - Total gross loans increased by $72,640,000, reaching $22,432,036,000, a growth of 0.3% from the previous quarter[235]. - Non-performing assets increased by $1,695,000 to $79,113,000, with non-performing assets as a percentage of total assets at 0.29%[242]. - The allowance for credit losses on loans was $204,522,000, a slight increase of $769,000 from the previous quarter[235]. - Total non-accrual loans increased to $72,487,000, representing 0.29% of total assets, up from $69,541,000 or 0.28% in the previous quarter[245]. Capital and Equity - Shareholders' equity increased by $21,336,000 to $3,021,636,000, representing 10.91% of total assets[221]. - The common equity tier 1 capital ratio for the Company was 11.45% as of December 31, 2024, exceeding the minimum requirement of 4.50%[228]. - The ratio of tangible capital to tangible assets was 9.45% at December 31, 2024, indicating a strong equity position[221]. Operational Changes and Corporate Actions - The Company filed Articles of Amendment to change its name from Washington Federal, Inc. to WaFd, Inc. effective September 29, 2023[200]. - There have been no material changes in the company's internal control over financial reporting during the reporting period[269]. - The company is involved in legal proceedings that are believed to be immaterial to its financial statements[271]. - Management believes there have been no material changes in the company's quantitative and qualitative information about market risk since September 30, 2024[267]. Other Financial Metrics - The geographic distribution of loans shows Washington at 27.7%, Oregon at 11.7%, and California at 14.4%[241]. - Customer accounts increased by $64,807,000, or 0.3%, to $21,438,777,000 at December 31, 2024[252]. - The net gain on real estate owned (REO) for the three months ended December 31, 2024, was $429,000, down from a net gain of $1,826,000 in the prior year quarter[263]. - The estimated total amount of tax benefits from LIHTC investments for the fiscal year is approximately $19.7 million[265]. - The expected total amount of amortization expense recognized during the fiscal year related to LIHTC investments is about $16.1 million[266].

Loan Originations and Portfolio - Total loan originations for Q4 2024 amounted to $930,789, a decrease from $962,393 in Q3 2024[2] - The total net loan portfolio reached $21,060,501 as of December 2024, with single-family residential loans comprising 39.5% of the total[4] - Multi-family loans accounted for 21.5% of the total loan portfolio as of December 2024, up from 20.8% in September 2024[4] - Total loans increased to $21,265,022 thousand as of December 2024, up from $21,120,107 thousand in September 2024, reflecting a growth of 0.69%[6] - The number of loans in the Single-Family Residential category was 21,643, with an average size of $386, resulting in an amortized cost of $8,362,881[14] Financial Performance - The efficiency ratio for Q4 2024 was 65.04%, an increase from 62.13% in Q3 2024[2] - The total interest income for the quarter was $345,117, reflecting a decline from $374,097 in the previous quarter[12] - The company reported a net interest income of $155,431 for the quarter ended December 31, 2024, compared to $172,812 in the previous quarter[12] - The net interest margin for the quarter ended December 31, 2024, was 2.39%, a decrease from 2.62% in the previous quarter[12] - The average interest rate on loans receivable was 5.43% for the quarter ended December 31, 2024, down from 5.78% in the previous quarter[12] Asset and Liability Management - Total assets as of December 2024 were reported at $20,873,919[4] - For the quarter ended December 31, 2024, total assets amounted to $29,703,337, a decrease from $28,000,482 in the previous quarter[12] - The total liabilities were $26,756,281 as of December 31, 2024, down from $25,004,389 in the previous quarter[12] Credit Quality - The allowance for credit losses (ACL) for loans was $204,522, representing 1.00% of gross loans as of December 2024[2] - Non-performing assets rose to $79,113 thousand as of December 2024, compared to $77,418 thousand in September 2024, indicating an increase of 2.19%[6] - Non-accrual loans as a percentage of total net loans increased to 0.34% in December 2024 from 0.33% in September 2024[6] - The company reported net charge-offs of $231 thousand in December 2024, compared to $70 thousand in September 2024, reflecting an increase in charge-offs[6] - The delinquency rate for total loans was 0.73% as of December 31, 2024, compared to 0.69% in the previous quarter[14] Deposits and Shareholder Equity - Total deposits reached $21,438,777 thousand as of December 2024, up from $21,373,970 thousand in September 2024, representing a growth of 0.30%[8] - Time deposits accounted for 44.7% of total deposits as of December 2024, consistent with the previous quarter[8] - Non-interest checking deposits decreased slightly to $2,489,394 thousand, representing 11.6% of total deposits in December 2024[8] - The company had 81,373,760 shares outstanding as of December 2024, with 11,501,005 shares remaining authorized for repurchase[2] - Tangible common shareholders' book value per share increased to $27.93 as of December 2024, up from $27.73 in September 2024[4] Other Financial Metrics - The effective interest rate on borrowings within one year was 5.01% as of June 2024, decreasing to 4.84% by December 2024[8] - The average balance of interest-earning assets was $25,798,443 for the quarter ended December 31, 2024[12] - The conditional payment rate (CPR) for SFR Mortgages was 7.0% for the quarter ended September 30, 2023, and is projected to be 6.6% for December 31, 2023[10] - The net loan fee and discount accretion for Q4 2024 was $10,000[2] - The percentage of uninsured and non-collateralized deposits was 24.8% at the end of December 2024, slightly up from 24.0% in September 2024[8]

Core Viewpoint - WaFd, Inc. (WAFD) experienced a 3.4% decline in after-hours trading due to lower-than-expected first-quarter fiscal 2025 results, with adjusted earnings of 62 cents per share falling short of the Zacks Consensus Estimate of 69 cents and a year-over-year decline of 26.2% [1][4] Financial Performance - The quarterly net revenues were $171.1 million, reflecting a 2.8% increase from the prior-year quarter but below the Zacks Consensus Estimate of $193 million [5] - Net interest income (NII) was reported at $155.4 million, a 2.1% year-over-year growth, while the net interest margin (NIM) contracted by 52 basis points to 2.39% due to valuation adjustments related to the Luther Burbank acquisition [6] - Total non-interest income rose by 10.8% to $15.7 million, although it was below the estimate of $17.8 million [6] - Total non-interest expenses increased by 15.3% to $111.3 million, influenced by a rise in all components except FDIC insurance premiums and product delivery charges, including a restructuring charge of $5.4 million [7] - The efficiency ratio worsened to 65.04%, up from 58.02% in the prior-year quarter, indicating a decline in profitability [7] Strategic Initiatives - The company recorded a restructuring charge of $5.4 million as it shifts focus away from the single-family mortgage lending market, projecting annual cost savings of nearly $17 million by the end of June 2025 [3] - The workforce is expected to reduce by 8% as part of the restructuring, while the company will retain all existing home loans and HELOCs on its books [3] Credit Quality and Loan Performance - As of December 31, 2024, net loans receivable stood at $20.1 billion, showing marginal growth from the prior quarter, while total customer deposits remained stable at $21.4 billion [9] - The allowance for credit losses was 1% of gross loans outstanding, a slight decrease from 1.03% in the prior-year quarter, with no provisions for credit losses recorded in both the reported and last year's quarter [10] Shareholder Actions - During the reported quarter, WAFD repurchased 0.09 million shares at an average price of $38.09 per share [11] Market Outlook - The acquisition of Luther Burbank Corporation is expected to enhance WAFD's presence in the California market and contribute positively to earnings, despite elevated expenses posing a near-term challenge [12]

Core Insights - WaFd reported revenue of $171.13 million for the quarter ended December 2024, reflecting a year-over-year increase of 2.8% but falling short of the Zacks Consensus Estimate of $192.97 million, resulting in a surprise of -11.32% [1] - The company's EPS was $0.62, down from $0.85 in the same quarter last year, with an EPS surprise of -10.14% against a consensus estimate of $0.69 [1] Financial Performance Metrics - Total Non-performing Assets stood at $68.79 million, significantly lower than the average estimate of $84.09 million from two analysts [4] - The average balance of Total interest-earning assets was $25.80 billion, below the average estimate of $26.39 billion [4] - The Efficiency Ratio was reported at 65%, higher than the average estimate of 58.3% [4] - Net Interest Margin was 2.4%, compared to the estimated 2.6% [4] - Total Non-accrual loans were $61.27 million, lower than the average estimate of $76.21 million [4] - Total noninterest income was $15.70 million, below the average estimate of $16.84 million [4] - Net Interest Income was reported at $155.43 million, compared to the average estimate of $174.45 million [4] Stock Performance - Over the past month, WaFd's shares returned -1%, slightly outperforming the Zacks S&P 500 composite's -1.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

分组1 - WaFd reported quarterly earnings of $0.62 per share, missing the Zacks Consensus Estimate of $0.69 per share, and down from $0.85 per share a year ago, representing an earnings surprise of -10.14% [1] - The company posted revenues of $171.13 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 11.32%, compared to year-ago revenues of $166.4 million [2] - Over the last four quarters, WaFd has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The current consensus EPS estimate for the coming quarter is $0.67 on revenues of $192.96 million, and for the current fiscal year, it is $2.82 on revenues of $795.83 million [7] - The Zacks Industry Rank for Banks - West is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - WaFd shares have lost about 0.5% since the beginning of the year, while the S&P 500 has gained 1.2% [3]

Credit Losses and Allowances - The allowance for credit losses increased by $26,546,000, or 14.98%, from $177,207,000 as of September 30, 2023, to $203,753,000 at September 30, 2024[254]. - The total allowance for credit losses as of September 30, 2024, is $225,253,000, reflecting a $23,546,000 increase from $201,707,000 in the prior year[254]. - The allowance for multi-family loans increased by 92% from $13,155,000 to $25,248,000, while the allowance for single-family residential loans increased by 45% from $28,029,000 to $40,523,000[254]. - The total allowance for commercial loans rose by 12% from $137,194,000 to $153,373,000[254]. - The ending balance of the allowance for credit losses as of September 30, 2024, includes $144,848,000 related to the quantitative component and $58,905,000 related to qualitative overlays[254]. - The Company recorded a provision for credit losses of $17,500,000 in 2024, down from $41,500,000 in 2023, reflecting a significant decrease in provisioning needs[256]. - The provision for loan losses decreased from $49,500,000 to $27,902,000, reflecting a reduction in expected losses[252]. - The ratio of total allowance for credit losses (ACL) to total gross loans decreased to 1.01% as of September 30, 2024, from 1.03% in the previous year[256]. - The reserve for unfunded loan commitments was $21,500,000 as of September 30, 2024, down from $24,500,000 in the prior year[257]. - The Company maintains an allowance for credit losses (ACL) for loans receivable based on ongoing quarterly assessments, utilizing the current expected credit loss (CECL) methodology[413]. - The ACL consists of the allowance for loan losses and the reserve for unfunded commitments, with estimates based on historical loss experience and current conditions[414]. - The Company performs a quarterly asset quality review, which includes assessments of forecasted gross charge-offs, nonperforming assets, and delinquencies[420]. Loan Performance and Quality - The ratio of net charge-offs to average loans outstanding decreased to 0.01% from 0.26%[252]. - Net charge-offs for the year ended September 30, 2024, were $1,356,000, compared to $45,101,000 in the prior year, indicating improved asset quality[256]. - The ratio of the allowance for loan losses to non-accrual loans decreased to 293% as of September 30, 2024, from 351% in the prior year[269]. - Non-performing assets increased by 33.7% to $77,418,000, or 0.28% of total assets, as of September 30, 2024, compared to $57,924,000, or 0.26% of total assets, in 2023[266]. - Loans are placed on non-accrual status when the probability of collection is deemed insufficient, with interest not accrued on loans 90 days or more past due[428]. Financial Performance - As of September 30, 2024, net income decreased by $57,385,000, or 22.3%, to $200,041,000 compared to $257,426,000 for the same period in 2023[301]. - Net interest income for the year ended September 30, 2024, was $660,832,000, a decrease of $29,402,000 or 4.3% from the previous year, with a net interest margin of 2.69% compared to 3.40% in 2023[301]. - Non-interest income increased by $8,491,000, or 16.3%, to $60,692,000 for the year ended September 30, 2024, primarily due to increased income from WAFD Insurance Group[305]. - Total non-interest expense rose by $72,237,000, or 19.2%, to $448,272,000 for the year ended September 30, 2024, driven by merger-related costs and increased compensation[306]. - The efficiency ratio for 2024 was 62.1%, compared to 50.7% in the prior year, indicating increased operational costs relative to income[307]. - Basic earnings per common share decreased to $2.50 in 2024 from $3.72 in 2023, a decline of 32.4%[378]. - The company reported a comprehensive income of $208,971,000 for the year ended September 30, 2024, compared to $251,866,000 in 2023[381]. Assets and Liabilities - Cash and cash equivalents rose to $2,381,102,000 at September 30, 2024, compared to $980,649,000 at the same date in 2023, reflecting cash received from the Merger[271]. - The total assets of the company as of September 30, 2024, were $3,000,300,000, reflecting growth in the asset base[384]. - The company reported accumulated other comprehensive income of $55.85 million, up from $46.92 million, indicating an increase of approximately 19%[376]. - The fair value of net acquired assets from the merger was $360,797,000, with liabilities assumed at $7,316,380,000[389]. - Total borrowings decreased to $3,267,589,000 as of September 30, 2024, from $3,650,000,000 in the previous year, with a weighted average rate of 3.93%[300]. - The average balance of borrowings increased by $980,514,000, or 30.1%, from 2023, primarily due to the Merger[338]. Deposits and Customer Accounts - As of September 30, 2024, total customer deposits increased to $21,373,970,000, a rise of $5,303,641,000 or 33.0% compared to $16,070,329,000 in 2023, primarily due to deposits obtained in the Merger[292]. - Time deposits surged by $4,251,769,000 or 80.1%, with 66% of the LBC customer accounts being time deposits[292]. - Non-interest checking deposits decreased to $2,500,467,000, representing 11.7% of total deposits, down from 16.8% in 2023[294]. - Customer accounts increased significantly, with transaction deposit accounts rising to $11.82 billion from $10.77 billion, a growth of about 10%[376]. Mergers and Acquisitions - The company completed a merger with Luther Burbank Corporation, with the total purchase consideration allocated to acquired loans receivable valued at $3.2 billion and core deposit intangible assets at $37 million[364]. - The Company recorded $104,707,000 in goodwill and $37,022,000 in core deposit intangible assets as a result of the Merger[442]. - The Company completed the sale of approximately $2,800,000,000 in multifamily loans and $400,000,000 in single-family loans from the acquired LBC loan portfolio during the year[318]. Interest Rates and Yield - The period end interest rate spread was 1.91% at September 30, 2024, down from 2.61% at September 30, 2023[331]. - The weighted-average rate on interest-earning assets increased by 4 basis points to 5.11% as of September 30, 2024, while the weighted-average rate on interest-bearing liabilities increased by 74 basis points to 3.20%[331]. - The yield on interest-earning assets increased by 46 basis points to 5.59%[336]. - The cost of interest-bearing liabilities increased by 128 basis points to 3.46%[336]. Cash Flow and Investments - Net cash provided by operating activities increased to $439,233,000 in 2024, up from $213,957,000 in 2023, representing a 105.5% increase[386]. - The company reported a net cash provided by investing activities of $3,287,218,000 in 2024, a significant increase from a net cash used of $1,377,917,000 in 2023[386]. - Proceeds from borrowings amounted to $17,037,035,000 in 2024, slightly down from $17,175,000,000 in 2023[386]. Intangible Assets and Goodwill - The Bank's intangible assets totaled $448,425,000 as of September 30, 2024, compared to $310,619,000 in 2023, largely due to the Merger which created $104,707,000 in Goodwill[291]. - The core deposit intangible asset is amortized on an accelerated basis over 6 years[442]. - The fair value assessment of core deposit intangible assets considered expected customer attrition rates and maintenance costs, highlighting the subjective nature of the valuation process[368]. Interest Rate Risk Management - Interest rate swap agreements are utilized to convert variable obligations to fixed rates, with minimal impact on net income from changes in fair value[431]. - The Company has entered into interest rate swaps to hedge long-term fixed-rate commercial loans, qualifying as fair value hedges under ASC 815[436]. - Gains and losses on interest rate swaps are recorded in Other Comprehensive Income to the extent the hedge is effective[432].

Core Viewpoint - WaFd (NASDAQ: WAFD) is a large regional bank with a significant presence in the western United States, noted for its attractive yield on preferred shares [1] Group 1: Company Overview - WaFd operates primarily in the western United States and has been highlighted for its preferred shares, which have shown a rally due to favorable market expectations [1] Group 2: Investment Focus - The analysis emphasizes income investing strategies, including common shares, preferred shares, and bonds, indicating a targeted approach to generating returns [1]

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it ...