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]

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]