WaFd Bank(WAFD) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for the nine months ended June 30, 2025, was $165,471,000, with common stock dividends paid amounting to $63,785,000 and preferred stock dividends of $10,969,000 [232]. - Net income for the three months ended June 30, 2025, was $61,952,000, a decrease from $64,560,000 in the same quarter of the previous year [268]. - Net interest income for the three months ended June 30, 2025, was $167,988,000, down by $9,198,000 from the prior year, attributed to decreased loan volume and a net interest margin of 2.69% [269]. - Total non-interest income for the three months ended June 30, 2025, was $18,273,000, an increase of $1,018,000 from the previous year, driven by higher prepayment fees and commissions [275]. - Non-interest expense decreased to $104,327,000 for the three months ended June 30, 2025, from $110,079,000 in the prior year, primarily due to reduced compensation costs [276]. Asset and Liability Management - As of June 30, 2025, total assets decreased by $1,328,415,000 to $26,731,915,000 from $28,060,330,000, primarily due to a reduction in loans receivable and cash used to reduce borrowings and purchase investments [225]. - Total borrowings were $1,939,675,000 as of June 30, 2025, a decrease from $3,267,589,000 at September 30, 2024 [231]. - Cash and cash equivalents decreased by $1,571,850,000, or 66.0%, to $809,252,000 since September 30, 2024, primarily to fund investment securities purchases and pay down borrowings [239]. - Loans receivable decreased by $639,190,000 during the nine months ended June 30, 2025, while investment and mortgage-backed securities increased by $890,670,000 [225]. - The Company has $3,387,497,000 of AFS securities carried at fair value, with a net unrealized loss of $38,368,000 as of June 30, 2025 [213]. Capital Adequacy - The Company maintained a Common Equity Tier 1 risk-based capital ratio of 11.75% as of June 30, 2025, exceeding the minimum requirement of 4.50% [238]. - The Bank's total risk-based capital ratio was 14.58% as of June 30, 2025, above the minimum requirement of 8.00% [238]. - The Company and the Bank met all capital adequacy requirements and were categorized as well capitalized under regulatory frameworks as of June 30, 2025 [237]. - Shareholders' equity increased to $3,014,325,000, representing 11.28% of total assets as of June 30, 2025, up from $3,000,300,000 or 10.69% as of September 30, 2024 [232]. Loan Performance - Loans receivable decreased by $639,190,000 to $20,277,164,000 as of June 30, 2025, compared to $20,916,354,000 at September 30, 2024, with principal repayments outpacing originations [243]. - Commercial loans accounted for 58.5% of total gross loans, with a total of $12,508,992,000 as of June 30, 2025, down from $13,127,265,000 [244]. - Non-accrual loans totaled $82,696,000 as of June 30, 2025, with multi-family loans at $11,601,000 and commercial real estate at $46,720,000 [254]. - The total allowance for loan losses was $198,768,000, a decrease of 2.4% from the previous fiscal year [260]. - The allowance for credit losses decreased by $5,985,000 to $219,268,000, or 1.03% of gross loans, as of June 30, 2025 [260]. Non-Performing Assets - Non-performing assets increased by $19,742,000 to $97,160,000 as of June 30, 2025, compared to $77,418,000 at September 30, 2024, representing 0.36% of total assets [252]. - The percentage of non-performing assets as a percentage of total assets rose from 0.28% at September 30, 2024, to 0.36% at June 30, 2025 [252]. - The company had $687,436,000 of loans less than 90 days delinquent classified as substandard, which would increase the total NPAs ratio to 2.94% if deemed non-performing [256]. - The company’s commercial real estate allowance for credit losses increased by $3,065,000 to $42,275,000, representing 21.3% of total [260]. - Real estate owned (REO) increased by $6,587,000 to $11,154,000 due to the foreclosure of properties during the nine months ended June 30, 2025 [261]. Interest Rate and Yield - Net interest margin for the quarter ended June 30, 2025, was 2.69%, an increase from 2.56% for the same quarter in 2024 [221]. - The yield on interest-earning assets decreased by 36 basis points to 5.30% for the quarter ended June 30, 2025 [221]. - As of June 30, 2025, total deposits amounted to $21,386,571,000, with a weighted average interest rate of 2.70%, compared to $21,373,970,000 and 3.09% as of September 30, 2024 [266]. Regulatory and Tax Considerations - The effective tax rate for the three months ended June 30, 2025, was 22.33%, compared to 21.97% for the same period in 2024 [278]. - The total amount of tax benefits from the Low-Income Housing Tax Credit (LIHTC) investment portfolio expected to be recognized during the fiscal year is approximately $19.7 million [283]. - The Company is currently evaluating the impact of the One Big Beautiful Bill Act on its financial position, with no significant impact anticipated at this time [282].