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].
WAFD's Q2 Earnings Beat Estimates on Higher NII & Fee Income