WaFd Bank(US:WAFD) Yahoo Finance·2026-01-16 16:35Core Insights - WaFd reported a fiscal first-quarter 2026 net income of $60.5 million, or $0.79 per diluted share, an increase from $0.54 per share in the same quarter last year and $0.72 per share in the previous quarter [3][6] - The company increased investments in mortgage-backed securities (MBS) by $728 million, primarily funded through a $671 million increase in borrowings, as part of a strategy to replace single-family loan balance runoff [1][5] - Management indicated that credit metrics weakened, with non-performing assets rising to $203 million, or 0.75% of total assets, and delinquencies increasing to 1.07% of total loans [4][13] Financial Performance - The linked-quarter earnings improvement was attributed to higher income and lower expenses, including a modest increase in net interest income and a decrease in total non-interest expense [2] - Non-interest income increased by $1.9 million to $20.3 million, aided by a $3.2 million gain on the sale of a branch property [10] - Non-interest expense declined by $1.3 million, or 1.2%, leading to an improved efficiency ratio of 55.3% [11] Loan and Deposit Trends - Loans receivable decreased by $240 million, primarily due to runoff in inactive loan types, while originations and advances in active portfolio categories totaled $1.1 billion [1][5] - Deposits decreased by $21 million for the quarter, with non-interest-bearing deposits increasing by $125 million (up 4.9%) and interest-bearing deposits increasing by $434 million (up 4.5%) [6] Credit Quality - Non-performing assets increased by $62.7 million (up 49%) since September 30, 2025, largely due to two commercial relationships totaling approximately $58 million [13][14] - The company recorded a $3.5 million provision for credit losses, reflecting decreased loan balances and mixed credit metrics [15] Strategic Initiatives - WaFd's BUILD 2030 strategic plan aims to shift focus toward business banking, with a goal of raising non-interest-bearing deposits to 20% of total deposits by 2030 [16] - The company expects to grow its active loan portfolios by 8% to 12% over the next one to two years, with a lending pipeline increase of $697 million (28%) from $2.5 billion to $3.2 billion [18] - WaFd Wealth Management was launched with a goal to reach $1 billion in assets under management within two years, currently at just over $400 million [18] Regulatory and Compliance - The company is appealing an FDIC Community Reinvestment Act (CRA) "needs to improve" rating, which could affect branching logistics and mergers and acquisitions [19]