Financial Data and Key Metrics Changes - WaFd Inc. reported net income available to common shareholders of $56.9 million or $0.72 per diluted share for Q4 2025, a slight decrease from $0.73 per share in Q3 2025 and an increase from $0.71 per share in Q4 2024 [5] - For the full fiscal year 2025, net income available to common shareholders was $211.4 million or $2.63 per diluted share, compared to $2.50 per share in fiscal 2024 [5] - Total cash decreased by $152 million in Q4, while total investments and mortgage-backed securities increased to $279 million [8] Business Line Data and Key Metrics Changes - Loans receivable decreased by $188 million during the quarter, primarily due to a decrease in inactive loan types, which fell by $216 million [6] - Loan originations for the quarter were $1.4 billion, significantly higher than $700 million in the previous quarter, marking the first time this fiscal year that originations outpaced repayments [6] - Non-interest income increased slightly to $18.4 million, with $4.6 million coming from WaFd Insurance, which saw a 12.5% revenue increase year-over-year [9] Market Data and Key Metrics Changes - Deposits increased by $51 million during the quarter, with non-interest-bearing deposits rising by $80 million or 3.2% [7] - Core deposits accounted for 78% of total deposits, up from 75% at the prior year-end [7] - The net loan-to-deposit ratio ended the quarter at 93.7% [7] Company Strategy and Development Direction - The company is transitioning from a thrift to a commercial bank, with a new strategic plan called Build 2030 aimed at increasing non-interest-bearing deposits from 11% to 20% by the end of fiscal 2030 [23] - The focus is on serving small businesses to achieve lower funding costs, with a reorganization of frontline bankers into specialized teams [24] - WaFd has launched WaFd Wealth Management, aiming to grow assets under management to $1 billion in the first two years [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the elevated interest rate environment and economic uncertainty have impacted loan demand and credit quality [15] - The company expects to see 8% to 12% growth in the active loan portfolio in the next year, while anticipating a runoff of $200 million to $300 million per quarter in inactive loans [42] - Management remains optimistic about the future, citing improvements in technology and client engagement as key drivers for profitability [71] Other Important Information - The company has exited the single-family mortgage lending market, which has allowed for a shift towards mortgage-backed securities [6] - WaFd's liquidity and capital profile are strong, with all capital ratios exceeding regulatory well-capitalized levels [8] - The company is actively managing credit quality, with delinquent loans at 0.6% and non-performing assets at 0.54% of total assets [11][12] Q&A Session Summary Question: What are the expectations for net growth in fiscal 2026? - Management expects 8% to 12% growth in the active portfolio, with inactive loans running off about $200 million to $300 million per quarter [42] Question: Can you provide an update on rate sensitivity and margin expectations? - Management indicated that margin could expand with future rate cuts, but noted a lag in full effectiveness [46] Question: What are the drivers behind the decrease in core loan yields? - The decrease was primarily due to an increase in non-accrual loans, which had a 3 basis point impact on the margin [51] Question: What is the outlook for time deposits? - Management aims for overall growth rather than shrinking the time deposit book, expecting to break even or see slight growth in time deposits [62] Question: How is the company approaching stablecoin and potential partnerships? - Management is monitoring the situation closely and sees potential opportunities but has not announced any partnerships yet [58]

Financial Data and Key Metrics Changes - Banner Corporation reported a net profit available to common shareholders of $53.5 million or $1.54 per diluted share for Q3 2025, an increase from $1.30 per share in Q3 2024 and $1.31 per share in Q2 2025 [4] - Core earnings for Q3 2025 were $67.8 million, up from $62.5 million in the prior quarter and $57.4 million in Q3 2024 [5] - Revenue from core operations was $169 million, compared to $163 million in the prior quarter and $154 million in Q3 2024 [6] - Return on average assets was 1.3% for Q3 2025, reflecting strong core performance [6] Business Line Data and Key Metrics Changes - Loans and core deposits both increased by 4% year-over-year, with core deposits representing 89% of total deposits [7] - Delinquent loans improved to 0.39% of total loans, down from 0.40% a year ago [9] - Adversely classified loans decreased by $16 million quarter-over-quarter, now at 1.49% of total loans [9] Market Data and Key Metrics Changes - The company maintained a strong core deposit base, which proved resilient and loyal [6] - The loan-to-deposit ratio ended the quarter at 84%, indicating ample capacity to add new clients [14] Company Strategy and Development Direction - The overarching goal is to provide a consistent and reliable source of commerce and capital through all economic cycles [4] - The company continues to focus on its supercommunity bank strategy, emphasizing client relationships and core funding [6] - Investments in technology and fraud-related systems are prioritized to enhance scalability and efficiency [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through current market uncertainties due to a strong balance sheet and reputation [5] - The company anticipates solid loan growth in Q4, typically a strong quarter [12] - Management noted that the competitive landscape remains unchanged, with a focus on maintaining underwriting standards despite increased competition [41] Other Important Information - The company announced a 4% increase in the core dividend to $0.50 per common share [7] - Banner was recognized as one of America's 100 best banks and received various accolades for its performance and trustworthiness [8] Q&A Session Summary Question: Inquiry about margin and FHLB payoffs - Management indicated that FHLB advances were paid down halfway through the quarter, with expectations of flat funding costs despite Fed rate cuts [22][24] Question: Capital management and M&A interest - Management expressed confidence in continuing share repurchases and indicated readiness for potential M&A opportunities if they arise [26][28] Question: Deposit growth and pricing strategy - Management noted strong deposit growth driven by seasonal factors and indicated reductions in advertised CD rates following the Fed's rate cut [36] Question: Competitive landscape and loan originations - Management acknowledged a multifaceted decline in originations, attributing it to a strong prior quarter and muted reactions to rate cuts [41][42] Question: Strategic investments and technology - The company is investing heavily in technology to enhance scalability and efficiency, with a focus on fraud prevention and AI integration [47][48]

Financial Data and Key Metrics Changes - Banner Corporation reported a net profit available to common shareholders of $53.5 million or $1.54 per diluted share for Q3 2025, an increase from $1.31 per share in Q3 2024 [6] - Core earnings for Q3 2025 were $67.8 million, up from $62.5 million in the prior quarter and $57.4 million in Q3 2024 [7] - Revenue from core operations was $169 million, compared to $163 million in the prior quarter and $154 million in Q3 2024 [7] - Return on average assets was 1.3% for 2025 [8] Business Line Data and Key Metrics Changes - Core deposits represented 89% of total deposits, with loans and core deposits both increasing by 4% year-over-year [9] - The commercial construction portfolio declined, while the residential construction portfolio remained diversified across markets [14] - Small business segment loans increased by 8% year-over-year, and agricultural balances increased by 3% compared to the prior quarter [15] Market Data and Key Metrics Changes - Delinquent loans improved to 0.39% of total loans, down from 0.4% a year ago [12] - Adversely classified loans decreased by $16 million quarter-over-quarter, now representing 1.49% of total loans [12] - Total nonperforming assets were $4.5 million, representing 0.27% of total assets [12] Company Strategy and Development Direction - The company continues to execute its super community bank strategy, focusing on client relationships and core funding [9] - Banner has been recognized as one of America's 100 Best Banks and received various accolades for trustworthiness and client satisfaction [10] - The company is investing in technology, including a new loan origination system and fraud-related technology, to enhance scalability and efficiency [56][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market uncertainties due to a strong balance sheet and reputation [6] - The company anticipates a mid-single-digit growth rate for loans for the full year [15] - Management noted that the competitive landscape remains stable, with some stretching in underwriting standards but overall credit quality holding up well [50][53] Other Important Information - The company announced a 4% increase in its core dividend to $0.50 per common share [9] - Total borrowings decreased by $459 million during the quarter, reflecting strong deposit growth [19] - The company repurchased 250,000 shares during the quarter, indicating confidence in its capital position [19] Q&A Session Summary Question: Margin and FHLB Payoffs - Management indicated that FHLB advances were paid down halfway through the quarter, with expectations of margin expansion despite potential Fed rate cuts [25][27] Question: Capital and Buyback Activity - Management expressed confidence in continuing share repurchases and indicated that M&A opportunities would be considered if they arise [31][34] Question: Deposit Growth and Pricing - Management noted strong seasonal deposit growth without specific promotions, and they reduced CD rates following the Fed's rate cut [40][41] Question: Competitive Landscape and Loan Originations - Management acknowledged a multifaceted decline in loan originations, attributing it to strong prior quarter performance and muted reactions to rate cuts [50][51] Question: Strategic Investments - Management highlighted technology investments, particularly in loan origination systems and fraud prevention, as key areas for future growth [56][58]

Focus Review - The Federal Reserve lowered the federal funds rate by 25 basis points to 4.00%-4.25%, marking the first rate cut of the year and the first in nine months [2] - The Fed's dot plot indicates a downward revision of long-term rate expectations for 2025-2028, suggesting a more accommodative monetary policy outlook [2] Equity Market - Recent market performance shows a divergence between stock market strength and weak economic data, with a few tech stocks driving index gains [3] - The market is expected to transition from extreme differentiation to a more balanced approach, focusing on strong industry trends and economic conditions [4] - The Hong Kong stock market has seen significant gains due to interest rate cut expectations and AI industry benefits, with the Hang Seng Index reaching its highest level since 2021 [5] Industry Research - The AI sector is accelerating, with domestic capabilities closing the gap with international standards, creating investment opportunities in emerging industries like solid-state batteries and embodied intelligence [6] - The Chinese AI chip market is projected to reach nearly $50 billion, with increasing domestic demand for local chips as international supply diminishes [8] - The Hong Kong tech sector, particularly the Hang Seng Tech Index, is favored by investors due to its high sensitivity to interest rates and attractive valuation [8] Macro and Fixed Income - Morgan Asset Management suggests a higher probability of two additional rate cuts by the Federal Reserve this year, which may lead to a weaker dollar and increased interest in non-US markets [9] - Future fiscal and monetary policies are expected to remain accommodative, focusing on sectors like digital economy and green transition [10][11] Asset Allocation - Historical trends indicate that the onset of a Fed rate cut cycle is generally favorable for equity assets, particularly in the Hong Kong market, with growth styles expected to lead [12]