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]