This article first appeared on GuruFocus .
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Net Income:$62.5 million or $0.84 per diluted share for the quarter ended June 30, 2026.
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Revenue Growth:Earnings per share increased by $0.02 from the previous quarter.
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Loan Growth:Loans receivable increased by $51 million; active loan types increased by $315 million.
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Loan Originations:$1.5 billion for the quarter, with repayments and payoffs at $1 billion.
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Net Interest Margin:Held steady at 2.81% for the quarter.
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Total Deposits:Decreased by $192 million during the quarter.
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Efficiency Ratio:Improved to 53.7% from 55.7% in the prior quarter.
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Noninterest Income:Increased by $4.4 million to $24.2 million.
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Provision for Credit Losses:$11 million for the quarter.
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Allowance for Credit Losses:Coverage of 1.08% of gross loans as of June 30, 2026.
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Capital Ratios:CET1 ratio estimated at 11.4%; total risk-based capital ratio at 14.4%.
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Stock Performance:23% total shareholder return for the quarter.
Release Date: July 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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WaFd Inc ( NASDAQ:WAFD ) reported a net income available to common shareholders of $62.5 million or $0.84 per diluted share, showing an increase from $0.73 per share in the third quarter of fiscal 2025.
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The company achieved a 23% total shareholder return for the quarter, indicating strong market performance.
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Loan originations outpaced repayments, with $1.5 billion in originations compared to $1 billion in repayments, demonstrating robust loan growth.
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The efficiency ratio improved to 53.7% from 55.7% in the prior quarter, reflecting better cost management.
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WaFd Inc ( NASDAQ:WAFD ) has a strong capital profile with an estimated CET1 ratio of 11.4% and a total risk-based capital ratio of 14.4%.
Negative Points
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Total deposits decreased by $192 million during the quarter, with interest-bearing deposits and time deposits both declining.
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Criticized loans increased by $139 million, representing 4.9% of net loans, indicating rising credit risk concerns.
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Nonperforming assets increased slightly to $136 million, largely due to increased nonaccrual loans in the C&I segment.
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The net provision for credit losses was $11 million, reflecting concerns related to possible losses on adversely classified loans.
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The competition for deposits is intense, leading to increased rates to maintain deposit levels, which could pressure margins.
Q & A Highlights
Q: Can you provide an outlook on net growth expectations through fiscal '27, considering the active and inactive loan portfolios? A: Brent Beardall, President and CEO, stated that low single-digit growth is a fair assumption for net growth. The active portfolio is expected to grow around 10%, while the inactive portfolio continues to see attrition. They may also consider augmenting with mortgage-backed purchases depending on the rate environment.
Q: Is the Luther Burbank accretion included in the stable margin outlook, and does it incorporate tailwinds from securities moves? A: Brent Beardall confirmed that the stable margin outlook includes the Luther Burbank accretion and securities tailwinds. However, it does not account for potential increases in repayments from the Luther Burbank portfolio, which could positively impact the margin.
Q: Regarding the large C&I nonperformer expected to sell this quarter, are there any reserves set aside for this credit relationship? A: Ryan Mauer, Chief Credit Officer, explained that no specific reserves are assigned to this relationship, but general reserves have been increased partly due to this. The loan is expected to be resolved through a sale by the end of the quarter.
Q: What is the outlook for deposit costs, assuming the Fed remains on hold? A: Brent Beardall noted that competition for deposits is intense, with rising rates in the market. They expect to offset higher deposit costs with higher rates on new loans, but the trend for deposit rates is currently higher.
Q: With the revised Endgame framework potentially benefiting capital, what are the use cases for the incremental capital? A: Brent Beardall outlined that the highest priority for incremental capital would be organic growth, followed by strategic M&A opportunities. If these are not feasible, they would consider share repurchases as a use of capital.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
