Washington Federal’s (WAFD - Free Report) second-quarter fiscal 2022 (ended Mar 31) earnings of 70 cents per share missed the Zacks Consensus Estimate by a penny. The figure, however, reflects a year-over-year jump of 25%.
Results primarily benefited from higher revenues, provision benefits and a robust loan balance. However, an increase in expenses was the undermining factor.
Net income available to common shareholders was $45.7 million, rising 8.4% from the prior-year period.
Revenues & Expenses Rise
Net revenues were $150.7 million, up 8.8% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $148.8 million.
Net interest income was $135.1 million, up 8.9% from the year-earlier period. Net interest margin was 2.90%, rising 15 basis points (bps).
Total other income of $15.7 million grew 8.2%. This increase was mainly driven by a rise in loan fee income and deposit fee income.
Other expenses amounted to $88.4 million, up 8.2% year over year. Higher compensation and benefits, occupancy, product delivery and other expenses largely led to this rise.
The company’s efficiency ratio was 58.65%, down from 59.02% recorded a year ago. A fall in efficiency ratio indicates improved profitability.
At the end of the fiscal second quarter, the return on average common equity was 9.80%, up from 8.17% at the end of the year-earlier quarter. Return on average assets was 0.98%, up from 0.93%.
Loans and Deposit Rise
As of Mar 31, 2022, net loans receivables amounted to $15.1 billion, up from 13.8 billion as of Sep 30, 2021. Also, total customer deposits were $16.4 billion, up from $15.5 billion as of Sep 30, 2021.
Credit Quality Improves
As of Mar 31, 2022, the allowance for credit losses (including reserve for unfunded commitments) was 1.13% of gross loans outstanding, down 17 bps year over year. The ratio of non-performing assets to total assets was 0.23%, down 2 bps.
During the quarter, provision for credit losses was a benefit of $0.5 million against no provision in the year-ago quarter.
Share Repurchase Update
During the quarter, Washington Federal repurchased 4,684 shares at an average price of $34.65 per share.
Our Viewpoint
Solid loans and deposit balances, along with impressive credit quality, will likely continue to support Washington Federal’s profitability. However, elevated operating expenses remain a major headwind.
Currently, Washington Federal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release & Expectations of Other Banks
Hancock Whitney Corporation (HWC - Free Report) is scheduled to release first-quarter 2022 results on Apr 19.
Over the past 30 days, the Zacks Consensus Estimate for Hancock’s quarterly earnings has moved 1.5% lower to $1.32. This indicates a 9.1% increase from the prior-year quarter.
Associated Banc-Corp (ASB - Free Report) is scheduled to release first-quarter 2022 numbers on Apr 21.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has remained unchanged at 37 cents. This implies a 36.2% decrease from the prior-year quarter.
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Washington Federal’s (WAFD - Free Report) second-quarter fiscal 2022 (ended Mar 31) earnings of 70 cents per share missed the Zacks Consensus Estimate by a penny. The figure, however, reflects a year-over-year jump of 25%.
Results primarily benefited from higher revenues, provision benefits and a robust loan balance. However, an increase in expenses was the undermining factor.
Net income available to common shareholders was $45.7 million, rising 8.4% from the prior-year period.
Revenues & Expenses Rise
Net revenues were $150.7 million, up 8.8% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $148.8 million.
Net interest income was $135.1 million, up 8.9% from the year-earlier period. Net interest margin was 2.90%, rising 15 basis points (bps).
Total other income of $15.7 million grew 8.2%. This increase was mainly driven by a rise in loan fee income and deposit fee income.
Other expenses amounted to $88.4 million, up 8.2% year over year. Higher compensation and benefits, occupancy, product delivery and other expenses largely led to this rise.
The company’s efficiency ratio was 58.65%, down from 59.02% recorded a year ago. A fall in efficiency ratio indicates improved profitability.
At the end of the fiscal second quarter, the return on average common equity was 9.80%, up from 8.17% at the end of the year-earlier quarter. Return on average assets was 0.98%, up from 0.93%.
Loans and Deposit Rise
As of Mar 31, 2022, net loans receivables amounted to $15.1 billion, up from 13.8 billion as of Sep 30, 2021. Also, total customer deposits were $16.4 billion, up from $15.5 billion as of Sep 30, 2021.
Credit Quality Improves
As of Mar 31, 2022, the allowance for credit losses (including reserve for unfunded commitments) was 1.13% of gross loans outstanding, down 17 bps year over year. The ratio of non-performing assets to total assets was 0.23%, down 2 bps.
During the quarter, provision for credit losses was a benefit of $0.5 million against no provision in the year-ago quarter.
Share Repurchase Update
During the quarter, Washington Federal repurchased 4,684 shares at an average price of $34.65 per share.
Our Viewpoint
Solid loans and deposit balances, along with impressive credit quality, will likely continue to support Washington Federal’s profitability. However, elevated operating expenses remain a major headwind.
Currently, Washington Federal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release & Expectations of Other Banks
Hancock Whitney Corporation (HWC - Free Report) is scheduled to release first-quarter 2022 results on Apr 19.
Over the past 30 days, the Zacks Consensus Estimate for Hancock’s quarterly earnings has moved 1.5% lower to $1.32. This indicates a 9.1% increase from the prior-year quarter.
Associated Banc-Corp (ASB - Free Report) is scheduled to release first-quarter 2022 numbers on Apr 21.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has remained unchanged at 37 cents. This implies a 36.2% decrease from the prior-year quarter.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
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