We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WAFD Q2 Earnings Beat Estimates on Strong Y/Y NII & Fee Income Growth
Read MoreHide Full Article
Key Takeaways
WAFD's fiscal Q2 EPS of 83 cents beat estimates, with net income rising 17.7% year over year.
WaFd revenues grew on higher NII and margin expansion, alongside improved efficiency ratio.
WAFD saw declines in loans and deposits, while credit quality weakened as provisions rose.
WaFd, Inc.’s (WAFD - Free Report) second-quarter fiscal 2026 (ended March 31) adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line also jumped 27.7% year over year.
Results reflected higher net interest income (NII) and non-interest income. However, elevated expenses and provisions were the undermining factors. A decline in loans and deposits was another headwind.
The quarterly results excluded certain notable items. After considering these, net income available to common shareholders (GAAP basis) was $61.9 million, up 17.7% from the prior-year quarter. Our estimate for the metric was $55.6 million.
WaFd’s Revenues Rise, Expenses Increase
Quarterly net revenues (net interest income plus total non-interest income) were $197.4 million, up from $179.8 million in the prior-year quarter. The top line outpaced the Zacks Consensus Estimate of $190.7 million.
NII for the quarter was $177.6 million, rising 10.4% year over year. The net interest margin (NIM) was 2.81%, up 26 basis points (bps) from 2.55% in the year-ago quarter. Our estimates for NII and NIM were $169.7 million and 2.69%, respectively.
Total non-interest income of $19.8 million increased 5.0% year over year. The rise was primarily driven by higher deposit fee income, loan fee income and gain on termination of hedging derivatives, partially offset by lower other income. Our estimate for the metric was $20.8 million.
Total non-interest expenses were $109.9 million, up 4.5% from the prior-year quarter. The increase was mainly due to higher compensation, product delivery, occupancy and technology expenses. Our estimate for the metric was $109.5 million.
The company’s efficiency ratio was 55.66%, down from 58.31% in the prior-year quarter. A fall in the efficiency ratio reflects improved profitability.
Return on average common equity was 9.05%, up from 7.68% in the prior-year quarter. Return on average assets was 0.96%, up from 0.82%.
WAFD’s Loans & Deposits Decrease
As of March 31, 2026, net loans receivable were $19.97 billion, down 4.6% from the year-ago quarter. We projected the metric to be $20.22 billion.
Total deposits were $21.12 billion, down from $21.43 billion in the prior-year quarter. Our estimate for the metric was $21.29 billion.
WaFd’s Credit Quality Worsens
As of March 31, 2026, allowance for credit losses (including the reserve for unfunded commitments) was 1.05% of gross loans outstanding, up from 1.01% in the prior-year quarter.
The ratio of non-performing assets to total assets was 0.48%, up from 0.26% in the previous-year quarter.
In the reported quarter, provision for credit losses was $4.0 million, up from $2.8 million in the year-ago quarter. We had projected the metric to be $5.2 million.
Update on WAFD’s Share Repurchases
In the reported quarter, WAFD repurchased 2.74 million shares at an average price of $31.85 per share.
Our View on WAFD
Higher NII, margin expansion and improving operating efficiency are expected to support WAFD’s financial performance. However, declining loans and deposit balances, rising expenses and elevated credit costs remain key near-term concerns.
Hancock Whitney (HWC - Free Report) is slated to announce first-quarter 2026 results on April 21.
Over the past seven days, the Zacks Consensus Estimate for Hancock Whitney’s quarterly earnings has remained unchanged at $1.48. This implies 7.2% growth from the prior-year quarter.
Bank OZK (OZK - Free Report) is also scheduled to announce first-quarter 2026 results on April 21.
Over the past seven days, the Zacks Consensus Estimate for Bank OZK’s quarterly earnings has remained unchanged at $1.46. This implies a slight decline from the prior-year quarter.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
WAFD Q2 Earnings Beat Estimates on Strong Y/Y NII & Fee Income Growth
Key Takeaways
WaFd, Inc.’s (WAFD - Free Report) second-quarter fiscal 2026 (ended March 31) adjusted earnings of 83 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line also jumped 27.7% year over year.
Results reflected higher net interest income (NII) and non-interest income. However, elevated expenses and provisions were the undermining factors. A decline in loans and deposits was another headwind.
The quarterly results excluded certain notable items. After considering these, net income available to common shareholders (GAAP basis) was $61.9 million, up 17.7% from the prior-year quarter. Our estimate for the metric was $55.6 million.
WaFd’s Revenues Rise, Expenses Increase
Quarterly net revenues (net interest income plus total non-interest income) were $197.4 million, up from $179.8 million in the prior-year quarter. The top line outpaced the Zacks Consensus Estimate of $190.7 million.
NII for the quarter was $177.6 million, rising 10.4% year over year. The net interest margin (NIM) was 2.81%, up 26 basis points (bps) from 2.55% in the year-ago quarter. Our estimates for NII and NIM were $169.7 million and 2.69%, respectively.
Total non-interest income of $19.8 million increased 5.0% year over year. The rise was primarily driven by higher deposit fee income, loan fee income and gain on termination of hedging derivatives, partially offset by lower other income. Our estimate for the metric was $20.8 million.
Total non-interest expenses were $109.9 million, up 4.5% from the prior-year quarter. The increase was mainly due to higher compensation, product delivery, occupancy and technology expenses. Our estimate for the metric was $109.5 million.
The company’s efficiency ratio was 55.66%, down from 58.31% in the prior-year quarter. A fall in the efficiency ratio reflects improved profitability.
Return on average common equity was 9.05%, up from 7.68% in the prior-year quarter. Return on average assets was 0.96%, up from 0.82%.
WAFD’s Loans & Deposits Decrease
As of March 31, 2026, net loans receivable were $19.97 billion, down 4.6% from the year-ago quarter. We projected the metric to be $20.22 billion.
Total deposits were $21.12 billion, down from $21.43 billion in the prior-year quarter. Our estimate for the metric was $21.29 billion.
WaFd’s Credit Quality Worsens
As of March 31, 2026, allowance for credit losses (including the reserve for unfunded commitments) was 1.05% of gross loans outstanding, up from 1.01% in the prior-year quarter.
The ratio of non-performing assets to total assets was 0.48%, up from 0.26% in the previous-year quarter.
In the reported quarter, provision for credit losses was $4.0 million, up from $2.8 million in the year-ago quarter. We had projected the metric to be $5.2 million.
Update on WAFD’s Share Repurchases
In the reported quarter, WAFD repurchased 2.74 million shares at an average price of $31.85 per share.
Our View on WAFD
Higher NII, margin expansion and improving operating efficiency are expected to support WAFD’s financial performance. However, declining loans and deposit balances, rising expenses and elevated credit costs remain key near-term concerns.
WaFd, Inc. Price, Consensus and EPS Surprise
WaFd, Inc. price-consensus-eps-surprise-chart | WaFd, Inc. Quote
Currently, WAFD carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Earnings Date & Expectations of WAFD’s Peers
Hancock Whitney (HWC - Free Report) is slated to announce first-quarter 2026 results on April 21.
Over the past seven days, the Zacks Consensus Estimate for Hancock Whitney’s quarterly earnings has remained unchanged at $1.48. This implies 7.2% growth from the prior-year quarter.
Bank OZK (OZK - Free Report) is also scheduled to announce first-quarter 2026 results on April 21.
Over the past seven days, the Zacks Consensus Estimate for Bank OZK’s quarterly earnings has remained unchanged at $1.46. This implies a slight decline from the prior-year quarter.