WaFd Announces Quarterly Earnings Per Share of $0.85
President and CEO Brent Beardall commented, "We are disappointed but not surprised to see WaFd's net interest margin dip below
"After two consecutive quarters of meaningful credit losses related to one large idiosyncratic loan, we are very pleased to post net recoveries for this quarter and report continued strong credit metrics. Delinquencies were only
"Competition for deposits remains intense; our objective is to deliver value to our clients beyond the rate they earn by making banking with WaFd simple, reliable and fast. We aim to accomplish this through excellent client service combined with technology. We believe our strategic investments favorably position the Bank to be nimble in adopting new technologies and thus better serve our clients. Our clients are noticing as our Net Promoter Score, a measure of how likely clients are to recommend a company, is at an all-time high of 57.
"Looking forward, we remain optimistic that our previously announced acquisition of Luther Burbank Corporation will be approved during this current quarter and if the market sentiment is correct and the Federal Reserve does, in fact, begin decreasing interest rates, both occurrences should drive improved profitability for the Bank."
Total assets were
Customer deposits totaled
Borrowings totaled
The Company had loan originations of
Credit quality continues to be monitored closely in light of the shifting economic and monetary environment. As of December 31, 2023, non-performing assets decreased to
The Company did not record a provision for credit losses in the first fiscal quarter of 2024, compared to a provision for credit losses of
The Company paid a quarterly dividend on Series A preferred stock on October 15, 2023. On December 8, 2023, the Company paid a regular cash dividend on common stock of
Net interest income was
Total other income was
Total other expense was
Income tax expense totaled
WaFd Bank is headquartered in
Important Cautionary Statements
The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
This press release contains statements about the Company’s future that are not statements of historical or current fact. These statements are “forward-looking statements” for purposes of applicable securities laws and are based on current information and/or management's good faith belief as to future events. Words such as “expects,” “anticipates,” “believes,” “estimates,” “intends,” “forecasts,” “may,” “potential,” “projects,” and other similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could” are intended to help identify such forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes any such statements are based on reasonable assumptions, forward-looking statements should not be read as a guarantee of future performance, and you are cautioned not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement.
By their nature, forward-looking statements involve inherent risk and uncertainties including the following risks and uncertainties, and those risks and uncertainties more fully discussed under “Risk Factors” in the Company’s September 30, 2023 10-K, and Quarterly Reports on Form 10-Q which could cause actual performance to differ materially from that anticipated by any forward-looking statements. In particular, any forward-looking statements are subject to risks and uncertainties related to (i) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin; (ii) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, a potential recession, the monetary policies of the Federal Reserve, and slowdowns in economic growth; (iii) risks related to the proposed merger with Luther Burbank Corporation; (iv) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (v) changes in deposit flows or loan demands; (vi) the impact of bank failures or adverse developments at other banks and related negative press about regional banks and the banking industry in general; (vii) the effects of natural or man-made disasters, calamities, or conflicts, including terrorist events and pandemics (such as the COVID-19 pandemic) and the resulting governmental and societal responses; (viii) global economic trends, including developments related to
WAFD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) |
|||||||
|
December 31,
|
|
September 30,
|
||||
|
(In thousands, except share and ratio data) |
||||||
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
1,144,774 |
|
|
$ |
980,649 |
|
Available-for-sale securities, at fair value |
|
2,018,445 |
|
|
|
1,995,097 |
|
Held-to-maturity securities, at amortized cost |
|
415,079 |
|
|
|
423,586 |
|
Loans receivable, net of allowance for loan losses of |
|
17,584,622 |
|
|
|
17,476,550 |
|
Interest receivable |
|
87,022 |
|
|
|
87,003 |
|
Premises and equipment, net |
|
237,202 |
|
|
|
237,011 |
|
Real estate owned |
|
6,820 |
|
|
|
4,149 |
|
FHLB stock |
|
137,940 |
|
|
|
126,820 |
|
Bank owned life insurance |
|
244,558 |
|
|
|
242,919 |
|
Intangible assets, including goodwill of |
|
311,103 |
|
|
|
310,619 |
|
Federal and state income tax assets, net |
|
— |
|
|
|
8,479 |
|
Other assets |
|
452,557 |
|
|
|
581,793 |
|
|
$ |
22,640,122 |
|
|
$ |
22,474,675 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
Liabilities |
|
|
|
||||
Transaction deposits |
$ |
10,658,064 |
|
|
$ |
10,765,313 |
|
Time deposits |
|
5,380,723 |
|
|
|
5,305,016 |
|
Total customer deposits |
|
16,038,787 |
|
|
|
16,070,329 |
|
Borrowings |
|
3,875,000 |
|
|
|
3,650,000 |
|
Advance payments by borrowers for taxes and insurance |
|
19,244 |
|
|
|
52,550 |
|
Federal and state income tax liabilities, net |
|
1,478 |
|
|
|
— |
|
Accrued expenses and other liabilities |
|
253,609 |
|
|
|
275,370 |
|
|
|
20,188,118 |
|
|
|
20,048,249 |
|
Shareholders’ equity |
|
|
|
||||
Preferred stock, |
|
300,000 |
|
|
|
300,000 |
|
Common stock, |
|
136,679 |
|
|
|
136,467 |
|
Additional paid-in capital |
|
1,691,102 |
|
|
|
1,687,634 |
|
Accumulated other comprehensive income (loss), net of taxes |
|
47,014 |
|
|
|
46,921 |
|
Treasury stock, at cost; 72,424,779 and 71,729,663 shares |
|
(1,629,348 |
) |
|
|
(1,612,345 |
) |
Retained earnings |
|
1,906,557 |
|
|
|
1,867,749 |
|
|
|
2,452,004 |
|
|
|
2,426,426 |
|
|
$ |
22,640,122 |
|
|
$ |
22,474,675 |
|
CONSOLIDATED FINANCIAL HIGHLIGHTS |
|
|
|
||||
Common shareholders' equity per share |
$ |
33.49 |
|
|
$ |
32.85 |
|
Tangible common shareholders' equity per share |
|
28.65 |
|
|
|
28.05 |
|
Shareholders' equity to total assets |
|
10.83 |
% |
|
|
10.80 |
% |
Tangible shareholders' equity to tangible assets |
|
9.59 |
% |
|
|
9.55 |
% |
Tangible shareholders' equity + allowance for credit losses to tangible assets |
|
10.39 |
% |
|
|
10.35 |
% |
Weighted average rates at period end |
|
|
|
||||
Loans and mortgage-backed securities |
|
5.11 |
% |
|
|
5.08 |
% |
Combined loans, mortgage-backed securities and investments |
|
5.09 |
|
|
|
5.07 |
|
Customer accounts |
|
2.27 |
|
|
|
2.12 |
|
Borrowings |
|
3.99 |
|
|
|
3.98 |
|
Combined cost of customer accounts and borrowings |
|
2.60 |
|
|
|
2.46 |
|
Net interest spread |
|
2.49 |
|
|
|
2.61 |
|
WAFD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) |
|||||||||||||||||||
|
As of |
||||||||||||||||||
SUMMARY FINANCIAL DATA |
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
|
(In thousands, except share and ratio data) |
||||||||||||||||||
Cash |
$ |
1,144,774 |
|
|
$ |
980,649 |
|
|
$ |
1,139,643 |
|
|
$ |
1,118,544 |
|
|
$ |
645,862 |
|
Loans receivable, net |
|
17,584,622 |
|
|
|
17,476,550 |
|
|
|
17,384,188 |
|
|
|
17,271,906 |
|
|
|
16,993,588 |
|
Allowance for credit losses ("ACL") |
|
201,820 |
|
|
|
201,707 |
|
|
|
204,569 |
|
|
|
205,920 |
|
|
|
208,297 |
|
Available-for-sale securities, at fair value |
|
2,018,445 |
|
|
|
1,995,097 |
|
|
|
2,036,233 |
|
|
|
2,006,286 |
|
|
|
2,059,837 |
|
Held-to-maturity securities, at amortized cost |
|
415,079 |
|
|
|
423,586 |
|
|
|
434,172 |
|
|
|
445,222 |
|
|
|
453,443 |
|
Total assets |
|
22,640,122 |
|
|
|
22,474,675 |
|
|
|
22,552,588 |
|
|
|
22,325,211 |
|
|
|
21,653,811 |
|
Transaction deposits |
|
10,658,064 |
|
|
|
10,765,313 |
|
|
|
11,256,575 |
|
|
|
11,880,343 |
|
|
|
12,547,832 |
|
Time deposits |
|
5,380,723 |
|
|
|
5,305,016 |
|
|
|
4,863,849 |
|
|
|
3,980,605 |
|
|
|
3,412,203 |
|
Borrowings |
|
3,875,000 |
|
|
|
3,650,000 |
|
|
|
3,750,000 |
|
|
|
3,800,000 |
|
|
|
3,075,000 |
|
Total shareholders' equity |
|
2,452,004 |
|
|
|
2,426,426 |
|
|
|
2,394,066 |
|
|
|
2,375,117 |
|
|
|
2,324,381 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
FINANCIAL HIGHLIGHTS |
|
|
|
|
|
|
|
|
|
||||||||||
Common shareholders' equity per share |
$ |
33.49 |
|
|
$ |
32.85 |
|
|
$ |
32.36 |
|
|
$ |
31.54 |
|
|
$ |
30.96 |
|
Tangible common shareholders' equity per share |
$ |
28.65 |
|
|
$ |
28.05 |
|
|
$ |
27.58 |
|
|
$ |
26.85 |
|
|
$ |
26.24 |
|
Shareholders' equity to total assets |
|
10.83 |
% |
|
|
10.80 |
% |
|
|
10.62 |
% |
|
|
10.64 |
% |
|
|
10.73 |
% |
Tangible shareholders' equity to tangible assets |
|
9.59 |
% |
|
|
9.55 |
% |
|
|
9.37 |
% |
|
|
9.39 |
% |
|
|
9.44 |
% |
Tangible shareholders' equity + ACL to tangible assets |
|
10.39 |
% |
|
|
10.35 |
% |
|
|
10.17 |
% |
|
|
10.19 |
% |
|
|
10.27 |
% |
Common shares outstanding |
|
64,254,700 |
|
|
|
64,736,916 |
|
|
|
64,721,190 |
|
|
|
65,793,099 |
|
|
|
65,387,745 |
|
Preferred shares outstanding |
|
300,000 |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
|
300,000 |
|
|
|
300,000 |
|
Loans to customer deposits |
|
109.64 |
% |
|
|
108.75 |
% |
|
|
107.84 |
% |
|
|
108.90 |
% |
|
|
106.48 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||
CREDIT QUALITY |
|
|
|
|
|
|
|
|
|
||||||||||
ACL to gross loans |
|
1.04 |
% |
|
|
1.03 |
% |
|
|
1.03 |
% |
|
|
1.02 |
% |
|
|
1.03 |
% |
ACL to non-accrual loans |
|
445.93 |
% |
|
|
400.04 |
% |
|
|
370.09 |
% |
|
|
595.04 |
% |
|
|
713.83 |
% |
Non-accrual loans to net loans |
|
0.26 |
% |
|
|
0.29 |
% |
|
|
0.32 |
% |
|
|
0.20 |
% |
|
|
0.17 |
% |
Non-accrual loans |
$ |
45,258 |
|
|
$ |
50,422 |
|
|
$ |
55,276 |
|
|
$ |
34,606 |
|
|
$ |
29,180 |
|
Non-performing assets to total assets |
|
0.24 |
% |
|
|
0.26 |
% |
|
|
0.30 |
% |
|
|
0.21 |
% |
|
|
0.18 |
% |
Non-performing assets |
$ |
55,388 |
|
|
$ |
57,924 |
|
|
$ |
67,000 |
|
|
$ |
46,785 |
|
|
$ |
38,650 |
|
WAFD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||
|
Three Months Ended December 31, |
||||||
|
2023 |
|
2022 |
||||
|
(In thousands, except share and ratio data) |
||||||
INTEREST INCOME |
|
|
|
||||
Loans receivable |
$ |
245,792 |
|
|
$ |
203,946 |
|
Mortgage-backed securities |
|
11,266 |
|
|
|
10,613 |
|
Investment securities and cash equivalents |
|
29,788 |
|
|
|
18,860 |
|
|
|
286,846 |
|
|
|
233,419 |
|
INTEREST EXPENSE |
|
|
|
||||
Customer accounts |
|
96,671 |
|
|
|
31,646 |
|
Borrowings |
|
37,938 |
|
|
|
18,974 |
|
|
|
134,609 |
|
|
|
50,620 |
|
Net interest income |
|
152,237 |
|
|
|
182,799 |
|
Provision (release) for credit losses |
|
— |
|
|
|
2,500 |
|
Net interest income after provision (release) |
|
152,237 |
|
|
|
180,299 |
|
OTHER INCOME |
|
|
|
||||
Gain (loss) on sale of investment securities |
|
81 |
|
|
|
— |
|
Gain (loss) on termination of hedging derivatives |
|
109 |
|
|
|
— |
|
Loan fee income |
|
844 |
|
|
|
1,502 |
|
Deposit fee income |
|
6,802 |
|
|
|
6,353 |
|
Other income |
|
6,331 |
|
|
|
6,169 |
|
|
|
14,167 |
|
|
|
14,024 |
|
OTHER EXPENSE |
|
|
|
||||
Compensation and benefits |
|
49,841 |
|
|
|
49,070 |
|
Occupancy |
|
9,371 |
|
|
|
10,102 |
|
FDIC insurance premiums |
|
6,570 |
|
|
|
3,675 |
|
Product delivery |
|
6,009 |
|
|
|
4,621 |
|
Information technology |
|
12,866 |
|
|
|
12,329 |
|
Other expense |
|
11,883 |
|
|
|
12,481 |
|
|
|
96,540 |
|
|
|
92,278 |
|
Gain (loss) on real estate owned, net |
|
1,826 |
|
|
|
(112 |
) |
Income before income taxes |
|
71,690 |
|
|
|
101,933 |
|
Income tax provision |
|
13,237 |
|
|
|
22,424 |
|
Net income |
|
58,453 |
|
|
|
79,509 |
|
Dividends on preferred stock |
|
3,656 |
|
|
|
3,656 |
|
Net income available to common shareholders |
$ |
54,797 |
|
|
$ |
75,853 |
|
PER SHARE DATA |
|
|
|
||||
Basic earnings per common share |
$ |
0.85 |
|
|
$ |
1.16 |
|
Diluted earnings per common share |
|
0.85 |
|
|
|
1.16 |
|
Cash dividends per common share |
|
0.25 |
|
|
|
0.24 |
|
Basic weighted average shares outstanding |
|
64,297,499 |
|
|
|
65,341,974 |
|
Diluted weighted average shares outstanding |
|
64,312,110 |
|
|
|
65,430,690 |
|
PERFORMANCE RATIOS |
|
|
|
||||
Return on average assets |
|
1.04 |
% |
|
|
1.50 |
% |
Return on average common equity |
|
10.21 |
|
|
|
15.15 |
|
Net interest margin |
|
2.91 |
|
|
|
3.69 |
|
Efficiency ratio |
|
58.02 |
|
|
|
46.78 |
|
WAFD, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
|
December 31,
|
|
September 30,
|
|
June 30,
|
|
March 31,
|
|
December 31,
|
||||||||||
|
(In thousands, except share and ratio data) |
||||||||||||||||||
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
||||||||||
Loans receivable |
$ |
245,792 |
|
|
$ |
240,998 |
|
|
$ |
232,167 |
|
|
$ |
222,957 |
|
|
$ |
203,946 |
|
Mortgage-backed securities |
|
11,266 |
|
|
|
11,695 |
|
|
|
10,454 |
|
|
|
10,422 |
|
|
|
10,613 |
|
Investment securities and cash equivalents |
|
29,788 |
|
|
|
29,017 |
|
|
|
29,859 |
|
|
|
21,967 |
|
|
|
18,860 |
|
|
|
286,846 |
|
|
|
281,710 |
|
|
|
272,480 |
|
|
|
255,346 |
|
|
|
233,419 |
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
||||||||||
Customer accounts |
|
96,671 |
|
|
|
83,402 |
|
|
|
70,062 |
|
|
|
52,123 |
|
|
|
31,646 |
|
Borrowings |
|
37,938 |
|
|
|
34,611 |
|
|
|
33,718 |
|
|
|
28,185 |
|
|
|
18,974 |
|
|
|
134,609 |
|
|
|
118,013 |
|
|
|
103,780 |
|
|
|
80,308 |
|
|
|
50,620 |
|
Net interest income |
|
152,237 |
|
|
|
163,697 |
|
|
|
168,700 |
|
|
|
175,038 |
|
|
|
182,799 |
|
Provision (release) for credit losses |
|
— |
|
|
|
26,500 |
|
|
|
9,000 |
|
|
|
3,500 |
|
|
|
2,500 |
|
Net interest income after provision (release) |
|
152,237 |
|
|
|
137,197 |
|
|
|
159,700 |
|
|
|
171,538 |
|
|
|
180,299 |
|
OTHER INCOME |
|
|
|
|
|
|
|
|
|
||||||||||
Gain (loss) on sale of investment securities |
|
81 |
|
|
|
33 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Gain (loss) on termination of hedging derivatives |
|
109 |
|
|
|
33 |
|
|
|
(926 |
) |
|
|
26 |
|
|
|
— |
|
Loan fee income |
|
844 |
|
|
|
731 |
|
|
|
1,000 |
|
|
|
652 |
|
|
|
1,502 |
|
Deposit fee income |
|
6,802 |
|
|
|
6,849 |
|
|
|
6,660 |
|
|
|
6,188 |
|
|
|
6,353 |
|
Other income |
|
6,331 |
|
|
|
6,688 |
|
|
|
7,037 |
|
|
|
3,206 |
|
|
|
6,169 |
|
|
|
14,167 |
|
|
|
14,334 |
|
|
|
13,771 |
|
|
|
10,072 |
|
|
|
14,024 |
|
OTHER EXPENSE |
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and benefits |
|
49,841 |
|
|
|
45,564 |
|
|
|
50,456 |
|
|
|
51,444 |
|
|
|
49,070 |
|
Occupancy |
|
9,371 |
|
|
|
10,115 |
|
|
|
10,444 |
|
|
|
10,918 |
|
|
|
10,102 |
|
FDIC insurance premiums |
|
6,570 |
|
|
|
7,000 |
|
|
|
5,350 |
|
|
|
4,000 |
|
|
|
3,675 |
|
Product delivery |
|
6,009 |
|
|
|
5,819 |
|
|
|
5,217 |
|
|
|
5,316 |
|
|
|
4,621 |
|
Information technology |
|
12,866 |
|
|
|
12,672 |
|
|
|
11,661 |
|
|
|
12,785 |
|
|
|
12,329 |
|
Other expense |
|
11,883 |
|
|
|
11,007 |
|
|
|
11,571 |
|
|
|
12,418 |
|
|
|
12,481 |
|
|
|
96,540 |
|
|
|
92,177 |
|
|
|
94,699 |
|
|
|
96,881 |
|
|
|
92,278 |
|
Gain (loss) on real estate owned, net |
|
1,826 |
|
|
|
(235 |
) |
|
|
722 |
|
|
|
(199 |
) |
|
|
(112 |
) |
Income before income taxes |
|
71,690 |
|
|
|
59,119 |
|
|
|
79,494 |
|
|
|
84,530 |
|
|
|
101,933 |
|
Income tax provision |
|
13,237 |
|
|
|
8,911 |
|
|
|
17,719 |
|
|
|
18,596 |
|
|
|
22,424 |
|
Net income |
|
58,453 |
|
|
|
50,208 |
|
|
|
61,775 |
|
|
|
65,934 |
|
|
|
79,509 |
|
Dividends on preferred stock |
|
3,656 |
|
|
|
3,656 |
|
|
|
3,656 |
|
|
|
3,656 |
|
|
|
3,656 |
|
Net income available to common shareholders |
$ |
54,797 |
|
|
$ |
46,552 |
|
|
$ |
58,119 |
|
|
$ |
62,278 |
|
|
$ |
75,853 |
|
PER SHARE DATA |
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share |
$ |
0.85 |
|
|
$ |
0.72 |
|
|
$ |
0.89 |
|
|
$ |
0.95 |
|
|
$ |
1.16 |
|
Diluted earnings per common share |
|
0.85 |
|
|
|
0.72 |
|
|
|
0.89 |
|
|
|
0.95 |
|
|
|
1.16 |
|
Cash dividends per common share |
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.25 |
|
|
|
0.24 |
|
Basic weighted average shares outstanding |
|
64,297,499 |
|
|
|
64,729,006 |
|
|
|
65,194,880 |
|
|
|
65,511,131 |
|
|
|
65,341,974 |
|
Diluted weighted average shares outstanding |
|
64,312,110 |
|
|
|
64,736,864 |
|
|
|
65,212,846 |
|
|
|
65,551,185 |
|
|
|
65,430,690 |
|
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
||||||||||
Return on average assets |
|
1.04 |
% |
|
|
0.90 |
% |
|
|
1.12 |
% |
|
|
1.21 |
% |
|
|
1.50 |
% |
Return on average common equity |
|
10.21 |
|
|
|
8.73 |
|
|
|
11.09 |
|
|
|
12.01 |
|
|
|
15.15 |
|
Net interest margin |
|
2.91 |
|
|
|
3.13 |
|
|
|
3.27 |
|
|
|
3.51 |
|
|
|
3.69 |
|
Efficiency ratio |
|
58.02 |
|
|
|
51.78 |
|
|
|
51.90 |
|
|
|
52.34 |
|
|
|
46.78 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240116724220/en/
WaFd, Inc.
425 Pike Street,
Brad Goode, SVP, Chief Marketing Officer
206-626-8178
brad.goode@wafd.com
Source: WaFd, Inc.