WAFD earnings analysis
What we found in WAFD's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
WaFd delivered improved year-over-year profitability, with net income of $66.130 million versus $61.952 million and NIM of 2.81% versus 2.69%, primarily as deposit and borrowing costs repriced down faster than earning-asset yields. The balance sheet became more securities- and borrowing-funded: assets increased $897.271 million, investment and mortgage-backed securities increased $869.521 million, and borrowings increased $1.498 billion while customer accounts fell $505.561 million. Credit quality improved on reported NPAs, but the $11.000 million quarterly provision and $398.190 million of substandard loans temper the otherwise constructive earnings and margin trends.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Quarterly net income increased 6.7%
- Quarterly net income rose $4.178 million year over year to $66.130 million for the three months ended June 30, 2026, supported by a $13.350 million increase in net interest income to $181.338 million.
- NIM expanded despite lower asset yields
- Net interest margin expanded 12 basis points year over year to 2.81%, as the 34-basis-point decline in interest-bearing liability cost to 2.78% exceeded the 15-basis-point decline in earning-asset yield to 5.15%.
- Fee income and real-estate gains lifted income
- Non-interest income increased $5.905 million year over year to $24.178 million, including approximately $3.200 million of gains on sales of bank real estate, lower equity-method investment losses, and higher loan and deposit fees.
- Commercial loan mix continued to grow
- The loan mix shifted materially toward commercial lending: commercial loans increased $1.186 billion, or 9.4%, to $13.838 billion, led by C&I loans up $717.320 million, or 30.0%, and construction loans up $387.453 million, or 22.1%.
- Reported nonperforming assets declined
- Asset quality improved on reported NPAs: non-performing assets declined $7.274 million to $135.748 million, or 0.49% of total assets, from 0.54% at fiscal year-end.
- Capital ratios remain well above thresholds
- Capital remains above well-capitalized thresholds: the Bank's June 30, 2026 CET1 ratio was 12.95% versus the 6.50% well-capitalized guideline, and its tier 1 leverage ratio was 9.21% versus 5.00%.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Credit provisioning increased sharply
- Quarterly provision for credit losses rose to $11.000 million from $2.000 million a year earlier, driven by C&I and construction portfolio growth and concerns over adversely classified loans; the allowance increased to 1.08% of gross loans from 1.03%.
- Funding shifted from deposits to borrowings
- Deposit balances fell $505.561 million, or 2.4%, to $20.932 billion since September 30, 2025, while borrowings increased $1.498 billion to $3.316 billion to support asset growth; borrowing cost was 3.08% versus 2.50% at fiscal year-end.
- Large adversely classified loan exposure
- Although reported NPAs were $135.748 million, the company had $398.190 million of substandard loans still less than 90 days delinquent; if deemed non-performing, NPAs/assets would rise from 0.49% to 1.93%.
- CRA risk factor updated after rating upgrade
- The sole material risk-factor update is favorable but remains conditional: the FDIC upgraded WaFd's overall CRA rating to “Satisfactory” on January 16, 2026 after the Lending Test moved from “Needs to Improve” to “Low Satisfactory”; management anticipates the next CRA examination sometime in 2027.
- Portfolio value remains rate-sensitive
- Rate sensitivity remains meaningful: the modeled effect of an immediate 200-basis-point rate increase is a $630.334 million, or 19.76%, decline in net portfolio value, while AFS securities carried a $39.483 million net unrealized loss at June 30, 2026.
What they said about what is next.
The 10-Q provides no revenue or EPS guidance. Management estimates approximately $20.0 million of LIHTC tax benefits and approximately $15.9 million of LIHTC amortization expense for the current fiscal year; these are tax items rather than earnings guidance.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 5, 2026
- WaFd's Q2 results for the quarter ending March 31, 2026, demonstrated robustness with revenues of $197.4 million and EPS of $0.82, both exceeding analyst expectations and reflecting a rise in profitability compared to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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