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WAFD INC (WAFD)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 EPS of $0.72 missed S&P Global consensus ($0.765) and total revenue of $185.3M missed consensus ($190.6M), while Q3/Q2 were modest beats; margin improved to 2.71% QoQ/YoY and net interest income rose to $169.9M . EPS/revenue consensus values from S&P Global*.
  • Credit quality deteriorated driven largely by one CRE loan >90 days past due: NPAs increased to 0.54% of assets (from 0.36% in Q3), delinquencies rose to 0.60% of loans (from 0.26% in Q3); net charge-offs fell to $1.0M QoQ .
  • Loan production accelerated: originations rose 103% QoQ to ~$1.373B across CRE, C&I, construction; deposit mix improved with transaction accounts at 57.4% of deposits vs. 55.3% a year ago .
  • Management signaled margin tailwinds from rate cuts (spot NIM 2.82% at quarter-end), more aggressive deposit repricing, and continuing share repurchases (969,653 shares at $29.74 in Q4; FY buybacks 3.45M) .

What Went Well and What Went Wrong

What Went Well

  • “We finished Fiscal 2025 trending in the right direction with an improving margin… and an improving deposit mix,” with checking rising from 33% to 35% of deposits and NIM up to 2.71% from 2.69% QoQ and 2.62% YoY .
  • Loan originations up 103% QoQ to ~$1.373B; CRE +380% QoQ to $211M, C&I +56% to $507M, construction +142% to $499M; pipeline building for three consecutive quarters .
  • Shareholder returns: 969,653 shares repurchased in Q4 (avg $29.74); FY repurchases 3,447,771 shares (avg $29.56); tangible book per share grew to $29.38 .

What Went Wrong

  • Credit metrics worsened: NPAs to assets rose to 0.54% (vs. 0.36% Q3), non-accrual loans to net loans to 0.64% (vs. 0.41%), delinquencies to 0.60% (vs. 0.26%); driven primarily by one CRE loan over 90 days .
  • Efficiency ratio rose to 56.82% (56.01% Q3) on higher compensation and IT investments; non-interest expense increased $2.7M QoQ to $107.0M .
  • Profitability still trails peers per CEO: margin 2.71% vs. peers ~3.42%; loan yields 5.38% vs. peers ~6%; cost of deposits ~2.6% vs. peers just above 2% .

Financial Results

Results vs. S&P Global Consensus

EPS and revenue compared to Wall Street consensus (S&P Global); “Beat/Miss” calculated vs. consensus.

MetricQ2 2025Q3 2025Q4 2025
Primary EPS Consensus Mean ($)0.5875*0.675*0.765*
Diluted EPS Actual ($)0.65 0.73 0.72
Beat/MissBeat by $0.0625*Beat by $0.055*Miss by $0.045*
MetricQ2 2025Q3 2025Q4 2025
Revenue Consensus Mean ($USD Millions)$174.577*$183.951*$190.567*
Revenue Actual ($USD Millions)$177.041*$184.261*$185.297*
Beat/MissBeat by $2.464*Beat by $0.310*Miss by $5.270*

Note: *Values retrieved from S&P Global.

P&L (Document-based)

MetricQ2 2025Q3 2025Q4 2025
Net Interest Income ($USD Millions)$160.910 $167.988 $169.906
Non-Interest Income ($USD Millions)$18.881 $18.273 $18.391
Non-Interest Expense ($USD Millions)$104.832 $104.327 $106.993
Provision for Credit Losses ($USD Millions)$2.750 $2.000 $3.000
Net Income ($USD Millions)$56.252 $61.952 $60.597
Diluted EPS ($)$0.65 $0.73 $0.72

KPIs

MetricQ2 2025Q3 2025Q4 2025
Net Interest Margin (%)2.55% 2.69% 2.71%
Efficiency Ratio (%)58.31% 56.01% 56.82%
Return on Avg Assets (%)0.82% 0.92% 0.91%
Return on Avg Common Equity (%)7.68% 8.54% 8.36%
Loans to Customer Deposits (%)97.63% 94.81% 93.71%

Credit Quality

MetricQ2 2025Q3 2025Q4 2025
ACL to Gross Loans (%)1.01% 1.03% 1.04%
Non-Accrual Loans to Net Loans (%)0.29% 0.41% 0.64%
Delinquencies to Net Loans (%)0.27% 0.26% 0.60%
NPAs to Total Assets (%)0.26% 0.36% 0.54%
Net Charge-Offs ($USD Millions)$5.063 ~$5.4 $1.0

Deposits Mix

MetricQ2 2025Q3 2025Q4 2025
Transaction Accounts (% of Deposits)55.3% 56.0% 57.4%

Segment/Activity Breakdown (Loan Originations – Q4 Quarter)

ProductQ4 2025 Originations ($USD Thousands)
Commercial Real Estate$210,650
Commercial & Industrial$507,280
Construction$498,368
Multi-Family$67,649
Land – Acquisition & Development$43,864
Consumer$44,962
Total Active Types$1,372,773

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest MarginNear term (Q1 FY26)Not providedSpot margin 2.82% at Q4-end; expected to expand with further cuts, lag ~1 quarter for full effect .Implicitly raised outlook
Deposit CostsNear termNot providedMore aggressive rate cuts enabled by L/D in low 90s; minimal client pushback .Lower costs
Inactive Loan Runoff (SFR/Custom/HELOC)QuarterlyNot provided~$200–$300M per quarter runoff; redeploy into agency MBS (pick up ~100 bps spread) .Strategic shift maintained
Non-Interest-Bearing Deposits MixFY2030 targetNot providedTargeting 20%; currently ~12% .Long-term target reiterated
Share RepurchaseOngoingAuthorization prior FY: ~9.13M sharesAuthorization remaining 8,162,654; likely to exercise given stock below TBV .Maintained
DividendQuarterly$0.27$0.27 (171st consecutive), payable Dec 5, 2025; record Nov 21, 2025 .Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25)Previous Mentions (Q3 FY25)Current Period (Q4 FY25)Trend
AI/Tech, Digital PlatformBranch-originated small biz lending progress; JD Power service recognition .Margin/efficiency focus; limited tech detail in 8-K -.Pike Street Labs Release 2.8; wires via device ID + voice print; 4,700 online accounts; 44% auto-approval .Improving
Tariffs/MacroNot highlighted.Not highlighted.Tariffs cited as headwind for borrowers; rates easing likely near term .Mixed
Product PerformanceOriginations $1.009B; NIM up to 2.55% .Originations $0.697B; NIM up to 2.69% .Originations ~$1.373B; NIM 2.71%; pipeline +24% QoQ .Improving
Regional/FranchiseLuther Burbank deposit runoff managed; core deposits stable .L/D ratio improved to 94.8% .California entry affirmed; Luther deposits -$1.8B since close; organic deposit growth offsets runoff .Improving
Regulatory/LegalNot highlighted.Not highlighted.HMDA consent orders closed; appealing CRA “Needs to Improve” .Improving
Wealth ManagementNot highlighted.Not highlighted.WaFd Wealth launched Aug 29; target $1B AUM in 2 years .New initiative

Management Commentary

  • CEO on mix and margin: “The margin increased to 2.71%… driven by decreasing cost of deposits and borrowings… loan originations [up] 103%… It would be hard to overstate the magnitude of the shift… moving from mortgage lending to providing solutions for businesses.”
  • CFO on margin sensitivity: “282 is the as-of end-of-quarter spot rate… we lag about a quarter for full effectiveness on rate cuts.”
  • CCO on credit: “Increases in delinquencies and NPAs were largely impacted by a single CRE loan… no charge-off taken; recent developments indicate positive momentum.”
  • CEO on profitability vs peers: margin 2.71% vs. peers ~3.42%; focus on Build 2030 to raise low-cost deposits and business banking .

Q&A Highlights

  • Loan growth outlook: Active portfolio net growth targeted at 8–12% in FY26; inactive runoff ~$200–$300M per quarter redeployed into agency MBS .
  • Margin path: Spot NIM at 2.82% at Q4-end; benefit from future cuts with ~one-quarter lag; deposit repricing becoming more aggressive given improved L/D .
  • Deposit strategy: Clients expected cuts; minimal pushback; focus on growing non-interest-bearing and business checking .
  • Stablecoin: Monitoring; no partnerships yet; potential opportunity; no deposit risk observed .
  • Capital management: Likely to continue buybacks with shares below tangible book value .

Estimates Context

  • Q4 2025: EPS $0.72 vs. $0.765 consensus (miss); revenue ~$185.3M vs. ~$190.6M consensus (miss). Q3/Q2 showed modest beats on both metrics. Expect models to adjust for NIM improvement and deposit cost trajectory but incorporate higher NPAs/delinquencies and slightly higher provision [S&P Global values above].
  • NIM trajectory (spot 2.82%) and more aggressive deposit repricing may prompt upward revisions to margin assumptions; credit and opex investments temper near-term EPS uplift .

Note: Consensus and actual revenue/EPS in this section are from S&P Global*.

Key Takeaways for Investors

  • Margin tailwinds are building (spot NIM 2.82%), supported by deposit repricing and rate cuts; near-term EPS recovery hinges on sustaining lower funding costs .
  • Credit noise was concentrated in one CRE exposure; provision rose to $3.0M, but net charge-offs fell to $1.0M; watch NPAs/delinquency trajectory into FY26 .
  • Business banking pivot is gaining traction: originations surged, pipelines up 24% QoQ, and transaction deposits mix improved to 57.4% .
  • Capital return remains supportive: continued buybacks authorized (~8.16M shares) and quarterly dividend maintained at $0.27; TBV/share grew to $29.38 .
  • Valuation rerate requires margin normalization and progress toward 20% non-interest-bearing deposits by 2030; management is prioritizing quality growth and treasury solutions .
  • Near-term trading: Q4 miss may cap upside, but improving margin/production and buybacks are catalysts; monitor upcoming rate decisions and credit updates from the CRE loan .
  • Medium-term thesis: Shift to business banking and tech-enabled treasury should lower funding costs, support NIM expansion, and diversify non-interest income (insurance, wealth) .

Additional Data and References

  • Q4 press release and 8-K exhibits including financial scorecard, statements, and fact sheet -.
  • Earnings call transcripts (Q4 2025) for detailed management commentary and Q&A - - -.
  • Prior quarter releases (Q3 and Q2 2025) for trend analysis - -.
  • Dividend press release (Nov 11, 2025): $0.27 per share, 171st consecutive dividend .

Note: *Values retrieved from S&P Global.