WaFd's EPS Surges to $0.73, Beating Analyst Estimates

WaFd, Inc. (NASDAQ: WAFD), the holding company for Washington Federal Bank, reported quarterly earnings per share (EPS) of $0.73 for the quarter ended September 30, 2024, surpassing analyst estimates of $0.68. This strong performance represents a year-over-year decline of 5.6% but demonstrates the company's resilience in the face of challenging market conditions.



Several key factors contributed to WaFd's robust EPS:

1. Net Interest Income (NII) Growth: WaFd's NII grew by 16% year-over-year (YoY) to $175 million, driven by higher interest rates and a steady increase in loan balances. This growth in NII was a significant driver of WaFd's EPS.
2. Loan Growth: WaFd's loan portfolio expanded by 1.6% quarter-over-quarter (QoQ) and 6.5% YoY, reaching $17.27 billion. This growth in loans led to higher interest income, contributing to the increase in EPS.
3. Deposit Growth: WaFd's total customer deposits increased by 1.2% QoQ and 13.4% YoY, reaching $15.86 billion. This growth in deposits helped WaFd maintain its liquidity and fund its loan portfolio expansion.
4. Cost Control: WaFd managed to control its expenses, with the efficiency ratio (non-interest expenses as a percentage of revenue) improving to 52.34% from 58.65% a year ago. This improvement in cost control helped WaFd maintain its profitability and contribute to its EPS.
5. Credit Quality: WaFd maintained a strong credit quality profile, with the allowance for credit losses (ACL) as a percentage of gross loans outstanding decreasing to 1.02% from 1.13% a year ago. This improvement in credit quality helped WaFd avoid significant loan loss provisions, contributing to its EPS.

WaFd's EPS for the quarter ended September 2024 was $0.73, which was above the analyst estimate of $0.68. In the previous quarter, WaFd reported EPS of $0.95, which was also above the analyst estimate of $0.91. However, this was a decrease from the EPS of $1.16 reported in the quarter ended December 2023.

WaFd's strong EPS performance, despite the year-over-year decline, demonstrates the company's ability to navigate challenging market conditions and maintain profitability. The company's strategic investments in its loan portfolio, cost control measures, and strong credit quality profile have all contributed to its success. As WaFd continues to execute on its strategic initiatives, investors can expect the company to maintain its competitive position in the banking sector.