- **Active Loan Growth**: Q4 originations ($1.4B) > repayments ($1.2B), with FY26 target 8-12% growth in active portfolio.
- **Margin Expansion**: Spot rate 2.82% could improve with rate cuts, but 1-2q lag for full impact.
- **Deposit Strategy**: 20% noninterest-bearing deposits by 2030 (12% now), focusing on small business relationships.
- **Wealth Management**: $1B AUM target in 2 years, enhancing noninterest income.
- **Share Buybacks**: Likely resuming as stock trades below tangible book value.
- **Credit Quality**: Delinquencies up 34bps to 0.6%, but nonperforming assets (0.54%) remain healthy.

**【CEO Opening Remarks】**
- WaFd reported net income of $56.9 million for Q4 2025, down $0.01 per share from Q4 2024 due to higher noninterest expenses.
- Loans receivable decreased $188 million, with active loan originations ($1.4B) outpacing repayments ($1.2B) for the first time in FY25.
- Deposits grew $51 million, with noninterest-bearing deposits up 3.2% and core deposits at 78% of total.
- Net loan-to-deposit ratio improved to 93.7%, and liquidity remains strong with well-capitalized ratios.

**【CFO Financial Commentary】**
- Net interest income increased $1.9 million, driven by lower liability costs outpacing asset yield declines (3bps).
- Noninterest income rose slightly to $18.4M, including $4.6M from WaFd Insurance (12.5% FY25 growth).
- Noninterest expenses rose $2.7M due to tech and talent investments, raising efficiency ratio to 56.82%.
- Net interest margin ended at 2.71%, with a spot rate of 2.82% as of Q4 end.

**【Chief Credit Officer Update】**
- Active loan production surged 100% QoQ to $1.4B, with CRE up 380%, C&I up 56%, and construction up 142%.
- Delinquencies rose 34bps to 0.6%, but nonperforming assets (0.54%) remain modest vs. peers.
- Single large CRE loan (>$90M past due) drove NPA increase, but no charge-off taken.
- Allowance for credit losses at 1.04% of loans, up from 1.01% FY24, reflecting cautious underwriting.

**【Client Experience Update】**
- Launched WaFd Wealth Management with $1B AUM target in 2 years; early momentum positive.
- Digital banking enhancements include direct deposit switching, mobile wire transfers ($10 fee), and consumer account opening in 10 mins.
- Client data platform personalizes experience, e.g., targeting small business loan applicants.
- Net Promoter Score improved to 58 from 17 in 8 years, winning 'Best Bank' in 4 states.

**【Q&A Highlights】**
- **Loan Growth**: Active portfolio expected to grow 8-12% FY26, with $200-300M Q/Q inactive runoff.
- **Margin Outlook**: Spot rate of 2.82% could expand with rate cuts, but lag 1-2 qtrs for full benefit.
- **Deposit Strategy**: Target 20% noninterest-bearing deposits by 2030 (currently 12%), focusing on small business relationships.
- **M&A**: Open to acquisitions but constrained by low valuation and CRA compliance needs.
- **Regulatory Focus**: Advocating for $10M transaction deposit insurance to level playing field vs. G-SIBs.
- **Share Buybacks**: Likely to resume given stock trading below tangible book value.

WaFd, Inc. (WAFD) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

WAFD

WAFD fundamentals

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