WaFd Q3 Earnings Call Highlights

WaFd posted stronger fiscal Q3 earnings with net income of $62.5 million, or $0.84 per diluted share, up from $0.73 a year earlier. The improvement was driven by modestly higher net interest income and non-interest income, along with controlled expenses. Loan growth returned for a second straight quarter, with active portfolios up 10% sequentially and C&I lending leading the way. Loan growth outpaced repayments, even as deposit competition remained intense and total deposits fell by $192 million. Credit quality showed some pressure but remained manageable, as criticized loans rose to 4.9% of net loans and the bank booked an $11 million provision for credit losses. WaFd also highlighted strong capital levels and said it remains disciplined on buybacks and M&A while pursuing its Build 2030 deposit and business-lending goals.

WaFd NASDAQ: WAFD reported higher fiscal third-quarter earnings as loan growth resumed across its active portfolios, expenses remained stable and credit costs increased amid continued pressure from elevated interest rates and economic uncertainty. The Seattle-based bank reported net income available to common shareholders of $62.5 million, or $0.84 per diluted share, for the quarter ended June 30, 2026. That compared with $0.73 per share in the same quarter a year earlier and $0.82 per share in the linked March quarter, Chief Financial Officer Kelli Holz said on the company’s earnings call.

Holz said the sequential increase in earnings per share reflected “a modest increase in net interest income and non-interest income, as well as controlled expenses,” partly offset by a higher loan loss provision.

Loans receivable increased by $51 million during the quarter, driven by growth in what WaFd defines as its active loan categories: commercial real estate, multifamily, construction, land acquisition and development, commercial and industrial, and consumer loans. Those categories increased by a combined $315 million, Holz said. Loan originations and advances in active loan types totaled $1.5 billion, outpacing $1 billion of repayments and payoffs. The weighted average rate on originations was 6.31%, while the weighted average rate on repayments and payoffs was 6.06%.

President and Chief Executive Officer Brent Beardall said the “headline news” for the quarter was again loan growth. After more than a year of contraction in the loan portfolio, WaFd has posted net overall loan growth for two consecutive quarters, he said. Beardall said the active loan portfolio grew 10% on a linked-quarter basis, following 12% growth in the March quarter. “I am pleased to report that the biggest contributor to that growth from a percentage standpoint is C&I lending,” Beardall said. Commercial and industrial originations were $741 million, or 49% of total originations for the quarter, he said.

Chief Credit Officer Ryan Mauer said loan production was centered in commercial and industrial at 49%, construction at 27% and commercial real estate at 10%. He said the bank achieved that production while maintaining “a consistent approach to underwriting and managing to a moderate risk profile.”

Net interest income increased $3.8 million from the prior quarter, while the net interest margin held steady at 2.81%, Holz said. She said the margin reflected a one-basis-point improvement in both the yield on assets and the cost paid on liabilities. As of June 30, the spot yield on interest-earning assets was 5.12%, the cost of interest-bearing liabilities was 2.77% and the margin was 2.82%. Holz said that, absent changes in interest rates, WaFd expects its margin to be “relatively flat” in the next quarter, taking into account day count...