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WaFed: WaFd's Q4 Earnings: A Closer Look at Financial Performance

WaFd, Inc. reported net income available to common shareholders of $60.5 million or $0.79 per diluted share for the quarter ended December 31, 2025. The increase in earnings per share was due to improvements in income and expense, with net interest income increasing $1.2 million from the prior quarter, and a net interest margin of 2.7%. The actual EPS came out at $0.79, slightly higher than the previous quarter's $0.72, and close to but below estimates of $0.80 wasn't available however '0.75' relative to '0.76' was, indicating a stable performance. The company's efficiency ratio decreased to 55.3% compared to 56.8% in the prior quarter, showing cost control. With a P/E Ratio of 10.26 and a P/B Ratio of 0.82, the stock appears to be reasonably valued.

WAFD

USD 32.39

-3.97%

A-Score: 5.6/10

Publication date: January 16, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Earnings Growth EPS rose 13.0% to $0.79 from $0.72 in the prior quarter, driven by higher net interest income (+$1.2M) and improved efficiency.
  • Capital Management Share repurchases totaled 1.95M shares at $29.75, reflecting confidence in capital allocation and undervalued stock.
  • Liquidity Strength Loan-to-deposit ratio of 92.7% remains balanced, supported by robust core funding and $728M increase in investments/MBS.
  • Credit Quality Nonperforming assets at 0.75% of assets with $3.5M credit loss provision, indicating stable asset quality despite $203M NPA increase.
  • Growth Pipeline Active loan portfolio growth target of 8-12% annually, with a $697M ($28% QoQ) lending pipeline and new $400M wealth management division.

Loan Portfolio and Credit Quality

Loans receivable decreased $240 million during the quarter, primarily due to a decrease in inactive loan types, while total investments and mortgage-backed securities increased $728 million. The loan-to-deposit ratio ended the quarter at 92.7%. Credit quality metrics remain modest, with nonperforming assets increasing to $203 million or 0.75% of total assets. The net provision for credit losses in the quarter was $3.5 million, and the allowance for credit losses provides coverage of 1.05% of gross loans.

Growth Initiatives and Capital Management

The company is focused on growing its active loan portfolios by 8% to 12% over the next 1 to 2 years, with the lending pipeline up $697 million or 28% over the last quarter. WaFd Wealth Management was launched on August 31, with assets under management amounting to just over $400 million as of December 31. The company repurchased 1.95 million shares of common stock at a weighted average price of $29.75, indicating a commitment to returning capital to shareholders. As Kelli Holz mentioned, "they expect further margin pressure but growth in NII dollars" with the current strategy to replace single-family runoff with mortgage-backed securities.

Margin Expectations and Outlook

Brent Beardall stated that they are working to get to a 3% margin over the short term, helped by a shift in their balance sheet to lower-cost deposits. The company is baking in 1-2 rate cuts this year to achieve this target. With a Dividend Yield of 3.33%, the stock offers an attractive income stream. Analysts estimate next year's revenue growth at 4.2%, indicating a positive outlook for the company.

WaFed's A-Score