WAFD WaFd Inc

2024 Highlights

• Net Income was $200 million or $2.50 per diluted share for fiscal 2024 compared to $257 million or $3.72 per diluted share for 2023.
• The year included the acquisition of California-based Luther Burbank Corporation which added $7.7 billion in assets and resulted in acquisition-related expenses of $26 million.
• The Company completed the sales of $2.8 billion in multifamily loans and $0.4 billion in single family loans obtained in the acquisition.
• Loans receivable increased $3.4 billion, or 19.7%, during 2024.
• Deposits increased $5.3 billion or 33.0% during 2024.
• During the year, the Company repurchased 1,070,207 shares of common stock at a weighted average price of $25.29.
• On September 6, 2024, the Company paid a cash dividend of $0.26 per share. This was the 166th consecutive quarterly dividend paid. A total of $1.03 was paid as cash dividends during the year. 

WaFd, Inc. (Nasdaq: WAFD) (the "Company"), parent company of Washington Federal Bank ("WaFd Bank" or the "Bank"), today announced annual earnings of $200,041,000 for the fiscal year ended September 30, 2024, including the effects of the acquisition of California-based Luther Burbank Corporation ("LBC"). After the effect of dividends on preferred stock, net income available for common shareholders was $2.50 per share for the year. These results reflect acquisition related costs of $26,319,000 incurred in fiscal 2024. Adjusted for these expenses and non-operating items, earnings per share for the year was $3.02. For a reconciliation, see the Non-GAAP Financial Measures section below.

The following table provides the Company's financial scorecard for the last five quarters:

 

As of

 

September 30, 2024

 

June 30,

2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

BALANCE SHEET

(In thousands, except share and ratio data)

Cash

$

2,381,102

 

 

$

2,492,504

 

 

$

1,505,771

 

 

$

1,144,774

 

 

$

980,649

 

Loans receivable, net

 

20,916,354

 

 

 

20,873,919

 

 

 

20,795,259

 

 

 

17,584,622

 

 

 

17,476,550

 

Allowance for credit losses ("ACL")

 

225,253

 

 

 

225,324

 

 

 

225,077

 

 

 

201,820

 

 

 

201,707

 

Loans held for sale

 

—

 

 

 

468,527

 

 

 

2,993,658

 

 

 

—

 

 

 

—

 

Available-for-sale securities, at fair value

 

2,572,709

 

 

 

2,428,768

 

 

 

2,438,114

 

 

 

2,018,445

 

 

 

1,995,097

 

Held-to-maturity securities, at amortized cost

 

436,972

 

 

 

447,638

 

 

 

457,882

 

 

 

415,079

 

 

 

423,586

 

Total Investments

 

3,009,681

 

 

 

2,876,406

 

 

 

2,895,996

 

 

 

2,433,524

 

 

 

2,418,683

 

Total assets

 

28,060,330

 

 

 

28,580,800

 

 

 

30,140,288

 

 

 

22,640,122

 

 

 

22,474,675

 

Transaction deposits

 

11,817,185

 

 

 

11,929,005

 

 

 

12,338,862

 

 

 

10,658,064

 

 

 

10,765,313

 

Time deposits

 

9,556,785

 

 

 

9,255,760

 

 

 

9,000,911

 

 

 

5,380,723

 

 

 

5,305,016

 

Total deposits

 

21,373,970

 

 

 

21,184,765

 

 

 

21,339,773

 

 

 

16,038,787

 

 

 

16,070,329

 

Borrowings

 

3,318,307

 

 

 

4,079,360

 

 

 

5,489,501

 

 

 

3,875,000

 

 

 

3,650,000

 

Total shareholders' equity

 

3,000,300

 

 

 

2,958,339

 

 

 

2,921,906

 

 

 

2,452,004

 

 

 

2,426,426

 

Loans to customer deposits2

 

97.86

%

 

 

98.53

%

 

 

97.45

%

 

 

109.64

%

 

 

108.75

%

 

 

 

 

 

 

 

 

 

 

PROFITABILITY

 

 

 

 

 

 

 

 

 

Net income

$

61,140

 

 

$

64,560

 

 

$

15,888

 

 

$

58,453

 

 

$

50,208

 

Net income to common shareholders

 

57,484

 

 

 

60,904

 

 

 

12,232

 

 

 

54,797

 

 

 

46,552

 

Earnings per common share

 

0.71

 

 

 

0.75

 

 

 

0.17

 

 

 

0.85

 

 

 

0.72

 

Return on tangible common equity1

 

10.24

%

 

 

11.10

%

 

 

2.47

%

 

 

11.93

%

 

 

10.22

%

Return on tangible assets1

 

0.89

%

 

 

0.88

%

 

 

0.26

%

 

 

1.06

%

 

 

0.92

%

Net interest margin

 

2.62

%

 

 

2.56

%

 

 

2.73

%

 

 

2.91

%

 

 

3.13

%

Efficiency ratio

 

57.21

%

 

 

56.61

%

 

 

77.74

%

 

 

58.02

%

 

 

51.78

%

 

 

 

 

 

 

 

 

 

 

FINANCIAL HIGHLIGHTS

 

 

 

 

 

 

 

 

 

Common shareholders' equity per share

$

33.25

 

 

$

32.76

 

 

$

32.21

 

 

$

33.49

 

 

$

32.85

 

Tangible common shareholders' equity per share1

 

27.73

 

 

 

27.18

 

 

 

26.64

 

 

 

28.65

 

 

 

28.05

 

Shareholders' equity to total assets

 

10.69

%

 

 

10.35

%

 

 

9.69

%

 

 

10.83

%

 

 

10.80

%

Tangible shareholders' equity to tangible assets1

 

9.24

%

 

 

8.91

%

 

 

8.31

%

 

 

9.59

%

 

 

9.55

%

Common shares outstanding

 

81,220,269

 

 

 

81,157,173

 

 

 

81,405,391

 

 

 

64,254,700

 

 

 

64,736,916

 

Preferred shares outstanding

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY2

 

 

 

 

 

 

 

 

 

ACL to gross loans

 

1.01

%

 

 

1.00

%

 

 

1.00

%

 

 

1.04

%

 

 

1.03

%

Non-accrual loans to net loans

 

0.33

%

 

 

0.29

%

 

 

0.29

%

 

 

0.26

%

 

 

0.29

%

Delinquencies to net loans

 

0.25

%

 

 

0.22

%

 

 

0.36

%

 

 

0.33

%

 

 

0.36

%

Non-performing assets to total assets

 

0.28

%

 

 

0.24

%

 

 

0.23

%

 

 

0.24

%

 

 

0.26

%

Criticized loans to net loans

 

2.41

%

 

 

3.01

%

 

 

2.59

%

 

 

2.27

%

 

 

2.33

%

Substandard loans to net loans

 

2.04

%

 

 

1.84

%

 

 

1.48

%

 

 

1.74

%

 

 

1.75

%

 

 

 

 

 

 

 

 

 

 

1Metric is a non-GAAP Financial Measure. See page 9 for additional information on our use of non-GAAP Financial Measures.

2Metrics include only loans held for investment. Loans held for sale are not included.

President and CEO Brent Beardall commented, "Considering what was one of the more challenging macro environments in my twenty-three years at the Bank, our fiscal year 2024 was an excellent year with after tax earnings just north of $200 million. We took material steps to position the balance sheet for the Fed’s much anticipated move to reduce interest rates. As we start fiscal 2025, we have over 19% of our total balance sheet in cash and investments, borrowing capacity of more than $6 billion and problem loans totaling just 0.28% of assets. Optionality is a beautiful thing when the future is uncertain and we believe we are moving forward with a capacity to be relevant and a nimbleness to adapt. WaFd sees significant opportunity for growth in all of our nine western states, where we believe economic growth will outpace overall US growth. Perhaps our biggest concern is the potential for unexpected events. Over the years, we have seen it’s the surprise of what was not modeled, what was not thought likely, that takes down strong financial institutions. This knowledge keeps us humble and operating with a meaningful surplus of capital and liquidity."

As a result of the LBC acquisition on February 29, 2024, the Company's results as of September 30, 2024 reflect seven months of the newly combined entity. Given this, the Company's financial results are not directly comparable to the results of the prior periods. Total assets were $28.1 billion as of September 30, 2024, an increase of 24.9% from $22.5 billion at September 30, 2023. Net loans held for investment increased by $3.4 billion, or 19.7%, from September 30, 2023 to September 30, 2024 reflecting the addition of LBC loans. The Company acquired $6.2 billion in loans in the transaction but sold $2.8 billion in acquired multifamily loans in the June 2024 quarter and $0.4 billion in acquired single family loans in September 2024. Cash and cash equivalents as of September 30, 2024 increased by $1.4 billion, or 142.8%, since September 30, 2023 as a result of the LBC acquisition, and the completion of the LBC loan sales offset by the pay-down of borrowings and debt. Investment securities increased by $591.0 million compared to September 30, 2023 due to the addition of $529.2 million in securities obtained in the acquisition combined with normal activity during the year.

Customer deposits totaled $21.4 billion as of September 30, 2024, an increase of 33.0% since September 30, 2023. Transaction accounts increased by $1.1 billion or 9.8% during the fiscal year 2024, while time deposits increased $4.3 billion, or 80.1%, as 66% of the LBC deposits were time deposits. As a result of this product mix, the Company's transaction accounts as a percentage of total customer deposits decreased to 55.3% compared to 67% at September 30, 2023. Core deposits, defined as all transaction accounts and time deposits less than $250,000, totaled 75.1% of deposits at September 30, 2024. Deposits that are uninsured or not collateralized were 24.0% as of September 30, 2024, a decrease from 25.7% as of September 30, 2023.

Borrowings totaled $3.3 billion as of September 30, 2024, a net decrease of $0.4 billion or 10.5% since September 30, 2023. The Company utilized proceeds from the LBC loan sales to pay off $2.2 billion of borrowings which matured since the acquisition. The acquisition added $1.4 billion in borrowings in addition to net borrowing activity of $400 million during the year. The weighted average effective interest rate as of September 30, 2024, was 3.93% versus 3.98% at September 30, 2023. As of September 30, 2024, $2.3 billion of the $3.3 billion in outstanding borrowings have effective maturities less than one year.

Loan originations totaled $3.6 billion for fiscal year 2024 compared to $4.7 billion in fiscal year 2023. Offsetting the loan origination volume in each of these years were loan repayments of $4.3 billion and $4.4 billion, respectively. The Bank has intentionally slowed new loan production to temper loan growth. Commercial loans represented 73% of all loan originations during fiscal 2024 with consumer loans accounting for the remaining 27%. Commercial loans are viewed by the Bank as preferable as they generally have floating interest rates and shorter durations. The weighted average period end interest rate on the loan portfolio was 5.26% as of September 30, 2024, an increase from 5.22% at September 30, 2023.

Credit quality continues to be monitored closely in light of the shifting economic and monetary environment. As of September 30, 2024, non-performing assets were $77 million, or 0.3% of total assets, compared to 0.3% as of September 30, 2023. The percentage of non-accrual loans to total loans at September 30, 2024 remained largely unchanged from September 30, 2023 at 0.3%. Delinquent loans as a percentage of total loans decreased to 0.3% from 0.4% during the year.

The allowance for credit losses including the reserve for unfunded commitments totaled $225 million as of September 30, 2024, and was 1.01% of gross loans as compared to $202 million or 1.03% of gross loans as of September 30, 2023. Net charge-offs were $1.4 million for fiscal year 2024 compared to net charge-offs of $45.1 million in fiscal 2023. The increase in the ACL reflects the $16.0 million provision recorded on LBC loans held for investment that are not credit deteriorated and the $7.4 million estimated lifetime credit losses for those that are considered purchased credit deteriorated ("PCD").

Net interest income was $660.8 million for fiscal 2024, a decrease of $29.4 million or 4.3% from the prior year. The net interest margin for the year was 2.69% compared to 3.40% the prior year. This decrease was the result of the combination of greater growth in interest-bearing liabilities balances than in interest-paying assets and a larger increase in the rate paid on those liabilities compared to the rates earned on interest-earning assets. Average interest-bearing liabilities grew by 27.2% while average interest-earning assets grew by 20.8%. Rates on interest-bearing liabilities increased by 128 basis points outpacing the 46 basis point increase in the average rate on interest-earning assets.

Total non-interest income was $60.7 million for fiscal year 2024, an increase of $8.5 million or 16.3% from $52.2 million in the prior year. The increase in other income is primarily due to increased income from the Company's subsidiary, WAFD Insurance Group, and a decrease in unrealized losses recorded for certain equity method investments in fiscal 2024 compared to prior year.

Total non-interest expense was $448.3 million for fiscal 2024, an increase of $72.2 million or 19.2% from the prior year. Compensation and benefits costs increased $37.6 million or 19.14% year-over-year primarily due to acquisition related retention, severance and change-in-control expenses combined with a larger post-acquisition workforce. FDIC premiums increased $8.8 million compared to the same period last year as a result of both the FDIC's special assessment and the Company's increased size post-acquisition. Information technology costs increased by $3.9 million due to increased telephone and data lines combined with lingering conversion costs and termination fees on LBC software. Other expense increased by $18.4 million and included acquisition related expenses of $8.9 million, a $2 million charitable donation and $6.6 million in amortization expense related to the Core Deposit Intangible Asset created in the acquisition.

The Company recorded a provision for credit losses of $17.5 million in the year ended September 30, 2024, compared to a provision for credit losses of $41.5 million in 2023. The provision for loan losses included the initial provision recorded on LBC loans, as well as other qualitative considerations such as prolonged and intensified borrower sensitivity to high interest rates and operating costs due to inflationary pressures.

For the year ended September 30, 2024, the Company recorded federal and state income tax expense of $56.0 million, which equates to a 21.88% effective tax rate. This compares to an effective tax rate of 20.81% for fiscal year 2023. Although the Company's effective tax rate may vary from the statutory rate mainly due to state taxes, tax-exempt income and tax-credit investments, some of the change in the current year resulted specifically from the LBC acquisition and consideration of California State and Local taxes.

WaFd Bank is headquartered in Seattle, Washington and has 210 branches in nine western states. To find out more, please visit our website www.wafdbank.com. The Company uses its website to distribute financial and other material information about the Company.

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

 

 

September 30, 2024

 

September 30, 2023

 

(In thousands, except share and ratio data)

ASSETS

 

 

 

Cash and cash equivalents

$

2,381,102

 

 

$

980,649

 

Available-for-sale securities, at fair value

 

2,572,709

 

 

 

1,995,097

 

Held-to-maturity securities, at amortized cost

 

436,972

 

 

 

423,586

 

Loans receivable, net of allowance for loan losses of $203,753 and $177,207

 

20,916,354

 

 

 

17,476,550

 

Interest receivable

 

102,827

 

 

 

87,003

 

Premises and equipment, net

 

247,901

 

 

 

237,011

 

Real estate owned

 

4,567

 

 

 

4,149

 

FHLB stock

 

95,617

 

 

 

126,820

 

Bank owned life insurance

 

267,633

 

 

 

242,919

 

Intangible assets, including goodwill of $411,360 and $304,750

 

448,425

 

 

 

310,619

 

Federal and state income tax assets, net

 

119,248

 

 

 

8,479

 

Other assets

 

466,975

 

 

 

581,793

 

 

$

28,060,330

 

 

$

22,474,675

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Liabilities

 

 

 

Transaction deposits

$

11,817,185

 

 

$

10,765,313

 

Time deposits

 

9,556,785

 

 

 

5,305,016

 

Total customer deposits

 

21,373,970

 

 

 

16,070,329

 

Borrowings

 

3,267,589

 

 

 

3,650,000

 

Junior subordinated deferrable debentures

 

50,718

 

 

 

—

 

Advance payments by borrowers for taxes and insurance

 

61,330

 

 

 

52,550

 

Accrued expenses and other liabilities

 

306,423

 

 

 

275,370

 

 

 

25,060,030

 

 

 

20,048,249

 

Stockholders’ equity

 

 

 

Preferred stock, $1.00 par value, 5,000,000 shares authorized; 300,000 and 300,000 shares issued; 300,000 and 300,000 shares outstanding

 

300,000

 

 

 

300,000

 

Common stock, $1.00 par value, 300,000,000 shares authorized; 154,007,429 and 136,466,579 shares issued; 81,220,269 and 64,736,916 shares outstanding

 

154,007

 

 

 

136,467

 

Additional paid-in capital

 

2,150,675

 

 

 

1,687,634

 

Accumulated other comprehensive (loss) income, net of taxes

 

55,851

 

 

 

46,921

 

Treasury stock, at cost; 72,787,160 and 71,729,663 shares

 

(1,639,131

)

 

 

(1,612,345

)

Retained earnings

 

1,978,898

 

 

 

1,867,749

 

 

 

3,000,300

 

 

 

2,426,426

 

 

$

28,060,330

 

 

$

22,474,675

 

CONSOLIDATED FINANCIAL HIGHLIGHTS

 

 

 

Common shareholders' equity per share

$

33.25

 

 

$

32.85

 

Shareholders' equity to total assets

 

10.69

%

 

 

10.80

%

 

 

 

 

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Three Months Ended September 30,

 

Twelve Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

 

(In thousands, except share and ratio data)

INTEREST INCOME

 

 

 

 

 

 

 

Loans receivable

$

308,598

 

 

$

240,998

 

 

$

1,165,849

 

 

$

900,068

 

Mortgage-backed securities

 

18,088

 

 

 

11,695

 

 

 

59,782

 

 

 

43,184

 

Investment securities and cash equivalents

 

47,411

 

 

 

29,017

 

 

 

146,079

 

 

 

99,703

 

 

 

374,097

 

 

 

281,710

 

 

 

1,371,710

 

 

 

1,042,955

 

INTEREST EXPENSE

 

 

 

 

 

 

 

Customer accounts

 

165,240

 

 

 

83,402

 

 

 

532,434

 

 

 

237,233

 

Borrowings, senior debt and junior subordinated debentures

 

36,045

 

 

 

34,611

 

 

 

178,444

 

 

 

115,488

 

 

 

201,285

 

 

 

118,013

 

 

 

710,878

 

 

 

352,721

 

Net interest income

 

172,812

 

 

 

163,697

 

 

 

660,832

 

 

 

690,234

 

Provision for credit losses

 

—

 

 

 

26,500

 

 

 

17,500

 

 

 

41,500

 

Net interest income after provision

 

172,812

 

 

 

137,197

 

 

 

643,332

 

 

 

648,734

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

Gain (loss) on sale of investment securities

 

91

 

 

 

33

 

 

 

342

 

 

 

33

 

Gain (loss) on termination of hedging derivatives

 

72

 

 

 

33

 

 

 

241

 

 

 

(867

)

Loan fee income

 

757

 

 

 

731

 

 

 

2,745

 

 

 

3,885

 

Deposit fee income

 

7,047

 

 

 

6,849

 

 

 

27,507

 

 

 

26,050

 

Other income

 

7,911

 

 

 

6,688

 

 

 

29,857

 

 

 

23,100

 

 

 

15,878

 

 

 

14,334

 

 

 

60,692

 

 

 

52,201

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

Compensation and benefits

 

53,983

 

 

 

45,564

 

 

 

234,148

 

 

 

196,534

 

Occupancy

 

10,843

 

 

 

10,115

 

 

 

42,036

 

 

 

41,579

 

FDIC insurance premiums

 

6,800

 

 

 

7,000

 

 

 

28,870

 

 

 

20,025

 

Product delivery

 

6,306

 

 

 

5,819

 

 

 

23,986

 

 

 

20,973

 

Information technology

 

14,129

 

 

 

12,672

 

 

 

53,306

 

 

 

49,447

 

Other expense

 

15,880

 

 

 

11,007

 

 

 

65,926

 

 

 

47,477

 

 

 

107,941

 

 

 

92,177

 

 

 

448,272

 

 

 

376,035

 

Gain (loss) on real estate owned, net

 

(83

)

 

 

(235

)

 

 

304

 

 

 

176

 

Income before income taxes

 

80,666

 

 

 

59,119

 

 

 

256,056

 

 

 

325,076

 

Income tax provision

 

19,526

 

 

 

8,911

 

 

 

56,015

 

 

 

67,650

 

Net Income

 

61,140

 

 

 

50,208

 

 

 

200,041

 

 

 

257,426

 

Dividends on preferred stock

 

3,656

 

 

 

3,656

 

 

 

14,625

 

 

 

14,625

 

Net Income available to common shareholders

$

57,484

 

 

$

46,552

 

 

$

185,416

 

 

$

242,801

 

PER SHARE DATA

 

 

 

 

 

 

 

Basic earnings per common share

$

0.71

 

 

$

0.72

 

 

$

2.50

 

 

$

3.72

 

Diluted earnings per common share

 

0.71

 

 

 

0.72

 

 

 

2.50

 

 

 

3.72

 

Cash dividends per common share

 

0.26

 

 

 

0.25

 

 

 

1.03

 

 

 

0.99

 

Basic weighted average shares outstanding

 

81,208,683

 

 

 

64,729,006

 

 

 

74,244,323

 

 

 

65,192,510

 

Diluted weighted average shares outstanding

 

81,353,644

 

 

 

64,736,864

 

 

 

74,290,568

 

 

 

65,255,283

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

Return on average assets

 

0.87

%

 

 

0.90

%

 

 

0.76

%

 

 

1.18

%

Return on average common equity

 

8.53

 

 

 

8.73

 

 

 

7.55

 

 

 

11.69

 

Net interest margin

 

2.62

 

 

 

3.13

 

 

 

2.69

 

 

 

3.40

 

Efficiency ratio

 

57.21

 

 

 

51.78

 

 

 

62.13

 

 

 

50.65

 

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

Three Months Ended

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

(In thousands, except share and ratio data)

INTEREST INCOME

 

 

 

 

 

 

 

 

 

Loans receivable

$

308,598

 

 

$

337,118

 

 

$

274,341

 

 

$

245,792

 

 

$

240,998

 

Mortgage-backed securities

 

18,088

 

 

 

17,523

 

 

 

12,905

 

 

 

11,266

 

 

 

11,695

 

Investment securities and cash equivalents

 

47,411

 

 

 

37,300

 

 

 

31,580

 

 

 

29,788

 

 

 

29,017

 

 

 

374,097

 

 

 

391,941

 

 

 

318,826

 

 

 

286,846

 

 

 

281,710

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Customer accounts

 

165,240

 

 

 

154,359

 

 

 

116,164

 

 

 

96,671

 

 

 

83,402

 

Borrowings, senior debt and jr. subordinated debentures

 

36,045

 

 

 

60,396

 

 

 

44,065

 

 

 

37,938

 

 

 

34,611

 

 

 

201,285

 

 

 

214,755

 

 

 

160,229

 

 

 

134,609

 

 

 

118,013

 

Net interest income

 

172,812

 

 

 

177,186

 

 

 

158,597

 

 

 

152,237

 

 

 

163,697

 

Provision for credit losses

 

—

 

 

 

1,500

 

 

 

16,000

 

 

 

—

 

 

 

26,500

 

Net interest income after provision

 

172,812

 

 

 

175,686

 

 

 

142,597

 

 

 

152,237

 

 

 

137,197

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

Gain (loss) on sale of investment securities

 

91

 

 

 

80

 

 

 

90

 

 

 

81

 

 

 

33

 

Gain (loss) on termination of hedging derivatives

 

72

 

 

 

54

 

 

 

6

 

 

 

109

 

 

 

33

 

Loan fee income

 

757

 

 

 

594

 

 

 

550

 

 

 

844

 

 

 

731

 

Deposit fee income

 

7,047

 

 

 

6,960

 

 

 

6,698

 

 

 

6,802

 

 

 

6,849

 

Other income

 

7,911

 

 

 

9,567

 

 

 

6,048

 

 

 

6,331

 

 

 

6,688

 

 

 

15,878

 

 

 

17,255

 

 

 

13,392

 

 

 

14,167

 

 

 

14,334

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

53,983

 

 

 

57,169

 

 

 

73,155

 

 

 

49,841

 

 

 

45,564

 

Occupancy

 

10,843

 

 

 

10,904

 

 

 

10,918

 

 

 

9,371

 

 

 

10,115

 

FDIC insurance premiums

 

6,800

 

 

 

7,600

 

 

 

7,900

 

 

 

6,570

 

 

 

7,000

 

Product delivery

 

6,306

 

 

 

6,090

 

 

 

5,581

 

 

 

6,009

 

 

 

5,819

 

Information technology

 

14,129

 

 

 

13,428

 

 

 

12,883

 

 

 

12,866

 

 

 

12,672

 

Other expense

 

15,880

 

 

 

14,888

 

 

 

23,275

 

 

 

11,883

 

 

 

11,007

 

 

 

107,941

 

 

 

110,079

 

 

 

133,712

 

 

 

96,540

 

 

 

92,177

 

Gain (loss) on real estate owned, net

 

(83

)

 

 

(124

)

 

 

(1,315

)

 

 

1,826

 

 

 

(235

)

Income before income taxes

 

80,666

 

 

 

82,738

 

 

 

20,962

 

 

 

71,690

 

 

 

59,119

 

Income tax provision

 

19,526

 

 

 

18,178

 

 

 

5,074

 

 

 

13,237

 

 

 

8,911

 

Net income

 

61,140

 

 

 

64,560

 

 

 

15,888

 

 

 

58,453

 

 

 

50,208

 

Dividends on preferred stock

 

3,656

 

 

 

3,656

 

 

 

3,656

 

 

 

3,656

 

 

 

3,656

 

Net income available to common shareholders

$

57,484

 

 

$

60,904

 

 

$

12,232

 

 

$

54,797

 

 

$

46,552

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

Basic earnings per common share

$

0.71

 

 

$

0.75

 

 

$

0.17

 

 

$

0.85

 

 

$

0.72

 

Diluted earnings per common share

 

0.71

 

 

 

0.75

 

 

 

0.17

 

 

 

0.85

 

 

 

0.72

 

Cash dividends per common share

 

0.26

 

 

 

0.26

 

 

 

0.26

 

 

 

0.25

 

 

 

0.25

 

Basic weighted average shares outstanding

 

81,208,683

 

 

 

81,374,811

 

 

 

70,129,072

 

 

 

64,297,499

 

 

 

64,729,006

 

Diluted weighted average shares outstanding

 

81,353,644

 

 

 

81,393,708

 

 

 

70,164,558

 

 

 

64,312,110

 

 

 

64,736,864

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.87

%

 

 

0.87

%

 

 

0.26

%

 

 

1.04

%

 

 

0.90

%

Return on average common equity

 

8.53

 

 

 

9.20

 

 

 

2.09

 

 

 

10.21

 

 

 

8.73

 

Net interest margin

 

2.62

 

 

 

2.56

 

 

 

2.73

 

 

 

2.91

 

 

 

3.13

 

Efficiency ratio

 

57.21

 

 

 

56.61

 

 

 

77.74

 

 

 

58.02

 

 

 

51.78

 

Non-GAAP Financial Measures and Management Projections

The Company has presented certain non-GAAP measures within this document to remove the effect of certain income and expenses to provide investors with information useful in understanding our financial performance. The Company considers these items to be non-operating in nature as they are items that Management does not consider indicative of the Company's on-going financial performance. We believe that the tables presented reflect our on-going performance in the periods presented and, accordingly, are useful to consider in addition to our GAAP financial results. These measures should not be considered a substitution for GAAP basis disclosures.

Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way they are calculated herein. Because of this, our non-GAAP financial measures may not be comparable to similar measures used by others. We caution investors not to place undue reliance on such measures. See the following unaudited tables for reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measures.

Tangible Measures

September 30,

2024

 

June 30,

2024

 

March 31,

2024

 

December 31,

2023

 

September 30,

2023

 

(Unaudited - In thousands, except for ratio data)

Shareholders equity - GAAP

$

3,000,300

 

 

$

2,958,339

 

 

$

2,921,906

 

 

$

2,452,004

 

 

$

2,426,426

 

Less intangible assets - GAAP

 

448,425

 

 

 

452,255

 

 

 

453,539

 

 

 

311,103

 

 

 

310,619

 

Tangible shareholders' equity

$

2,551,875

 

 

$

2,506,084

 

 

$

2,468,367

 

 

$

2,140,901

 

 

$

2,115,807

 

Less preferred stock - GAAP

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

Tangible common shareholders' equity

$

2,251,875

 

 

$

2,206,084

 

 

$

2,168,367

 

 

$

1,840,901

 

 

$

1,815,807

 

 

 

 

 

 

 

 

 

 

 

Total assets - GAAP

$

28,060,330

 

 

$

28,580,800

 

 

$

30,140,288

 

 

$

22,640,122

 

 

$

22,474,675

 

Less intangible assets - GAAP

 

448,425

 

 

 

452,255

 

 

 

453,539

 

 

 

311,103

 

 

 

310,619

 

Tangible assets

$

27,611,905

 

 

$

28,128,545

 

 

$

29,686,749

 

 

$

22,329,019

 

 

$

22,164,056

 

 

 

 

 

 

 

 

 

 

 

Tangible Metrics

 

 

 

 

 

 

 

 

 

Common shares outstanding - GAAP

 

81,220,269

 

 

 

81,157,173

 

 

 

81,405,391

 

 

 

64,254,700

 

 

 

64,736,916

 

Tangible common equity per share

$

27.73

 

 

$

27.18

 

 

$

26.64

 

 

$

28.65

 

 

$

28.05

 

Tangible equity to tangible assets

 

9.24

%

 

 

8.91

%

 

 

8.31

%

 

 

9.59

%

 

 

9.55

%

 

Quarter Ended

Average Tangible Measures

September 30,

2024

 

June 30,

2024

 

March 31,

2024

 

December 31,

2023

 

September 30,

2023

 

(Unaudited - In thousands, except for ratio data)

Average shareholders equity - GAAP

$

2,996,093

 

 

$

2,947,056

 

 

$

2,638,483

 

 

$

2,447,580

 

 

$

2,431,846

 

Less average preferred stock - GAAP

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

 

 

300,000

 

Less average intangible assets - GAAP

 

451,204

 

 

 

453,142

 

 

 

360,251

 

 

 

311,022

 

 

 

310,200

 

Average tangible common equity

$

2,244,889

 

 

$

2,193,914

 

 

$

1,978,232

 

 

$

1,836,558

 

 

$

1,821,646

 

 

 

 

 

 

 

 

 

 

 

Average Assets - GAAP

$

28,000,482

 

 

$

29,703,337

 

 

$

24,907,376

 

 

$

22,381,459

 

 

$

22,233,741

 

Less average intangible assets - GAAP

 

451,204

 

 

 

453,142

 

 

 

360,251

 

 

 

311,022

 

 

 

310,200

 

Average tangible assets

$

27,549,278

 

 

$

29,250,195

 

 

$

24,547,125

 

 

$

22,070,437

 

 

$

21,923,541

 

 

 

 

 

 

 

 

 

 

 

Average Tangible Metrics

 

 

 

 

 

 

 

 

 

Net income - GAAP

 

61,140

 

 

 

64,560

 

 

 

15,888

 

 

 

58,453

 

 

 

50,208

 

Net income available to common shareholders - GAAP

 

57,484

 

 

 

60,904

 

 

 

12,232

 

 

 

54,797

 

 

 

46,552

 

Return on tangible common equity

 

10.24

%

 

 

11.10

%

 

 

2.47

%

 

 

11.93

%

 

 

10.22

%

Return on tangible assets

 

0.89

%

 

 

0.88

%

 

 

0.26

%

 

 

1.06

%

 

 

0.92

%

Net Income Adjusted for Acquisition Expenses and Other Non-Operating Items

Year Ended September 30, 2024

 

Year Ended September 30, 2023

 

(Unaudited - In thousands, except for ratio data)

Non-interest income adjustments

 

 

 

Distribution received on LBC equity method investment

$

(874

)

 

$

—

 

(Gain)Loss on WaFd Bank equity method investment

 

1,244

 

 

 

3,385

 

Total non-interest income adjustments

$

370

 

 

$

3,385

 

 

 

 

 

Non-interest expense adjustments

 

 

 

Acquisition-related expenses

$

26,319

 

 

$

3,016

 

Select non-operating expenses:

 

 

 

FDIC Special Assessment

 

2,084

 

 

 

—

 

Legal and Compliance Accruals

 

2,818

 

 

 

—

 

Charitable Donation

 

2,000

 

 

 

—

 

 

 

6,902

 

 

 

—

 

Total non-interest expense adjustments

$

33,221

 

 

$

3,016

 

 

 

 

 

Net Income - GAAP

$

200,041

 

 

$

257,426

 

Preliminary ACL provision on LBC loans

 

16,000

 

 

 

—

 

Non-interest income adjustments

 

370

 

 

 

3,385

 

Non-interest expense adjustments

 

33,221

 

 

 

3,016

 

REO adjustments

 

304

 

 

 

176

 

Income tax adjustment

 

(10,915

)

 

 

(1,369

)

Net Income - non-GAAP

$

239,021

 

 

$

262,634

 

 

 

 

 

Dividend on preferred stock

$

14,625

 

 

$

14,625

 

 

 

 

 

Net Income available to common shareholders - non-GAAP

$

224,396

 

 

$

248,009

 

 

 

 

 

Basic weighted average number of shares outstanding - GAAP

 

74,244,323

 

 

 

65,192,510

 

Diluted weighted average number of shares outstanding - GAAP

 

74,290,568

 

 

 

65,255,283

 

 

 

 

 

Basic EPS - non-GAAP

 

3.02

 

 

 

3.80

 

Diluted EPS - non-GAAP

 

3.02

 

 

 

3.80

 

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

This press release contains statements about the Company’s future that are not statements of historical or current fact. These statements are “forward-looking statements” for purposes of applicable securities laws and are based on current information and/or management's good faith belief as to future events. Words such as “expects,” “anticipates,” “believes,” “estimates,” “intends,” “forecasts,” “may,” “potential,” “projects,” and other similar expressions or future or conditional verbs such as “will,” “should,” “would,” and “could” are intended to help identify such forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes any such statements are based on reasonable assumptions, forward-looking statements should not be read as a guarantee of future performance, and you are cautioned not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement.

By their nature, forward-looking statements involve inherent risk and uncertainties including the following risks and uncertainties, and those risks and uncertainties more fully discussed under “Risk Factors” in the Company’s September 30, 2023 10-K, and Quarterly Reports on Form 10-Q which could cause actual performance to differ materially from that anticipated by any forward-looking statements. Forward-looking statements relating to our financial condition or operations are subject to risks and uncertainties related to (i) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin; (ii) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, a potential recession, the monetary policies of the Federal Reserve, and slowdowns in economic growth; (iii) risks related to the integration of the operations of Luther Burbank Corporation; (iv) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (v) changes in deposit flows or loan demands; (vi) the impact of bank failures or adverse developments at other banks and related negative press about regional banks and the banking industry in general; (vii) the effects of natural or man-made disasters, calamities, or conflicts, including terrorist events and pandemics (such as the COVID-19 pandemic) and the resulting governmental and societal responses; (viii) global economic trends, including developments related to Ukraine and Russia, and the evolving conflict in the Middle East, and related negative financial impacts on our borrowers; (ix) litigation risks resulting in significant expenses, losses and reputational damage; (x) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft; and (xi) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241017054297/en/

WaFd, Inc. 425 Pike Street, Seattle, WA 98101 Brad Goode, SVP, Chief Marketing Officer 206-626-8178 brad.goode@wafd.com