Washington Federal Stock Earnings Reports

WaFd reported fiscal Q1 2026 net income available to common shareholders of $60.5 million, or $0.79 diluted EPS, up $0.07 sequentially and up 40% year-over-year. Key drivers: modestly higher net interest income, higher noninterest income (including a $3.2M branch property gain), and lower noninterest expense, bringing the efficiency ratio down to 55.3%. Loans declined $240M driven by runoff in inactive single-family-related categories (SFR, custom construction, consumer lot), while originations in active loan categories totaled $1.1B. Management increased the investment portfolio (primarily discount agency MBS yielding ~4.93%) funded in part by $671M of borrowings; this strategy is replacing single-family loan runoff but exerts near-term pressure on margin. Net interest margin was 2.7% (spot yield on earning assets 5.05%, cost of interest-bearing liabilities 2.76%). Credit trends showed rising criticized loans and nonaccruals: nonperforming assets rose to $203M (0.75% of assets) driven largely by two commercial relationships totaling ~$58M; the allowance for credit losses (including unfunded commitments) was 1.05% of gross loans. Management reiterated its strategic Build 2030 shift toward small business/C&I and CRE, set a target to raise noninterest-bearing deposits to 20% of total deposits by 2030 (currently 12.6%), and expects active loan portfolio growth of roughly 8%–12% over 1–2 years (guidance narrowed to ~6%–10% for fiscal 2026). Capital remains healthy above well-capitalized regulatory levels; the company repurchased 1.95M shares in the quarter and continues buybacks when shares trade near/below tangible book value. Management appealed an FDIC 'Needs to Improve' rating but expects that designation to remain.