WaFd, Inc. Q2 FY2026 earnings call

Brent Beardall noted an outstanding second quarter. Kelli Holz reviewed balance sheet and income statement. Ryan Mauer commented on loan portfolio and credit quality. Brent discussed loan growth, strategic plan Build 2030, goals like increasing noninterest-bearing deposits, progress in becoming a preferred SBA lender, wealth management with AUM near $450 million as of March 31, technology developments including new mobile app and AI Call Center Agent, capital management with share repurchases and Fed capital calculation proposal impact.

WaFd Inc. reported net income available to common shareholders of $61.9 million or $0.82 per diluted share for the quarter ended March 31, 2026. Loans receivable increased $119 million during the quarter. Total investments and mortgage-backed securities increased $191 million during the quarter. Total deposits decreased by $292 million during the quarter. Core deposits ended the quarter at 80.4%. The loan-to-deposit ratio ended the quarter at 94.5%. WaFd's capital profile remained strong with CET1 ratio at 11.4% and total risk-based capital ratio at 14.4%. Net interest income increased $6.5 million from the prior quarter. Net interest margin was 2.81% in the March quarter. Total noninterest income decreased $400,000 compared to the prior quarter to $19.8 million. Total noninterest expense increased $4.1 million or 3.9% from the prior quarter. The company's efficiency ratio for the quarter was 55.7%.

WaFd expects net margin to be flat in the near term. Hopes to increase net interest margin to 3% over the next 2 years. Believes active loan portfolios can grow 8%-12% going forward. Lending pipeline is strong with $1.5 billion originations in Q2. Deposit pipeline increased 66% on a linked-quarter basis.

Intense deposit competition, including new entrant X Money with aggressive offerings. Interest rate fluctuations risk. Economic uncertainty impacting borrowers' financials.

Q: Jeff Rulis with D.A. Davidson asked about margin and go-forward expectation.

A: Kelli Holz and Brent Beardall responded.

Q: Matthew Clark with Piper Sandler asked about loan growth, fee income, CD repricing.

A: Brent Beardall responded.

Q: Kelly Motta with KBW asked about deposit funding, new relationships size, expenses.

A: Brent Beardall responded