WAFD — WaFd, Inc.

Summary of WaFd Inc. Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $61.9 million, or $0.82 per diluted share, up from $0.65 per share YoY and $0.79 per share QoQ.
• Net Interest Income: Increased by $6.5 million from the prior quarter, with a net interest margin of 2.81%, up from 2.7% in the previous quarter.
• Loan Portfolio: Loans receivable grew by $119 million, with active loan types increasing by $359 million. Total loan originations were $1.5 billion, outpacing repayments of $900 million.
• Deposits: Total deposits decreased by $292 million, primarily due to seasonal outflows. Core deposits increased to 80.4% of total deposits.
• Capital Ratios: CET1 ratio at 11.4%, total risk-based capital ratio at 14.4%.

2. Strategic Updates and Business Highlights

• Build 2030 Initiative: Focus on increasing noninterest-bearing deposits from 11% to 20% by 2030. Current noninterest-bearing deposits at 12.2%.
• Loan Growth: Significant growth in Commercial and Industrial (C&I) lending, with a 12% increase in the active portfolio on a linked quarter basis.
• Wealth Management: AUM reached nearly $450 million, with a goal of $1 billion in two years.
• Technology Investments: Launch of a new mobile app and AI-driven customer service enhancements to improve client experience.

3. Forward Guidance and Outlook

• Margin Expectations: Aiming for a net interest margin of 3% over the next two years, contingent on organic growth and repricing of loans.
• Loan Growth Projections: Anticipating 8% to 12% growth in the active loan portfolio, supported by a strong lending pipeline.
• Deposit Pipeline: Increased by 66% on a linked-quarter basis, indicating positive momentum for future deposit growth.

4. Bad News, Challenges, or Points of Concern

• Deposit Outflows: Seasonal declines in deposits could impact liquidity and funding costs.
• Credit Quality Risks: Elevated interest rates and economic uncertainty are affecting borrowers, with nonperforming assets at 0.48% of total assets. Delinquent loans remain elevated at 0.78%.
• Competitive Pressures: Increased competition for low-cost deposits, particularly with new entrants like Elon Musk's X Money, which may disrupt traditional banking dynamics.

5. Notable Q&A Insights

• Margin Improvement: CFO Kelli Holz clarified that the recent margin improvement was linked to the reclassification of a large nonperforming credit, with expectations for a flat margin going forward absent changes in interest rates.
• Loan Growth Sources: CEO Brent Beardall confirmed that recent C&I growth did not stem from club deals, indicating a focus on direct originations.
• Expense Management: While expenses increased due to merit raises and technology investments, Beardall indicated that the current expense run rate is sustainable, with potential for slight increases tied to performance.

This summary encapsulates WaFd Inc.'s Q2 2026 earnings call, highlighting the company's financial performance, strategic direction, outlook, and challenges faced in the current economic landscape.