On October 18, 2024, WaFd Inc (WAFD, Financial) released its 8-K filing detailing its financial performance for the fiscal year ending September 30, 2024. WaFd Inc, a provider of lending, depository, insurance, and other banking services across several western states, reported a net income of $200 million or $2.50 per diluted share, slightly above the annual analyst estimate of $2.49 per share. The company also reported a revenue of $660.8 million, slightly below the estimated $665.56 million.
Performance and Challenges
WaFd Inc's fiscal year 2024 was marked by the acquisition of Luther Burbank Corporation, which added $7.7 billion in assets but also incurred $26 million in acquisition-related expenses. This acquisition significantly influenced the company's financial results, making direct comparisons with previous periods challenging. The acquisition led to a 24.9% increase in total assets, reaching $28.1 billion by the end of the fiscal year.
The company's net interest income decreased by 4.3% to $660.8 million, with a net interest margin of 2.69%, down from 3.40% the previous year. This decline was attributed to a greater increase in interest-bearing liabilities compared to interest-earning assets, highlighting the challenges posed by fluctuating interest rates and economic conditions.
Financial Achievements
Despite the challenges, WaFd Inc achieved notable financial milestones. Loans receivable increased by $3.4 billion, or 19.7%, and deposits surged by $5.3 billion, or 33.0%, reflecting strong growth in customer engagement and trust. The company also repurchased over a million shares of common stock, demonstrating confidence in its financial stability and future prospects.
Key Financial Metrics
WaFd Inc's balance sheet showed a significant increase in cash and cash equivalents, up by 142.8% to $2.4 billion, largely due to the acquisition. The company's efficiency ratio stood at 57.21%, indicating effective cost management despite the increased expenses from the acquisition. The allowance for credit losses was 1.01% of gross loans, reflecting prudent risk management practices.
| Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Total Assets | $28.1 billion | $22.5 billion |
| Net Loans Receivable | $20.9 billion | $17.5 billion |
| Total Deposits | $21.4 billion | $16.1 billion |
| Net Interest Margin | 2.69% | 3.40% |
Analysis and Commentary
President and CEO Brent Beardall commented on the fiscal year, stating,
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."Beardall emphasized the company's strategic positioning and readiness to adapt to future economic conditions, highlighting the importance of maintaining a strong capital and liquidity position.
WaFd Inc's performance underscores the complexities of navigating acquisitions and economic fluctuations. While the acquisition of Luther Burbank Corporation presented challenges, it also positioned the company for potential growth in its operational regions. The company's focus on maintaining a robust balance sheet and managing credit quality will be crucial as it moves forward in a dynamic economic landscape.
Explore the complete 8-K earnings release (here) from WaFd Inc for further details.
