WaFd Surges on Strong Earnings, Aggressive Buybacks, and Credit Quality

SEATTLE, WA – April 16, 2026 – WaFd, Inc. (Nasdaq: WAFD) delivered a robust financial performance for its second fiscal quarter, decisively beating analyst expectations and signaling strong momentum despite a climate of economic uncertainty. The Seattle-based bank holding company reported diluted earnings per common share of $0.82, a 26% increase from the same quarter last year, underpinned by significant improvements in credit quality, a widening net interest margin, and an aggressive capital return strategy that has caught the attention of investors.

The results, for the quarter ending March 31, 2026, paint a picture of a regional bank successfully navigating a complex landscape. Net income rose to $65.5 million, a 17% year-over-year increase. The performance stands as a testament to the company's strategic pivot and operational discipline, providing a positive data point for the health of commercial activity across the Western United States.

Navigating Uncertainty with Strong Fundamentals

In an environment where many banking peers are grappling with margin pressure, WaFd reported a sequential increase in its net interest margin (NIM) to 2.81%, up from 2.70% in the prior quarter. This expansion was driven by a combination of higher yields on interest-earning assets and a decrease in the cost of interest-bearing liabilities, a difficult feat in the current competitive market for deposits. Net interest income climbed to $178 million for the quarter, surpassing consensus estimates of approximately $173 million.

Brent Beardall, President and CEO of WaFd Bank, addressed the challenging backdrop directly in the company's announcement. "Uncertainty seems to be our new reality, not just in the banking sector, but also in the broader global context," Beardall stated. "Our strong foundation enabled us to deliver for our customers even during uncertain times. During the quarter, we executed on our strategic plan and grew our active loan segments by 12% annualized. Given our growth in loans, notable improvements in asset quality metrics, and a widening margin, we see a bright future in spite of current uncertainties."

The bank's ability to grow its active loan portfolio, which includes its focus areas in commercial and consumer lending, indicates that its strategic shift away from other sectors is gaining traction and finding demand.

A Clear Bright Spot: Credit Quality Rebounds Sharply

A key highlight of the quarter was a dramatic improvement in the company's credit metrics, a development analysts have called a "clear bright spot." Non-performing assets (NPAs) as a percentage of total assets plummeted to 0.48%, a significant drop from 0.75% in the previous quarter. This sharp reversal alleviates concerns that arose from a spike in non-accrual loans in the prior period, which management had attributed to isolated commercial relationships.

Specifically, non-accrual loans decreased by $67.5 million, or 35%, during the quarter. Delinquencies also showed improvement, falling to 0.78% of total loans from 1.07%. WaFd maintained a stable allowance for credit losses at 1.05% of gross loans, a reserve that now covers a formidable 163% of its non-performing loans. This high coverage ratio underscores a conservative approach to risk and provides a substantial buffer against potential future losses, bolstering confidence in the resilience of the bank's balance sheet.

While the overall trend was positive, total criticized loans, which represent potential weaknesses, decreased but remained elevated at 4.24% of net loans. This serves as a reminder of the persistent economic uncertainties affecting some borrowers, a factor the bank's management continues to monitor closely.

Doubling Down on Shareholders and Strategy

Perhaps the strongest signal of management's confidence came in its capital allocation strategy. WaFd aggressively repurchased 2,738,096 shares of its common stock during the quarter at a weighted average price of $31.85. This single-quarter buyback represents a substantial 3.6% of the company's total outstanding shares.

CEO Brent Beardall noted the rationale behind the move: "Our stock was trading near tangible book value for the majority of the quarter, so we aggressively bought back shares at less than 1.1x tangible book value. Our return on tangible common equity was 10.8% making it one of the best investment alternatives available to us."

This action, coupled with the board's recent authorization to increase the share repurchase plan to 10 million shares, sends a clear message that the company believes its stock is undervalued. For investors, it's a tangible commitment to enhancing shareholder value. This was further solidified by the payment of a $0.27 per share cash dividend, the 172nd consecutive quarterly dividend paid by the company, reinforcing its reputation for stability and consistent returns.

A Barometer for the West: The 'Build 2030' Pivot

WaFd's performance offers a valuable lens into the economic health of the nine Western states it serves. The bank's "Build 2030" strategy involves a deliberate pivot away from single-family mortgage lending—an exit it plans to complete by June 2025—to concentrate on higher-margin commercial and industrial (C&I) and small business banking.

The 12% annualized growth in these active loan segments, driven by $1.5 billion in new originations, suggests the strategy is not only being executed but is also meeting a robust demand. With commercial loans representing 96% of all originations during the quarter, the results reflect healthy business activity and investment across its footprint.

As the bank continues this transformation, analysts and investors will be watching closely to see if it can sustain this earnings momentum. The successful quarter demonstrates WaFd's ability to balance strategic growth, disciplined risk management, and generous shareholder returns, positioning it as a standout performer in the regional banking sector.