WAFD · WaFd, Inc.

WaFd, Inc. delivered strong Q2 FY2026 results anchored by disciplined balance sheet management and operational execution amid macroeconomic uncertainty. Net interest income increased $6.5M (4%) sequentially to $178M, driven by a 5 basis point expansion in asset yields and a 9 basis point reduction in funding costs—resulting in a 11 bps improvement in net interest margin to 2.81%. This outperformance reflects successful repricing of the loan portfolio (5.26% yield as of March 31) and liability optimization, including a shift toward lower-cost transaction deposits, which now comprise 60.3% of total deposits. Credit quality strengthened meaningfully: non-performing assets declined to $132M (0.48% of total assets), down $71M from Q1, while delinquencies fell to 0.78% of loans. The $4.0M provision for credit losses was modest relative to only $0.6M in net charge-offs, underscoring improving portfolio health. Non-interest expense rose $4.1M (3.9%) primarily due to merit-based compensation and technology investments, pushing the efficiency ratio up slightly to 55.66%. Capital return activity was aggressive—2.7M shares were repurchased at $31.85, reducing common shares outstanding by 3.6% and lifting tangible book value per share to $30.27. With no forward guidance provided, management emphasized strategic priorities: organic loan growth (12% annualized in active segments), margin resilience, and opportunistic capital allocation—including remaining authorization of 8.0M shares for buybacks. The 10.8% return on tangible common equity reinforces WaFd’s position as a high-return regional bank, though investors should monitor rising borrowings ($3.1B as of March 31, up from $1.8B six months prior) and concentration in commercial real estate and multi-family lending, which together represent ~39% of the active loan portfolio.