WaFd (WAFD) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was $64.2 million, up 36% year-over-year and 6% sequentially, driven by higher net interest income and lower expenses.

• Diluted EPS reached $0.79, a 46% increase from Q1 2025 and 10% higher than the previous quarter.

• Net interest margin improved to 2.70% from 2.39% year-over-year, remaining nearly flat sequentially.

• Return on average assets was 0.96% and return on tangible common equity was 10.6%.

• Share repurchases at 0.99x tangible book value contributed to EPS growth and tangible book value per share rose 7.1% annualized.

Financial highlights

• Net interest income was $171.1 million, up $15.7 million year-over-year and $1.2 million sequentially.

• Non-interest income increased to $20.3 million, aided by a $3.2 million gain on a branch sale.

• Non-interest expense decreased by $5.6 million year-over-year and $1.3 million sequentially, mainly from lower restructuring, compensation, and technology costs.

• Efficiency ratio improved to 55.25% from 56.82% last quarter.

• Loans receivable decreased $240 million, mainly from inactive loan types; active loan originations were $1.1 billion.

Outlook and guidance

• Management expects stronger loan production in coming months, citing increased client inquiries.

• Net interest income is expected to rise despite margin pressure from additional MBS purchases.

• Short-term goal to reach a 3% net interest margin within two years, assuming one to two rate cuts.

• Active loan portfolio growth targeted at 6%-10% for fiscal 2026, rising to 8%-12% in 2027.

• Management asserts reserves are adequate despite rising delinquencies.