WaFd (WAFD) Q2 2025 earnings summary

Executive summary

• Net income for the quarter ended March 31, 2025 was $56.3 million, up from $15.9 million in the prior year quarter, reflecting the impact of the Luther Burbank Corporation merger and operational changes.

• Six-month net income was $103.5 million, up from $74.3 million year-over-year.

• The company exited the single-family mortgage lending market in January 2025, incurring a $5.4 million restructuring charge and expecting $17 million in annual expense savings.

• Shareholders' equity increased to $3.03 billion, or 10.97% of total assets, as of March 31, 2025.

• Results reflect the completed merger with Luther Burbank Corporation on March 1, 2024, impacting comparability to prior periods.

Financial highlights

• Net interest income for the quarter was $160.9 million, up $2.3 million year-over-year, with a net interest margin of 2.55% (down from 2.73%).

• Total assets decreased to $27.64 billion from $28.06 billion at September 30, 2024; loans receivable were $20.92 billion, nearly flat from prior period.

• Provision for credit losses was $2.8 million, down from $16 million in the prior year quarter; net charge-offs increased to $5.1 million from $146,000.

• Non-interest income rose to $18.9 million for the quarter, driven by higher loan prepayment fees and insurance commissions.

• Non-interest expense fell to $104.8 million, down $28.9 million year-over-year, reflecting lower merger and compensation costs.

Outlook and guidance

• Management expects annual expense savings of $17 million from the exit of the single-family mortgage business, with a $5.4 million restructuring charge recognized.

• The company continues to focus on commercial lending and managing interest rate risk through balance sheet adjustments and hedging.

• Ongoing CRA rating restrictions and risks from the business model shift are noted.