WaFd, Inc. — Fiscal Year 2026 Earnings Summary

Financial Performance

• Fiscal 2026 net income was $255.865 million, a 13% increase from $226.068 million in fiscal 2025.
• Fiscal 2026 diluted earnings per common share (EPS) were $3.21, a 22% increase from $2.63 in fiscal 2025.
• Fourth quarter 2026 net income was $59.991 million, a 9% decrease from $66.130 million in the prior quarter.
• Fourth quarter 2026 diluted EPS was $0.76, down from $0.84 in the prior quarter.
• Net interest income for Q4 2026 was $182.353 million, up 0.6% from the prior quarter.
• Net interest margin (NIM) remained flat at 2.81% for Q4 2026 compared to the prior quarter.
• Total non-interest income for Q4 2026 was $38.084 million, up $13.9 million from the prior quarter, driven by a $16.4 million gain on the sale of single-family loans.
• Total non-interest expense for Q4 2026 was $121.495 million, up $11.2 million (10.1%) from the prior quarter due to strategic investments and merger-related costs.
• The efficiency ratio for Q4 2026 increased to 55.12% from 53.69% in the prior quarter.
• Provision for credit losses was $20.0 million for Q4 2026, compared to $11.0 million in the prior quarter.
• Net charge-offs were $39.2 million for Q4 2026, compared to $1.6 million in the prior quarter.
• Total assets were $27.23 billion as of September 30, 2026, up from $26.70 billion at September 30, 2025.
• Loans receivable, net, decreased to $19.04 billion as of September 30, 2026, from $20.09 billion at September 30, 2025.
• Total deposits were $21.32 billion as of September 30, 2026, down slightly from $21.44 billion at September 30, 2025.
• Transaction deposits increased 4.6% to $12.88 billion, while time deposits decreased 7.5% to $8.45 billion.
• Borrowings totaled $2.54 billion as of September 30, 2026, up from $1.82 billion at September 30, 2025.
• Tangible common equity per share increased to $30.51 as of September 30, 2026, from $29.38 at September 30, 2025.
• Return on tangible common equity (ROTE) for Q4 2026 was 9.85%, down from 11.04% in the prior quarter.
• Return on tangible assets (ROTA) for Q4 2026 was 0.89%, down from 0.97% in the prior quarter.

Guidance and Future Outlook

• Management expects assets to reprice more quickly than liabilities in a rising rate environment, leading to margin expansion in the short term.
• The company anticipates realizing a net gain of approximately $7 million upon the finalization of the sale of $429 million in multifamily loans in the first quarter of fiscal 2027.
• The company has entered into an agreement to sell $429 million of multifamily loans, which were reclassified as Held for Sale as of September 30, 2026.

Business Segments and Product Lines

• Loan originations for active loan types totaled $5.5 billion for fiscal 2026, compared to $4.0 billion in fiscal 2025.
• Commercial loans represented 95% of all loan originations during fiscal 2026, with consumer loans accounting for the remaining 5%.
• The company sold $543 million of single-family residential loans during the September quarter.
• The period-end interest yield on the loan portfolio was 5.44% as of September 30, 2026, up from 5.38% at September 30, 2025.
• Core deposits (transaction accounts and time deposits under $250,000) totaled 81.8% of total deposits as of September 30, 2026, up from 77.9% at September 30, 2025.
• Uninsured or uncollateralized deposits were 25.7% of total deposits as of September 30, 2026, up from 24.7% at September 30, 2025.

Market and Competitive Landscape

• The 10-year bond yield is noted to be above 5.20%, representing the highest level in the last twenty years.
• Investment securities increased by $0.8 billion (18.1%) in the year ended September 30, 2026, driven by $1.4 billion in purchases, primarily discount-priced 30-year mortgage-backed securities at an expected yield to maturity of 5%.

Risks and Challenges

• A large previously classified loan was resolved during the quarter, resulting in a $36 million charge-off.
• Net charge-offs increased significantly to $39.2 million in Q4 2026 from $1.6 million in the prior quarter.
• The company faces risks related to interest rate fluctuations, economic conditions, borrower financial stress, and the potential termination of the merger agreement with EverBank.
• Risks include the possibility that anticipated merger benefits will not be realized, the transaction may be more expensive than anticipated, or regulatory approvals may not be received.

Management Commentary and Tone

• Brent Beardall, President and CEO, stated the company is pleased to report a 22% increase in EPS and significant improvements in asset quality.
• Management highlighted that non-performing assets and delinquencies decreased by 37% since the June 30 quarter end.
• The CEO noted the balance sheet strength allowed the company to handle the classified loan resolution while delivering meaningful earnings improvement.
• Management expressed confidence in benefiting from rising rates due to the asset-liability repricing dynamic.

Other Key Points

• On September 7, 2026, the company announced a merger agreement with EverBank.
• On September 4, 2026, the company paid a cash dividend of $0.27 per share, marking the 174th consecutive quarterly dividend.
• During the fiscal year, the company repurchased 4,703,844 shares of common stock at a weighted average price of $31.00.
• The share repurchase plan authorization currently stands at 7,992,669 shares.
• The company operates 210 branches across nine western states.
• The effective tax rate for Q4 2026 was 22.17%, compared to 21.60% in the prior quarter.