WaFd, Inc. Reports $64.2 Million Net Income for December 2025 Quarter, Driven by Increased Net Interest Income

WaFd, Inc. reported a net income of $64.2 million for the three months ending December 31, 2025, a significant increase from $47.3 million in the same period the previous year. This growth in profitability was driven by a rise in net interest income, which reached $171.1 million, up from $155.4 million year-over-year. The net interest margin improved to 2.70%, compared to 2.39% in the prior year, reflecting a decrease in the cost of interest-bearing liabilities, which fell by 60 basis points to 2.88%. However, the yield on interest-earning assets also decreased by 22 basis points to 5.09%, primarily due to falling interest rates affecting adjustable-rate loans.

Total assets for WaFd increased to $27.3 billion as of December 31, 2025, up from $26.7 billion at the end of September 2025. This growth was largely attributed to a $728 million increase in investment and mortgage-backed securities, alongside a $77.6 million rise in cash and cash equivalents. Conversely, loans receivable decreased by $240.5 million to $19.8 billion, primarily due to higher loan repayments compared to new originations. The company continues to focus on commercial lending, which accounted for 94% of total loan originations during the quarter.

In terms of operational metrics, WaFd's customer accounts saw a slight decline of $20.7 million, or 0.1%, totaling $21.4 billion. The company reported a decrease in time deposits, which fell by 6.4%, while transaction accounts increased by 4.5%. The total allowance for credit losses remained relatively stable at $199.5 million, representing 1.05% of gross loans, reflecting management's assessment of the credit quality of its loan portfolio amid mixed credit metrics.

Strategically, WaFd has made significant organizational changes, including a name change from Washington Federal Bank to WaFd Bank, effective September 25, 2025. The company also announced its exit from the consumer single-family home loan and home equity line of credit markets in January 2025, focusing instead on commercial lending. The company repurchased 1.95 million shares of its common stock during the quarter, reflecting its commitment to returning value to shareholders, with 6.3 million shares remaining authorized for repurchase under its current program.

Looking ahead, WaFd's management remains cautious about potential economic uncertainties, including fluctuating interest rates and inflationary pressures. The company is well-capitalized, with a total shareholders' equity of $3.03 billion, or 11.10% of total assets, and continues to monitor its asset quality closely. The outlook for the upcoming quarters will depend on the company's ability to navigate these challenges while maintaining its focus on commercial lending and managing its interest rate risk effectively.