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WaFd, Inc. (WAFD)FY2026 investor yearly review
WaFd’s calls moved from testing its business-focused growth plan to reporting stronger active lending and managing deposit and credit pressures. By year-end, a major C&I impairment and the announced EverBank merger reframed the outlook: execution on core growth remained visible, while integration and transaction outcomes became central questions.
Overall investor read
Growth gained traction; execution risks persisted
Active lending expanded through the year, but deposit competition and a large C&I impairment tempered the operating progress.
Primary financial signal
$3.21 diluted EPS
The supplied annual scorecard reports $3.21 diluted EPS; management said full-year EPS rose 22% year over year.
Primary call signal
EverBank became the next strategic test
Q4 management presented the merger as a response to deposit competition, technology scale, and changing sources of banking activity.
Annual financial measures and reported earnings context.
Revenue
Annual result; quarterly revenue rose through Q4
Revenue growth
Supplied annual growth measure
Net income
Supplied annual result; management emphasized earnings progress
Diluted EPS
Management reported 22% full-year EPS growth
Gross margin
Supplied annual margin measure
Operating margin
Supplied annual margin measure
The year shifted from strategic repositioning to evidence of active-loan growth, with funding, credit costs, and the EverBank merger shaping the final investor debate.
Loan growth
In Q1, management described the business-focused shift and a larger lending pipeline, while acknowledging that loan growth still needed to materialize. Q2 and Q3 brought consecutive quarters of active-portfolio expansion, with C&I prominent. Q4 maintained active production, although loan sales drove a separate decline in total loans.
Quarter-by-quarter materiality and tone for annual transcript themes.
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| Theme | Q1 | Q2 | Q3 | Q4 | Next monitor |
|---|---|---|---|---|---|
| Active lending and commercial mix | Positive Pipeline grew; management said execution remained to prove | Positive Active portfolio posted first net growth in over five quarters |
Active loan production and efficiency improved during the year, while deposit competition, credit risk, margin constraints, and merger execution shaped the harder questions.
After Q1’s pipeline-focused discussion, management reported active-portfolio growth in Q2 and Q3, and strong production again in Q4. The improvement reflected the intended commercial lending shift, although year-end loan sales reduced total loans.
Management reported lower criticized loans, nonperforming assets, and delinquencies in Q2. Q4 also reported improvement in several measures after resolving a large relationship, though the resolution involved a significant impairment.
The calls progressed from building the commercial lending plan to growth, credit monitoring, and a year-end strategic shift.
Earnings and efficiency
The story moved from strategic intent to visible lending growth, then to balancing credit and funding pressures with a major merger announcement.
Management described Build 2030, a larger lending pipeline, and plans to deepen business banking relationships. The call remained measured: active loan growth had not yet been established, deposits were challenging, and elevated nonaccruals weighed on margin.
Read earnings transcriptCompared with Q1’s pipeline-led case, Q2 delivered reported active and overall loan growth. Management presented this as early evidence of execution, while seasonal deposit outflows and the ongoing need to attract low-cost funding limited the breadth of the improvement.
These recurring questions link the standalone growth plan to credit costs and the new merger path, with consequences for funding, earnings quality, and execution.
Low-cost funding is central to management’s standalone profitability ambitions.
Track noninterest-bearing share, deposit costs, retention, and business-account pipeline conversion.
Commercial production is a key measure of Build 2030 execution.
Funding mix
Management consistently tied Build 2030 to business relationships and a higher share of noninterest-bearing deposits. Early account and pipeline commentary offered signs of progress, but deposit balances remained seasonally variable and Q3 management described structural competition for deposits. Q4 made the funding challenge part of the rationale for partnering with EverBank.
Margin quality
Q1 management discussed near-term pressure from nonaccruals and mortgage-backed security purchases while retaining a 3% medium-term margin goal. In Q2 and Q3, the reported margin improved or held steady, but management described deposit repricing and rate uncertainty as constraints. Q4 again reported a stable margin and described only modest near-term expansion expectations.
Credit risk
Credit metrics improved in Q2 after Q1 deterioration, then criticized loans and provisions rose in Q3 as management monitored a large C&I relationship. Q4 resolved that relationship but recorded a substantial impairment well outside management’s stated normalized loss history, leaving broader credit conditions and remaining classified credits in focus.
Positive Second consecutive quarter of active loan growth |
Mixed Active lending grew as loan sales reduced total loans |
| Track active originations, C&I mix, funded pipeline conversion, and loan-sale effects. |
| Low-cost deposits and funding competition | Mixed Business shift supported deposits; management flagged flat balances | Mixed Seasonal outflows offset rising deposit pipeline | Negative Management described fierce competition and structural deposit headwinds | Mixed Deposit competition featured in EverBank merger rationale | Watch noninterest-bearing deposit mix, deposit costs, retention, and business-account growth. |
| Net interest margin and profitability goal | Mixed Nonaccruals and MBS purchases weighed on margin | Positive Margin increased; management expected near-term stability | Mixed Stable margin outlook faced deposit-cost pressure | Mixed Margin held steady; modest near-term expansion expected | Monitor funding costs, loan repricing, purchase-accounting accretion, and progress toward the margin goal. |
| C&I credit exposures and loss provision | Negative Two relationships raised nonaccruals and delinquencies | Positive Nonperforming assets and criticized loans declined | Negative Criticized loans rose; large C&I credit downgraded | Negative Large C&I resolution produced an outsized impairment | Track criticized loans, nonaccruals, charge-offs, provisions, and remaining large classified credits. |
| Efficiency and expense discipline | Positive Lower expenses improved the reported efficiency ratio | Mixed Merit increases and technology spending lifted expenses | Positive Efficiency ratio improved as expenses stayed stable | Negative Merger costs and investments lifted quarterly expenses | Watch efficiency ratio, recurring expenses, staffing investments, and merger-related costs. |
| Balance-sheet repositioning and loan sales | Mixed MBS purchases replaced single-family runoff | Mixed MBS additions continued alongside active-loan growth | Positive Funding shifted from MBS toward higher-yielding loan originations | Mixed Single-family sale closed; multifamily sale planned | Follow multifamily sale completion, reinvestment choices, earning assets, and NII defense. |
| EverBank merger and strategic scale | Mixed Merger positioned as response to scale and funding pressures | Monitor regulatory and shareholder approvals, closing timing, integration planning, and stated merger economics. |
Management cited controlled expenses and a lower efficiency ratio in Q1 and Q3. The ratio rose in Q4 amid merger expenses and continued investment, so the improvement was not uninterrupted.
Management described growing noninterest-bearing accounts in Q1 and a larger deposit pipeline in Q2. Q3 and Q4 discussion still emphasized difficulty building low-cost deposits, making these early signs incomplete evidence of durable funding gains.
Management described deposit balances as challenging in Q1, cited intense competition in Q2, and framed the Q3 market backdrop as structurally difficult. Q4 made this pressure part of the strategic case for EverBank.
A large C&I relationship remained under close watch in Q3 after being downgraded. Its Q4 resolution produced an impairment management characterized as well outside normalized loss history, increasing the importance of single-credit outcomes.
Management discussed the 3% goal in Q1 and Q2, but later described a stable near-term outlook as deposit costs and rate expectations changed. Q4 expected modest expansion, not a quantified timetable for reaching the goal.
Q4 management presented EverBank as a response to scale, technology, and funding challenges, while noting that closing remained subject to shareholder and regulatory approvals. Management also acknowledged a weaker market response after announcement.
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| Quarter | Revenue | YoY revenue growth | Diluted EPS | Gross margin | Investor read |
|---|---|---|---|---|---|
| Q1Dec-25 | $342.91M | -0.4% | $0.79 | 54.8% | The repositioning was still prospective: management saw pipeline progress but said loan growth and deposit traction had to be demonstrated. |
| Q2Mar-26 | $344.83M | 0.6% | $0.87 | 56.2% | The commercial lending plan began showing balance-sheet results, but management still described low-cost deposit competition as a constraint. |
| Q3Jun-26 | $356.47M | 3.4% | $0.89 | 54.6% | Growth was more tangible, but the cost and credit quality of that growth became more prominent investor questions. |
| Q4Sep-26 | $372.71M | 4.6% | $0.76 | 53.3% | The year closed with active production intact, but merger approvals, integration, loan-sale effects, and credit normalization became key uncertainties. |
Active lending expanded again, but the call placed more weight on rising criticized loans, a large C&I relationship, and competition for deposits. Management maintained its growth ambition while describing a stable near-term margin outlook and greater uncertainty around rates.
Read earnings transcriptQ4 combined continued active production with loan sales, a large impairment, and merger-related costs. The announced EverBank partnership shifted the forward debate toward scale, funding, technology, regulatory approval, and execution, alongside the standalone business’s credit and margin trajectory.
Read earnings transcriptCompare originations, active balances, funded pipeline, and total loans after sales.
The large C&I impairment highlighted risk from individual borrower outcomes.
Follow criticized loans, nonaccruals, charge-offs, provisions, and remaining large exposures.
Funding costs and repricing affect the path toward management’s margin goal.
Monitor deposit repricing, loan yields, earning-asset mix, and purchase-accounting accretion.
The merger changes the strategic plan and adds approval and integration milestones.
Watch regulatory and shareholder approvals, closing timing, and management’s integration updates.
Dafinchi