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Washington Federal (WAFD) Tops on Q3 Earnings as Revenues Rise
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Washington Federal’s (WAFD - Free Report) third-quarter fiscal 2022 (ended Jun 30) earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 79 cents. The figure reflects a year-over-year jump of 49.2%.
Results were primarily aided by higher revenues and improving loan balances. However, an increase in expenses and higher provisions were the undermining factors.
Net income available to common shareholders was $59.6 million, rising 36.3% from the prior-year quarter.
Revenues Improve, Expenses Rise
Net revenues were $169.3 million, up 19.4% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $159 million.
Net interest income was $151.7 million, up 18% from the year-earlier period. The net interest margin was 3.22%, rising 40 basis points (bps).
Total other income of $17.6 million grew 32.8% year over year. The increase was mainly driven by a rise in deposit fee income and other income.
Other expenses amounted to $87.4 million, up 4.5% year over year. Higher compensation and benefits, occupancy, product delivery and information technology expenses led to the rise.
The company’s efficiency ratio was 51.63%, down from 58.98% a year ago. A fall in the efficiency ratio indicates improved profitability.
At the end of the fiscal third quarter, the return on average common equity was 12.50%, up from 8.71% at the end of the year-earlier quarter. Return on average assets was 1.25%, up from 0.97%.
Loan Balances Rise, Deposits Decline
As of Jun 30, 2022, net loans receivable amounted to $15.6 billion, up 3.1% from the end of the prior quarter. Total customer deposits were $16 billion, down from $16.4 billion as of Mar 31, 2022.
Credit Quality: A Mixed Bag
As of Jun 30, 2022, the allowance for credit losses (including reserve for unfunded commitments) was 1.08% of gross loans outstanding, down 18 bps year over year.
However, the ratio of non-performing assets to total assets was 0.25%, up 2 bps. In the reported quarter, provision for credit losses was $1.5 million against a release of $2 million in the year-ago quarter.
Share Repurchase Update
During the quarter, Washington Federal repurchased 2,446 shares at an average price of $31.36 per share.
Our Viewpoint
Growth in loans and a robust balance sheet will likely continue aiding Washington Federal’s profitability. Further, the bank’s solid capital deployment activities will enhance shareholder value. However, elevated operating expenses remain a major headwind.
Washington Federal, Inc. Price, Consensus and EPS Surprise
Hancock Whitney Corporation (HWC - Free Report) is scheduled to release second-quarter 2022 results on Jul 19.
Over the past 30 days, the Zacks Consensus Estimate for HWC’s quarterly earnings has moved 5% lower to $1.34. The estimate indicates a 2.2% decline from the prior-year quarter.
Associated Banc-Corp (ASB - Free Report) is scheduled to release second-quarter 2022 numbers on Jul 21.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has been unchanged at 44 cents. The figure implies a 21.4% decrease from the prior-year quarter.
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Washington Federal (WAFD) Tops on Q3 Earnings as Revenues Rise
Washington Federal’s (WAFD - Free Report) third-quarter fiscal 2022 (ended Jun 30) earnings of 91 cents per share surpassed the Zacks Consensus Estimate of 79 cents. The figure reflects a year-over-year jump of 49.2%.
Results were primarily aided by higher revenues and improving loan balances. However, an increase in expenses and higher provisions were the undermining factors.
Net income available to common shareholders was $59.6 million, rising 36.3% from the prior-year quarter.
Revenues Improve, Expenses Rise
Net revenues were $169.3 million, up 19.4% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $159 million.
Net interest income was $151.7 million, up 18% from the year-earlier period. The net interest margin was 3.22%, rising 40 basis points (bps).
Total other income of $17.6 million grew 32.8% year over year. The increase was mainly driven by a rise in deposit fee income and other income.
Other expenses amounted to $87.4 million, up 4.5% year over year. Higher compensation and benefits, occupancy, product delivery and information technology expenses led to the rise.
The company’s efficiency ratio was 51.63%, down from 58.98% a year ago. A fall in the efficiency ratio indicates improved profitability.
At the end of the fiscal third quarter, the return on average common equity was 12.50%, up from 8.71% at the end of the year-earlier quarter. Return on average assets was 1.25%, up from 0.97%.
Loan Balances Rise, Deposits Decline
As of Jun 30, 2022, net loans receivable amounted to $15.6 billion, up 3.1% from the end of the prior quarter. Total customer deposits were $16 billion, down from $16.4 billion as of Mar 31, 2022.
Credit Quality: A Mixed Bag
As of Jun 30, 2022, the allowance for credit losses (including reserve for unfunded commitments) was 1.08% of gross loans outstanding, down 18 bps year over year.
However, the ratio of non-performing assets to total assets was 0.25%, up 2 bps. In the reported quarter, provision for credit losses was $1.5 million against a release of $2 million in the year-ago quarter.
Share Repurchase Update
During the quarter, Washington Federal repurchased 2,446 shares at an average price of $31.36 per share.
Our Viewpoint
Growth in loans and a robust balance sheet will likely continue aiding Washington Federal’s profitability. Further, the bank’s solid capital deployment activities will enhance shareholder value. However, elevated operating expenses remain a major headwind.
Washington Federal, Inc. Price, Consensus and EPS Surprise
Washington Federal, Inc. price-consensus-eps-surprise-chart | Washington Federal, Inc. Quote
Currently, Washington Federal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Expected Earnings Release Dates of Other Banks
Hancock Whitney Corporation (HWC - Free Report) is scheduled to release second-quarter 2022 results on Jul 19.
Over the past 30 days, the Zacks Consensus Estimate for HWC’s quarterly earnings has moved 5% lower to $1.34. The estimate indicates a 2.2% decline from the prior-year quarter.
Associated Banc-Corp (ASB - Free Report) is scheduled to release second-quarter 2022 numbers on Jul 21.
Over the past 30 days, the Zacks Consensus Estimate for Associated Banc-Corp’s quarterly earnings has been unchanged at 44 cents. The figure implies a 21.4% decrease from the prior-year quarter.