We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Washington Federal (WAFD) Tops on Q3 Earnings as Revenues Rise
Read MoreHide Full Article
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.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Image: Bigstock
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.