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WaFd (WAFD) Down 2.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for WaFd (WAFD - Free Report) . Shares have lost about 2.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is WaFd due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WAFD's Q3 Earnings Beat Estimates, Revenues Rise on LBC Deal
WaFd third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
The quarter marked the first full quarter after the completion of the acquisition of LBC.
The results reflected a rise in net interest income (NII) and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Results in the reported quarter excluded merger-related costs and certain non-operating expenses. After considering those, net income available to common shareholders (GAAP basis) was $60.9 million or 75 cents per share, significantly up from $12.2 million or 17 cents per share in the prior quarter.
Revenues Rise, Expenses Up
Adjusted net revenues were $193.4 million, rising 11.2% from the prior quarter. Also, the top line surpassed the Zacks Consensus Estimate of $180.6 million.
NII came in at $177.2 million, growing 11.7% sequentially. The net interest margin (NIM) was 2.56%, contracting 17 basis points (bps). Our estimates for NII and NIM were $166.8 million and 2.74%, respectively.
The total adjusted other income of $16.2 million rose 5.9%. Our estimate for the metric was $14.5 million.
Total adjusted other expenses were $107.8 million, up 5.9%. The rise was due to an increase in all the components. Our estimate for the metric was $114.8 million. During the reported quarter, WaFd recorded $2.3 million of merger-related expenses for the LBC deal.
The company’s adjusted efficiency ratio was 55.7%, down from 58.5% in the prior quarter. A fall in the efficiency ratio reflects improved profitability.
As of Jun 30, 2024, net loans receivable were $20.9 billion, growing marginally from the prior quarter. During the quarter, the company sold $2.8 billion of acquired multifamily loans.
Total customer deposits were $21.2 billion, recording a slight fall.
At the end of the fiscal third quarter, the adjusted return on average common equity was 9.36%, up from 8.74% at the end of the prior quarter. Adjusted return on average assets was 0.88%, stable on a sequential basis.
Credit Quality: A Mixed Bag
As of Jun 30, 2024, allowance for credit losses (including reserve for unfunded commitments) was 1% of gross loans outstanding, stable from the prior quarter end.
In the reported quarter, the provision for credit losses was $1.5 million compared with $16 million provisions in the previous quarter.
The ratio of non-performing assets to total assets was 0.24%, up 1 bp.
Share Repurchase Update
During the quarter, WAFD repurchased 0.36 million shares at an average price of $26.63 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.73% due to these changes.
VGM Scores
At this time, WaFd has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, WaFd has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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WaFd (WAFD) Down 2.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for WaFd (WAFD - Free Report) . Shares have lost about 2.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is WaFd due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WAFD's Q3 Earnings Beat Estimates, Revenues Rise on LBC Deal
WaFd third-quarter fiscal 2024 (ended Jun 30) adjusted earnings of 76 cents per share handily surpassed the Zacks Consensus Estimate of 59 cents. Also, the bottom line rose 4.1% sequentially.
The quarter marked the first full quarter after the completion of the acquisition of LBC.
The results reflected a rise in net interest income (NII) and other income, which aided the top line. Also, higher loan balances and lower provisions were other positives. However, a rise in expenses and a slight decline in the deposit balance acted as spoilsports.
Results in the reported quarter excluded merger-related costs and certain non-operating expenses. After considering those, net income available to common shareholders (GAAP basis) was $60.9 million or 75 cents per share, significantly up from $12.2 million or 17 cents per share in the prior quarter.
Revenues Rise, Expenses Up
Adjusted net revenues were $193.4 million, rising 11.2% from the prior quarter. Also, the top line surpassed the Zacks Consensus Estimate of $180.6 million.
NII came in at $177.2 million, growing 11.7% sequentially. The net interest margin (NIM) was 2.56%, contracting 17 basis points (bps). Our estimates for NII and NIM were $166.8 million and 2.74%, respectively.
The total adjusted other income of $16.2 million rose 5.9%. Our estimate for the metric was $14.5 million.
Total adjusted other expenses were $107.8 million, up 5.9%. The rise was due to an increase in all the components. Our estimate for the metric was $114.8 million. During the reported quarter, WaFd recorded $2.3 million of merger-related expenses for the LBC deal.
The company’s adjusted efficiency ratio was 55.7%, down from 58.5% in the prior quarter. A fall in the efficiency ratio reflects improved profitability.
As of Jun 30, 2024, net loans receivable were $20.9 billion, growing marginally from the prior quarter. During the quarter, the company sold $2.8 billion of acquired multifamily loans.
Total customer deposits were $21.2 billion, recording a slight fall.
At the end of the fiscal third quarter, the adjusted return on average common equity was 9.36%, up from 8.74% at the end of the prior quarter. Adjusted return on average assets was 0.88%, stable on a sequential basis.
Credit Quality: A Mixed Bag
As of Jun 30, 2024, allowance for credit losses (including reserve for unfunded commitments) was 1% of gross loans outstanding, stable from the prior quarter end.
In the reported quarter, the provision for credit losses was $1.5 million compared with $16 million provisions in the previous quarter.
The ratio of non-performing assets to total assets was 0.24%, up 1 bp.
Share Repurchase Update
During the quarter, WAFD repurchased 0.36 million shares at an average price of $26.63 per share.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 5.73% due to these changes.
VGM Scores
At this time, WaFd has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, WaFd has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.