Published on 23 Apr 2024 on Zacks via Yahoo Finance
WaFd (WAFD) Q2 Earnings & Revenues Beat, LBC Deal Boosts Loans
WaFd, Inc.’s WAFD second-quarter fiscal 2024 (ended Mar 31) adjusted earnings of 73 cents per share handily surpassed the Zacks Consensus Estimate of 31 cents. However, the bottom line declined 13.1% sequentially.During the reported quarter, WAFD completed the acquisition of California-based Luther Burbank Corporation (LBC).The results reflected a rise in net interest income (NII) and other income, which aided the top line. Also, higher loan and deposit balances were another positive. However, a rise in expenses and higher provisions 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 $12.2 million or 17 cents per share, down from $54.8 million or 85 cents per share in the prior quarter.
Revenues & Expenses
Adjusted net revenues in the quarter were $173.9 million, up 4.1% from the prior quarter. Moreover, the top line surpassed the Zacks Consensus Estimate of $168.22 million.NII came in at $158.6 million, growing 4.2% sequentially. The net interest margin (NIM) was 2.73%, contracting 18 basis points (bps). Our estimates for NII and NIM were $149.5 million and 2.47%, respectively.Total adjusted other income of $15.3 million increased 3%. Our estimate for the metric was $14.6 million.Total adjusted other expenses were $101.8 million, up 6.6%. The rise was led by an increase in all the components. Our estimate for the metric was $102.3 million. During the reported quarter, WaFd recorded $25.1 million of merger-related expenses for the LBC deal.The company’s adjusted efficiency ratio was 58.5%, up from 57.2% sequentially. A rise in the efficiency ratio reflects lower profitability.As of Mar 31, 2024, net loans receivable amounted to $20.8 billion, up 18.3% from the prior quarter. Total customer deposits were $21.34 billion, jumping 33.1%. The rise in both metrics was driven by the LBC deal completion.At the end of the fiscal second quarter, the adjusted return on average common equity was 8.74%, down from 10.19% at the end of the prior quarter. Adjusted return on average assets was 0.88%, down from 1.04% at the end of the previous quarter.