WaFd Inc. (WAFD) Q4 2026: Earnings Decline Amid Strong Annual Growth — Cautiously Optimistic: Calm Open (-0.5%) — Post-Earnings Analysis
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WaFd Inc. (Nasdaq: WAFD) reported its fourth-quarter earnings for fiscal 2026, revealing a net income of $60 million, which represents a decrease of 9% compared to the previous quarter. However, the annual performance shows a notable increase, with net income for the fiscal year reaching $256 million, up 13% from $226 million in the prior year. This translates to diluted earnings per share (EPS) of $0.76 for Q4 2026, down from $0.84 in Q3 2026, but an impressive increase of $0.58 or 22% year-over-year, resulting in an annual EPS of $3.21 compared to $2.63 in fiscal 2025.
Key Financial Metrics:
- Q4 2026 Net Income: $60 million (down 9% QoQ)
- Q4 2026 EPS: $0.76 (down from $0.84 in Q3 2026)
- Fiscal 2026 Net Income: $256 million (up 13% YoY)
- Fiscal 2026 EPS: $3.21 (up 22% YoY)
Analyst View
This quarter presents a mixed bag for shareholders. While the quarterly earnings have declined, the annual growth in net income and EPS is a positive indicator of the company's overall performance. The decrease in Q4 earnings can be attributed to increased non-interest expenses, which rose by $11.2 million or 10.1% from the previous quarter, largely due to strategic investments and merger-related costs. Despite this, the company has demonstrated resilience in a challenging interest rate environment, with a net interest margin of 2.81% maintained throughout the quarter.
Additional Highlights:
- Net Interest Income: $182.4 million for Q4 2026, a slight increase of $1 million or 0.6% from Q3 2026.
- Non-Interest Income: Increased by $13.9 million to $38.1 million, driven by a $16.4 million gain on the sale of single-family loans.
- Total Assets: Increased to $27.2 billion as of September 30, 2026, up from $26.7 billion a year earlier.
- Customer Deposits: Totaled $21.3 billion, a slight decrease from $21.4 billion in the previous year.
- Dividends: The company paid a cash dividend of $0.27 per share on September 4, 2026, consistent with the previous quarter.
Credit Quality and Future Outlook
WaFd has made significant strides in improving its asset quality, with non-performing assets decreasing by $57 million to $86 million, or 0.32% of total assets. Delinquencies also fell to 0.50% of total loans, down from 0.75% in the previous quarter. This improvement is crucial as it reflects the company's ability to manage credit risk effectively.
Looking ahead, investors should monitor the upcoming merger with EverBank, announced on September 7, 2026. The successful integration of this merger could provide additional growth opportunities and enhance WaFd's market position. Furthermore, with interest rates expected to remain elevated, WaFd is well-positioned to benefit from a quicker repricing of assets compared to liabilities, potentially expanding its net interest margin.
Conclusion
In summary, while the quarterly results may be disappointing at first glance, the overall annual performance and improvements in asset quality suggest a cautiously optimistic outlook for WaFd. Shareholders should keep an eye on the integration of the EverBank merger and the company's ability to navigate the current economic landscape effectively.
Here are the extracted tables from the press release:
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(amounts in thousands)
Note: The amounts in the following tables are in thousands.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands)
Please note that the sections have been sectioned for correct amounts and references, retaining table originality as instructed.
Quarterly Earnings — Revenue vs. Estimate
| Quarter Label | Quarter End | Rev Actual ($M) | Rev Est ($M) | Rev Var ($M) | EPS Actual | EPS Est | EPS Beat |
|---|---|---|---|---|---|---|---|
| Q4 2026 | 2026-10 | 220 | 204 | +17 | 0.85 | 0.84 | +0.01 |
| Q3 2026 | 2026-06-30 | 206 | 200 | +6 | 0.81 | 0.82 | -0.01 |
| Q2 2026 | 2026-03-31 | 198 | 191 | +7 | 0.83 | 0.74 | +0.09 |
| Q1 2026 | 2025-12-31 | 188 | 193 | -5 | 0.75 | 0.76 | -0.01 |
| Q4 2025 | 2025-09-30 | 188 | — | — | 0.72 | — | — |
Revenue vs. Estimate — 5 Quarters
EPS vs. Estimate — 5 Quarters
Analyst Ratings & Price Targets
| Date | Status | Outer | Rating | Price |
|---|---|---|---|---|
| 2025-02-06 | Downgrade | DA Davidson | Buy → Neutral | $35 → $32 |
| 2024-10-21 | Downgrade | Keefe Bruyette | Outperform → Mkt Perform | $40 |
| 2023-12-08 | Initiated | Stephens | Equal-Weight | $32 |
| 2022-03-15 | Upgrade | DA Davidson | Neutral → Buy | $43 |
| 2020-02-19 | Initiated | Stephens | Equal-Weight | $36 |
| 2016-04-18 | Reiterated | RBC Capital Mkts | Sector Perform | $23 → $26 |
| 2016-01-21 | Reiterated | RBC Capital Mkts | Sector Perform | $26 → $23 |
| 2015-06-25 | Downgrade | Macquarie | Neutral → Underperform |
Wall Street analysts have recently adopted a more cautious stance on WaFd Inc. (WAFD), with two downgrades in the past six months. DA Davidson cut its rating from Buy to Neutral in February 2025, reducing its price target from $35 to $32, while Keefe Bruyette downgraded the stock from Outperform to Market Perform in October 2024 without specifying a new target. Earlier, Stephens initiated coverage with an Equal-Weight rating and a $32 target in December 2023. The consensus price target now sits around $32–$35, implying limited upside from WAFD’s current trading levels, with potential downside risk if sentiment weakens further. The most bullish call remains DA Davidson’s March 2022 upgrade to Buy with a $43 target, though recent actions suggest analysts see near-term headwinds. RBC Capital Markets maintained a Sector Perform rating in 2016 but has not updated its view recently. Overall, the recent downgrades reflect tempered expectations for the regional bank.
Technical Analysis — 90-Day Price Chart
WaFd Inc. (WAFD) is trading at $28.62, below all key moving averages ($30.00 SMA20, $33.29 SMA50), confirming a bearish trend, with no near-term crossover signals. The RSI(14) at 33.9 indicates approaching oversold conditions but remains neutral for now. Volume of 67,380 is significantly below the 20-day average of 1.18M, suggesting weak participation in the downtrend. The stock is currently testing its 52-week low ($28.62), which now acts as critical support; a breach could signal further downside. Conversely, resistance levels are distant, with the 52-week high at $39.20. The sustained price below declining SMAs reinforces bearish control, while low volume and near-oversold RSI hint at potential consolidation or exhaustion if support holds. A break below the 52-week low may trigger accelerated selling.
