The Top 5 Analyst Questions From WaFd Bank’s Q3 Earnings Call

WaFd’s results for the third quarter reflected a combination of robust loan production in key segments and significant loan sale activity, with revenue growth of 6.8% year-over-year but a modest miss of Wall Street’s top-line expectations. Management attributed performance to strong origination in commercial and industrial loans, as well as a noteworthy gain from the sale of single-family loans. CFO Kelli Holz highlighted that non-interest income rose due to the $16.4 million gain from these loan sales, though this was partially offset by higher loan loss provisions and merger expenses. CEO Brent Beardall pointed to the resolution of a large problematic loan, noting, “Credit quality measures are strong,” following the impairment.

Is now the time to buy WAFD? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From WaFd Bank’s Q3 Earnings Call

• Jeff Rulis (D.A. Davidson) asked about the timing and yields of the recent loan sales and whether more sales are likely. CFO Kelli Holz detailed the closing dates and average yields, while CEO Brent Beardall said future sales would be evaluated opportunistically.
• Matthew Clark (Piper Sandler) questioned offset strategies for the decline in earning assets from loan sales and their impact on net interest income. Beardall indicated that higher-yielding investments could partially offset the effect, and noted no definitive expense changes yet.
• Clark further inquired about the expense run rate and expectations for core expenses post-merger charges. Beardall explained that year-end “cleanup” inflated expenses, but a stable core run rate is expected going forward.
• Andrew Terrell (Stephens) sought clarification on accretion from purchased loans and the impact on future margins. Holz explained that accretion will decrease slightly after the sales, but remaining balances are still significant and will amortize over time.
• Kelly Motta (KBW) asked about how merger discussions have affected employee sentiment and the balance sheet strategy for loan sale proceeds. Beardall described optimism among staff and flexibility in reinvesting or paying down borrowings to defend net interest income.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) progress on closing the EverBank merger and the speed of regulatory approvals, (2) WaFd’s ability to reinvest loan sale proceeds efficiently while defending margins, and (3) developments in credit quality, especially as economic headwinds and elevated rates persist. Execution on expense control and technology investment will also be closely watched.

WaFd Bank currently trades at $29.15, down from $29.45 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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