WaFd Bank reports quarterly, an annual decline in net income

WaFd Inc. (Nasdaq: WAFD) said it ended its fiscal year on Sept. 30 with more than $200 million in annual earnings, nearly a quarter of the net income it reported in fiscal 2023.

Net income for the Seattle financial institution that interest Santa Rosa-based Luther Burbank Savings earlier this year was $61.14 million for the third calendar quarter. That’s down more than $3 million from the previous quarter, but up about $11 million year-over-year.

Chairman and CEO Brent Beardall called the year-end results “excellent” given that the period was “one of the most challenging macro environments.” The term refers to banks that play a key role in the overall economy by purely handling withdrawals, making loans and holding deposits for communities.

WaFd’s customer deposits totaled $21.37 billion for the quarter ended Sept. 30 — up slightly from the prior three-month period and up 33 percent year-on-year. Part of the increase in deposits over the past two quarters was attributed to the gain on the $654 million acquisition of Luther Burbank Corp. in February.

In other financial barometers, net interest income for the most recent quarter was $172.81 million. Despite the figure increasing by about $10 million quarter-on-quarter, the revenue level fell for the fiscal year ended last month to $660.83 million — a drop of more than 4 percent from the previous year. Net interest income marks the difference between the income generated by interest-bearing accounts and the costs of servicing debt.

Total non-interest income was up about $1 million to $15.87 million quarter over quarter. For the fiscal year ended September 30, 2024, fee income increased 16% from $52.2 million in the prior year.

In lending, WaFd Bank reported a loan loss provision of $17.5 million for the fiscal year. This accounting expense was partially reserved to cover potential loan losses from Luther Burbank Savings, which specializes in multifamily housing.

The other factor influencing the reported provision looms nationally, as inflationary pressures have heightened borrowers’ sensitivity to high interest rates.

Beardall summed up the bank’s cautious optimism: “Perhaps our biggest concern is the potential for unexpected events.”

Despite the challenges, the WaFd chief views promise on the horizon.

“WaFd sees significant growth opportunities in all nine western states, where we believe economic growth will outpace overall U.S. growth,” he said.

Founded in 1917, WaFd Bank manages $28 billion in assets – up nearly $6 billion year over year since the Luther Burbank acquisition. It has more than 2,400 employees and operates 210 branches in nine Western states. This includes two locations in the North Bay – Santa Rosa and San Rafael.

Susan Wood covers agriculture, law, cannabis, manufacturing, transport, as well as banking and finance. She can be reached at 530-545-8662 or [email protected]