WaFd's fiscal 2026 profit rises 13% to $256 million as EPS climbs 22%

WaFd Inc. reported fiscal 2026 net income of $256 million, up 13% from $226,068,000 a year earlier, and diluted earnings per common share of $3.21, up 22%, in a Form 8-K filed on October 16, 2026. The Seattle-based parent of WaFd Bank closed the year with a weaker fiscal fourth quarter on a sequential basis: net income fell 9% from the quarter ended June 30, 2026 to $60 million, or $0.76 a diluted share. The quarter carried a $36 million charge-off on one resolved $53 million loan relationship, within $39.2 million of net charge-offs, and the release states that 9% decline and the credit costs separately. The 9% drop is a sequential comparison: in the year-earlier quarter ended September 30, 2025, net income was $60.6 million and diluted earnings were $0.72 a share, so profit was roughly flat while earnings per share were higher against that period.

One resolved relationship drives a $36 million charge-off

Asset quality improved sharply even as charge-offs spiked. Non-performing assets fell to $86 million, or 0.32% of total assets, from $136 million, or 0.49%, at June 30, 2026, and delinquent loans dropped to 0.50% of total loans from 0.75% a quarter earlier. WaFd resolved one $53 million loan relationship during the quarter, producing a $36 million charge-off, the release said. Net charge-offs were $39.2 million, against $1.6 million in the quarter ended June 30, 2026. Those losses did not pass through profit dollar for dollar: the quarter's provision for credit losses was $20.0 million, up from $11.0 million, and the allowance for credit losses fell to $214.59 million from $233.83 million a quarter earlier, absorbing the balance. The release reports the 9% sequential decline in net income and the credit costs separately and gives no single reconciliation of the two, with the higher provision and the quarter's other expense growth, including the merger costs, as the reported drags on profit.

Brent Beardall, president and CEO of WaFd Bank, said the balance sheet could absorb the hit: "Our balance sheet strength and resiliency were demonstrated this quarter, allowing us to handle the classified loan, while still delivering meaningful improvement in earnings to shareholders."

Loan sales and deposit mix reshaped the balance sheet

WaFd sold $543 million of single-family residential loans during the September quarter and agreed to sell $429 million of multifamily loans in the first quarter of fiscal 2027, a transaction it expects to produce a net gain of about $7 million. Net loans decreased $1.0 billion to $19.0 billion. Funding moved toward transactional accounts: transaction accounts increased $569 million, or 4.6%, from a year earlier while time deposits fell $686 million, or 7.5%, leaving 60.4% of deposits in transaction accounts, up from 57.4% at September 30, 2025.

Margin held while merger costs lifted expenses

Net interest income was $182.4 million for the fiscal fourth quarter, up 0.6% from $181.3 million in the quarter ended June 30, 2026, as net interest margin stayed at 2.81% and the loan portfolio's period-end yield rose to 5.44% from 5.38% a year earlier. Non-interest income rose to $38.1 million from $24.2 million, mostly on a $16.4 million gain from the single-family loan sale, while non-interest expense rose 10.1% to $121.5 million, including about $6 million of merger-related costs recorded after WaFd announced its proposed EverBank merger on September 7, 2026. Those costs lifted the efficiency ratio to 55.12% from 53.69%. Excluding the merger costs and other items the company deems non-operating, non-GAAP diluted earnings were $0.85 a share, against $0.73 a year earlier. The fiscal year's return on average tangible common equity, a non-GAAP measure, was 10.68%, and WaFd paid a quarterly dividend of $0.27 a share on September 4, 2026, its 174th consecutive one.

Net income available for common shareholders, the figure the per-share amounts divide, fell to $56.34 million in the September quarter from $62.47 million in the June quarter, which is why diluted earnings per share moved from $0.84 to $0.76. In the year-earlier quarter the same line was $56.94 million, and diluted weighted average shares were 78,573,457 against 74,157,143 now, so the year-over-year per-share comparison runs the other way from the sequential net income decline.

Open items: the multifamily sale and the annual report

The release publishes no consensus estimate, so the quarter cannot be scored as a beat or a miss, and it states no figures for fiscal 2027. On the EverBank transaction the release keeps its qualifier: it describes a proposed transaction under a definitive merger agreement between WaFd and EverBank that is subject to required regulatory, shareholder and other approvals, warns that it may not close, and gives no deal terms and no expected closing date. Two dated items carry the story forward. The $429 million multifamily sale, reclassified as held for sale at September 30, 2026, is expected to close in the December 2026 quarter, and WaFd's annual report on Form 10-K for fiscal 2026 will set out the year's credit and capital detail on an audited basis.