The Q3 beat on GAAP EPS and improved efficiency are positive, but the Street EPS miss and the sharp increase in provision/charge-offs introduce caution. Monitor the Q4 provision trajectory and credit quality metrics closely; the 8.0M share buyback authorization provides downside support. The stock's 19% rally since March suggests much of the good news is priced in.
Price Chart
Executive Summary
WaFd reported Q3 2026 diluted EPS of $0.84 (GAAP) and $0.81 (non-GAAP/Street), with net income of $66.1M. The Street EPS of $0.81 was a slight miss vs the $0.82 consensus. Net interest income grew 2% QoQ to $181M, and the efficiency ratio improved to 53.7%. However, the provision for credit losses more than doubled to $11M, and net charge-offs rose to $1.6M, signaling credit quality deterioration. The stock has already rallied 19% from March 31, and the 8.0M share buyback authorization provides a floor, but the elevated provision and charge-offs are a watch item for credit-sensitive investors.
Key Financial Metrics
Key Facts
- GAAP diluted EPS of $0.84 vs $0.82 in Q2 and $0.73 in Q3 last year.
- Non-GAAP (Street) diluted EPS of $0.81 vs consensus of $0.82, a slight miss.
- Net interest income rose to $181M, up 2% QoQ; NIM held steady at 2.81%.
- Provision for credit losses surged to $11M from $4M in Q2, driven by loan growth and adverse classifications.
- Net charge-offs increased to $1.6M from $0.6M in Q2.
- Efficiency ratio improved to 53.69% from 55.66% in Q2, aided by a $3.2M gain on branch sale.
- Tangible book value per share grew to $30.82 from $30.27 in Q2.
- Company repurchased only 8,806 shares in Q3; 8.0M shares remain authorized for buyback.
- Non-performing assets ticked up to 0.49% of total assets from 0.48% in Q2.
Financial Impact
Q3 net income of $66.1M (+1% QoQ, +7% YoY); Street EPS of $0.81 vs $0.82 consensus (-1.2% miss); provision for credit losses of $11M (+175% QoQ)
Risk Factors
- Elevated provision for credit losses ($11M) and net charge-offs ($1.6M) signal potential credit deterioration.
- Street EPS miss vs consensus, albeit small, could cap near-term upside.
- Borrowings increased to $3.3B from $1.8B in Sep 2025, increasing interest expense and leverage.
- Uninsured deposits remain at 25.4% of total deposits, a potential liquidity risk in a stress scenario.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000936528-26-000055 |
| Exhibit: exhibit991_june2026earning.htm | 0000936528-26-000055 |
| Document: wfsl-20260716.htm | 0000936528-26-000055 |
| Document: 0000936528-26-000055-index-headers.html | 0000936528-26-000055 |
| Document: 0000936528-26-000055-index.html | 0000936528-26-000055 |
| Document: 0000936528-26-000055.txt | 0000936528-26-000055 |
| 8-K Data (Synthetic) | 0000936528-26-000055 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 11, 2026 7w ago | 8-K | $37.76 $34.10 | ▼ −9.69% | ▼ −7.79% | $30.80 (−18.43%) |
Jul 17, 2026 11w ago | 8-K | $38.12 $37.94 | ▼ −0.47% | ▼ −4.92% | $30.80 (−19.20%) |
US Market Status
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