Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Washington Federal's (WAFD) Q2 Earnings Beat, Costs Rise

By Zacks Investment ResearchStock MarketsApr 16, 2019 08:56AM ET
www.investing.com/analysis/washington-federals-wafd-q2-earnings-beat-costs-rise-200407176
Washington Federal's (WAFD) Q2 Earnings Beat, Costs Rise
By Zacks Investment Research   |  Apr 16, 2019 08:56AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
WAFD
-1.41%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CBU
-1.46%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ACBI
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
FBK
-1.37%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Washington Federal’s (NASDAQ:WAFD) second-quarter fiscal 2019 (ended Mar 31) earnings came in at 63 cents per share, surpassing the Zacks Consensus Estimate of 61 cents. The figure also reflects year-over-year growth of 10.5%.

Results benefited from a rise in revenues, and decent growth in loan and deposit balances. However, expense growth was an undermining factor.

Net income for the quarter increased 3.7% year over year to $51.1 million.

Revenues Rise, Costs Flare Up

Net revenues for the quarter came in at $132.9 million, up 2.3% from the year-ago quarter. The revenue figure, however, lagged the Zacks Consensus Estimate of $133.4 million.

Net interest income for the quarter was $120.1 million, up 2.4% from the year-earlier quarter. However, net interest margin shrunk 10 basis points (bps) year over year to 3.15%.

Total other income of $12.8 million inched up 1.8% from the prior-year tally. This upside was mainly driven by an increase in other income.

Operating expenses flared up 3.3% from the prior-year quarter to $68 million. Higher compensation and benefit, occupancy and other expenses led to this upswing. Moreover, the company incurred Bank Secrecy Act (BSA)-related costs of nearly $1.2 million in the quarter under review.

Management expects to incur an additional $1 million of non-recurring costs for BSA improvements in third-quarter fiscal 2019.

The company’s efficiency ratio was 51.15%, up from 50.65% recorded a year ago. A rise in efficiency ratio indicates deterioration in profitability.

At the end of the reported quarter, return on average common equity was 10.20%, up from 9.81% witnessed at the end of the prior-year quarter. Return on average assets was 1.24% compared with 1.26% at the end of the year-ago quarter.

Loans & Deposits Rise

As of Mar 31, 2019, net loans receivables amounted to $11.9 billion, up from $11.5 billion recorded as of Sep 30, 2018. Also, customer deposit accounts were $11.7 billion, up from $11.4 billion as of Sep 30, 2018.

Credit Quality: A Mixed Bag

As of Mar 31, 2019, the ratio of non-performing assets to total assets was 0.36%, down 9 bps year over year. Furthermore, the allowance for loan losses and reserve for unfunded commitments were 1.05% of gross loans outstanding, down from 1.06% recorded as of Sep 30, 2018.

However, during the fiscal second quarter, the company recorded provision for loan losses of $0.75 million compared with a benefit of nearly $1 million in the prior-year quarter.

Share Repurchases

During the fiscal second quarter, Washington Federal repurchased 0.7 million shares at average price of $29.65 per share.

Our View

Washington Federal is well poised to grow organically, supported by continued rise in loan balances. Additionally, its solid capital and liquidity position will aid the company’s growth through acquisitions. Nevertheless, persistently rising expenses might keep curbing the company’s bottom-line growth.

Washington Federal, Inc. Price, Consensus and EPS Surprise

Washington Federal, Inc. Price, Consensus and EPS Surprise | Washington Federal, Inc. Quote

Currently, Washington Federal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Schedule of Other Banks

Among other banks, FB Financial Corporation (NYSE:FBK) is scheduled to release its quarterly results on Apr 23, Community Bank System, Inc. (NYSE:CBU) on Apr 22, while Atlantic Capital Bancshares, Inc. (NASDAQ:ACBI) will report earnings on Apr 25.

Will you retire a millionaire?

One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”

Click to get it free >>



Atlantic Capital Bancshares, Inc. (ACBI): Free Stock Analysis Report

Washington Federal, Inc. (WAFD): Free Stock Analysis Report

Community Bank System, Inc. (CBU): Free Stock Analysis Report

FB Financial Corporation (FBK): Free Stock Analysis Report

Original post
Washington Federal's (WAFD) Q2 Earnings Beat, Costs Rise
 

Related Articles

Washington Federal's (WAFD) Q2 Earnings Beat, Costs Rise

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email