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Mar 31, 2024
WaFd Q2 2024 Earnings Report
Reported earnings after successfully completing the merger of California-based Luther Burbank Corporation.
Key Takeaways
WaFd's earnings for the quarter ended March 31, 2024, were $15.888 million, a decrease of 73% from the previous quarter and 76% from the same quarter last year, impacted by merger-related costs and certain non-operating expenses of $51.1 million. Adjusted for these expenses, net income would have been $54.8 million, a 6% decrease from the December quarter.
Completed the acquisition of Luther Burbank Corporation (LBC) on February 29, 2024, and integrated its systems and branches rapidly.
Identified a portion of the LBC multifamily loan portfolio (up to $3.2 billion) for potential sale and initiated a sale program.
Total assets reached $30.1 billion as of March 31, 2024, primarily due to the addition of $7.7 billion of LBC assets.
Net interest income was $159 million, a decrease of $16.4 million or 9.4% from the same quarter in the prior year.
Revenue by Segment
Forward Guidance
WaFd expects earnings per share accretion of 8% in fiscal 2025 and 16% in fiscal 2026 factoring in the redeployment of funds received in the potential loan sale into higher yielding assets.
Positive Outlook
- EPS Accretion: 8% accretion for FY 2025
- Cost savings: $31 million immediate savings
- Sale of $3.2 billion loan portfolio
- Strong regional bank
- Relationship banking
Challenges Ahead
- Fluctuations in interest rate risk and market interest rates
- Current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates and inflationary pressures.
- Risks related to the integration of the operations of Luther Burbank Corporation
- Financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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