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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.
WaFd
WaFd
WaFd Revenue by Segment
Revenue by Segment
Loan Fee Income Revenue
CapyFin.comDeposit Fee Income Revenue
CapyFin.comOther Income Revenue
CapyFin.comGain on Sale of Investment Securities Revenue
CapyFin.comGain on Termination of Hedging Derivatives Revenue
CapyFin.com 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
- Changes in deposit flows or loan demands
Revenue & Expenses
Visualization of income flow from segment revenue to net income