WaFd: 3 Key Takeaways for Long-Term Investors

On its fourth quarter of 2026 earnings call, held on Oct. 16, 2026, WaFd (NASDAQ:WAFD) announced full-year earnings per share grew 22% over the prior year. The bank is reallocating capital away from lower-yielding residential mortgages. Management plans to combine operations with EverBank in early 2027. Three things management said stand out.

1. Asset Sales Clear Low-Yielding Loans From the Balance Sheet

WaFd sold off single-family mortgages and agreed to unload multifamily loans to exit low-yielding assets. Management intends to reallocate that capital into higher-yielding loan originations and investment securities.

The company sold $543 million of single-family residential loans during the quarter and has entered into an agreement to sell $429 million of multifamily loans in the first quarter of fiscal 2027.
-- Kelli Holz, Chief Financial Officer

2. One Commercial Loan Impairment Drives a Temporary Loss Spike

A single default by a private equity-owned commercial and industrial (C&I) borrower created a $54 million impairment during the quarter. Management views this loss as an outlier that doesn't reflect the bank's broader credit quality.

Inclusive of this loss, the loss rate for fiscal year ending 9/30/2026 was 22 basis points. Adjusting for or excluding this loss at 9/30/2026 would have resulted in a loss rate of four basis points.
-- Ryan Mauer, Chief Credit Officer

3. Scale From the EverBank Merger Enhances Deposit Profitability

Large banks currently hold a major advantage in gathering organic deposits across the industry. Short-term interest rate trends support an expansion in net interest margin, the spread between loan yields and deposit costs, because earning assets reprice faster than deposit liabilities. WaFd relies on structural advantages in core deposit funding and lean operating expenses, while management focuses on deposit-pricing discipline and loan-pipeline execution.

Given the recent increase in short-term rates, we would expect our margin to expand over the next couple of quarters as assets will reprice more quickly than liabilities.
-- Brent Beardall, President and CEO

The pending combination with EverBank creates a larger regional entity capable of supporting necessary technology investments and revaluing legacy mortgages.

Through this merger, we will be able to fair value the WaFd balance sheet, including the $6.6 billion of single-family residential loans that are today earning only 4.25%, and mark those loans to market rates.
-- Brent Beardall, President and CEO

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