WaFd (NASDAQ:WAFD), the parent company of Washington Federal Savings Bank, reported fiscal first-quarter net income of $64.2 million on Thursday, reflecting a resilient performance in a tightening credit environment.
The bank posted diluted earnings of $0.79 per share, surpassing the Zacks Investment Research consensus estimate of $0.76 per share.
The bottom-line beat provided a silver lining for the Seattle-based lender, as total revenue for the period ending December 31, 2025, hit $342.8 million.
However, revenue net of interest expense—the core engine of bank profitability—totaled $191.4 million, narrowly missing the Street’s forecast of $192.8 million.
The miss highlights the persistent pressure that elevated interest rates have placed on regional banks, as the cost of retaining deposits continues to eat into the yield generated from long-term loans.
Despite the revenue headwind, WaFd managed to improve its operational profile.
The bank's efficiency ratio—a measure of how much it spends to earn every dollar—came in at 55.3%, a slight beat against the projected 56.1%.
This improvement was driven by disciplined expense management and a shift toward higher-yielding commercial originations.
Tangible book value per share, a critical metric for bank valuation, grew to $29.91, representing a 7.1% year-over-year increase.
The bank's capital position remains a hallmark of its conservative strategy, with a Tier 1 leverage ratio that continues to sit comfortably above regulatory "well-capitalized" minimums.
Investor response to the "mixed" report was largely neutral, with the stock remaining relatively flat in after-hours trading.
While the EPS beat suggests that WaFd is finding ways to squeeze profit out of its existing portfolio, the revenue miss confirms that organic growth remains difficult to find.