WaFd Inc (NASDAQ:WAFD) stock fell 2.46% (As on January 16, 11:26:31 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY26. The company successfully launched WaFd Wealth Management, which managed $400 million in assets by the end of December 2025, with ambitions to reach $1 billion in two years. WaFd also became a preferred SBA lender, showcasing its strategic focus on expanding its financial services. Meanwhile, the loans receivable decreased $240 million during the quarter, primarily due to a decrease in our inactive loan types, SFR, custom construction, and consumer lot loans, which combined decreased by $256 million. Loan originations and advances for the quarter outpaced repayments and payoffs in the active loan types, with originations at $1.1 billion and repayments and payoffs at $1 billion.

Moreover, the total investments and mortgage-backed securities increased $728 million during the quarter, funded primarily by the increase in borrowings of $671 million. Investment purchases were primarily discount-priced agency mortgage-backed securities with an effective yield of 4.93%. This increase in mortgage-backed securities is part of the overall investment strategy, currently replacing the single-family mortgage loan balance runoff. Total deposits decreased by $21 million during the quarter, with non-interest-bearing deposits increasing $125 million or 4.9%, interest-bearing deposits increasing $434 million or 4.5%, while time deposits decreased $580 million or 6.4%. Core deposits ended the quarter at 79.7% of total deposits, up slightly from the September quarter at 77.9%. Non-interest-bearing deposits ended the quarter at 12.6% of total deposits. The loan-to-deposit ratio ended the quarter at 92.7%. The net interest income increased $1.2 million from the prior quarter. The net interest margin was 2.7% in the December quarter, compared to 2.71% for the September quarter. Non-performing assets increased to $203 million, or 0.75% of total assets, from $143 million, or 0.54%, at September 30 of 2025.

WAFD in the first quarter of FY26 has reported the adjusted earnings per share of 75 cents, missing the analysts’ estimates for the adjusted earnings per share of 76 cents. The company had reported the adjusted revenue of $191.37 million in the first quarter of FY26, beating the analysts’ estimates for revenue of $192.83 million.

Looking ahead, WaFd aims to increase non-interest-bearing deposits from 12.6% to 20% by 2030. The company also projects active loan portfolio growth of 6%-10% for fiscal 2026 and 8%-12% for fiscal 2027. WaFd expects 1-2 Federal Reserve rate cuts in 2026, which could influence its net interest margin.