Overview

• U.S. regional bank's fiscal Q3 diluted EPS rose 15% yr/yr to $0.84

• Net interest income for Q3 grew 2% from prior quarter; margin steady at 2.81%

• Efficiency ratio improved to 53.7% on higher income and expense discipline

Outlook

• Company expects capital ratios to remain in line with prior quarter and above regulatory minimums

• Company continues to closely monitor credit quality amid shifting economic and monetary conditions

• Company evaluating potential capital relief from proposed Basel III Endgame revisions once finalized

Result Drivers

• NET INTEREST INCOME - Growth in net interest income was driven by a higher rate earned on interest-earning assets and a lower rate paid on interest-bearing liabilities

• NON-INTEREST INCOME - Higher non-interest income resulted from gains on sale of bank real estate and lower losses on equity method investments

• EXPENSE DISCIPLINE - Efficiency ratio improved due to disciplined expense management and higher income

Company press release: ID:nBwb7qZjva

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q3 EPS		$0.84
Q3 Net Interest Income		$181 mln
Q3 Net Interest Margin		2.81%

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for WaFd Inc is $37.50, about 2.3% below its July 15 closing price of $38.39

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 10 three months ago

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