Regional banking company WaFd (NASDAQ: WAFD) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 7.8% year on year to $193.4 million. Its non-GAAP profit of $0.83 per share was 10.7% above analysts’ consensus estimates.

Is now the time to buy WAFD? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

WaFd Bank delivered a first quarter that exceeded Wall Street’s expectations, with management attributing the strong performance to a meaningful rebound in loan growth and disciplined expense management. CEO Brent Beardall emphasized that "the headline for this quarter is loan growth," noting it was the first expansion in the loan portfolio after several quarters of contraction. The quarter also benefited from a well-controlled cost base and a notable increase in net interest income, aided by favorable repricing of liabilities and successful execution of share repurchases. Additionally, the bank highlighted continued improvements in credit quality, as nonperforming assets and delinquencies trended positively despite lingering economic pressures.

Looking ahead, WaFd Bank’s forward outlook centers on expanding its business banking relationships and increasing low-cost deposits, which management views as essential for driving higher margins and long-term profitability. Beardall outlined the bank’s “Build 2030” strategy, targeting a substantial rise in noninterest-bearing deposits to improve funding costs and support further loan growth. The upcoming launch of technology upgrades, including an enhanced mobile app and AI-powered call center tools, is expected to strengthen customer engagement. However, management flagged persistent competition for deposits and macroeconomic uncertainties as ongoing headwinds shaping their execution priorities.

Key Insights from Management’s Remarks

Management credited the quarter’s outperformance to robust C&I and commercial real estate lending, disciplined cost control, and technology-driven operational improvements, while acknowledging ongoing deposit competition and macroeconomic pressures.

• Active loan growth resumed: After several quarters of contraction, WaFd’s active loan portfolio expanded by 12% on a linked-quarter basis, led by commercial and industrial (C&I) lending and commercial real estate (CRE) segments. Management cited broad-based growth without reliance on large, syndicated club deals, emphasizing the importance of diversified client relationships.

• Deposit pipeline strengthened: The bank reported a 66% increase in its deposit pipeline compared to the prior quarter, reflecting traction in commercial banking initiatives. CEO Brent Beardall noted that new business accounts are being opened, though it may take time for substantial deposit balances to accumulate.

• Technology investments advancing: WaFd highlighted the upcoming launch of a next-generation mobile banking app, which will significantly reduce access times for clients and enable features like real-time peer-to-peer payments and consumer positive pay. The bank is also set to introduce an AI-powered call center agent to provide 24/7 support, aiming to improve efficiency and free up bankers for higher-value client interactions.

• Proactive credit management: Credit quality metrics improved, with a reduction in both nonperforming assets and delinquent loans, despite a continued challenging environment for some commercial borrowers. Management stressed that criticized loans are not concentrated in any one sector and that asset quality trends remain manageable.

• Efficient capital deployment: WaFd repurchased 2.7 million shares during the quarter, representing 3.6% of shares outstanding, taking advantage of a compressed share price. Management continues to prioritize share buybacks when capital levels are robust, while also monitoring potential regulatory changes that could affect risk-based capital ratios and future capital allocation.

Drivers of Future Performance

Management’s outlook focuses on continued growth in business lending, expanding low-cost deposit relationships, and leveraging technology upgrades to drive margin improvement and operational efficiency.

• Deposit growth as a margin lever: WaFd’s strategic plan targets raising noninterest-bearing deposits to 20% of total deposits by 2030, up from the current 12.2%. Management believes this shift is critical for lowering funding costs and supporting sustainable loan growth, though competition from large banks, credit unions, and fintech entrants remains intense.

• Business banking expansion: The bank is reorganizing its frontline teams to serve small and medium-sized businesses more effectively, with the goal of capturing treasury and operating accounts alongside lending. Management expects these efforts to gradually increase both loan demand and core deposit balances, aiding efforts to reach a 3% net interest margin over the next two years.

• Technology and noninterest income initiatives: Planned launches of enhanced digital banking services and AI-driven customer support are expected to improve customer experience and operational efficiency. Additionally, the organic buildout of the wealth management business and continued insurance commission growth are seen as important drivers of noninterest income, though management remains cautious about the pace of profitability in these segments.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) whether WaFd can accelerate growth in both business banking relationships and low-cost deposits, (2) the adoption and impact of new digital banking and AI-powered customer service tools, and (3) trends in credit quality, especially as economic and competitive pressures persist. Capital deployment decisions, including share repurchases and responses to potential regulatory changes, will also be key milestones to track.

WaFd Bank currently trades at $34.89, up from $32.51 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

Now Could Be The Perfect Time To Invest In These Stocks

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.