WAFD

WaFd($WAFD) President Makes Rare Insider Purchase... Strategic Pivot Timing Draws Attention

11/26/2025 19:28

WaFd Inc ($WAFD) President Brent Beardall purchased 3,000 shares for approximately $49,650 on November 26th, marking a stark contrast to the significant insider selling by the company's top executives just a year ago. This rare insider buying signal in the regional banking sector deserves careful attention from investors. WaFd operates Washington Federal Bank, a regional institution founded in 1917 that serves consumers and small businesses across nine western states from Arizona to Washington through over 200 branches. The $2.5 billion market cap regional bank is currently undergoing a strategic transformation, exiting single-family mortgage lending to focus on commercial banking operations. Beardall's purchase carries particular significance when viewed against the backdrop of executive selling in November 2024. EVPs Ryan Mauer and Cathy Cooper sold shares worth $404,364 and $243,938 respectively, suggesting a notable shift in management's outlook. Moreover, this purchase was made in preferred shares, with each depositary share representing 1/40th interest in 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock, indicating long-term commitment. The company's financial performance presents a mixed picture. Fiscal 2025 net income rose 13% to $226.1 million, with earnings per share growing 5.2% to $2.63. WaFd declared its 171st consecutive quarterly dividend of $0.27 per share, maintaining a solid 3.33% dividend yield. The efficiency ratio improved from 57.2% to 55.5%, demonstrating successful operational optimization efforts. However, concerning indicators warrant attention. Total non-performing assets increased from $77.42 million to $98.38 million, while non-accrual loans rose from $69.54 million to $83.91 million. Though this represents a manageable 0.54% of total assets, it signals the need for continued credit quality monitoring amid economic uncertainties. The company's strategic pivot deserves recognition. Exiting single-family mortgage lending is expected to save approximately $17 million annually with an 8% workforce reduction, allowing resource reallocation to higher-margin commercial banking activities. September's designation as an SBA Preferred Lender enhances small business lending capabilities significantly. Key metrics investors should monitor include next quarter's net interest margin changes. Currently at 2.71%, this could face pressure from Federal Reserve policy shifts and intensifying deposit competition. Commercial real estate and small business loan portfolio credit quality will also be critical to watch. From a stock performance perspective, $WAFD faces challenges. The stock declined approximately 8.5% over the past month, contrasting with the S&P 500's 0.4% gain. However, trading at 12.34x earnings and 0.91x book value suggests significant discount to industry peers. Analyst price targets range from $30-33, implying limited upside from current levels around $31.1. In an optimistic scenario, successful business model transition and net interest margin improvement could drive share price appreciation. Expanded SBA lending and increased commercial banking fee income could deliver additional ROE and efficiency gains. Stable dividend history and regional economic recovery provide additional support. Risks to monitor include regional economic downturn and commercial real estate market deterioration. Further increases in non-performing assets or margin pressure could threaten dividend sustainability. Structural challenges facing regional banks, including fintech competition and digital transformation pressures, remain persistent headwinds. Overall, President Beardall's purchase signals insider confidence in current valuation levels. Combined with an attractive 3.33% dividend yield, discounted valuation, and potential benefits from business model transformation, this presents an interesting opportunity for value-oriented long-term investors. However, near-term focus should remain on non-performing asset trends and guidance changes in upcoming quarterly results.