WAFD INC
For the period ended Mar 31, 2025. Filed May 2, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
WAFD$29.43-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-04.
0000936528-25-000040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000936528-25-000063
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 115 current paragraphs.
86 unchanged; 27 reworded; 2 added; 2 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Real estate owned ("REO") - REO increased during the six months ended March 31, 2025 by $3,121,000 to $7,688,000. The increase was due to the foreclosure of two commercial properties and the transfer of a former branch property.
Current report
Provision for Credit Losses - The Company recorded $2,750,000 provision for credit losses for the three months ended March 31, 2025, compared with a provision for credit losses of $16,000,000 for the three months ended March 31, 2024. The provision recorded in the three months ended March 31, 2025 was a result of a stable loan receivable balance offset by net charge-offs taken during the quarter. The provision in 2024 was the initial provision booked on the LBC loan portfolio post-Merger. The increase in overall ACL was offset by a decrease in the reserve for unfunded commitments of $1,000,000. The Company's provision for credit losses for the six months ended March 31, 2025 and March 31, 2024 were the same as the three month figures as no provision was booked for the first quarter in the six month periods. Net charge-offs totaled $5,063,000 for the three months ended March 31, 2025, compared to $146,000 during the three months ended March 31, 2024. Net charge-offs totaled $5,294,000 for the six months ended March 31, 2025, compared to $33,000 during the six months ended March 31, 2024.
Removed paragraphs (2)
Previous report
Real estate owned ("REO") - REO decreased during the three months ended December 31, 2024 by $1,251,000 to $3,316,000. The decrease was due to property sales.
Previous report
Provision for Credit Losses - The Company recorded no provision for credit losses both the three months ended December 31, 2024 and the three months ended December 31, 2023. The lack of provision in the three months ended December 31, 2024 was primarily due to a stable loan receivable balance and stable credit performance. The increase in overall ACL was offset by the equal decrease in the reserve for unfunded commitments. Net charge-offs totaled $231,000 for the three months ended December 31, 2024, compared to net recoveries of $113,000 during the three months ended December 31, 2023.
Reworded paragraphs (27)
Previous wording
•Risks associated with changes in business structure and divestitures of lines of business, including the Bank's exist from the single family mortgage lending market;
Current wording
•risks associated with changes in business structure and divestitures of lines of business, including the Bank's exit from the single family mortgage lending market;
Previous wording
Based on management's assessment of the current interest rate environment, the Company has taken steps, including growing shorter-term loans and transaction deposit accounts, to reduce its interest rate risk profile. The mix of transaction and savings accounts is 55% of total deposits as of December 31, 2024 while the composition of the investment securities portfolio is 54% variable and 46% fixed rate. When interest rates rise, the fair value of the investment securities with fixed rates will decrease and vice versa when interest rates decline. The Company has $537,348,000 of mortgage-backed securities that it has designated as HTM and are carried at amortized cost. As of December 31, 2024, the net unrealized loss on these securities was $52,242,000. The Company has $2,743,731,000 of AFS securities that are carried at fair value. As of December 31, 2024, the net unrealized loss on these securities was $69,036,000. The Company has executed interest rate swaps to hedge interest rate risk on certain FHLB borrowings. The unrealized gain on these interest rate swaps as of December 31, 2024 was $138,870,000. All of the above are pre-tax net unrealized gains or losses.
Current wording
Based on management's assessment of the current interest rate environment, the Company has taken steps, including growing shorter-term loans and transaction deposit accounts, to reduce its interest rate risk profile. The mix of transaction and savings accounts is 55% of total deposits as of March 31, 2025 while the composition of the investment securities portfolio is 47% variable and 53% fixed rate. The Company has entered into $400,000,000 of pay fixed interest rate swaps to hedge the fair value risk of the AFS portfolio which effectively converts 11% of fixed securities to variable. When interest rates rise, the fair value of the investment securities with fixed rates will decrease and vice versa when interest rates decline. The Company has $526,502,000 of mortgage-backed securities that it has designated as HTM and are carried at amortized cost. As of March 31, 2025, the net unrealized loss on these securities was $41,910,000. The Company has $3,142,763,000 of AFS securities that are carried at fair value. As of March 31, 2025, the net unrealized loss on these securities was $44,483,000. The Company has executed interest rate swaps to hedge interest rate risk on certain FHLB borrowings. The unrealized gain on these interest rate swaps as of March 31, 2025 was $120,666,000. All of the above are pre-tax net unrealized gains or losses.
Previous wording
Prepayment speeds continue to be low at December 31, 2024 but increasing with the Bank's conditional payment rate ("CPR") for single family mortgages at 8.10%, up from 6.60% the year before.
Current wording
Prepayment speeds continue to be low at March 31, 2025 but increasing with the Bank's conditional payment rate ("CPR") for single family mortgages at 8.10%, up from 4.80% the year before.
Previous wording
Net Interest Margin - Net interest margin is measured as net interest income divided by average earning assets for the period. Net interest margin was 2.39% for the quarter ended December 31, 2024 compared to 2.91% for the quarter ended December 31, 2023. The yield on interest-earning assets decreased 16 basis points to 5.31% and the cost of interest-bearing liabilities decreased 32 basis points to 3.48% over that same period. The lower yield on interest-earning assets was primarily due to the impact of rate reductions on adjustable rate assets and cash. This decrease out-paced the decrease in interest-bearing liabilities resulted primarily from customer deposits repricing at a slower rate.
Current wording
Net Interest Margin - Net interest margin is measured as net interest income divided by average earning assets for the period. Net interest margin was 2.55% for the quarter ended March 31, 2025 compared to 2.73% for the quarter ended March 31, 2024. The yield on interest-earning assets decreased 18 basis points to 5.32% and the cost of interest-bearing liabilities decreased 3 basis points to 3.29% over that same period. The lower yield on interest-earning assets was primarily due to falling rates affecting adjustable rate loans and interest-bearing cash deposits.
Previous wording
As of December 31, 2024, total assets had decreased by $375,876,000 to $27,684,454,000 from $28,060,330,000 at September 30, 2024. During the three months ended December 31, 2024, loans receivable increased $144,147,000, investment securities increased by $271,398,000, and FHLB stock increased by $32,779,000 while cash and cash equivalents decreased by $873,367,000.
Current wording
As of March 31, 2025, total assets had decreased by $415,693,000 to $27,644,637,000 from $28,060,330,000 at September 30, 2024. During the six months ended March 31, 2025, loans receivable increased $3,647,000, investment securities increased by $659,584,000, and FHLB stock increased by $38,347,000 while cash and cash equivalents decreased by $1,149,641,000.
Previous wording
Cash and cash equivalents of $1,507,735,000 and shareholders’ equity of $3,021,636,000 as of December 31, 2024 provide management with flexibility in managing interest rate risk going forward.
Current wording
Cash and cash equivalents of $1,231,461,000 and shareholders’ equity of $3,032,620,000 as of March 31, 2025 provide management with flexibility in managing interest rate risk going forward.
Previous wording
The Bank has a credit line with the Federal Home Loan Bank of Des Moines ("FHLB - DM") of up to 45% of total assets depending on specific collateral eligibility. This line provides the Bank a substantial source of additional liquidity. The Bank has entered into borrowing agreements with the FHLB - DM to borrow funds under a short-term floating rate cash management advance program and fixed-rate term loan agreements. All borrowings are secured by stock of the FHLB - DM, deposits with the FHLB - DM, and a blanket pledge of qualifying loans receivable. The Bank also has a credit line with the Federal Home Loan Bank of San Francisco ("FHLB - SF") in support of LBC borrowings from the FHLB - SF, but the Bank is unable to take down new advances against this line. The FHLB - SF credit line is secured by a line-item pledge of single-family residential mortgages that are specifically identified.
Current wording
The Bank has a credit line with the Federal Home Loan Bank of Des Moines ("FHLB - DM") of up to 45% of total assets depending on specific collateral eligibility. This line provides the Bank a substantial source of additional liquidity. The Bank has entered into borrowing agreements with the FHLB - DM to borrow funds under a short-term floating rate cash management advance program and fixed-rate term loan agreements. All borrowings are secured by stock of the FHLB - DM, deposits with the FHLB - DM, and a blanket pledge of qualifying loans receivable. The Bank also has a credit line with the Federal Home Loan Bank of San Francisco ("FHLB - SF") in support of LBC borrowings from the FHLB - SF, but the Bank is unable to take down new advances against this line. The FHLB - SF credit line is secured by a line-item pledge of mortgage backed securities.
Previous wording
Customer account balances have remained stable, increasing by $64,807,000, or 0.3%, to $21,438,777,000 at December 31, 2024 compared with $21,373,970,000 at September 30, 2024. Total borrowings were $2,863,675,000 as of December 31, 2024 a decrease from $3,267,589,000 at September 30, 2024.
Current wording
Customer account balances have remained stable, increasing by $53,456,000, or 0.3%, to $21,427,426,000 at March 31, 2025 compared with $21,373,970,000 at September 30, 2024. Total borrowings were $2,763,758,000 as of March 31, 2025, a decrease from $3,267,589,000 at September 30, 2024.
Previous wording
The Company's cash and cash equivalents totaled $1,507,735,000 at December 31, 2024, a decrease from $2,381,102,000 at September 30, 2024. This decrease served to fund loan growth and purchases of investment securities and pay down borrowings.
Current wording
The Company's cash and cash equivalents totaled $1,231,461,000 at March 31, 2025, a decrease from $2,381,102,000 at September 30, 2024. This decrease served to fund purchases of investment securities and pay down borrowings.
Previous wording
The Company’s shareholders' equity at December 31, 2024 was $3,021,636,000, or 10.91% of total assets. This is an increase of $21,336,000 from September 30, 2024 when shareholders' equity was $3,000,300,000, or 10.69% of total assets. The Company’s shareholders' equity was impacted in the three months ended December 31, 2024 by net income of $47,267,000, the payment of $20,923,000 in common stock dividends, payment of $3,656,000 in preferred stock dividends, treasury stock purchases of $3,410,000, as well as the other comprehensive loss of $2,498,000. The ratio of tangible capital to tangible assets at December 31, 2024 was 9.45%. Management believes the Company's strong equity position allows it to manage balance sheet risk and provide the capital support needed for controlled growth in a regulated environment.
Current wording
The Company’s shareholders' equity at March 31, 2025 was $3,032,620,000, or 10.97% of total assets. This is an increase of $32,320,000 from September 30, 2024 when shareholders' equity was $3,000,300,000, or 10.69% of total assets. The Company’s shareholders' equity was impacted in the six months ended March 31, 2025 by net income of $103,519,000, the payment of $42,541,000 in common stock dividends, payment of $7,313,000 in preferred stock dividends, treasury stock purchases of $24,751,000, as well as the other comprehensive loss of $4,447,000. The ratio of tangible capital to tangible assets at March 31, 2025 was 9.51%. Management believes the Company's strong equity position allows it to manage balance sheet risk and provide the capital support needed for controlled growth in a regulated environment.
Previous wording
Cash and cash equivalents - Cash and cash equivalents were $1,507,735,000 at December 31, 2024, a decrease of $873,367,000, or 36.7%, since September 30, 2024. This decrease served to fund loan growth and purchases of investment securities and pay down borrowings.
Current wording
Cash and cash equivalents - Cash and cash equivalents were $1,231,461,000 at March 31, 2025, a decrease of $1,149,641,000, or 48.3%, since September 30, 2024. This decrease served to fund purchases of investment securities and pay down borrowings.
Previous wording
Available-for-sale and held-to-maturity investment securities - AFS securities increased $171,022,000, or 6.6%, during the three months ended December 31, 2024, a result of securities purchases of $310,999,000 offset by unrealized losses during the period of $24,547,000 and principal repayments and maturities of $114,882,000. During the same period, the balance of HTM securities increased by $100,376,000 primarily due to purchases of $114,182,000 offset by principal pay-downs and maturities of $13,786,000. As of December 31, 2024, the Company had a total net unrealized loss on AFS securities of $69,036,000, which is included on a net of tax basis in accumulated other comprehensive income (loss).
Current wording
Available-for-sale and held-to-maturity investment securities - AFS securities increased $570,054,000, or 22.2%, during the six months ended March 31, 2025, a result of securities purchases of $809,552,000 offset by unrealized gains during the period of $8,000 and principal repayments and maturities of $239,903,000. During the same period, the balance of HTM securities increased by $89,530,000 primarily due to purchases of $114,182,000 offset by principal pay-downs and maturities of $24,619,000. As of March 31, 2025, the Company had a total net unrealized loss on AFS securities of $44,483,000, which is included on a net of tax basis in accumulated other comprehensive income (loss).
Previous wording
Loans receivable - Loans receivable, net of related contra accounts, increased by $144,147,000 to $21,060,501,000 at December 31, 2024, compared to $20,916,354,000 at September 30, 2024. The increase was primarily the net result of originations of $930,789,000, a decrease to loans-in-process of $106,545,000, offset by loan principal repayments of $981,574,000. Commercial loan originations accounted for 68% of total originations and consumer loan originations were 32% during the period. The Company continues to focus on commercial lending, coupled with growing economies in all major markets in which we operate.
Current wording
Loans receivable - Loans receivable, net of related contra accounts, increased by $3,647,000 to $20,920,001,000 at March 31, 2025, compared to $20,916,354,000 at September 30, 2024. The increase was primarily the net result of originations of $1,844,448,000, and a decrease to loans-in-process of $104,257,000, offset by loan principal repayments of $2,165,471,000. Commercial loan originations accounted for 74% of total originations and consumer loan originations were 26% during the period. The Company continues to focus on commercial lending, coupled with growing economies in all major markets in which we operate.
Previous wording
The following table shows the change in the geographic distribution by state of the loan portfolio since the prior quarter.
Current wording
The following table shows the change in the geographic distribution by state of the loan portfolio since the prior fiscal year end.
Previous wording
Non-performing assets - Non-performing assets increased $1,695,000 during the three months ended December 31, 2024 to $79,113,000 from $77,418,000 at September 30, 2024. The change is primarily due to a $2,946,000 increase in non-accrual loans offset by a $1,251,000 decrease in real estate owned as a result of property sales. Non-performing assets as a percentage of total assets was 0.29% at December 31, 2024 compared to 0.28% at September 30, 2024.
Current wording
Non-performing assets - Non-performing assets decreased $6,534,000 during the six months ended March 31, 2025 to $70,884,000 from $77,418,000 at September 30, 2024. The change is primarily due to a $9,655,000 decrease in non-accrual loans offset by a $3,121,000 increase in real estate owned. Non-performing assets as a percentage of total assets was 0.26% at March 31, 2025 compared to 0.28% at September 30, 2024.
Previous wording
Company would have recognized interest income of $924,000 for the same period had non-accrual loans performed according to their original contract terms. In addition to the non-accrual loans reflected in the above table, the Company had $381,010,000 of loans that were less than 90 days delinquent at December 31, 2024 but were classified as substandard for one or more reasons. If these loans were deemed non-performing, the Company's ratio of total NPAs as a percent of total assets would have increased to 1.66% at December 31, 2024.
Current wording
For the six months ended March 31, 2025, the Company recognized $1,733,000 in interest income on cash payments received from borrowers on non-accrual loans. Recognized interest income on loans for the six months ended March 31, 2025 was higher than what otherwise would have been recognized in the period due to the collection of past due amounts. The Company would have recognized interest income of $1,776,000 for the same period had non-accrual loans performed according to their original contract terms. In addition to the non-accrual loans reflected in the above table, the Company had $506,938,000 of loans that were less than 90 days delinquent at March 31, 2025 but were classified as substandard for one or more reasons. If these loans were deemed non-performing, the Company's ratio of total NPAs as a percent of total assets would have increased to 2.09% at March 31, 2025.
Previous wording
Management believes the allowance for credit losses of $225,022,000, or 1.00% of gross loans, is sufficient to absorb estimated losses inherent in the portfolio of loans and unfunded commitments. See Note E and Note I for further details of the allowance for loan losses and reserve for unfunded commitments as of and for the period ended December 31, 2024 and September 30, 2024.
Current wording
Management believes the allowance for credit losses of $222,709,000, or 1.01% of gross loans, is sufficient to absorb estimated losses inherent in the portfolio of loans and unfunded commitments. See Note E and Note I for further details of the allowance for loan losses and reserve for unfunded commitments as of and for the period ended March 31, 2025 and September 30, 2024.
Previous wording
Intangible assets - Intangible assets increased to $449,213,000 as of December 31, 2024 from $448,425,000 as of September 30, 2024 as the result of an adjustment to purchase accounting related to the Merger.
Current wording
Intangible assets - Intangible assets decreased to $446,660,000 as of March 31, 2025 from $448,425,000 as of September 30, 2024 as the result of an adjustment to purchase accounting related to the Merger combined with normal amortization.
Previous wording
Customer accounts - Customer accounts increased $64,807,000, or 0.3%, to $21,438,777,000 at December 31, 2024 compared with $21,373,970,000 at September 30, 2024. Transaction accounts increased by $36,674,000 or 0.3% during that period, while time deposits increased $28,133,000 or 0.3%.
Current wording
Customer accounts - Customer accounts increased $53,456,000, or 0.3%, to $21,427,426,000 at March 31, 2025 compared with $21,373,970,000 at September 30, 2024. Transaction accounts increased by $36,799,000 or 0.3% during that period, while time deposits increased $16,657,000 or 0.2%.
Previous wording
Borrowings - Borrowings were $2,863,675,000 as of December 31, 2024 a decrease from $3,267,589,000 as of September 30, 2024 as a result of repayments. The weighted average rate for borrowings was 3.62% as of December 31, 2024 and 3.93% at September 30, 2024.
Current wording
Borrowings - Borrowings were $2,763,758,000 as of March 31, 2025 a decrease from $3,267,589,000 as of September 30, 2024 as a result of repayments. The weighted average rate for borrowings was 3.30% as of March 31, 2025 and 3.93% at September 30, 2024.
Previous wording
Shareholders' equity - The Company’s shareholders' equity at December 31, 2024 was $3,021,636,000, or 10.91% of total assets. This is an increase of $21,336,000 from September 30, 2024 when shareholders' equity was $3,000,300,000, or 10.69% of total assets. The Company’s shareholders' equity was impacted in the three months ended December 31, 2024 by net income of $47,267,000, the payment of $20,923,000 in common stock dividends, payment of $3,656,000 in preferred stock dividends, treasury stock purchases of $3,410,000, as well as changes in other comprehensive income of $2,498,000.
Current wording
Shareholders' equity - The Company’s shareholders' equity at March 31, 2025 was $3,032,620,000, or 10.97% of total assets. This is an increase of $32,320,000 from September 30, 2024 when shareholders' equity was $3,000,300,000, or 10.69% of total assets. The Company’s shareholders' equity was impacted in the six months ended March 31, 2025 by net income of $103,519,000, the payment of $42,541,000 in common stock dividends, payment of $7,313,000 in preferred stock dividends, treasury stock purchases of $24,751,000, as well as changes in other comprehensive income of $4,447,000.
Previous wording
Net Income - The Company recorded net income of $47,267,000 for the three months ended December 31, 2024 compared to $58,453,000 for the prior year quarter. The changes are due to the factors described below.
Current wording
Net Income - The Company recorded net income of $56,252,000 for the three months ended March 31, 2025 compared to $15,888,000 for the prior year quarter. Much of the change is due to the effects of the Merger in the prior year but all driving factors are described below.
Previous wording
Net Interest Income - For the three months ended December 31, 2024, net interest income was $155,431,000, which is $3,194,000 lower than the same quarter of the prior year. Net interest margin was 2.39% for the quarter ended December 31, 2024 compared to 2.91% for the quarter ended December 31, 2023. The decrease in net interest income compared to the December 31, 2023 quarter is largely due to greater growth in interest-bearing liabilities than in interest-earning assets. As a result of the Merger, average interest-earning assets increased by 23.75% from the same quarter last year while average interest-bearing liabilities increased by 27.56%. Additionally, average rate earned on interest-earning assets decreased by 16 basis points to 5.31% while the average rate paid on interest-bearing liabilities increased by 32 basis points to 3.48%.
Current wording
Net Interest Income - For the three months ended March 31, 2025, net interest income was $160,910,000, which is $2,313,000 higher than the same quarter of the prior year. This is largely the result of volume as net interest margin was 2.55% for the quarter ended March 31, 2025 compared to 2.73% for the quarter ended March 31, 2024. The increase in net interest income compared to the March 31, 2024 quarter is largely due to growth in interest-earning assets compared to the growth in interest-bearing liabilities for the same period. Average interest-earning assets increased by $2,302,803,000 compared to an increase of $2,201,498,000 in average interest-bearing liabilities. These increases reflect the Merger which occurred on March 1, 2024. The effects of the balance increases were offset by a lower average rate earned on interest-earning assets which decreased by 18 basis points. For the six months ended March 31, 2025, net interest income was $316,341,000, which is an increase of $5,507,000 from the same period of the prior year. Net interest margin was 2.47% for the six months ended March 31, 2025 compared to 2.81% for the prior year same period.
Previous wording
Non-Interest Income - The three months ended December 31, 2024 results include total non-interest income of $15,702,000 compared to $14,167,000 for the same period one year ago, a $1,535,000 increase. The increase is primarily due to income growth of WaFd Insurance, the Company's insurance subsidiary as well as increases in overall fee income as a result of the Merger.
Current wording
Non-Interest Income - The three months ended March 31, 2025 results include total non-interest income of $18,881,000 compared to $13,392,000 for the same period one year ago, a $5,489,000 increase. The increase is primarily due to increased prepayment fees earned on loans and increased commission income from WaFd Insurance, the Company's insurance subsidiary. The results for the six months ended March 31, 2025 include total non-interest income of $34,583,000 compared to $27,559,000 for the six months ended March 31, 2024, a $7,024,000 increase.
Previous wording
Non-Interest Expense - Total other expense was $111,311,000 for the three months ended December 31, 2024, an increase of $14,771,000 from $96,540,000 for the prior year quarter, largely as the result of being a larger organization post-Merger, driving increased occupancy and compensation costs. Related to this, other non-interest expenses for the quarter included $2,755,000 of intangible amortization costs arising from the recognition of a Core Deposit Intangible in Merger accounting. In addition, the quarter included a $5,400,000 restructuring charge arising from management's decision to exit the single family mortgage lending market. These increases were offset by a reduction in FDIC premiums of $1,720,000. Total non-interest expense for the three months ended December 31, 2024 and December 31, 2023 equaled 1.62% and 1.73%, respectively, of average assets.
Current wording
Non-Interest Expense - Non-interest expense was $104,832,000 for the three months ended March 31, 2025, a decrease of $28,880,000 from $133,712,000 for the prior year quarter, largely a result of Merger-related expenses booked in the prior year combined with reduced compensation costs in 2025 due to restructuring arising from management's decision to exit the single family mortgage lending market. Non-interest expense for the three months ended March 31, 2025 and March 31, 2024 equaled 1.53% and 2.15%, respectively, of average assets Non-interest expense was $216,143,000 for the six months ended March 31, 2025, a decrease of $14,109,000 from $230,252,000 for the same period in fiscal 2024. Total non-interest expense for the six months ended March 31, 2025 and March 31, 2024 equaled 1.58% and 1.95%, respectively, of average assets.
Previous wording
Gain (Loss) on Real Estate Owned - Results for the three months ended December 31, 2024 include a net gain on REO of $429,000, compared to a net gain of $1,826,000 for the prior year quarter. The gains during both periods were due to property sales.
Current wording
Gain (Loss) on Real Estate Owned - Results for the three months ended March 31, 2025 include a net loss on REO of $199,000, compared to a net loss of $1,315,000 for the prior year quarter. The loss in the prior year was the result of losses on the sale of a former branch property. Results for the six months ended March 31, 2025 included a net gain on REO of $230,000, compared to a net gain of $511,000 in the prior year period.
Previous wording
Income Tax Expense - Income tax expense totaled $12,984,000 for the three months ended December 31, 2024, compared to $13,237,000 for the prior year quarter. The effective tax rate was 21.55% and 18.46% for the three months ended December 31, 2024 and December 31, 2023, respectively. The Company’s effective tax rate varies from the statutory rate mainly due to state taxes, tax-exempt income, tax-credit investments miscellaneous non-deductible expenses and discrete tax adjustments for prior periods.
Current wording
Income Tax Expense - Income tax expense totaled $15,758,000 for the three months ended March 31, 2025, compared to $5,074,000 for the prior year quarter. The effective tax rate was 21.88% and 24.21% for the three months ended March 31, 2025 and March 31, 2024, respectively. Income tax expense totaled $28,742,000 for the six months ended March 31, 2025, compared to $18,311,000 for the prior year period. The effective tax rate was 21.73% and 19.76% for the six months ended March 31, 2025 and March 31, 2024, respectively. The Company’s effective tax rate varies from the statutory rate mainly due to state taxes, tax-exempt income, tax-credit investments, miscellaneous non-deductible expenses and discrete tax adjustments for prior periods.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the three months ended December 31, 2024, the Company recognized $761,000 in interest income on cash payments received from borrowers on non-accrual loans. Recognized interest income on loans for the three months ended December 31, 2024 was higher than what otherwise would have been recognized in the period due to the collection of past due amounts. The