WaFd, Inc. Announces Cash Dividend of 26 Cents Per Share

LendingTree, Inc.’s TREE third-quarter 2024 adjusted net income per share of 80 cents topped the Zacks Consensus Estimate of 67 cents. The figure compares favorably with the 61 cents reported in the prior-year quarter.

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The results were driven by increased earnings before interest, taxes, depreciation and amortization (EBITDA). A rise in revenues acted as another tailwind. However, an increase in total cost was a spoilsport.

The results exclude certain non-recurring items. After considering these, TREE reported a GAAP net loss of $58 million compared with a loss of $148.5 million in the year-ago quarter.

TREE’s Revenues, Variable Marketing Margin Increase

Total revenues grew 68% year over year to $260.8 million. The rise stemmed from a substantial increase in the Insurance segment's revenues. Also, the reported figure surpassed the Zacks Consensus Estimate by 6.9%.

The total cost of revenues was $9.4 million, up 23.8% from the prior-year quarter.

Adjusted EBITDA totaled $26.9 million, up 23% year over year. The variable marketing margin was $77.2 million, up 14% year over year.

As of Sept. 30, 2024, cash and cash equivalents were $96.8 million compared with $66.8 billion as of June 30, 2024. Long-term debt was $346.2 million compared with $467.7 million as of June 30, 2024.

Lending Tree’s Outlook

The company provided the fourth-quarter 2024 outlook and updated its 2024 view.

4Q 2024

For the fourth quarter of 2024, total revenues are estimated between $231 million and $241 million. Adjusted EBITDA and the variable marketing margin are anticipated between $20-$23 million and $69-$74 million, respectively.

2024

For 2024, total revenues are projected between $870 million and $880 million versus the prior mentioned $830-$870 million. Adjusted EBITDA is projected to be $92-$95 million versus the $85-$95 million stated previously. The variable marketing margin is expected to be $287-$292 million compared with the $280-$300 million mentioned earlier.

Our View on Lending Tree

TREE’s inorganic growth moves have strengthened its online lending platform. Its third-quarter results were boosted by strong growth in the Insurance segment revenues. The company’s efforts to boost revenues by diversifying its non-mortgage product offerings will support top-line growth in the future.

LendingTree, Inc. Price, Consensus and EPS Surprise

LendingTree, Inc. price-consensus-eps-surprise-chart | LendingTree, Inc. Quote

Currently, LendingTree carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Finance Stocks

WaFd, Inc.’s WAFD fourth-quarter fiscal 2024 (ended Sept. 30) earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 68 cents. Also, the bottom line declined 1.4% year over year.

The results reflected a rise in NII and non-interest income, driven by the acquisition of Luther Burbank Corporation in February. This supported WAFD’s top line. Higher loan balances and nil provisions were other positives. However, a rise in expenses acted as a spoilsport.

Hancock Whitney Corp.’s HWC third-quarter 2024 earnings per share of $1.33 beat the Zacks Consensus Estimate of $1.31. The bottom line compared favorably with the $1.12 per share registered in the year-ago quarter.

HWC’s results were aided by an increase in non-interest income and NII. Lower expenses and provisions were positives. However, the decline in total loans and deposits affected the results to some extent.

Zacks Investment Research

Cullen/Frost Bankers, Inc. CFR reported third-quarter 2024 earnings per share (EPS) of $2.24, down 5.6% from the prior-year quarter. Nonetheless, the bottom line surpassed the Zacks Consensus Estimate by 3.7%.

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

Results were primarily aided by a rise in non-interest income and net interest income (NII), alongside higher loan balances in the quarter. However, a rise in non-interest expenses and credit loss expenses were significant drags. Lower deposits were other negatives.

The company reported net income available to its common shareholders of $144.8 million, down from $153.9 million in the prior-year quarter.

CFR’s Revenues Increase, Expenses Rise

The company’s total revenues were $538.9 million in the third quarter, up 4.9% year over year. Also, the top line surpassed the Zacks Consensus Estimate by 3%.

NII on a taxable-equivalent basis increased 2.2% to $425.2 million year over year. Nonetheless, the net interest margin (NIM) expanded 12 basis points (bps) year over year to 3.56%. Our estimates for NII and NIM were $415.7 million and 3.55%, respectively.

Non-interest income improved 7.3% to $113.7 million year over year. The rise was attributed to increases in all components, except for net gain on securities transactions. Our estimate for non-interest income was $108.3 million.

Non-interest expenses of $323.4 million increased 10.3% year over year. The rise was due to an increase in all components. Our estimate for non-interest expenses was $326 million.

As of Sept. 30, 2024, total loans were $20 billion, up 0.3% sequentially. Total deposits amounted to $41.7 billion, down 3.5% from the previous quarter. Our estimates for total loans and total deposits were $21.1 billion and $39 billion, respectively.

CFR’s Credit Quality: Mixed Bag

As of Sept. 30, 2024, the company recorded credit loss expenses of $19.4 million compared with $11.2 million in the prior-year quarter. Nonetheless, the allowance for credit losses on loans, as a percentage of total loans, was 1.31%, down 1 bps.

Net charge-offs, annualized as a percentage of average loans, declined 8 bps year over year to 0.19%.

CFR’s Capital Ratios Improve, Profitability Ratios Worsen

As of Sept. 30, 2024, the Tier 1 risk-based capital ratio was 14.02%, up from 13.81% at the end of the year-earlier quarter. The total risk-based capital ratio was 15.50%, up from 15.28% as of the prior-year quarter. The common equity

Tier 1 risk-based capital ratio was 13.55%, up from the year-ago quarter’s 13.32%.

The leverage ratio increased to 8.80% from 8.17%.

Return on average assets and return on average common equity were 1.15% and 15.90% compared with 1.32% and 20.25% in the prior-year quarter, respectively.

Our Viewpoint on Cullen Frost

CFR is well-positioned for revenue growth, given the steady improvement in loan balances. Solid Capital Position is an added advantage. The company’s efforts to expand its presence in Texas markets look encouraging. However, rising expenses and weak credit quality may affect its financials to some extent in the near term.

Cullen/Frost Bankers, Inc. Price, Consensus and EPS Surprise

Cullen/Frost Bankers, Inc. price-consensus-eps-surprise-chart | Cullen/Frost Bankers, Inc. Quote

Currently, Cullen/Frost carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

WaFd, Inc.’s WAFD fourth-quarter fiscal 2024 (ended Sept. 30) earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 68 cents. Also, the bottom line declined 1.4% year over year.

The results reflected a rise in NII and non-interest income, driven by the acquisition of Luther Burbank Corporation in February. This supported WAFD’s top line. Higher loan balances and nil provisions were other positives. However, a rise in expenses acted as a spoilsport.

Hancock Whitney Corp.’s HWC third-quarter 2024 earnings per share of $1.33 beat the Zacks Consensus Estimate of $1.31. The bottom line compared favorably with $1.12 per share in the year-ago quarter.

HWC’s results were aided by an increase in non-interest income and NII. Lower expenses and provisions were positives. However, the decline in total loans and deposits affected the results to some extent.

Zacks Investment Research

Bank of Hawaii Corporation BOH reported third-quarter 2024 adjusted earnings per share of 93 cents, beating the Zacks Consensus Estimate of 81 cents. The bottom line compared unfavorably with $1.17 earned in the year-ago quarter.

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BOH's quarterly results benefited from an increase in deposits balance and net interest margin (NIM). A decline in net interest income (NII), along with a drop in loans balances and higher expenses, were undermining factors. A surge in provisions was another major headwind.

The company’s net income (GAAP basis) came in at $40.4 million, down 15.8% year over year. Our estimate for the metric was pegged at $33.7 million.

BOH’s Revenues Decrease, Expenses Increase

BOH’s total revenues fell 5% year over year to $162.7 million in the third quarter. However, the top line beat the Zacks Consensus Estimate of $160.3 million.

NII was $117.6 million, down 2.7% year over year. NIM increased 5 basis points to 2.18%. Our estimate for NII and NIM was pegged at $116.5 million and 2.16%, respectively.

Non-interest income came in at $45.1 million, down 10.4% year over year. This included a $14.7 million gain from the early termination of private repurchase agreements, partially offset by a $4.6 million net loss related to investment securities sales. Adjusted for these items, noninterest income increased 9.9% year over year. The rise primaily stemmed from increase in trust and asset management income, and fees, exchange, and other service charges. Our estimate for the same was pinned at $43.5 million.

Non-interest expenses increased 1.4% to $107.1 million. It included a separation expense of $2.1 million and extraordinary expenses related to the Maui wildfires of $0.4 million. Adjusted for these items, noninterest expense increased 3.9% from adjusted non-interest expenses recorded in the year-ago quarter. We projected the metric to be $113.3 million.

The efficiency ratio was 65.81%, up from 61.66% recorded in the year-ago period. A rise in the efficiency ratio reflects lower profitability.

BOH’s Loans Decline, Deposits Increase

As of Sept. 30, 2024, total loans and leases balance dropped marginally from the year-ago quarter’s end to $13.9 billion.

Total deposits moved up 2.8% year over year to $21 billion. Our estimates for total loans and leases and total deposits were $13.8 billion and $20.8 billion, respectively.

BOH’s Credit Quality Deteriorates

As of Sept. 30, 2024, non-performing assets were $19.8 million, which jumped 71.7% year over year. Our estimate for the metric was pegged at $12.8 million.

Net loans and lease charge-offs were $3.8 million, up $1.8 million from the year-ago quarter's level. Our estimate for the metric was pegged at $3.5 million.

Provision for credit losses was $3 million, up 50% from the year-ago quarter’s tally. Our estimate for the metric was pegged at $2.2 million.

The allowance for credit losses inched up 1.4% to $147.3 million. Our estimate for the metric was pegged at $146.2 million.

BOH’s Capital Ratios Improve

As of Sept. 30, 2024, the Tier 1 capital ratio was 14.05%, up from 12.53% as of Sept. 30, 2023. The total capital ratio was 15.11%, which rose from 13.56% in the year-ago period.

The ratio of tangible common equity to risk-weighted assets was 9.17%, which increased from 8.1% at the end of the year-ago quarter.

BOH’s Profitability Ratios Deteriorate

Return on average assets was 0.69% at the end of third-quarter 2024, which declined from 0.78% reported in the prior-year quarter. Return on average shareholders' equity was 9.9%, down from 13.92% as of Sept. 30, 2023.

BOH's Share Repurchase Update

During the reported quarter, the Bank of Hawaii did not repurchase any shares. As of Sept. 30, 2024, the total remaining buyback authority under the share repurchase program was $126.0 million.

Our View on BOH

Persistently rising expenses are likely to hurt Bank of Hawaii’s bottom-line growth. Further, declining fee income limits top-line expansion. A fall in loan balances was another headwind. However, strong capital ratios and rising deposit balance will support its financials.

Bank of Hawaii Corporation Price, Consensus and EPS Surprise

Bank of Hawaii Corporation price-consensus-eps-surprise-chart | Bank of Hawaii Corporation Quote

Currently, BOH carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

WaFd, Inc.’s WAFD fourth-quarter fiscal 2024 (ended Sept. 30) earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 68 cents. Also, the bottom line declined 1.4% year over year.

The results reflected a rise in NII and non-interest income, driven by the acquisition of Luther Burbank Corporation in February. This supported WAFD’s top line. Higher loan balances and nil provisions were other positives. However, a rise in expenses acted as a spoilsport.

Hancock Whitney Corp.’s HWC third-quarter 2024 earnings per share of $1.33 beat the Zacks Consensus Estimate of $1.31. The bottom line compared favorably with $1.12 per share registered in the year-ago quarter.

HWC’s results were aided by an increase in non-interest income and NII. Lower expenses and provisions were positives. However, the decline in total loans and deposits affected the results to some extent.

Zacks Investment Research

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

WaFd in Focus

WaFd (WAFD) is headquartered in Seattle, and is in the Finance sector. The stock has seen a price change of 12.11% since the start of the year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 2.81%. In comparison, the Banks - West industry's yield is 2.75%, while the S&P 500's yield is 1.48%.

Taking a look at the company's dividend growth, its current annualized dividend of $1.04 is up 1% from last year. In the past five-year period, WaFd has increased its dividend 5 times on a year-over-year basis for an average annual increase of 4.35%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. WaFd's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for WAFD for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.06 per share, which represents a year-over-year growth rate of 1.32%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.

High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that WAFD is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).

Zacks Investment Research