Wrapping up Q1 earnings, we look at the numbers and key takeaways for the thrifts & mortgage finance stocks, including WaFd Bank (NASDAQ: WAFD) and its peers.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 22 thrifts & mortgage finance stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 18.5%.

In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.

WaFd Bank (NASDAQ: WAFD)

Founded in 1917 and rebranded from Washington Federal in 2023, WaFd (NASDAQ: WAFD) is a bank holding company that provides lending, deposit services, and insurance through its Washington Federal Bank subsidiary across eight western states.

WaFd Bank reported revenues of $179.8 million, up 3.4% year on year. This print exceeded analysts’ expectations by 3.6%. Overall, it was a very strong quarter for the company with a decent beat of analysts’ net interest income and EPS estimates.

Interestingly, the stock is up 1.7% since reporting and currently trades at $30.45.

Is now the time to buy WaFd Bank? Access our full analysis of the earnings results here, it’s free.

Best Q1: Northwest Bancshares (NASDAQ: NWBI)

Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.

Northwest Bancshares reported revenues of $156.2 million, up 19% year on year, outperforming analysts’ expectations by 9.9%. The business had a stunning quarter with a solid beat of analysts’ EPS and net interest income estimates.

The market seems happy with the results as the stock is up 14.1% since reporting. It currently trades at $13.48.

Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Dynex Capital (NYSE: DX)

Operating in the financial markets since 1988 with a focus on capital preservation during economic turbulence, Dynex Capital (NYSE: DX) is a mortgage real estate investment trust that invests primarily in government-backed residential mortgage securities to generate income for shareholders.

Dynex Capital reported revenues of $17.13 million, up 637% year on year, falling short of analysts’ expectations by 22.4%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 1.5% since the results and currently trades at $12.28.

Read our full analysis of Dynex Capital’s results here.

Columbia Financial (NASDAQ: CLBK)

Founded during the Roaring Twenties in 1926 and headquartered in Fair Lawn, New Jersey, Columbia Financial (NASDAQ: CLBK) operates federally chartered savings banks in New Jersey that offer traditional banking services including loans, deposits, and insurance products.

Columbia Financial reported revenues of $55.86 million, up 25.9% year on year. This number surpassed analysts’ expectations by 11.8%. More broadly, it was a satisfactory quarter as it also logged a narrow beat of analysts’ tangible book value per share estimates but a slight miss of analysts’ EPS estimates.

The stock is up 11% since reporting and currently trades at $14.95.

Read our full, actionable report on Columbia Financial here, it’s free.

Ellington Financial (NYSE: EFC)

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial (NYSE: EFC) acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Ellington Financial reported revenues of $82.91 million, up 9.8% year on year. This result beat analysts’ expectations by 20.7%. Overall, it was a strong quarter as it also recorded a decent beat of analysts’ tangible book value per share estimates.

The stock is down 2.2% since reporting and currently trades at $12.95.

Read our full, actionable report on Ellington Financial here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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