WaFd: Preferred Shares Still Offering Attractive Income At 6.7% Yield
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WaFd's merger with Luther Burbank Corporation has improved its financial metrics, enhancing future earnings potential. However, risks remain due to high loan-to-deposit ratios and lower credit loss allowances. WaFd's preferred shares offer a 6.7% yield, trading at 73% of their call price.
November 05, 2024 | 10:45 pm
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WaFd's merger with Luther Burbank Corporation has improved its loan-to-deposit ratio and reduced external borrowing, enhancing future net interest income and earnings potential. However, high loan-to-deposit ratios and lower-than-average allowance for credit losses pose risks. WaFd's preferred shares offer a 6.7% yield and trade at 73% of their call price, providing income and potential capital appreciation.
The merger with Luther Burbank Corporation has positively impacted WaFd's financial metrics, which is likely to enhance future earnings. The attractive yield on preferred shares and their trading below call price suggest potential for income and capital appreciation. However, risks from high loan-to-deposit ratios and low credit loss allowances could pressure earnings, but the overall impact is positive.
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