Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 8-K

____________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 17, 2023

____________________________________

WAFD, INC.

(Exact name of registrant as specified in its charter)

____________________________________

Washington

001-34654

91-1661606

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification No.)

425 Pike Street

Seattle

Washington

98101

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (206) 624-7930

Washington Federal, Inc.

(Former name or former address, if changed since last report)

____________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1.00 par value per share

WAFD

NASDAQ Stock Market

Depositary Shares, Each Representing a 1/40th Interest in a Share of 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock

WAFDP

NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02			Results of Operations and Financial Condition

On October 17, 2023, the Company announced by press release its earnings for the quarter and fiscal year ended September 30, 2023. A copy of the press release is attached to this filing as Exhibit 99.1. A copy of the September 30, 2023 Fact Sheet, which presents certain detailed financial information about the Company, is attached as Exhibit 99.2. This information is being furnished under Item 2.02 (Results of Operations and Financial Condition) of Form 8-K.


Item 9.01			Financial Statements and Exhibits

(a) Not applicable

(b) Not applicable

(d) The following exhibits are being furnished herewith:

99.1 Press release dated October 17, 2023

99.2 Fact Sheet as of September 30, 2023

Important Cautionary Statements

The foregoing information should be read in conjunction with the financial statements, notes and other information contained in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

our net interest income and net interest margin, (iii) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (iv) changes in deposit flows or loan demands; (v) the effect of COVID-19 and other infectious illness outbreaks that may arise in the future and the resulting governmental and societal responses; (vi) global economic trends, including developments related to Ukraine and Russia, and related negative financial impacts on our borrowers; (vii) risks related to the proposed merger with Luther Burbank Corporation; (viii) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft; and (ix) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services. The Company undertakes no obligation to update or revise any forward-looking statement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

October 18, 2023

WASHINGTON FEDERAL, INC.

By:

/s/ KELLI J. HOLZ

Kelli J. Holz

Executive Vice President
and Chief Financial Officer

Exhibit 99.1

Tuesday, October 17, 2023

FOR IMMEDIATE RELEASE

WaFd's Annual Earnings Per Share Increased 10% For 2023 Even After Net Interest Margin Contraction and Outsized Provision For Credit Losses

SEATTLE, WASHINGTON – WaFd, Inc. (Nasdaq: WAFD) (the "Company"), parent company of WaFd Bank (the "Bank"), today announced record annual earnings of $257,426,000 for the fiscal year ended September 30, 2023, an increase of $21,096,000 from earnings of $236,330,000 for the year ended September 30, 2022. After the effect of dividends on preferred stock, net income available for common shareholders was $3.72 per share for the fiscal year ended September 30, 2023, a $0.33 or 9.7% increase from $3.39 for the prior fiscal year. Return on common shareholders' equity for the fiscal year ended September 30, 2023, was 11.69% compared to 11.70% for the year ended September 30, 2022. Return on assets for the year ended September 30, 2023, was 1.18% compared to 1.17% for the prior year.

President and CEO Brent Beardall commented, “This past year was a roller-coaster for the banking industry. At WaFd, despite the ups and downs in the industry, the year culminated in record net income and earnings per share for the Company. We are grateful to our bankers for their efforts and to our clients for the trust that led to these results.

I am most pleased that for the year our total deposits increased, and the percentage of uninsured deposits decreased to 26%. In a year that saw the second and third largest bank failures in the history of the United States and net outflows of deposits in the banking industry, we view the fact that we were able to achieve net deposit growth as a meaningful accomplishment. One of the commonalities of the failed banks in 2023 was a high percentage of uninsured deposits (70 to 95%), so having only 26% of uninsured deposits at WaFd is a nice contrast.

Over the past two years, the Federal Reserve has increased its short-term interest rates from 0.25% to 5.50%. The impact of increasing interest rates was substantial. This increase occurred at the fastest pace and to the highest absolute level in forty years. For example, the rate on a 30-year fixed rate mortgage is now 8%. Two years ago, that rate would have been 3%. The rate for a short-term construction loan today is around 8.5%. Two years ago, a comparable rate would have been only 2.5%. Higher borrowing costs means our clients have less cash available for discretionary expenditures. Essentially, the challenging interest rate environment is exposing weaknesses. The Bank experienced its first material net charge-off in a decade this past year when we charged off approximately $40 million, primarily due to one commercial loan currently in bankruptcy. We believe the conditions surrounding this credit were idiosyncratic. As we do with all material losses, we will study the circumstances to understand the causation and learn from it going forward.

For the Bank, the higher rates translated into higher interest expense on both deposits and borrowings. Interest expense for the year increased $281 million or 391%. Even with interest expense increasing almost four-fold, it was more than offset by a $377 million increase in interest income, resulting in growth in net interest income by $96 million or 16%. Our margin for the year increased from 3.16% to 3.40%. However, our quarterly margin has decreased every quarter of this fiscal year from 3.69% in December to 3.13% in September. Importantly, the margin for the month of September 2023 was 3.10%, just 3 basis points below the quarterly margin signaling margin compression is slowing. This could be an indication we are approaching the trough for this rate cycle if the Fed is done raising rates.

One of the biggest challenges for our bankers this year has been the intentional slowing of loan production to match the significant reduction in loan repayments. Our clients are astute, not many borrowers want to pre-pay loans that are materially below current rates. As a result, loan repayments decreased from $6.2 billion to $4.4 billion. Our bankers have shifted their efforts to selling the distinctive functionality of our deposit products and supporting our clients in these shifting economic times.

The market is keenly aware of margin compression and additional credit stressors facing lenders and that is why banks, including WaFd, are trading at a significant discount to the broader market. We remain focused on what we can control, like tangible book value per share. For the year 2023, we grew tangible book value per share by 10% to $28.05.

We continue to make strategic investments in both our technology and our teams and we are pleased to see that our clients are noticing. Our Net Promoter Score, a measure of how likely clients are to

recommend a company, increased to an all-time high of 57. The average for the industry is approximately 30 (the higher the score the better). Our belief is that the upheaval in the regional banking space is providing a rare opportunity for WaFd Bank to earn more market share in the Western United States. Our value proposition remains consistent: We strive to combine a strong balance sheet, deep relationships and intuitive technology that simplifies banking.”

Total assets were $22.5 billion as of September 30, 2023, an increase of 8.2% from $20.8 billion at September 30, 2022, primarily due to the $1.4 billion, or 8.5%, increase in net loans. In addition, cash increased by $297 million.

The Bank's held-to-maturity ("HTM") investments were $424 million as of September 30, 2023, with a net unrealized loss of $55 million. Although not permitted by U.S. Generally Accepted Accounting Principles ("GAAP"), including these unrealized losses in accumulated other comprehensive income would result in a ratio of shareholder's equity to total assets of 10.55% compared to 10.80%, as reported.

Customer deposits totaled $16.1 billion as of September 30, 2023, an increase of 0.3% since September 30, 2022. Transaction accounts decreased by $1.9 billion or 15.2% during the fiscal year 2023, while time deposits increased $2.0 billion or 58.9%. As of September 30, 2023, 67.0% of the Company's deposits were in transaction accounts. Core deposits, defined as all transaction accounts and time deposits less than $250,000, totaled 88.1% of deposits at September 30, 2023. Deposits that are uninsured or not collateralized were 25.7% as of September 30, 2023, a decrease from 30.3% as of September 30, 2022. The focus historically has been on growing transaction accounts to lessen sensitivity to rising interest rates and manage interest expense. However, the current rate environment has resulted in increased demand for higher yielding deposits. The loan-to-deposit ratio was 108.8% at September 30, 2023 compared to 100.5% at September 30, 2022.

Borrowings totaled $3.7 billion as of September 30, 2023, an increase of $1.5 billion or 71.8% since September 30, 2022. The weighted average effective interest rate as of September 30, 2023, was 3.98% versus 2.02% at September 30, 2022. As of September 30, 2023, $2.8 billion of the $3.7 billion in outstanding borrowings have effective maturities less than one year.

Loan originations totaled $4.7 billion for fiscal year 2023 compared to $8.7 billion in fiscal year 2022. Offsetting the loan origination volume in each of these years were loan repayments of $4.4 billion and $6.2 billion, respectively. In addition to the slowing repayments, which are directly correlated with the rapid

rise in interest rates, the Bank has intentionally slowed new loan production to temper loan growth. Even so, net loans outstanding grew for the quarter due to the funding of construction loans previously originated. Commercial loans represented 74% of all loan originations during fiscal 2023 with consumer loans accounting for the remaining 26%. Commercial loans are preferable as they generally have floating interest rates and shorter durations. The weighted average interest rate on the loan portfolio was 5.22% as of September 30, 2023, an increase from 4.25% at September 30, 2022, due primarily to higher rates on adjustable rate loans as well as higher rates on newly originated loans.

Credit quality continues to be monitored closely in light of the shifting economic and monetary environment. As of September 30, 2023, non-performing assets increased to $58 million, or 0.3% of total assets, compared to 0.2% as of September 30, 2022. Since September 30, 2022, real estate owned decreased by $2.5 million and non-accrual loans increased by $15.9 million. Delinquent loans were 0.4% of total loans at September 30, 2023 compared to 0.2% at September 30, 2022. The allowance for credit losses (including the reserve for unfunded commitments) totaled $202 million as of September 30, 2023, and was 1.03% of gross loans as compared to $205 million or 1.06% of gross loans as of September 30, 2022. Net charge-offs were $45.1 million for fiscal year 2023 compared to net recoveries of $3.5 million in fiscal 2022.

The Company recorded a provision for credit losses of $41.5 million in fiscal 2023, compared to provision of $3.0 million in fiscal 2022. In fiscal 2023, the provision primarily supported net growth in the loan portfolio, as well as one charge-off, offset by reduced unfunded commitment balances combined with the uncertain economic outlook amid concerns around a possible recession and recent macro-economic events.

The Company paid a quarterly dividend on the 4.875% Series A preferred stock on July 17, 2023. On September 8, 2023, the Company paid a cash dividend of $0.25 per share to common stockholders of record on August 25, 2023, which was the Company’s 162nd consecutive quarterly cash dividend. Tangible common shareholders’ equity per share increased by $2.56 or 10.04% during fiscal 2023 to $28.05. The ratio of tangible shareholders' equity to tangible assets increased to 9.55% as of September 30, 2023.

Net interest income was $690.2 million for fiscal 2023, an increase of $96 million or 16.1% from the prior year. The increase in net interest income from the prior year was primarily due to the $2.0 billion increase in average loans outstanding during the year despite a decrease in the interest rate spread of 9 basis points. The decrease in the spread was the result of an increase of 168 basis points in the average rate on

interest-bearing liabilities outpacing the 159 basis point increase in the average rate earned on interest-earning assets.

Total other income was $52.2 million for fiscal year 2023, a decrease from $66.4 million in the prior year. The decrease in other income is primarily due to $4.7 million in unrealized losses recorded for certain equity investments in fiscal 2023 versus $9.3 million in unrealized gains recorded in fiscal 2022.

Total other expense was $376.0 million for fiscal 2023, an increase of $17.5 million or 4.9% from the prior year. FDIC premiums increased $10.5 million compared to the same period last year. Compensation and benefits costs increased $2.6 million or 1.35% year-over-year primarily due to annual merit increases and investments in strategic initiatives combined with a reduction in capitalization of compensation as loan originations have decreased. These initiatives also drove an increase of $2.2 million in information technology expenses. Merger related expenses of $3.0 million were also included in total other expense. The Company’s efficiency ratio was 50.65% for fiscal 2023 as compared to 54.25% for the prior year as income growth outpaced expense growth.

For the year ended September 30, 2023, the Company recorded federal and state income tax expense of $67.7 million, which equates to a 20.81% effective tax rate. This compares to an effective tax rate of 21.23% for fiscal year 2022. The Company's effective tax rate for fiscal 2023 differs from the statutory federal tax rate mainly due to state taxes, tax-exempt income, tax-credit investments and miscellaneous non-deductible expenses.

As announced last November, the Company has entered into an agreement to purchase Luther Burbank Corporation, an $8 billion dollar financial institution headquartered in the State of California. In May, shareholders of each entity approved the transaction, and the merger application has been submitted to the regulatory authorities for approval. On October 13, 2023, the Washington State Department of Financial Institutions granted approval of the proposed merger, subject to approval by the FDIC and the Federal Reserve Bank. In order to move forward with the transaction, approval must be received from all three regulatory agencies, including both the FDIC and the Federal Reserve. While the market has been turbulent, management remains confident in both the strategic and economic merits of this merger.

WaFd Bank is headquartered in Seattle, Washington and has 198 branches in eight western states. To find out more, please visit our website www.wafdbank.com. The Company uses its website to distribute financial and other material information.

Non-GAAP Financial Measures

The adjusted ratio of shareholders' equity to total assets on September 30, 2023, discussed above, is calculated by deducting the $55 million in tax-effected unrealized losses on HTM investments from total GAAP equity of $2.4 billion, then dividing the adjusted equity by total assets of $22.5 billion to arrive at 10.55%. The unadjusted ratio as of September 30, 2023, was 10.80%.

Important Cautionary Statements

This press release contains statements about the Company’s future that are not statements of historical or current fact. These statements are “forward looking statements” for purposes of applicable securities laws, and are based on current information and/or management's good faith belief as to future events. Words such as “anticipate,” “believe,” “continue,” “expect,” “goal,” “intend,” “should,” “strategy,” “will,” or similar expressions signify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. By their nature, forward-looking statements involve inherent risk and uncertainties, including the following risks and uncertainties, and those risks and uncertainties more fully discussed under “Risk Factors” in the Company’s September 30, 2022 10-K, and Quarterly Reports on Form 10-Q which could cause actual performance to differ materially from that anticipated by any forward-looking statements. In particular, any forward-looking statements are subject to risks and uncertainties related to (i) current and future economic conditions, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, a potential recession, and slowdowns in economic growth; (ii) fluctuations in interest rate risk and market interest rates, including the effect on our net interest income and net interest margin, (iii) financial stress on borrowers (consumers and businesses) as a result of higher interest rates or an uncertain economic environment; (iv) changes in deposit flows or loan demands; (v) the effect of COVID-19 and other infectious illness outbreaks that may arise in the future and the resulting governmental and societal responses; (vi) global economic trends, including developments related to Ukraine and Russia, and related negative financial impacts on our borrowers; (vii) risks related to the proposed merger with Luther Burbank Corporation; (viii) our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft; and (ix) other

economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services. The Company undertakes no obligation to update or revise any forward-looking statement.

# # #

Contact:

WaFd, Inc.

425 Pike Street, Seattle, WA 98101

Brad Goode, SVP, Chief Marketing Officer

206-626-8178

brad.goode@wafd.com

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)


	September 30, 2023			September 30, 2022
	(In thousands, except share and ratio data)
ASSETS
Cash and cash equivalents	$	980,649		$	683,965
Available-for-sale securities, at fair value	1,995,097			2,051,037
Held-to-maturity securities, at amortized cost	423,586			463,299
Loans receivable, net of allowance for loan losses of $177,207 and $172,808	17,476,550			16,113,564
Interest receivable	87,003			63,872
Premises and equipment, net	237,011			243,062
Real estate owned	4,149			6,667
FHLB and FRB stock	126,820			95,073
Bank owned life insurance	242,919			237,931
Intangible assets, including goodwill of $304,750 and $303,457	310,619			309,009
Federal and state income tax assets, net	8,479			—
Other assets	581,793			504,652
	$	22,474,675		$	20,772,131
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Transaction deposits	$	10,765,313		$	12,691,527
Time deposits	5,305,016			3,338,043
Total customer deposits	16,070,329			16,029,570
Borrowings	3,650,000			2,125,000
Advance payments by borrowers for taxes and insurance	52,550			50,051
Federal and state income tax liabilities, net	—			3,306
Accrued expenses and other liabilities	275,370			289,944
	20,048,249			18,497,871
Stockholders’ equity
Preferred stock, $1.00 par value, 5,000,000 shares authorized; 300,000 and 300,000 shares issued; 300,000 and 300,000 shares outstanding	300,000			300,000
Common stock, $1.00 par value, 300,000,000 shares authorized; 136,466,579 and 136,270,886 shares issued; 64,736,916 and 65,330,126 shares outstanding	136,467			136,271
Additional paid-in capital	1,687,634			1,686,975
Accumulated other comprehensive (loss) income, net of taxes	46,921			52,481
Treasury stock, at cost; 71,729,663 and 70,940,760 shares	(1,612,345)			(1,590,207)
Retained earnings	1,867,749			1,688,740
	2,426,426			2,274,260
	$	22,474,675		$	20,772,131
CONSOLIDATED FINANCIAL HIGHLIGHTS
Common shareholders' equity per share	$	32.85		$	30.22
Tangible common shareholders' equity per share	28.05			25.49
Shareholders' equity to total assets	10.80		%	10.95		%
Tangible shareholders' equity (TSE) to tangible assets	9.55			9.60
TSE + allowance for credit losses to tangible assets	10.35			10.45
Weighted average rates at period end
Loans and mortgage-backed securities	5.08		%	4.13		%
Combined loans, all interest-earning assets	5.07			4.04
Customer accounts	2.12			0.51
Borrowings	3.98			2.02
Combined cost of customer accounts and borrowings	2.46			0.68
Net interest spread	2.61			3.36

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)


	As of
SUMMARY FINANCIAL DATA	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	(In thousands, except share and ratio data)
Cash	$	980,649		$	1,139,643		$	1,118,544		$	645,862		$	683,965
Loans receivable, net	17,476,550			17,384,188			17,271,906			16,993,588			16,113,564
Allowance for credit losses ("ACL")	201,707			204,569			205,920			208,297			205,308
Available-for-sale securities, at fair value	1,995,097			2,036,233			2,006,286			2,059,837			2,051,037
Held-to-maturity securities, at amortized cost	423,586			434,172			445,222			453,443			463,299
Total assets	22,474,675			22,552,588			22,325,211			21,653,811			20,772,131
Transaction deposits	10,765,313			11,256,575			11,880,343			12,547,832			12,691,527
Time deposits	5,305,016			4,863,849			3,980,605			3,412,203			3,338,043
FHLB advances	3,650,000			3,750,000			3,800,000			3,075,000			2,125,000
Total shareholders' equity	2,426,426			2,394,066			2,375,117			2,324,381			2,274,260

FINANCIAL HIGHLIGHTS
Common shareholders' equity per share	32.85			32.36			31.54			30.96			30.22
Tangible common shareholders' equity per share	28.05			27.58			26.85			26.24			25.49
Shareholders' equity to total assets	10.80		%	10.62		%	10.64		%	10.73		%	10.95		%
Tangible shareholders' equity to tangible assets	9.55		%	9.37		%	9.39		%	9.44		%	9.60		%
Tangible shareholders' equity + ACL to tangible assets	10.35		%	10.17		%	10.19		%	10.27		%	10.45		%
Common shares outstanding	64,736,916			64,721,190			65,793,099			65,387,745			65,330,126
Preferred shares outstanding	300,000			300,000			300,000			300,000			300,000
Loans to customer deposits	108.75		%	107.84		%	108.90		%	106.48		%	100.52		%

CREDIT QUALITY
ACL to gross loans	1.03		%	1.03		%	1.02		%	1.03		%	1.06		%
ACL to non-accrual loans	400.04		%	370.09		%	595.04		%	713.83		%	594.51		%
Non-accrual loans to net loans	0.29		%	0.32		%	0.20		%	0.17		%	0.21		%
Non-accrual loans	50,422			55,276			34,606			29,180			34,534
Non-performing assets to total assets	0.26		%	0.30		%	0.21		%	0.18		%	0.21		%
Non-performing assets	57,924			67,000			46,785			38,650			44,554

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended September 30,						Twelve Months Ended September 30,
	2023			2022			2023			2022
	(In thousands, except share and ratio data)						(In thousands, except share and ratio data)
INTEREST INCOME
Loans receivable	$	240,998		$	174,710		$	900,068		$	601,592
Mortgage-backed securities	11,695			8,263			43,184			26,332
Investment securities and cash equivalents	29,017			14,960			99,703			38,435
	281,710			197,933			1,042,955			666,359
INTEREST EXPENSE
Customer accounts	83,402			17,071			237,233			43,041
FHLB advances and other borrowings	34,611			7,243			115,488			28,729
	118,013			24,314			352,721			71,770
Net interest income	163,697			173,619			690,234			594,589
Provision (release) for credit losses	26,500			1,500			41,500			3,000
Net interest income after provision (release)	137,197			172,119			648,734			591,589
OTHER INCOME
Gain (loss) on sale of investment securities	33			18			33			99
Gain (loss) on termination of hedging derivatives	33			—			(867)			—

Loan fee income	731			1,154			3,885			7,168
Deposit fee income	6,849			6,604			26,050			25,942
Other income	6,688			6,706			23,100			33,163
	14,334			14,482			52,201			66,372
OTHER EXPENSE
Compensation and benefits	45,564			51,304			196,534			193,917
Occupancy	10,115			10,568			41,579			42,499
FDIC insurance premiums	7,000			2,231			20,025			9,531
Product delivery	5,819			5,104			20,973			19,536
Information technology	12,672			12,228			49,447			47,202
Other expense	11,007			11,707			47,477			45,890
	92,177			93,142			376,035			358,575
Gain (loss) on real estate owned, net	(235)			(488)			176			651
Income before income taxes	59,119			92,971			325,076			300,037
Income tax provision	8,911			19,576			67,650			63,707
Net Income	50,208			73,395			257,426			236,330
Dividends on preferred stock	3,656			3,656			14,625			14,625
Net Income available to common shareholders	$	46,552		$	69,739		$	242,801		$	221,705
PER SHARE DATA
Basic earnings	$	0.72		$	1.07		$	3.72		$	3.40
Diluted earnings	0.72			1.07			3.72			3.39
Cash dividends per share	0.25			0.24			0.99			0.95
Basic weighted average shares outstanding	64,729,006			65,326,706			65,192,510			65,287,650
Diluted weighted average shares outstanding	64,736,864			65,423,817			65,255,283			65,404,110
PERFORMANCE RATIOS
Return on average assets	0.90		%	1.44		%	1.18		%	1.17		%
Return on average common equity	8.73			14.22			11.69			11.70
Net interest margin	3.13			3.64			3.40			3.16
Efficiency ratio	51.78			49.52			50.65			54.25

WAFD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
	(In thousands, except share and ratio data)
INTEREST INCOME
Loans receivable	$	240,998		$	232,167		$	222,957		$	203,946		$	174,710
Mortgage-backed securities	11,695			10,454			10,422			10,613			8,263
Investment securities and cash equivalents	29,017			29,859			21,967			18,860			14,960
	281,710			272,480			255,346			233,419			197,933
INTEREST EXPENSE
Customer accounts	83,402			70,062			52,123			31,646			17,071
FHLB advances and other borrowings	34,611			33,718			28,185			18,974			7,243
	118,013			103,780			80,308			50,620			24,314
Net interest income	163,697			168,700			175,038			182,799			173,619
Provision (release) for credit losses	26,500			9,000			3,500			2,500			1,500
Net interest income after provision (release)	137,197			159,700			171,538			180,299			172,119
OTHER INCOME
Gain (loss) on sale of investment securities	33			—			—			—			18
Gain (loss) on termination of hedging derivatives	33			(926)			26			—			—

Loan fee income	731			1,000			652			1,502			1,154
Deposit fee income	6,849			6,660			6,188			6,353			6,604
Other income	6,688			7,037			3,206			6,169			6,706
	14,334			13,771			10,072			14,024			14,482
OTHER EXPENSE
Compensation and benefits	45,564			50,456			51,444			49,070			51,304
Occupancy	10,115			10,444			10,918			10,102			10,568
FDIC insurance premiums	7,000			5,350			4,000			3,675			2,231
Product delivery	5,819			5,217			5,316			4,621			5,104
Information technology	12,672			11,661			12,785			12,329			12,228
Other expense	11,007			11,571			12,418			12,481			11,707
	92,177			94,699			96,881			92,278			93,142
Gain (loss) on real estate owned, net	(235)			722			(199)			(112)			(488)
Income before income taxes	59,119			79,494			84,530			101,933			92,971
Income tax provision	8,911			17,719			18,596			22,424			19,576
Net income	50,208			61,775			65,934			79,509			73,395
Dividends on preferred stock	3,656			3,656			3,656			3,656			3,656
Net income available to common shareholders	$	46,552		$	58,119		$	62,278		$	75,853		$	69,739
PER SHARE DATA
Basic earnings per common share	$	0.72		$	0.89		$	0.95		$	1.16		$	1.07
Diluted earnings per common share	0.72			0.89			0.95			1.16			1.07
Cash dividends per common share	0.25			0.25			0.25			0.24			0.24
Basic weighted average shares outstanding	64,729,006			65,194,880			65,511,131			65,341,974			65,326,706
Diluted weighted average shares outstanding	64,736,864			65,212,846			65,551,185			65,430,690			65,423,817
PERFORMANCE RATIOS
Return on average assets	0.90		%	1.12		%	1.21		%	1.50		%	1.44		%
Return on average common equity	8.73			11.09			12.01			15.15			14.22
Net interest margin	3.13			3.27			3.51			3.69			3.64
Efficiency ratio	51.78			51.90			52.34			46.78			49.52

Exhibit 99.2

WaFd, Inc.

Fact Sheet

September 30, 2023

($ in Thousands)


	As of 03/23						As of 06/23						As of 09/23
Allowance for Credit Losses (ACL) - Total	$	205,920					$	204,569					$	201,707
ACL - Loans	177,420						178,069						177,207
ACL Unfunded Commitments	28,500						26,500						24,500
Total ACL as a % of Gross Loans	1.02		%				1.03		%				1.03		%

	03/23 QTR			03/23 YTD			06/23 QTR			06/23 YTD			09/23 QTR			09/23 YTD
Loan Originations - Total	$	1,039,722		$	3,082,400		$	870,963		$	3,953,363		$	748,793		$	4,702,156
Multi-Family	17,729			115,219			12,604			127,823			8,965			136,788
Commercial Real Estate	39,689			170,598			21,538			192,136			31,225			223,361
Commercial & Industrial	456,168			1,408,867			372,718			1,781,585			250,875			2,032,460
Construction	226,750			755,800			143,600			899,400			147,571			1,046,971
Land - Acquisition & Development	20,043			30,147			1,912			32,059			2,887			34,946
Single-Family Residential	149,774			300,495			168,532			469,027			141,103			610,130
Construction - Custom	74,005			188,196			77,210			265,406			81,378			346,784
Land - Consumer Lot Loans	6,315			10,705			4,894			15,599			5,534			21,133
HELOC	36,622			79,254			38,287			117,541			36,489			154,030
Consumer	12,627			23,119			29,668			52,787			42,766			95,553

Purchased Loans (including acquisitions)	$	—		$	80,015		$	—		$	80,015		$	—		$	80,015

Net Loan Fee and Discount Accretion	$	4,923		$	10,582		$	4,859		$	15,441		$	4,689		$	20,130

Repayments
Loans	$	1,109,433		$	2,342,752		$	1,103,238		$	3,445,990		$	989,279		$	4,435,269
MBS	33,354			81,664			43,639			125,303			56,648			181,951

MBS Net Premium Amortization	$	93		$	(64)		$	1,436		$	1,372		$	(106)		$	1,266

Efficiency
Operating Expenses/Average Assets	1.78		%	1.76		%	1.71		%	1.71		%	1.70		%	1.74		%
Efficiency Ratio (%)	52.34		%	49.53		%	51.90		%	50.29		%	51.78		%	50.65		%
Amortization of Intangibles	$	243		$	486		$	240		$	726		$	254		$	980

EOP Numbers
Shares Issued and Outstanding	65,793,099						64,721,190						64,736,916

Share repurchase information
Remaining shares authorized for repurchase	3,676,260						2,559,611						2,559,183
Shares repurchased	3,239			48,084			1,116,649			1,164,733			428			1,165,161
Average share repurchase price	$	33.48		$	38.19		$	25.62		$	26.14		$	30.41		$	26.14

WaFd, Inc.

Fact Sheet

September 30, 2023

($ in Thousands)


Tangible Common Book Value	As of 03/23			As of 06/23			As of 09/23
$ Amount	$	1,766,593		$	1,784,997		$	1,815,807
Per Share	26.85			27.58			28.05

# of Employees	2,110			2,115			2,120

Investments
Available-For-Sale:
Agency MBS	$	899,744		$	950,210		$	912,844
Other	1,106,542			1,086,023			1,082,253
	$	2,006,286		$	2,036,233		$	1,995,097
Held-To-Maturity:
Agency MBS	$	445,222		$	434,172		$	423,586
	$	445,222		$	434,172		$	423,586

	As of 03/31/23			As of 06/30/23			As of 09/30/23
Loans Receivable by Category	AMOUNT		%	AMOUNT		%	AMOUNT		%
Multi-Family	$	2,894,567	14.3%	$	2,889,635	14.5%	$	2,907,086	14.8%
Commercial Real Estate	3,283,151		16.3	3,239,387		16.3	3,344,959		17.0
Commercial & Industrial	2,590,700		12.8	2,496,778		12.5	2,321,717		11.8
Construction	3,735,821		18.5	3,578,430		17.9	3,318,994		16.9
Land - Acquisition & Development	231,990		1.1	216,185		1.1	201,538		1.0
Single-Family Residential	6,175,250		30.6	6,313,561		31.7	6,451,270		32.8
Construction - Custom	840,475		4.2	757,171		3.8	672,643		3.4
Land - Consumer Lot Loans	141,215		0.7	134,967		0.7	125,723		0.7
HELOC	218,179		1.1	224,917		1.1	234,410		1.2
Consumer	71,083		0.4	76,813		0.4	70,164		0.4
	20,182,431		100%	19,927,844		100%	19,648,504		100%
Less:
Allowance	177,420			178,069			177,207
Loans in Process	2,648,512			2,270,038			1,895,940
Net Deferred Fees, Costs and Discounts	84,593			95,549			98,807
Sub-Total	2,910,525			2,543,656			2,171,954
	$	17,271,906		$	17,384,188		$	17,476,550

Net Loan Portfolio by Category	AMOUNT		%	AMOUNT		%	AMOUNT		%
Multi-Family	$	2,846,956	16.5%	$	2,845,457	16.4%	$	2,873,439	16.4%
Commercial Real Estate	3,230,501		18.7	3,190,319		18.4	3,281,258		18.8
Commercial & Industrial	2,521,895		14.6	2,428,825		14.0	2,256,546		12.9
Construction	1,582,486		9.2	1,731,519		10.0	1,809,528		10.4
Land - Acquisition & Development	159,584		0.9	154,411		0.9	149,645		0.9
Single-Family Residential	6,107,105		35.3	6,231,509		35.8	6,360,961		36.4
Construction - Custom	400,327		2.3	372,824		2.1	321,670		1.8
Land - Consumer Lot Loans	136,195		0.8	130,224		0.7	121,330		0.7
HELOC	218,497		1.3	225,388		1.3	234,895		1.3
Consumer	68,360		0.4	73,712		0.4	67,278		0.4
	$	17,271,906	100%	$	17,384,188	100%	$	17,476,550	100%

WaFd, Inc.

Fact Sheet

September 30, 2023

($ in Thousands)


	As of 03/31/23					As of 06/30/23					As of 09/30/23
Loans by State	AMOUNT			%		AMOUNT			%		AMOUNT			%
Washington	$	5,609,172		32.1	%	$	5,549,532		31.6	%	$	5,471,235		31.0	%
Idaho	865,543			5.0		877,573			5.0		891,240			5.0
Oregon	2,303,843			13.2		2,306,181			13.1		2,350,173			13.3
Utah	1,758,831			10.1		1,849,187			10.5		1,939,332			11.0
Nevada	767,250			4.4		758,988			4.3		740,394			4.2
Texas	2,330,637			13.4		2,381,783			13.6		2,403,111			13.6
Arizona	2,398,029			13.7		2,435,541			13.9		2,455,866			13.9
New Mexico	720,320			4.1		728,140			4.2		735,073			4.2
Other	695,701			4.0		675,332			3.8		667,333			3.8
Total	$	17,449,326		100%		$	17,562,257		100%		$	17,653,757		100%

Non-Performing Assets	AMOUNT			%		AMOUNT			%		AMOUNT			%
Non-accrual loans:
Multi-Family	$	5,844		16.9%		$	5,951		10.8%		$	5,127		10.2%
Commercial Real Estate	4,519			13.0		1,087			2.0		23,435			46.5
Commercial & Industrial	7,681			22.2		31,686			57.3		6,082			12.1
Construction	—			—		—			—		—			—
Land - Acquisition & Development	—			—		—			—		—			—
Single-Family Residential	16,396			47.4		15,510			28.0		14,918			29.6
Construction - Custom	—			—		87			0.2		88			—
Land - Consumer Lot Loans	6			—		122			0.2		9			—
HELOC	128			0.4		801			1.4		736			1.5
Consumer	32			0.1		32			0.1		27			0.1
Total non-accrual loans	34,606			100%		55,276			100%		50,422			100%
Real Estate Owned	8,826					8,371					4,149
Other Property Owned	3,353					3,353					3,353
Total non-performing assets	$	46,785				$	67,000				$	57,924

Non-accrual loans as % of total net loans	0.20		%			0.32		%			0.29		%
Non-performing assets as % of total assets	0.21		%			0.30		%			0.26		%

Net Charge-offs (Recoveries) by Category	03/23 QTR			CO % (a)		06/23 QTR			CO % (a)		09/23 QTR			CO % (a)
Multi-Family	$	—		—%		$	—		—%		$	—		—%
Commercial Real Estate	(1)			—		—			—		(98)			(0.01)
Commercial & Industrial	6,012			0.93		10,459			1.68		29,242			5.04
Construction	—			—		—			—		—			—
Land - Acquisition & Development	(14)			(0.02)		(24)			(0.04)		(24)			(0.05)
Single-Family Residential	(70)			—		(18)			—		(16)			—
Construction - Custom	—			—		—			—		—			—
Land - Consumer Lot Loans	(5)			(0.01)		(9)			(0.03)		(9)			(0.03)
HELOC	—			—		—			—		(1)			—
Consumer	(45)			(0.25)		(57)			(0.30)		268			1.53
Total net charge-offs (recoveries)	$	5,877		0.12%		$	10,351		0.21%		$	29,362		0.60%
(a) Annualized Net Charge-offs (recoveries) divided by Gross Balance

WaFd, Inc.

Fact Sheet

September 30, 2023

($ in Thousands)



	As of 03/23					As of 06/23					As of 09/23
Deposits & Branches by State	AMOUNT		%		#	AMOUNT		%		#	AMOUNT		%		#
Washington	$	7,273,498	45.9	%	71	$	7,505,777	46.6	%	71	$	7,627,674	47.5	%	71
Idaho	1,020,154		6.4		22	1,047,730		6.5		22	972,424		6.1		22
Oregon	2,750,323		17.3		36	2,810,153		17.4		36	2,820,338		17.4		36
Utah	852,062		5.4		9	837,696		5.2		9	662,192		4.1		9
Nevada	527,449		3.3		8	496,316		3.1		8	495,794		3.1		8
Texas	410,972		2.6		6	363,460		2.2		6	381,576		2.4		5
Arizona	1,579,815		10.0		28	1,605,868		10.0		28	1,635,345		10.2		28
New Mexico	1,446,675		9.1		19	1,453,424		9.0		19	1,474,986		9.2		19
Total	$	15,860,948	100%		199	$	16,120,424	100%		199	$	16,070,329	100%		198

Deposits by Type	AMOUNT		%			AMOUNT		%			AMOUNT		%
Non-Interest Checking	$	2,856,165	18.0	%		$	2,729,888	16.9	%		$	2,706,448	16.8	%
Interest Checking	4,125,554		26.0			4,124,463		25.6			3,882,715		24.2
Savings	943,915		6.0			874,256		5.4			817,547		5.1
Money Market	3,954,709		24.9			3,527,968		21.9			3,358,603		20.9
Time Deposits	3,980,605		25.1			4,863,849		30.2			5,305,016		33.0
Total	$	15,860,948	100%			$	16,120,424	100%			$	16,070,329	100%

Deposits Uninsured & Non-collateraized - EOP	$	4,238,628.64	26.7	%		$	4,033,174	25.0	%		$	4,124,355	25.7	%

Time Deposit Repricing	Amount		Rate			Amount		Rate			Amount		Rate
Within 3 months	$	553,797	1.49	%		$	1,402,532	3.28	%		$	2,345,588	3.84	%
From 4 to 6 months	947,860		2.51	%		1,500,396		3.22	%		1,517,379		3.89	%
From 7 to 9 months	920,635		2.38	%		1,017,655		3.67	%		408,399		3.84	%
From 10 to 12 months	933,763		3.46	%		400,959		3.73	%		323,741		3.02	%

Borrowings (Effective Maturity)	Amount		Rate			Amount		Rate			Amount		Rate
Within 1 year	$	2,700,000	4.74	%		$	2,650,000	5.14	%		$	2,750,000	5.05	%
1 to 3 years	300,000		2.07	%		300,000		2.11	%		100,000		1.70	%
3 to 5 years	—		—	%		—		—	%		—		—	%
More than 5 years	800,000		0.76	%		800,000		0.61	%		800,000		0.61	%
Total	$	3,800,000				$	3,750,000				$	3,650,000

Interest Rate Risk

NPV post 200 bps shock (b)			9.9	%				9.9	%				9.5	%
Change in NII after 200 bps shock (b)			3.3	%				3.0	%				(2.0)	%
(b) Assumes no balance sheet management actions taken.

WaFd, Inc.

Fact Sheet

September 30, 2023

($ in Thousands)


Historical CPR Rates (c)
	WAFD		WAFD
Average for Quarter Ended:	SFR Mortgages		GSE MBS











9/30/2021	28.4	%	38.3	%
12/31/2021	25.0	%	35.3	%
3/31/2022	18.4	%	28.6	%
6/30/2022	13.1	%	20.9	%
9/30/2022	8.1	%	14.7	%
12/31/2022	6.3	%	12.6	%
3/31/2023	5.8	%	8.9	%
6/30/2023	7.9	%	11.8	%
9/30/2023	7.0	%	14.5	%

(c) The CPR Rate (conditional payment rate) is the rate that is equal to the proportion of the principal of a pool of loans that is paid off prematurely in each period.

WaFd, Inc.

Fact Sheet

September 30, 2023

Average Balance Sheet

($ in Thousands)


	Quarter Ended
	March 31, 2023						June 30, 2023						September 30, 2023
	Average				Average		Average				Average		Average				Average
	Balance		Interest		Rate		Balance		Interest		Rate		Balance		Interest		Rate
Assets
Loans receivable	$	17,097,130	$	222,957	5.29	%	$	17,307,298	$	232,167	5.38	%	$	17,397,745	$	240,998	5.50	%
Mortgage-backed securities	1,355,403		10,422		3.12		1,349,264		10,454		3.11		1,375,938		11,695		3.37
Cash & investments	1,657,027		19,786		4.84		1,879,893		27,249		5.81		1,841,726		26,536		5.72
FHLB & FRB Stock	139,484		2,181		6.34		131,191		2,610		7.98		120,005		2,481		8.20
Total interest-earning assets	20,249,044		255,346		5.11	%	20,667,646		272,480		5.29	%	20,735,414		281,710		5.39	%
Other assets	1,491,981						1,445,635						1,498,327
Total assets	$	21,741,025					$	22,113,281					$	22,233,741

Liabilities and Shareholders' Equity
Interest-bearing customer accounts	12,746,827		52,123		1.66	%	13,019,055		70,062		2.16	%	13,245,484		83,402		2.50	%
Borrowings	3,281,945		28,185		3.48		3,595,879		33,718		3.76		3,478,261		34,611		3.95

Total interest-bearing liabilities	16,028,772		80,308		2.03	%	16,614,934		103,780		2.51	%	16,723,745		118,013		2.80	%
Noninterest-bearing customer accounts	3,046,867						2,826,538						2,761,622
Other liabilities	290,702						275,522						316,528
Total liabilities	19,366,341						19,716,994						19,801,895
Shareholders’ equity	2,374,684						2,396,287						2,431,846
Total liabilities and shareholders' equity	$	21,741,025					$	22,113,281					$	22,233,741

Net interest income/interest rate spread			$	175,038	3.08	%			$	168,700	2.78	%			$	163,697	2.59	%

Net interest margin (1)					3.51	%					3.27	%					3.13	%

(1) Annualized net interest income divided by average interest-earning assets

WaFd, Inc.

Fact Sheet

September 30, 2023

Delinquency Summary

($ in Thousands)


			AMOUNT OF LOANS		# OF LOANS				% based				% based
TYPE OF LOANS	#LOANS	AVG Size	NET OF LIP & CHG-OFFs		30	60	90	Total	on #		$ Delinquent		on $

September 30, 2023
Multi-Family	1,134	2,545	$	2,886,594	—	—	1	1	0.09	%	$	132	—	%
Commercial Real Estate	1,199	2,761	3,310,101		1	1	3	5	0.42		24,428		0.74
Commercial & Industrial	2,000	1,158	2,315,318		2	5	18	25	1.25		8,298		0.36
Construction	490	3,753	1,838,936		—	—	—	—	—		—		—
Land - Acquisition & Development	93	1,685	156,661		—	—	—	—	—		—		—
Single-Family Residential	19,737	324	6,388,990		30	19	45	94	0.48		23,925		0.37
Construction - Custom	665	488	324,451		1	1	1	3	0.45		3,464		1.07
Land - Consumer Lot Loans	1,131	110	124,842		2	2	1	5	0.44		611		0.49
HELOC	4,229	56	237,754		11	3	6	20	0.47		2,046		0.86
Consumer	1,694	41	70,110		9	2	14	25	1.48		411		0.59
	32,372	545	$	17,653,757	56	33	89	178	0.55	%	$	63,315	0.36	%
June 30, 2023
Multi-Family	1,137	2,514	$	2,858,433	1	—	1	2	0.18	%	$	496	0.02	%
Commercial Real Estate	1,193	2,698	3,218,451		—	—	—	—	—		—		—
Commercial & Industrial	2,068	1,204	2,490,740		3	3	12	18	0.87		32,551		1.31
Construction	528	3,332	1,759,434		—	—	—	—	—		—		—
Land - Acquisition & Development	101	1,601	161,658		—	—	—	—	—		—		—
Single-Family Residential	19,630	319	6,258,592		29	9	49	87	0.44		19,086		0.30
Construction - Custom	804	468	376,045		1	—	1	2	0.25		711		0.19
Land - Consumer Lot Loans	1,173	114	133,994		2	2	1	5	0.43		264		0.20
HELOC	4,151	55	228,132		6	1	6	13	0.31		1,448		0.63
Consumer	1,729	44	76,778		8	1	16	25	1.45		540		0.70
	32,514	540	$	17,562,257	50	16	86	152	0.47	%	$	55,096	0.31	%
March 31, 2023
Multi-Family	1,147	2,493	$	2,859,994	1	—	—	1	0.09	%	$	132	—	%
Commercial Real Estate	1,210	2,693	3,258,304		2	—	2	4	0.33		2,011		0.06
Commercial & Industrial	2,171	1,191	2,585,196		18	2	11	31	1.43		4,199		0.16
Construction	576	2,793	1,608,513		1	—	—	1	0.17		505		0.03
Land - Acquisition & Development	109	1,533	167,080		—	—	—	—	—		—		—
Single-Family Residential	19,543	314	6,134,021		28	4	56	88	0.45		19,238		0.31
Construction - Custom	953	424	403,783		1	—	—	1	0.10		87		0.02
Land - Consumer Lot Loans	1,209	116	140,140		1	—	—	1	0.08		79		0.06
HELOC	4,070	54	221,159		8	4	4	16	0.39		1,348		0.61
Consumer	1,765	40	71,136		7	2	15	24	1.36		235		0.33
	32,753	533	$	17,449,326	67	12	88	167	0.51	%	$	27,834	0.16	%

Document and Entity Information	Oct. 17, 2023
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Oct. 17, 2023
Entity Registrant Name	WAFD, INC.
Entity Central Index Key	0000936528
Amendment Flag	false
Entity Incorporation, State or Country Code	WA
Entity File Number	001-34654
Entity Tax Identification Number	91-1661606
Entity Address, Address Line One	425 Pike Street
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98101
City Area Code	206
Local Phone Number	624-7930
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Series A Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	WAFDP
Title of 12(b) Security	Depositary Shares, Each Representing a 1/40th Interest in a Share of 4.875% Fixed Rate Series A Non-Cumulative Perpetual Preferred Stock
Security Exchange Name	NASDAQ
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	WAFD
Title of 12(b) Security	Common Stock, $1.00 par value per share
Security Exchange Name	NASDAQ