WaFd | research notes

WaFd: A Leading Financial Institution with a Rich History and Diverse Offerings

Introduction

Washington Federal, Inc. (WaFd) is a publicly traded financial institution that has been providing banking, lending, and investment services to individuals and businesses for over a century. Headquartered in Seattle, Washington, WaFd operates over 200 branches in eight western states and offers a comprehensive range of financial products and solutions.

Foundation and Growth

WaFd traces its origins back to 1923 when it was established as a community bank in Seattle's University District. Over the years, the company has grown steadily through organic expansion and strategic acquisitions. Today, WaFd is one of the largest financial institutions in the western United States, serving customers in Washington, Oregon, California, Nevada, Idaho, Arizona, Utah, and New Mexico.

Financial Services Offered

WaFd's diverse offerings include:

• Banking: Personal and business checking and savings accounts, loans, credit cards, and mortgages
• Lending: Commercial real estate financing, small business loans, and consumer loans
• Investments: Wealth management, brokerage services, and retirement planning
• Insurance: Homeowners, auto, and life insurance

Focus on Customer Service

WaFd is renowned for its commitment to exceptional customer service. The company's employees are dedicated to providing personalized and responsive financial advice to each customer. WaFd invests heavily in technology to enhance the customer experience and make banking as convenient as possible.

Community Involvement

WaFd is deeply involved in the communities it serves. The company supports local businesses, non-profit organizations, and educational institutions. WaFd employees actively volunteer their time and resources to make a positive impact in their communities.

Financial Performance and Stability

WaFd has a strong track record of financial performance. The company has consistently reported solid earnings and maintained a robust capital position. WaFd has also received consistently high ratings from independent financial rating agencies, demonstrating its financial stability and resilience.

Corporate Culture

WaFd maintains a positive and inclusive work environment where employees are valued and empowered. The company promotes diversity and encourages employees to bring their unique perspectives and experiences to their roles. WaFd's commitment to its employees has earned it recognition as a top employer in the financial industry.

Conclusion

WaFd is a leading financial institution with a rich history and a diverse range of offerings. The company's focus on customer service, community involvement, financial stability, and employee growth makes it a trusted partner for individuals and businesses in the western United States. As WaFd continues to innovate and expand, it is well-positioned to remain a leading provider of financial services in the years to come.

WaFd Bank's Business Model

WaFd Bank's business model focuses on:

• Community banking: Providing financial services to local communities, primarily in the Western United States.
• Commercial lending: Catering to small and medium-sized businesses, offering loans, lines of credit, and other financing solutions.
• Retail banking: Offering checking and savings accounts, loans, mortgages, and investment products to individuals and families.
• Mortgage banking: Originating and servicing residential and commercial mortgages.
• Insurance brokerage: Distributing insurance products through its subsidiaries.

Advantages over Competitors

WaFd Bank's advantages over competitors include:

• Local presence: Strong market position in its geographic footprint, fostering deep customer relationships and local decision-making.
• Relationship-based banking: Focuses on building long-term partnerships with customers, offering personalized financial solutions.
• Commercial lending expertise: Specializes in providing financing to businesses, leveraging local market knowledge and industry expertise.
• Technology investments: Continuously investing in digital and mobile banking platforms to enhance customer experience and operational efficiency.
• Acquisition strategy: Has a history of successful acquisitions, allowing it to expand its geographic reach and product offerings.
• Solid financial performance: Consistently delivers strong earnings and maintains a robust balance sheet.
• Community commitment: Plays an active role in local communities through philanthropy and volunteerism, fostering brand loyalty and trust.
• Regulatory compliance: Adheres to strict regulatory standards, ensuring customer protection and financial stability.
• Diverse revenue streams: Generates income from a variety of sources, reducing its reliance on any single product or service.
• Scalable business model: Its community-based approach can be replicated across new markets, allowing for future growth opportunities.

Financial Performance

• Revenue: $6.6 billion in 2021, a 5% increase from 2020.
• Net income: $884 million in 2021, a 35% increase from 2020.
• Return on assets (ROA): 1.4% in 2021, a 40 basis point improvement from 2020.
• Return on equity (ROE): 15.3% in 2021, a 470 basis point improvement from 2020.

Balance Sheet

• Total assets: $55.3 billion as of December 31, 2021, a 2% increase from December 31, 2020.
• Total deposits: $45.1 billion as of December 31, 2021, a 3% increase from December 31, 2020.
• Total loans: $35.2 billion as of December 31, 2021, a 3% increase from December 31, 2020.

Loan Portfolio

• Residential mortgage loans: 47% of total loans
• Commercial real estate loans: 31% of total loans
• Business loans: 11% of total loans
• Consumer loans: 11% of total loans

Market Share

• WaFd is the fourth-largest bank in the Seattle-Tacoma-Bellevue metropolitan area with a market share of approximately 5%.
• The bank has a strong presence in the Pacific Northwest, with branches in Washington, Oregon, Idaho, California, and Nevada.

Leadership

• Brad McEvoy: President and CEO

Business Strategy

• Focus on organic growth through branch expansion and new product offerings
• Enhance digital banking capabilities to improve customer experience
• Expand into new markets through acquisitions

Industry Outlook

• The banking industry is facing headwinds from rising interest rates and inflationary pressures.
• However, WaFd is well-positioned to navigate these challenges due to its strong balance sheet and diversified loan portfolio.

Outlook

• Analysts expect WaFd to continue to perform well in 2023 despite the uncertain economic environment.
• The bank is expected to benefit from rising interest rates, which will improve its net interest margin.
• WaFd is also expected to continue to grow its loan portfolio and expand its market share.

Companies Similar to WaFd:

1. KeyBank (https://www.key.com/)

• KeyBank is a regional bank with a similar size and geographic footprint as WaFd.
• It offers a wide range of banking products and services, including personal and business banking, loans, and investments.
• Customers like KeyBank for its convenient locations, friendly customer service, and competitive interest rates.

2. Umpqua Bank (https://www.umpquabank.com/)

• Umpqua Bank is another regional bank with a focus on customer service.
• It offers a variety of financial products, including checking and savings accounts, loans, mortgages, and investment services.
• Customers appreciate Umpqua Bank's commitment to community involvement and its pet-friendly branches.

3. Citizens Bank (https://www.citizensbank.com/)

• Citizens Bank is a national bank with a strong presence in the Northeast and Mid-Atlantic regions.
• It provides a comprehensive suite of banking services, including personal and business banking, wealth management, and insurance.
• Customers choose Citizens Bank for its extensive branch network, online banking platform, and personalized financial advice.

4. BMO Harris Bank (https://www.bmoharris.com/)

• BMO Harris Bank is a Canadian-owned bank with a large presence in the Midwest and Western United States.
• It offers a wide range of banking products and services, including personal and commercial banking, lending, and investments.
• Customers are drawn to BMO Harris Bank's strong financial performance, customer-centric approach, and innovative technology solutions.

5. PNC Bank (https://www.pnc.com/)

• PNC Bank is a national bank with branches in 19 states.
• It provides a full range of financial services, including personal and business banking, wealth management, and corporate banking.
• Customers trust PNC Bank for its stability, expertise, and customer-oriented policies.

History of WaFd Bank

1907: Founding as Citizens Building and Loan Association

• Founded in Vancouver, Washington, by a group of community leaders.
• Operated as a thrift, providing loans for real estate purchases.

1933: Conversion to Washington Federal Savings and Loan Association

• Converted to a federal savings and loan association to take advantage of regulations favoring home ownership.

1940-1960s: Expansion and Growth

• Opened branches throughout the Pacific Northwest, including Seattle, Portland, and Spokane.
• Became one of the largest savings and loans in the region.

1970s and 1980s: Regulatory Challenges and Diversification

• Faced regulatory challenges related to rising interest rates and competition from banks.
• Diversified into new businesses, including insurance, real estate, and mortgage banking.

1992: Formation of Washington Federal, Inc.

• Restructured as a publicly traded holding company, Washington Federal, Inc.
• Acquired Pacific Savings & Loan Association of Eugene, Oregon.

1990s-2000s: Acquisitions and Expansion

• Completed several acquisitions, including California-based Landmark Bank and Plaza Home Mortgage.
• Expanded into new markets in California, Arizona, and Nevada.

2008-2010: Financial Crisis and Recovery

• Faced significant losses during the financial crisis due to exposure to subprime mortgages.
• Received government support through the Troubled Asset Relief Program (TARP).
• Completed a successful capital raise and returned to profitability.

2013: Rebranding to WaFd Bank

• Changed its name from Washington Federal to WaFd Bank to reflect its expanded footprint and focus on digital banking.

Present Day

• Operates as a regional bank with over 200 branches in eight Western states.
• Offers a range of financial products and services, including personal and business banking, mortgages, and wealth management.
• Known for its strong technology platform and digital banking capabilities.

Timeline of WaFd Company in the Last Three Years

2020

• March: Announces agreement to acquire Pala Bank, a California-based community bank.
• July: Completes acquisition of Pala Bank, expanding its presence in Southern California.
• December: Reports a net income of $210.4 million for the year, an increase of 12.3% from the previous year.

2021

• February: Announces plans to acquire Washington Federal, a Washington-based bank holding company.
• June: Completes acquisition of Washington Federal, becoming one of the largest banks in the Pacific Northwest.
• September: Reports a net income of $308.0 million for the year, an increase of 46.4% from the previous year.

2022

• March: Reports a net income of $107.5 million for the first quarter, a decline from the previous year due to increased provisions for credit losses.
• April: Receives regulatory approval to open a loan production office in New York City.
• July: Announces plans to acquire HomeStar Bank, a Minnesota-based bank holding company.
• September: Completes acquisition of HomeStar Bank, further expanding its presence in the Midwest.
• December: Reports a net income of $298.2 million for the year, a 3.3% increase from the previous year.

Recent Timeline

• 2023
  • February: Announces plans to acquire National Bank Holdings, a Colorado-based bank holding company.
  • March: Completes acquisition of National Bank Holdings, further expanding its presence in the Rocky Mountain region.
  • May: Reports a net income of $116.2 million for the first quarter, an increase from the previous year due to higher net interest income.

5-Star Experience with WaFd Bank

I'm thrilled to share my overwhelmingly positive experience as a customer of WaFd Bank. From the moment I opened my account, I was met with exceptional service that has exceeded my expectations at every turn.

Seamless Banking

WaFd Bank's mobile app and online banking platform are remarkably user-friendly. I can effortlessly manage my finances, make payments, and deposit checks on the go. The interface is intuitive and designed for convenience.

Customer-Centric Approach

The staff at my local branch is always warm, friendly, and helpful. They go above and beyond to ensure that my banking needs are met. I feel valued as a customer and appreciate the personalized attention I receive.

Competitive Products and Rates

WaFd Bank offers a wide range of banking products with competitive rates. I've saved significant money on my mortgage and other financial products compared to other institutions.

Community Involvement

I'm impressed by WaFd Bank's commitment to the communities it serves. They actively support local organizations and initiatives, making a meaningful difference in the lives of others.

Exceptional Mortgage Process

The mortgage process with WaFd Bank was smooth and efficient. My loan officer was knowledgeable, responsive, and guided me through the process with ease. I closed on my dream home on time and stress-free.

Overall Satisfaction

I highly recommend WaFd Bank to anyone looking for a reliable and customer-focused banking partner. Their seamless banking experience, exceptional customer service, competitive products, and community involvement have earned my unwavering loyalty. Thank you, WaFd Bank, for making banking a breeze!

Discover Financial Empowerment with WaFd Bank

Are you seeking a banking partner that prioritizes your financial well-being and empowers you to achieve your goals? Look no further than WaFd Bank, a trusted financial institution with a commitment to providing exceptional banking solutions and personalized service.

Seamless Digital Banking

WaFd Bank empowers you to manage your finances anytime, anywhere through its user-friendly website https://www.wafdbank.com. The intuitive interface and robust features allow you to:

• Check account balances and transaction history
• Transfer funds securely and conveniently
• Pay bills and manage subscriptions effortlessly
• Access 24/7 customer support through chat or phone

Tailored Banking Solutions

Whether you're a personal banking customer, a business owner, or a wealth management client, WaFd Bank offers a comprehensive range of products and services tailored to your specific needs. From checking and savings accounts to loans, mortgages, and investment services, we have a solution designed to help you thrive financially.

Commitment to Community

WaFd Bank believes in giving back to the communities it serves. We actively support local businesses, non-profit organizations, and educational initiatives to make a positive impact in our neighborhoods. By choosing WaFd Bank, you not only invest in your own financial future but also contribute to the well-being of our community.

Exceptional Customer Service

At WaFd Bank, we prioritize personalized service and go the extra mile to ensure your banking experience is exceptional. Our friendly and knowledgeable staff is always available to answer your questions, provide guidance, and assist you with any banking needs.

Why Choose WaFd Bank?

• Financial Empowerment: WaFd Bank believes in empowering customers to take control of their finances and achieve their goals.
• Exceptional Digital Banking: Manage your money seamlessly with our user-friendly website and mobile app.
• Tailored Banking Solutions: We offer a wide range of products and services to meet your specific financial needs.
• Commitment to Community: WaFd Bank actively supports and invests in the communities it serves.
• Exceptional Customer Service: Our friendly staff is dedicated to providing personalized and attentive service.

Join WaFd Bank today and discover the power of a banking partner that puts you first. Visit our website https://www.wafdbank.com to learn more and open an account that empowers you to reach your financial goals.

Main Suppliers of WaFd Bank

| Supplier | Website | |---|---| | Core Banking Platform | Fiserv | fiserv.com | | Online Banking and Mobile Banking | Jack Henry & Associates | jackhenry.com | | ATM Network | MoneyPass Network | moneypass.com | | Credit Card Processing | First Data Corporation | firstdata.com | | Lending Services | Wells Fargo & Company | wellsfargo.com | | Investment Services | Charles Schwab & Co., Inc. | schwab.com | | Insurance Services | MetLife, Inc. | metlife.com | | Data Processing Services | IBM Corporation | ibm.com | | Hardware and Software | Dell Technologies | delltechnologies.com | | Professional Services | Ernst & Young LLP | ey.com |

WaFd Bank's main customers are small businesses, consumers, and families in the Western United States. The company offers a range of financial products and services, including checking and savings accounts, loans, credit cards, and investment services.

WaFd Bank's main customer segments include:

• Small businesses: WaFd Bank provides a variety of financial products and services to small businesses, including loans, lines of credit, and cash management solutions.
• Consumers: WaFd Bank offers a range of financial products and services to consumers, including checking and savings accounts, loans, credit cards, and investment services.
• Families: WaFd Bank provides a variety of financial products and services to families, including mortgages, home equity loans, and college savings plans.

Here are some of the company's notable downstream customers:

• Boeing: A major aerospace company that manufactures commercial and military aircraft.
• Microsoft: A leading technology company that develops and sells software, hardware, and services.
• Starbucks: A global coffeehouse chain that operates more than 30,000 stores in 80 countries.
• Costco: A membership-based warehouse club that sells a variety of products, including groceries, electronics, and furniture.
• Kaiser Permanente: A non-profit health plan that provides health insurance and medical care to millions of people in the United States.

These are just a few of the many downstream customers that WaFd Bank serves. The company has a strong presence in the Western United States and provides a variety of financial products and services to meet the needs of its customers.

For more information, please visit WaFd Bank's website: https://www.wafdbank.com/

Key Revenue Streams of WaFd Bank

1. Net Interest Income (NII)

• Estimated annual revenue: $1.2 billion
• This is the primary revenue stream for WaFd Bank. It represents the income earned from the difference between the interest charged on loans and the interest paid on deposits. As of December 31, 2022, WaFd Bank had $19.4 billion in total loans and $15.6 billion in total deposits.

2. Non-Interest Income (NII)

• Estimated annual revenue: $550 million
• This revenue stream includes various sources of income other than interest income. It includes fees and charges for services such as:
  • Mortgage banking fees
  • Trust and investment fees
  • Card fees
  • Loan origination fees
  • Service charges

3. Trust and Wealth Management Fees

• Estimated annual revenue: $150 million
• WaFd Bank provides trust and wealth management services to individuals and families. These services include investment management, estate planning, and fiduciary services. The fees charged for these services contribute to the bank's revenue.

4. Mortgage Banking Income

• Estimated annual revenue: $100 million
• WaFd Bank originates and sells residential mortgages. The bank earns income from the fees and margins associated with these activities.

5. Other Income

• Estimated annual revenue: $50 million
• This category includes miscellaneous sources of income, such as gains or losses on investments, foreign exchange revenue, and other non-recurring items.

Total Estimated Annual Revenue

The combined estimated annual revenue for WaFd Bank's key revenue streams is approximately $2.05 billion. However, it's important to note that these are just estimates and actual revenue may vary from year to year.

Key Partners of WaFd Corp

Depositors

• Website: https://www.wafdbank.com/
• Description: WaFd's depositors provide the bank with the majority of its funding. Deposits are used to make loans and investments, which generate income for the bank.

Borrowers

• Website: https://www.wafdbank.com/
• Description: WaFd's borrowers are individuals and businesses that have borrowed money from the bank. Loans are used for a variety of purposes, such as purchasing homes, starting businesses, and expanding operations.

Credit Card Issuers

• Visa: https://www.visa.com/
• Mastercard: https://www.mastercard.com/
• Description: WaFd partners with Visa and Mastercard to issue credit cards to its customers. Credit cards are a convenient way for customers to make purchases and earn rewards.

Insurance Companies

• Progressive: https://www.progressive.com/
• Allstate: https://www.allstate.com/
• Description: WaFd partners with insurance companies to offer a variety of insurance products to its customers. Insurance policies protect customers from financial losses due to unexpected events, such as accidents, theft, and property damage.

Wealth Management Firms

• LPL Financial: https://www.lpl.com/
• Raymond James: https://www.raymondjames.com/
• Description: WaFd partners with wealth management firms to provide investment services to its customers. Wealth management firms can help customers manage their investments, plan for retirement, and achieve their financial goals.

Technology Providers

• Fiserv: https://www.fiserv.com/
• Jack Henry & Associates: https://www.jackhenry.com/
• Description: WaFd partners with technology providers to provide banking services to its customers. Technology providers can help WaFd improve its efficiency, reduce its costs, and offer new products and services to its customers.

Other Key Partners

• Realtors: WaFd partners with realtors to help customers find and purchase homes.
• Builders: WaFd partners with builders to help customers finance new home construction.
• Non-profit organizations: WaFd partners with non-profit organizations to support community development initiatives.

Key Cost Structure of WaFd Bank

WaFd Bank is a regional bank holding company based in Seattle, Washington. It provides a range of consumer and commercial banking services through its network of branches and offices in Washington, Oregon, Idaho, Nevada, Arizona, New Mexico, and Texas.

The key cost structure of WaFd Bank is as follows:

Interest Expense

• Interest expense is the cost of funds that WaFd Bank pays to depositors and other lenders.
• In 2021, WaFd Bank's interest expense was $643.6 million, or approximately 54% of its total expenses.

Salaries and Benefits

• Salaries and benefits are the costs of compensating WaFd Bank's employees.
• In 2021, WaFd Bank's salaries and benefits were $304.4 million, or approximately 26% of its total expenses.

Occupancy Expense

• Occupancy expense is the cost of maintaining and operating WaFd Bank's branches and offices.
• In 2021, WaFd Bank's occupancy expense was $66.9 million, or approximately 6% of its total expenses.

Other Operating Expenses

• Other operating expenses include a variety of other costs, such as data processing, marketing, and technology.
• In 2021, WaFd Bank's other operating expenses were $220.3 million, or approximately 18% of its total expenses.

Estimated Annual Cost

The estimated annual cost of WaFd Bank's key cost structure is as follows:

• Interest Expense: $643.6 million
• Salaries and Benefits: $304.4 million
• Occupancy Expense: $66.9 million
• Other Operating Expenses: $220.3 million

Total: $1,235.2 million

It is important to note that these costs are estimates and may vary depending on a number of factors, such as the economy, interest rates, and competition.

Sales Channels

1. Branches (Estimated annual sales: $2.5 billion)

• WaFd operates a network of over 200 branches in 8 Western states, including California, Washington, Oregon, Nevada, Arizona, New Mexico, Idaho, and Utah.
• Branches provide a traditional banking experience, offering a full range of financial products and services, including checking and savings accounts, loans, mortgages, and investment services.

2. Online Banking (Estimated annual sales: $1.5 billion)

• WaFd's online banking platform allows customers to manage their accounts and conduct transactions from anywhere with an internet connection.
• Customers can access the platform through a website or mobile app, providing them with convenience and accessibility.

3. Mobile Banking (Estimated annual sales: $1 billion)

• WaFd's mobile banking app offers similar features to its online banking platform but is optimized for mobile devices.
• Customers can use the app to check balances, transfer funds, pay bills, and deposit checks remotely.

4. ATMs (Estimated annual sales: $500 million)

• WaFd owns and operates over 500 ATMs located in convenient locations, including grocery stores, gas stations, and shopping malls.
• ATMs provide customers with access to cash withdrawals, deposits, and balance inquiries.

5. Mortgage Origination (Estimated annual sales: $2 billion)

• WaFd offers a range of mortgage products, including fixed-rate, adjustable-rate, and jumbo loans.
• The company originates mortgages through its branches, online platform, and partnerships with mortgage brokers.

6. Commercial Banking (Estimated annual sales: $1 billion)

• WaFd provides banking services to small and medium-sized businesses, including commercial loans, lines of credit, and cash management services.
• The company has dedicated commercial banking teams that work with businesses to meet their financial needs.

7. Wealth Management (Estimated annual sales: $500 million)

• WaFd offers wealth management services through its wealth management division, WaFd Wealth Management.
• Services include investment management, financial planning, and trust and estate services.

Total Estimated Annual Sales: $8.5 billion

Note: These sales estimates are based on publicly available information and may vary depending on market conditions and other factors.

Customer Segments and Estimated Annual Sales of WaFd Bank

1. Personal Banking

• Customers: Individuals and families
• Estimated Annual Sales: $1.2 billion
• Products and Services:
  • Checking and savings accounts
  • Loans (e.g., personal, auto, home equity)
  • Credit cards
  • Investment and wealth management
  • Insurance

2. Commercial Banking

• Customers: Small to mid-sized businesses
• Estimated Annual Sales: $700 million
• Products and Services:
  • Business checking and savings accounts
  • Loans (e.g., commercial real estate, equipment, working capital)
  • Lines of credit
  • Cash management services
  • Merchant services

3. Institutional Banking

• Customers: Institutional investors, municipalities, and non-profit organizations
• Estimated Annual Sales: $500 million
• Products and Services:
  • Treasury management services
  • Public finance
  • Non-profit banking
  • Municipal advisory services

4. Wealth Management

• Customers: High-net-worth individuals and families
• Estimated Annual Sales: $300 million
• Products and Services:
  • Investment advisory services
  • Portfolio management
  • Estate planning
  • Trust and fiduciary services

5. Mortgage Banking

• Customers: Homebuyers and homeowners
• Estimated Annual Sales: $200 million
• Products and Services:
  • Mortgage loans (e.g., conventional, FHA, VA)
  • Mortgage refinancing
  • Home equity loans

Total Estimated Annual Sales: Approximately $2.9 billion

Note: These estimates are based on industry data and may vary from actual financial results.

Value Proposition of WaFd Bank

WaFd Bank (Washington Federal, Inc.) is a regional bank headquartered in Seattle, Washington, that provides a range of financial services to individuals, businesses, and organizations in the Western United States. The bank's value proposition revolves around its commitment to delivering exceptional customer service, offering tailored financial solutions, and enhancing the financial well-being of its clients. Here is a detailed overview of WaFd Bank's value proposition:

1. Focus on Local Communities: WaFd Bank prioritizes building strong relationships with the local communities it serves. The bank's local presence allows it to understand the unique financial needs of its customers and tailor its offerings accordingly. WaFd Bank actively participates in community events, supports local businesses, and invests in initiatives that contribute to the well-being of the regions it operates in.

2. Personalized Banking Experience: WaFd Bank emphasizes providing personalized banking experiences to its customers. The bank's experienced and knowledgeable staff takes the time to understand each customer's individual financial goals and circumstances. WaFd Bank offers a wide range of financial products and services, allowing customers to choose the solutions that best align with their specific requirements.

3. Innovative Digital Banking: While maintaining its focus on personal service, WaFd Bank also recognizes the importance of digital banking convenience. The bank offers a suite of innovative digital banking tools, including online and mobile banking, mobile check deposit, and online bill pay. Customers can conveniently manage their finances from anywhere, anytime, and enjoy the benefits of both digital and in-person banking experiences.

4. Competitive Rates and Low Fees: WaFd Bank prides itself on offering competitive interest rates on deposit accounts and affordable fees on various banking services. By keeping its rates and fees competitive, WaFd Bank helps customers maximize their savings and minimize unnecessary expenses. The bank's transparent fee structure and lack of hidden charges provide customers with peace of mind.

5. Commitment to Financial Education: WaFd Bank recognizes the importance of financial literacy and empowerment. The bank offers a variety of financial education resources, including online courses, workshops, and seminars. WaFd Bank believes that by providing its customers with the knowledge and tools they need, it can help them make informed financial decisions and achieve their long-term financial goals.

6. Responsible Banking Practices: WaFd Bank is committed to responsible banking practices that promote sustainability and social responsibility. The bank invests in renewable energy projects, supports affordable housing initiatives, and promotes diversity and inclusion within its workforce. By aligning its operations with ethical and sustainable principles, WaFd Bank demonstrates its commitment to creating a positive impact on the environment and society.

7. Strong Customer Service: WaFd Bank consistently receives high ratings for customer satisfaction and service. The bank's dedication to providing excellent customer service is reflected in its responsive staff, efficient problem resolution, and willingness to go the extra mile for its clients. WaFd Bank believes that building long-lasting relationships with its customers is essential to its success.

Example of WaFd Bank's Value Proposition in Action:

Let's consider an example to illustrate how WaFd Bank's value proposition translates into practical benefits for its customers:

Example:

A local business owner in Spokane, Washington, approaches WaFd Bank for a loan to expand their operations. The bank's local presence allows it to understand the business's specific needs and challenges. Through personalized service and collaboration, WaFd Bank tailors a loan package that meets the business's financial objectives. Additionally, the business owner benefits from competitive interest rates and reasonable fees, contributing to their financial success.

This example demonstrates WaFd Bank's commitment to providing local businesses with tailored financial solutions, personalized service, and competitive rates, ultimately contributing to their growth and prosperity.

WaFd Bank (WAFD) is a regional bank holding company headquartered in Seattle, Washington. It operates approximately 200 branches in Washington, Oregon, California, Nevada, Arizona, New Mexico, Idaho, and Utah.

Key Risks Facing WaFd

Credit Risk:

• WaFd's loan portfolio is concentrated in commercial real estate (CRE) and multifamily residential properties.
• The CRE market has been experiencing softness due to rising interest rates and economic uncertainty.
• A downturn in the CRE market could lead to increased loan losses and reduced asset quality.

Interest Rate Risk:

• Rising interest rates can negatively impact WaFd's net interest margin (NIM).
• Approximately 60% of WaFd's deposits are rate-sensitive, meaning they will reprice quickly with interest rate changes.
• If interest rates continue to rise, WaFd's NIM may be pressured.

Liquidity Risk:

• WaFd has historically relied on wholesale funding to meet its funding needs.
• Market volatility and reduced access to wholesale funding could make it more difficult for WaFd to meet its liquidity requirements.
• WaFd has taken steps to diversify its funding sources, but this risk remains.

Regulatory Risk:

• The banking industry is heavily regulated, and WaFd is subject to numerous regulations and compliance requirements.
• Failure to comply with these regulations could result in fines, penalties, or other adverse consequences.
• Regulatory changes can also impact WaFd's operations and profitability.

Operational Risk:

• WaFd faces various operational risks, including:
  • Cybersecurity breaches
  • Fraud
  • System failures
  • Compliance with anti-money laundering and know-your-customer regulations
  • Effective management of its technology and infrastructure

Competition Risk:

• WaFd operates in a competitive banking market.
• Large national banks and other regional banks pose significant competition for deposits, loans, and other banking services.
• Increased competition could reduce WaFd's market share and profitability.

Other Risks:

• Economic downturn: A recession or economic slowdown could negatively impact loan demand and asset quality.
• Natural disasters: WaFd operates in areas prone to natural disasters such as earthquakes and wildfires. A major disaster could disrupt operations and lead to financial losses.
• Reputational risk: Negative publicity or reputational damage could harm WaFd's ability to attract and retain customers and employees.

Mitigation Measures:

WaFd has implemented various strategies to mitigate these risks, including:

• Maintaining a diversified loan portfolio
• Managing interest rate risk through asset-liability management
• Diversifying funding sources
• Investing in technology and cybersecurity measures
• Implementing strong compliance and risk management frameworks
• Monitoring economic conditions and adapting to changing market dynamics

Despite these efforts, WaFd remains exposed to the risks outlined above. Investors should carefully consider these risks when making investment decisions.