From our President and CEO

As we reflect on the past fiscal year, I am proud to share with you the progress, challenges, and achievements that have defined WaFd, Inc. in 2025. Our commitment to serving our customers, strengthening our communities, and delivering value to our shareholders remains as strong as ever.

Financial Performance and Growth

This year, WaFd, Inc. continued to demonstrate resilience and adaptability in a dynamic economic environment. Despite market volatility, decreasing short-term interest rates and ongoing changes in regulatory requirements, we delivered consistent financial results. Net Income increased 12% year-over-year from $200 million to $225 million, asset quality remained strong, capital increased, and we managed the bank within our board approved risk thresholds. These results do not fully reflect the significant changes we are methodically implementing in our balance sheet. For example, total loans receivable decreased just 4.0% even though we stopped making mortgage loans in January, eliminating new originations within our largest asset segment—single family residential loans. Also, during the year we saw our time deposits decrease by $426 million, or 4.5%, but were able to grow total deposits slightly. Lastly, we grew our investments by 39% during the year, an increase of $1.2 billion. Our balance sheet priorities are straightforward: more variable-rate commercial loans, more low-cost deposits, and more highly liquid, high-quality investments. Given the economic uncertainties, including interest rates, tariffs, and geo-political risks, we made solid progress toward our aim to provide maximum flexibility within our balance sheet while still earning a reasonable return for our shareholders.

Strategic Initiatives

We advanced several key initiatives aimed at positioning WaFd, Inc. for long-term success. As I mentioned above, after careful deliberation, we decided to exit the mortgage origination business, ceasing new loan originations of single-family mortgages. This was done for multiple reasons, the most important being the U.S. government's role in making mortgage lending a commodity. We had to accept that our customers could effectively get a subsidized mortgage rate from our competitors at a lower cost than getting the loan from WaFd. We believe doing what is best for our customers will ultimately be what’s best for the bank. Technology also plays a role in commoditizing lending. For many years, consumers looked to their local banker to help them with their home lending needs, but with the incredible technology that is prevalent today, it is literally as easy as spending five minutes on your phone to apply for a mortgage. Our thesis is that generative AI is only going to accelerate this trend and further squeeze profit margins for originators. Exiting mortgage lending gave us an opportunity to redirect our focus on launching a robust small business suite of products, including SBA (Small Business Administration) lending. We recognize that business owners need the assistance of a banker to help ramp up their operations. We believe our focus on being the bank “built for business” will drive long-term value for both our clients and shareholders. Our continued investment in digital banking platforms and automation has improved the customer experience and enhanced operational efficiency. We strategically expanded our team of business bankers in core markets, added or relocated branches, and invested time to deepen our relationships with local businesses and families. These efforts are central to our strategy of growing responsibly while maintaining the highest standards of service.

Commitment to Our Customers and Communities

At the heart of WaFd, Inc. is our dedication to making a positive impact in the communities we serve. Dear Shareholders, I want to share an experience that exemplifies why we believe “everyone deserves a banker”. A long-term, elderly client came into her branch, where she was greeted by two WaFd bankers—both with over thirty years of experience. Our bankers noticed right away that something was off. After asking how she was doing and largely being dismissed about their concerns, the client said, “I just want to wire out the money.” This was unusual, and our caring bankers pressed as to why. The client became more agitated, at which point our bankers insisted, “Something is wrong and we are concerned.” The client said again, “Nothing is wrong just send out the wire.” Our bankers were bold enough to demand to see the client’s phone, and after the client finally acquiesced, saw that sure enough, there were bad actors on phone that had compromised her personal computer and were now extorting our client. Our bankers picked up the phone and told the extortionists that they were WaFd Bank employees, that our customer is now safe and that they were calling the FBI. As CEO, I could not be more proud. That is caring. That is knowing your client and making a difference. Technology is a beautiful thing, but it will never be a substitute for a fellow human being who knows you and cares. This year, we increased our support for affordable housing, small business lending, and financial literacy programs. Our employees volunteered thousands of hours, and our philanthropic contributions helped address critical needs in education, healthcare, and social services.

Risk Management and Governance

Strong governance and risk management remain foundational to our approach. We continually monitor and adjust our practices to ensure compliance with evolving regulations and to safeguard our customers' assets. Our Board of Directors and executive team are committed to transparency and accountability in all aspects of our operations.

Looking Ahead

As we look to the future, we remain focused on innovation, operational excellence, and profitable growth. We are investing in emerging technologies to better serve our clients, reduce fraud, attract top talent, and adapt to changing market demands. Our vision is to be the bank of choice in every community we serve, offering people, products and services that empower our customers to achieve their financial goals.

Gratitude and Appreciation

I want to thank our employees for their hard work and dedication, our customers for their trust and loyalty, and you, our shareholders, for your continued support. Together, we are building a stronger WaFd, Inc. and laying the foundation for many years of success.

Respectfully,

Brent Beardall
President & Chief Executive Officer