WaFd Shifts Focus Post-Merger, Exits Single-Family Mortgage Origination

TL;DR

**WaFd is ditching consumer mortgages to double down on commercial lending after its Luther Burbank merger, a bold, risky bet on higher-yield assets.**

AI Summary

WAFD INC, operating as WaFd Bank, reported a net loan portfolio of $20.09 billion as of September 30, 2025, representing 75.2% of total assets. This is a decrease from $20.92 billion in 2024. The company completed its merger with Luther Burbank Corporation on March 1, 2024, adding approximately $7.7 billion in assets and expanding its footprint to nine western states with ten new California branches. A significant strategic shift occurred in January 2025, when the Bank announced it would no longer originate consumer single-family home loans and home equity lines of credit, though existing loans still comprise a substantial portion of its portfolio. Commercial loans, particularly multi-family, increased to $4.72 billion in 2025 from $4.66 billion in 2024, while construction loans decreased to $1.76 billion from $2.17 billion. Risks include fluctuating interest rates, cybersecurity threats, economic uncertainty, and regulatory changes, particularly those impacting regional banks. The company has maintained profitable operations every year since going public in 1982 and has paid 170 consecutive quarterly cash dividends.

Why It Matters

WaFd's strategic exit from single-family mortgage origination in January 2025 signals a significant pivot, concentrating its lending efforts on commercial and multi-family real estate. This move could impact its competitive position against larger banks still active in the consumer mortgage space, potentially streamlining operations but also narrowing its revenue streams. For investors, this shift, coupled with the successful integration of Luther Burbank Corporation's $7.7 billion in assets, suggests a focus on higher-yield commercial lending and expanded geographic reach, particularly in California. Employees in the consumer mortgage division may face restructuring, while customers seeking single-family home loans will need to look elsewhere, affecting market dynamics in its operating regions.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant strategic shift away from consumer single-family home loans in January 2025, which could impact future revenue stability. Additionally, the filing highlights 'eroding confidence in the banking system and regional banks in particular' as a market risk, which could affect deposit stability and funding costs for WaFd, Inc. as a regional player.

Analyst Insight

Investors should closely monitor WaFd's commercial loan portfolio performance, especially in multi-family and commercial real estate, given the strategic pivot. Evaluate the impact of the Luther Burbank merger on overall asset quality and profitability, and assess how the company mitigates risks associated with its geographic concentration in western states.

Key Numbers

• $20.09B — Net Loan Portfolio (Represents 75.2% of total assets as of September 30, 2025, a decrease from $20.92 billion in 2024.)
• $7.7B — Assets Added from Merger (Fair value of assets added to the balance sheet from the Luther Burbank Corporation merger on March 1, 2024.)
• 170 — Consecutive Quarterly Cash Dividends (Indicates a long history of consistent shareholder returns since going public in 1982.)
• 14,253% — Total Shareholder Return (Return for investors over 43 years since the 1982 offering price.)
• $4.72B — Multi-family Commercial Loans (Increased from $4.66 billion in 2024, showing growth in this segment.)
• $1.76B — Construction Loans (Decreased from $2.17 billion in 2024, reflecting a reduction in this lending category.)
• 208 — Branches (Total number of branches across nine western states as of September 30, 2025, including ten new California branches from the merger.)
• $2.28B — Market Value of Common Stock (Held by non-affiliates on March 31, 2025, based on a closing price of $28.58 per share.)

Key Players & Entities

• WAFD INC (company) — Registrant and bank holding company
• WaFd Bank (company) — Federally-insured Washington state chartered commercial bank subsidiary
• Luther Burbank Corporation (company) — Company merged with WAFD INC on March 1, 2024
• NASDAQ Stock Market (regulator) — Exchange where WAFD and WAFDP are traded
• Washington State Department of Financial Institutions (regulator) — Primary state regulator for WaFd Bank
• Federal Deposit Insurance Corporation (regulator) — Primary federal regulator for WaFd Bank, insures deposits
• Board of Governors of the Federal Reserve System (regulator) — Regulator for WAFD, Inc. as a bank holding company
• Consumer Financial Protection Bureau (regulator) — Regulator for WaFd Bank
• WaFd Insurance Group, Inc. (company) — Bank's subsidiary for insurance brokerage activities
• WaFd Wealth, Inc. (company) — Company's subsidiary for wealth management products and services

FAQ

Risk Factors

• Activist Shareholder Influence [medium — security ownership]: Negative effects from activist shareholders could impact the company's ability to pay dividends and conduct stock repurchases. The company also faces risks related to the volatility of its Common Stock and potential future dilution.
• Washington's Anti-Takeover Statute [low — regulatory]: The company is subject to Washington's anti-takeover statute, which could impact the ease with which a hostile takeover might occur, potentially affecting shareholder value and control.
• Management of Business Risks [medium — operational]: The success of the Company is contingent on its ability to effectively manage the various risks involved in its operations. Failure to do so could lead to adverse outcomes.
• Forward-Looking Statement Uncertainty [medium — market]: Forward-looking statements are subject to change based on evolving circumstances and the company undertakes no obligation to update them. Investors should not rely solely on these statements.

Industry Context

WaFd Bank operates in the highly competitive U.S. banking sector, characterized by increasing consolidation and evolving regulatory landscapes. Regional banks like WaFd face pressure from larger national institutions and agile fintech competitors. Key industry trends include a strategic shift in lending focus, with some banks reducing exposure to traditional consumer mortgages while increasing commercial real estate lending.

Regulatory Implications

The banking industry is subject to stringent regulatory oversight, particularly concerning capital requirements, risk management, and consumer protection. Recent events impacting regional banks highlight the potential for increased scrutiny and compliance burdens. Changes in monetary policy and interest rate environments also pose significant regulatory challenges.

What Investors Should Do

1. Monitor the impact of the strategic shift away from consumer single-family home loans and HELOCs on future revenue and profitability.
2. Assess the integration success and performance of the Luther Burbank Corporation merger, particularly its contribution to asset growth and geographic expansion.
3. Evaluate the company's ability to navigate interest rate volatility and cybersecurity threats, which are identified as key risks.
4. Consider the long-term implications of the company's consistent dividend payments and historical shareholder returns in the context of current market conditions.

Key Dates

• 1982-11-09: Company listed and began trading on NASDAQ — Marked the company's entry into public markets, initiating a long history of profitable operations and consistent dividend payments.
• 2024-02-29: Merger with Luther Burbank Corporation closed — Significantly expanded the company's asset base by approximately $7.7 billion and extended its geographic footprint to nine western states with ten new California branches.
• 2024-03-01: Luther Burbank Savings merged with WaFd Bank — Integrated the acquired bank's operations into WaFd Bank, solidifying the combined entity's market presence.
• 2025-01-01: Announced cessation of new consumer single-family home loans and HELOCs — Represents a strategic shift away from a significant portion of its traditional lending business, impacting future portfolio composition.
• 2025-03-31: Market value of common stock held by non-affiliates calculated — Indicates a market capitalization of $2.28 billion based on a closing price of $28.58 per share, providing a snapshot of investor valuation.
• 2025-09-30: Fiscal year end — Reporting period for key financial metrics, including a net loan portfolio of $20.09 billion, representing 75.2% of total assets.

Glossary

WaFd Bank

The primary operating subsidiary of WaFd, Inc., engaged in lending, depository, insurance, and other banking services. (The core business entity whose financial performance and operations are detailed in the 10-K.)

Luther Burbank Corporation (LBC)

A California corporation that merged with WaFd, Inc. on March 1, 2024. (Its merger significantly impacted WaFd's asset size, geographic reach, and operational scale.)

Corporate Merger

The merger of Luther Burbank Corporation with and into WaFd, Inc., with WaFd, Inc. as the surviving entity. (The initial step in the acquisition process that brought LBC's assets and operations under WaFd's holding company.)

Bank Merger

The subsequent merger of Luther Burbank Savings (LBC's bank subsidiary) with and into WaFd Bank, with WaFd Bank as the surviving institution. (The operational integration of the acquired bank, crucial for realizing synergies and expanding WaFd Bank's service offerings.)

Net Loan Portfolio

The total value of loans held by the bank after deducting any allowances for loan losses. (A primary asset class for WaFd Bank, representing 75.2% of total assets as of September 30, 2025, and a key indicator of its lending activity.)

Consecutive Quarterly Cash Dividends

Dividend payments made by the company to its shareholders on a regular quarterly basis without interruption. (Demonstrates a long-standing commitment to shareholder returns, with 170 consecutive payments since 1982.)

Total Shareholder Return

The total return received by an investor, including capital appreciation and dividends, over a specific period. (Measures the long-term investment performance, with WaFd reporting 14,253% return over 43 years.)

Year-Over-Year Comparison

The company's net loan portfolio decreased to $20.09 billion in 2025 from $20.92 billion in 2024, reflecting a strategic shift away from originating new consumer single-family home loans and HELOCs. The merger with Luther Burbank Corporation in March 2024 significantly increased total assets by approximately $7.7 billion and expanded the branch network. While multi-family commercial loans saw a slight increase, construction loans experienced a notable decrease, indicating a reallocation of lending focus. New risks related to the strategic shift and the integration of the merger are now prominent alongside existing concerns like interest rate fluctuations and economic uncertainty.

Key Financial Figures

• $1.00 — nge on which registered Common Stock, $1.00 par value per share WAFD NASDAQ Sto
• $28.58 — he NASDAQ Stock Market closing price of $28.58 per share on that date. This is based o
• $7.7 billion — Merger." The Merger added approximately $7.7 billion of LBC assets at fair value to the Com
• $50,175,000 — balance sheet, and the Company assumed $50,175,000 in floating rate junior subordinated d
• $93,514,000 — tures, due June 2036 and June 2037, and $93,514,000 in 6.5% senior unsecured term notes whi
• $20,088,618,000 — he Company's net loan portfolio totaled $20,088,618,000 at September 30, 2025 and represents 75
• $21,500,000 — erve for unfunded commitments which was $21,500,000 , $21,500,000 and $24,500,000 as of Se
• $24,500,000 — which was $21,500,000 , $21,500,000 and $24,500,000 as of September 30, 2025 , 2024 and 20

Filing Documents

• wfsl-20250930.htm (10-K) — 9681KB
• a2025_tradingxpolicy.htm (EX-19.1) — 36KB
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Business

Item 1. Business 6

Risk Factors

Item 1A. Risk Factors 22

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 36

Cybersecurity

Item 1C. Cybersecurity 36

Properties

Item 2. Properties 38

Legal Proceedings

Item 3. Legal Proceedings 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 38 PART II

Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity

Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 39

[Reserved]

Item 6. [Reserved] 41

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 41

Quantitative and Qualitative Disclosures about Market Risks

Item 7A. Quantitative and Qualitative Disclosures about Market Risks 56

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 61

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 123

Controls and Procedures

Item 9A. Controls and Procedures 123

Other Information

Item 9B. Other Information 125

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 125 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 125

Executive Compensation

Item 11. Executive Compensation 125

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 125

Certain Relationships and Related Transactions and Director Independence

Item 13. Certain Relationships and Related Transactions and Director Independence 126

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 126 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 127

Form 10-K Summary

Item 16. Form 10-K Summary 129

Signatures

Signatures 129 4 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY WaFd, Inc. ("we" or the "Company") makes statements in this Annual Report on Form 10-K that constitute forward- looking statements. Words such as "expects," "anticipates," "believes," "estimates," "intends," "forecasts," "projects" and other similar expressions or future or conditional verbs such as "will," "should," "would" and "could" are intended to help identify such forward-looking statements. These statements are not historical facts, but instead represent current expectations, plans or forecasts of the Company and are based on the beliefs and assumptions of the management of the Company and the information available to management at the time that these disclosures were prepared. The Company intends for all such forward-looking Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and often are beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, the Company's forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties discussed elsewhere in this report, including under Item 1A. "Risk Factors," and in any of the Company's other subsequent Securities and Exchange Commission filings, which could cause the Company's future results to differ materially from the plans, objectives, goals, estimates, intentions and expectations expressed in forward- looking statements: Operation

Security Ownership Risks

Security Ownership Risks: negative effects of activist shareholders; our ability to continue to pay dividends, including on our outstanding Series A Preferred Stock; and make stock repurchases; risks related to the volatility of our Common Stock, and future dilution; risks related to Washington's anti-takeover statute; General Risks: the success of the Company at managing the risks involved in the foregoing and managing its business; and the timing and occurrence or non-occurrence of events that may be subject to circumstances beyond the Company's control. For the reasons described above, we caution you against relying on any forward-looking statements. You should not consider the summary of such factors to be an exhaustive statement of all risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, all forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update or revise any forward- looking statements to reflect changed assumptions, the occurrence of unanticipated events, changes to future operating results over time, or the impact of circumstances arising after the date the forward-looking statement was made. 6

Business

Item 1. Business General WaFd Bank, a federally-insured Washington state chartered commercial bank formerly known as Washington Federal Bank (the "Bank" or "WaFd Bank"), was founded on April 24, 1917 in Ballard, Washington and is engaged primarily in providing lending, depository, insurance and other banking services to consumers, small, mid-sized and large businesses, and owners and developers of commercial real estate. Effective September 25, 2025, the Bank formally changed its name from Washington Federal Bank to WaFd Bank by filing its Second Amended and Restated Articles of Incorporation with the Washington Secretary of State. WaFd, Inc., a Washington corporation, was formed as the Bank's holding company in November, 1994. As used throughout this document, the terms "WaFd," the "Company" or "we" or "us" and "our" refer to WaFd, Inc. and its consolidated subsidiaries, and the term "Bank" or "WaFd Bank" refers to its bank operating subsidiary. The Company is headquartered in Seattle, Washington. On November 9, 1982 the Company listed and began trading on the NASDAQ. Profitable operations have been recorded every year since going public. As of September 30, 2025 , the stock traded at 82 times its original 1982 offering price, has paid 170 consecutive quarterly cash dividends and has returned 14,253% total shareholder return to those who invested 43 years ago. On February 29, 2024, WaFd, Inc. closed its merger with Luther Burbank Corporation ("Luther Burbank" or "LBC"), a California corporation, effective as of 12:00am on March 1, 2024. Pursuant to the Merger Agreement, at the Effective Time Luther Burbank merged with and into the Company (the "Corporate Merger"), with the Company surviving the Corporate Merger. Promptly following the Corporate Merger, Luther Burbank's wholly-owned bank subsidiary, Luther Burbank Savings, merged with and into WaFd Bank with WaFd Bank as the surviving institution (the "Bank Merger"). The Corporate Merger and the Ban

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