WAFD INC 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of WaFd, Inc. (the “Company” or “WaFd”) and its financial condition and results of operations should be read together with the financial statements and the related notes included elsewhere herein and the Consolidated Financial Statements, accompanying notes and management’s discussion and analysis of financial condition and results of operations and other disclosures contained in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed with the Securities and Exchange Commission ("SEC") on November 18, 2025 (the “2025 10-K”). FORWARD LOOKING STATEMENTS This discussion contains forward-looking statements that involve risks and uncertainties. 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 statements to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private 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, and including the Risk Factors included in the Company’s 2025 10-K, and in any of the Company's other subsequent SEC 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: Operational Risks: • fluctuating interest rates and the impact of inflation on the Company's business and financial results; • risks associated with cybersecurity incidents and threat actors; • risks associated with changes in business structure and divestitures of lines of business, including the Bank's exit from the single family mortgage lending market; • possible additional provisions for loan losses and charge-offs; credit risks of lending activities and deterioration in asset or credit quality; and our ability to make accurate assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the assets securing these loans; • economic uncertainty or a deterioration in economic conditions or slowdowns in economic growth, including financial stress on borrowers (consumers and businesses); • risks associated with changes to monetary policy by the Federal Reserve; • global economic trends, including developments related to Ukraine and Russia, the Middle East, and related negative financial impacts on our borrowers, the financial markets and the global economy; • risks associated with inflationary pressures and rising prices; • risk associated with the development and use of artificial intelligence; • risks related to operational, technological, and third-party provided technology infrastructure; • risks associated with data privacy laws and regulations; • risks associated with failures of our risk management framework; • risks associated with our failure to retain or attract key employees; • risks related to the impacts of climate change on our business or reputation; • the effects of natural or man-made disasters, calamities, or conflicts, including terrorist events and pandemics, and related regulations, and potential impact on the creditworthiness of our customers; Regulatory and Litigation Risks: • non-compliance with banking laws, rules and regulations; • legislative and regulatory limitations on business activities, and potential limitations on the manner in which the Company conducts its business and undertakes new investments and activities; 47 Table of Contents WAFD, INC. AND SUBSIDIARIES • risks associated with changes in regulation, regulatory capital requirements or regulatory oversight, accounting rules, and laws; • risks associated with increases to deposit insurance premiums or special assessments; • litigation risks resulting in significant expenses, losses and reputational damage; • environmental risks resulting from our real estate lending business; Market and Industry Risks: • eroding confidence in the banking system and regional banks in particular; • downturns in the real estate market; • changes in banking operations, including a shift from retail to online activities; • risks associated with inadequate or faulty underwriting and loan collection practices; • risks associated with our geographic concentration, including the effects of a severe economic downturn, including high unemployment rates and declines in housing prices and both commercial and residential property values, in our primary market areas; • impairment of goodwill and other intangible assets; Competitive Risks: • competition from other financial institutions and new market participants, and consolidation in the industry resulting in the creation of larger competitors with greater financial resources; • the ability of the Company to obtain external financing to fund its operations or obtain financing on favorable terms, when needed; • our ability to grow organically or through acquisitions; • risks associated with our entry into the California market; 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 of the 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. 48 Table of Contents WAFD, INC. AND SUBSIDIARIES GENERAL & BUSINESS DESCRIPTION WaFd Bank, a federally-insured Washington state chartered commercial bank (the "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, mid-sized to 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. On September 27, 2023, the Company filed Articles of Amendment to its Restated Articles of Incorporation, as amended, with the Washington Secretary of State, to change its name from Washington Federal, Inc. to WaFd, Inc. This change was effective on September 29, 2023. 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. CRITICAL ACCOUNTING POLICIES See Note A to the Consolidated Financial Statements in "Item 1. Financial Statements" above. Also, refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2025 10-K. ASSET QUALITY & ALLOWANCE FOR CREDIT LOSSES See Notes A, D and E to the Consolidated Financial Statements in "Item 1. Financial Statements" above. Also, refer to "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2025 10-K. INTEREST RATE RISK Based on management's assessment of the current interest rate environment, the Company has taken steps, including growing shorter-term loans and transaction deposit accounts, to reduce its interest rate risk profile. The mix of customer deposit accounts is 60% variable and 40% fixed as of March 31, 2026 while the composition of the investment securities portfolio is 45% variable and 55% fixed rate. The Company was a party to $610,000,000 of pay fixed interest rate swaps to hedge the fair value risk of the AFS portfolio which effectively converts 12% of fixed securities to variable as of March 31, 2026. When interest rates rise, the fair value of the investment securities with fixed rates will decrease and vice versa when interest rates decline. The Company has $745,727,000 of mortgage-backed securities that it has designated as HTM and are carried at amortized cost. As of March 31, 2026, the net unrealized loss on these securities was $33,610,000. The Company has $4,352,258,000 of AFS securities that are carried at fair value. As of March 31, 2026, the net unrealized loss on these securities was $16,815,000. The Company recognized in earnings a loss of $6,989,000 on fair value of AFS securities hedged by the fixed interest rate swaps for the six months ended March 31, 2026. The Company has also executed interest rate swaps to hedge interest rate risk on certain FHLB borrowings. The unrealized gain on these interest rate swaps as of March 31, 2026 was $97,378,000. All of the above are pre-tax net unrealized gains or losses. The Company relies on various measures of interest rate risk, including an asset/liability analysis, modeling of changes in forecasted net interest income under various rate change scenarios, and the impact of interest rate changes on the net portfolio value (“NPV”) of the Company. Net Interest Income Sensitivity - The Company estimates the sensitivity of its net interest income to changes in market interest rates using an interest rate simulation model that includes assumptions related to the level of balance sheet growth, deposit repricing characteristics and the rate of prepayments for multiple interest rate change scenarios. Interest rate sensitivity depends on certain repricing characteristics in the Company's interest-earning assets and interest-bearing liabilities, including the maturity structure of assets and liabilities and their repricing characteristics during the periods of changes in market interest rates. The analysis assumes a constant balance sheet. Actual results would differ from the assumptions used in this model, as management monitors and adjusts loan and deposit pricing and the size and composition of the balance sheet to respond to changing interest rates. The following table models the potential impact of changing interest rates on net income over a twelve-month period and compares the current results to the results as of the prior year end. The Company's focus is primarily on the impact of abrupt upward or downward changes in short term rates. It is important to note that this is not a forecast or prediction of future events, 49 Table of Contents WAFD, INC. AND SUBSIDIARIES but is used as a tool for measuring potential risk. This analysis assumes zero balance sheet growth and a constant percentage composition of assets and liabilities. Hypothetical, Immediate and Parallel Potential Increase (Decrease) in Net Interest Income - Year 1 Basis Point Increase (Decrease) in Interest Rates March 31, 2026 September 30, 2025 (In thousands, except percentages) (200) $ 88,959 11.78 % $ 65,287 8.79 % (100) 46,446 6.15 35,318 4.76 100 (391) (0.05) (407) (0.05) 200 (282) (0.04) 6,298 0.85 NPV Sensitivity - Another method used to quantify interest rate risk is the NPV analysis. This analysis calculates the difference between the present value of interest-bearing liabilities and the present value of expected cash flows from interest-earning assets and off-balance-sheet contracts. The following table sets forth an analysis of the Company’s interest rate risk as measured by the estimated changes in NPV resulting from instantaneous and sustained parallel shifts in the yield curve (measured in 100-basis-point increments) and compares the current model results to the prior quarter results. Hypothetical, Immediate and Parallel Potential Increase (Decrease) in NPV as of Basis Point Increase (Decrease) in Interest Rates March 31, 2026 September 30, 2025 (In thousands, except percentages) (200) $ 583,429 18.85 % $ 550,692 17.96 % (100) 348,072 11.24 317,236 10.35 100 (355,915) (11.50) (341,329) (11.13) 200 (687,092) (22.20) (649,066) (21.17) Prepayment speeds continue to be relatively low at March 31, 2026 with the Bank's conditional payment rate ("CPR") for single-family mortgages at 8.10%, the same as the year before. Net Interest Margin - Net interest margin is measured as net interest income divided by average earning assets for the period. Net interest margin was 2.81% for the quarter ended March 31, 2026 compared to 2.55% for the quarter ended March 31, 2025. The yield on interest-earning assets decreased 19 basis points to 5.14% and the cost of interest-bearing liabilities decreased 50 basis points to 2.79% over that same period. The lower yield on interest-earning assets was primarily due to falling interest rates affecting adjustable rate loans, non-accrual interest adjustments, lower net cash settlements on our loan and securities fair value hedge programs and interest-bearing cash deposits. 50 Table of Contents WAFD, INC. AND SUBSIDIARIES The following tables set forth the information explaining the changes in the net interest margin for the periods indicated compared to the respective periods one year ago. Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Average Balance Interest Average Rate Average Balance Interest Average Rate ($ in thousands) ($ in thousands) Assets Loans receivable $ 19,916,014 $ 262,148 5.34 % $ 20,918,986 $ 282,077 5.47 % Mortgage-backed securities 4,163,644 44,341 4.32 2,369,535 23,926 4.10 Cash & Investments 1,410,981 15,711 4.52 2,216,944 27,631 5.05 FHLB stock 135,738 2,534 7.57 123,346 2,450 8.06 Total interest-earning assets 25,626,377 324,734 5.14 % 25,628,811 336,084 5.32 % Other assets 1,724,237 1,742,509 Total assets $ 27,350,614 $ 27,371,320 Liabilities and Equity Interest-bearing customer accounts $ 18,515,826 $ 125,999 2.76 % $ 18,881,290 $ 151,948 3.26 % Borrowings 2,877,764 21,165 2.98 2,723,664 23,226 3.46 Total interest-bearing liabilities 21,393,590 147,164 2.79 % 21,604,954 175,174 3.29 % Noninterest-bearing customer accounts 2,603,558 2,448,965 Other liabilities 319,343 278,380 Total liabilities 24,316,491 24,332,299 Shareholders' equity 3,034,123 3,039,021 Total liabilities and equity $ 27,350,614 $ 27,371,320 Net interest income/interest rate spread $ 177,570 2.35 % $ 160,910 2.03 % Net interest margin (NIM) 2.81 % 2.55 % 51 Table of Contents WAFD, INC. AND SUBSIDIARIES Six Months Ended March 31, 2026 Six Months Ended March 31, 2025 Average Balance Interest Average Rate Average Balance Interest Average Rate ($ in thousands) ($ in thousands) Assets Loans receivable $ 19,917,703 $ 526,355 5.30 % $ 20,937,020 $ 568,674 5.46 % Mortgage-backed securities 3,903,792 83,243 4.28 2,123,436 42,263 4.00 Cash & Investments 1,427,400 33,001 4.64 2,539,493 65,572 5.19 FHLB stock 119,762 4,631 7.75 114,609 4,692 8.23 Total interest-earning assets 25,368,657 647,230 5.12 % 25,714,558 681,201 5.31 % Other assets 1,730,107 1,724,122 Total assets $ 27,098,764 $ 27,438,680 Liabilities and Equity Interest-bearing customer accounts $ 18,596,823 $ 262,213 2.83 % $ 18,811,409 $ 314,098 3.36 % Borrowings 2,522,388 36,336 2.89 2,812,301 50,762 3.63 Other borrowings — Total interest-bearing liabilities 21,119,211 298,549 2.84 % 21,623,710 364,860 3.38 % Noninterest-bearing customer accounts 2,620,019 2,486,647 Other liabilities 325,507 301,345 Total liabilities 24,064,737 24,411,702 Shareholders' equity 3,034,027 3,026,978 Total liabilities and equity $ 27,098,764 $ 27,438,680 Net interest income/interest rate spread $ 348,681 2.28 % $ 316,341 1.93 % Net interest margin (NIM) 2.76 % 2.47 % As of March 31, 2026, total assets had increased by $869,086,000 to $27,568,785,000 from $26,699,699,000 at September 30, 2025 primarily due to the purchase of investments during the period. During the six months ended March 31, 2026, loans receivable decreased $121,635,000, investment and mortgage-backed securities increased by $918,982,000, and FHLB stock increased by $58,283,000 while cash and cash equivalents increased by $12,489,000, in each case as compared to September 30, 2025. Management believes the Company's cash and cash equivalents of $669,799,000 and shareholders’ equity of $2,981,283,000 as of March 31, 2026 will provide flexibility in managing the Company's interest rate risk going forward. LIQUIDITY AND CAPITAL RESOURCES The principal sources of funds for the Company's activities are loan repayments (including prepayments), net deposit inflows, sales and repayments of investments and borrowings and retained earnings, if applicable. The Company's principal sources of revenue are interest on loans and interest and dividends on investments. Additionally, the Company earns fee income for loan, deposit, insurance and other services. The Bank has a credit line with the Federal Home Loan Bank of Des Moines ("FHLB - DM") of up to 45% of total assets depending on specific collateral eligibility. This line provides the Bank a substantial source of additional liquidity. The Bank has entered into borrowing agreements with the FHLB - DM to borrow funds under a short-term floating rate cash management advance program and fixed-rate term loan agreements. All borrowings are secured by stock of the FHLB - DM, deposits with the FHLB - DM, and a blanket pledge of qualifying loans receivable. The Bank also has a credit line with the Federal Home Loan Bank of San Francisco ("FHLB - SF") in support of Luther Burbank Corporation ("LBC") borrowings from the FHLB - 52 Table of Contents WAFD, INC. AND SUBSIDIARIES SF as a result of the merger with LBC effective March 1, 2024, but the Bank is unable to take down new advances against this line. The FHLB - SF credit line is secured by a line-item pledge of mortgage backed securities. To ensure ample contingent liquidity the Bank participates in the FRB of San Francisco Borrower-in-Custody program which collateralizes primary credit borrowings and serves as a backstop for the FHLB - DM credit line. Due to differing program requirements between the FHLB - DM and FRB of San Francisco, participating in both increases the amount of eligible collateral that may be pledged in support of contingent liquidity needs. The Bank is also eligible to borrow under the Federal Reserve Bank's primary credit program. Customer account balances have decreased by $313,485,000, or 1.5%, to $21,124,151,000 at March 31, 2026 compared with $21,437,636,000 at September 30, 2025. Total borrowings were $3,062,441,000 as of March 31, 2026, an increase from $1,765,604,000 at September 30, 2025, which were used for securities purchases during the fiscal year to date. The Company's cash and cash equivalents totaled $669,799,000 at March 31, 2026, an increase from $657,310,000 at September 30, 2025. This increase is the result of normal transactions and activities. The Company’s shareholders' equity at March 31, 2026 was $2,981,283,000, or 10.81% of total assets. This is a decrease of $58,292,000 from September 30, 2025 when shareholders' equity was $3,039,575,000, or 11.38% of total assets. The Company’s shareholders' equity was impacted in the six months ended March 31, 2026 by net income of $129,744,000, the payment of $40,519,000 in common stock dividends, the payment of $7,313,000 in preferred stock dividends, treasury stock purchases of $145,224,000, as well as a decrease in other comprehensive income of $1,865,000. The tier 1 leverage ratio at March 31, 2026 was 9.10%. Management believes the Company's strong equity position allows it to manage balance sheet risk and provide the capital support needed for controlled growth in a regulated environment. WaFd, Inc. and its banking subsidiary are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly discretionary actions by regulators that, if undertaken, could have a material adverse effect on the Company's financial statements. Federal banking agencies establish regulatory capital rules that require minimum capital ratios and establish criteria for calculating regulatory capital. Minimum capital ratios for four measures are used for assessing capital adequacy. The standards are indicated in the table below. The common equity tier 1 capital ratio recognizes common equity as the highest form of capital. The denominator for all except the leverage ratio is risk weighted assets. The rules set forth a “capital conservation buffer” of up to 2.5%. In the event that a bank’s capital levels fall below the minimum ratios plus these buffers, the bank's regulators may place restrictions on it. These restrictions include reducing dividend payments, share buy-backs, and staff bonus payments. The purpose of these buffers is to require banks to build up capital outside of periods of stress that can be drawn down during periods of stress. As a result, even during periods where losses are incurred, the minimum capital ratios can still be met. There are also standards for Adequate and Well Capitalized criteria that are used for “Prompt Corrective Action” purposes. To remain categorized as well capitalized, the Bank and the Company must maintain minimum common equity risk-based, tier 1 risk-based, total risk-based and tier 1 leverage ratios as set forth in the following table. 53 Table of Contents WAFD, INC. AND SUBSIDIARIES As of March 31, 2026 and September 30, 2025, the Company and the Bank met all capital adequacy requirements to which they are subject, and the Bank's regulators categorized it as well capitalized under the regulatory framework for prompt corrective action. Actual Minimum Capital Adequacy Guidelines Minimum Well-Capitalized Guidelines ($ in thousands) Capital Ratio Ratio Ratio March 31, 2026 Common Equity Tier I risk-based capital ratio: The Company $ 2,145,959 11.35 % 4.50 % NA The Bank 2,461,274 13.03 % 4.50 % 6.50 % Tier I risk-based capital ratio: The Company 2,445,959 12.94 % 6.00 % NA The Bank 2,461,274 13.03 % 6.00 % 8.00 % Total risk-based capital ratio: The Company 2,717,601 14.37 % 8.00 % NA The Bank 2,680,810 14.19 % 8.00 % 10.00 % Tier 1 Leverage ratio: The Company 2,445,959 9.10 % 4.00 % NA The Bank 2,461,274 9.17 % 4.00 % 5.00 % September 30, 2025 Common Equity Tier 1 risk-based capital ratio: The Company $ 2,202,901 11.77 % 4.50 % NA The Bank 2,506,271 13.40 % 4.50 % 6.50 % Tier I risk-based capital ratio: The Company 2,502,901 13.37 % 6.00 % NA The Bank 2,506,271 13.40 % 6.00 % 8.00 % Total risk-based capital ratio: The Company 2,770,166 14.80 % 8.00 % NA The Bank 2,721,890 14.55 % 8.00 % 10.00 % Tier 1 Leverage ratio: The Company 2,502,901 9.59 % 4.00 % NA The Bank 2,506,271 9.61 % 4.00 % 5.00 % CHANGES IN FINANCIAL CONDITION Cash and cash equivalents - Cash and cash equivalents were $669,799,000 at March 31, 2026, an increase of $12,489,000, or 1.9%, since September 30, 2025. This increase was the result of normal transactions and activities. Available-for-sale and held-to-maturity investment securities - AFS securities increased $819,057,000, or 23.2%, during the six months ended March 31, 2026, a result of securities purchases of $1,067,724,000 offset by unrealized losses during the period of $7,559,000, a reclassification of loss into earnings from AFS securities hedging derivatives of $6,989,000 and principal repayments and maturities of $247,515,000. During the same period, the balance of HTM securities increased by $99,925,000 due to purchases of $141,063,000, offset by principal pay-downs and maturities of $41,409,000. As of March 31, 2026, the Company had a total net unrealized loss on AFS securities of $16,815,000, which is included on a net of tax basis in accumulated other comprehensive income (loss). 54 Table of Contents WAFD, INC. AND SUBSIDIARIES Substantially all of the Company’s HTM and AFS debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit or implicit guarantee of the U.S. government and have a long history of zero credit loss. The Company did not record an allowance for credit losses for HTM securities as of March 31, 2026 or September 30, 2025 as the investment portfolio consists primarily of U.S. government agency mortgage-backed securities that management deems to have immaterial risk of loss. The impact going forward will depend on the composition, characteristics, and credit quality of the securities portfolios as well as the economic conditions at future reporting periods. The Company does not believe that any of its AFS debt securities had credit loss impairment as of March 31, 2026 or September 30, 2025, therefore, no allowance was recorded. Loans receivable - Loans receivable, net of related contra accounts, decreased by $121,635,000 to $19,966,983,000 at March 31, 2026, compared to $20,088,618,000 at September 30, 2025. The decrease was primarily loan principal repayments of $2,479,022,000 outpacing originations, net of loans-in-process, of $2,371,682. Commercial loan originations accounted for 95% of total originations and consumer loan originations were 5% for the quarter. The Company continues to focus on commercial lending, coupled with growing economies in all major markets in which we operate. The following table shows the loan portfolio by category and the change from prior fiscal year end. March 31, 2026 September 30, 2025 Change ($ in thousands) ($ in thousands) $ % Commercial loans Multi-family $ 4,750,092 22.2 % $ 4,718,480 22.2 % $ 31,612 0.7 % Commercial real estate 3,670,285 17.1 3,604,600 16.9 65,685 1.8 Commercial & industrial 2,798,568 13.1 2,392,685 11.3 405,883 17.0 Construction 1,955,180 9.1 1,756,890 8.3 198,290 11.3 Land - acquisition & development 197,044 0.9 179,099 0.8 17,945 10.0 Total commercial loans 13,371,169 62.4 12,651,754 59.5 719,415 5.7 Consumer loans Single-family residential 7,618,273 35.5 8,053,771 37.8 (435,498) (5.4) Construction - custom 69,520 0.3 150,237 0.7 (80,717) (53.7) Land - consumer lot loans 77,275 0.4 89,298 0.4 (12,023) (13.5) HELOC 252,319 1.2 267,871 1.3 (15,552) (5.8) Consumer 54,649 0.2 61,461 0.3 (6,812) (11.1) Total consumer loans 8,072,036 37.6 8,622,638 40.5 (550,602) (6.4) Total gross loans 21,443,205 100 % 21,274,392 100 % 168,813 0.8 Less: Allowance for credit losses on loans 201,950 199,720 2,230 1.1 Loans in process 1,063,129 773,606 289,523 37.4 Net deferred fees, costs and discounts 211,143 212,448 (1,305) (0.6) Total loan contra accounts 1,476,222 1,185,774 290,448 24.5 Net loans $ 19,966,983 $ 20,088,618 $ (121,635) (0.6) % 55 Table of Contents WAFD, INC. AND SUBSIDIARIES The following tables provide information regarding loans receivable by loan class and geography. March 31, 2026 Multi- family Commercial Real Estate Commercial and Industrial Construction Land - A & D Single - Family Residential Construction - custom Land - Lot Loans Consumer HELOC Total (In thousands) Washington $ 510,089 $ 486,043 $ 938,493 $ 225,343 $ 53,998 $ 3,091,980 $ 21,100 $ 41,223 $ 16,378 $ 130,089 $ 5,514,736 California 998,452 262,747 159,968 14,809 — 1,308,631 — — 7,948 548 2,753,103 Oregon 677,259 375,749 236,017 105,877 30,640 837,521 4,148 9,572 235 33,261 2,310,279 Arizona 643,819 578,827 125,513 124,179 8,664 729,653 5,091 12,671 5,098 32,928 2,266,443 Utah 660,585 288,468 167,997 64,758 48,003 543,106 6,743 1,147 17,460 12,508 1,810,775 Texas 570,606 805,922 680,784 267,852 8,022 133,957 — 85 6 4,777 2,472,011 New Mexico 196,779 307,175 25,781 62,238 3,328 197,654 1,204 1,957 482 8,388 804,986 Idaho 217,430 160,877 47,195 65,516 10,476 369,656 581 6,033 40 19,706 897,510 Nevada 158,209 181,100 146,983 1,084 5,435 284,983 — 4,075 2,017 10,145 794,031 Other 39,371 205,775 262,402 25,301 — 4,190 — — 5,018 3,002 545,059 $ 4,672,599 $ 3,652,683 $ 2,791,133 $ 956,957 $ 168,566 $ 7,501,331 $ 38,867 $ 76,763 $ 54,682 $ 255,352 $ 20,168,933 Percentage by geographic area March 31, 2026 Multi- family Commercial Real Estate Commercial and Industrial Construction Land - A & D Single - Family Residential Construction - custom Land - Lot Loans Consumer HELOC Total As % of total gross loans Washington 2.4 % 2.4 % 4.6 % 1.1 % 0.3 % 15.3 % 0.2 % 0.2 % 0.1 % 0.7 % 27.3 % California 5.0 1.3 0.8 0.1 — 6.5 — — — — 13.7 Oregon 3.4 1.9 1.2 0.5 0.2 4.2 — — — 0.1 11.5 Arizona 3.1 2.9 0.6 0.6 — 3.6 — 0.2 — 0.2 11.2 Utah 3.3 1.4 0.8 0.3 0.2 2.7 — — 0.2 0.1 9.0 Texas 2.8 4.0 3.4 1.4 — 0.7 — — — — 12.3 New Mexico 1.0 1.6 0.1 0.3 — 1.0 — — — — 4.0 Idaho 1.1 0.8 0.2 0.3 0.1 1.8 — — — 0.1 4.4 Nevada 0.8 0.9 0.7 — — 1.4 — — — 0.1 3.9 Other 0.3 0.9 1.4 0.1 — — — — — — 2.7 23.2 % 18.1 % 13.8 % 4.7 % 0.8 % 37.2 % 0.2 % 0.4 % 0.3 % 1.3 % 100 % Percentage by geographic area as a % of each loan type March 31, 2026 Multi- family Commercial Real Estate Commercial and Industrial Construction Land - A & D Single - Family Residential Construction - custom Land - Lot Loans Consumer HELOC As % of total gross loans Washington 10.9 % 13.3 % 33.6 % 23.6 % 32.0 % 41.2 % 54.3 % 53.7 % 30.0 % 50.9 % California 21.4 7.2 5.7 1.5 — 17.4 — — 14.5 0.2 Oregon 14.5 10.3 8.4 11.1 18.2 11.2 10.7 12.5 0.4 13.0 Arizona 13.8 15.8 4.5 13.0 5.1 9.8 13.1 16.5 9.3 12.9 Utah 14.1 7.9 6.1 6.8 28.5 7.2 17.3 1.5 31.9 4.9 Texas 12.2 22.1 24.4 28.0 4.8 1.8 — 0.1 — 1.9 New Mexico 4.2 8.4 0.9 6.5 2.0 2.6 3.1 2.5 0.9 3.3 Idaho 4.7 4.4 1.7 6.8 6.2 4.9 1.5 7.9 0.1 7.7 Nevada 3.4 5.0 5.3 0.1 3.2 3.8 — 5.3 3.7 4.0 Other 0.8 5.6 9.4 2.6 — 0.1 — — 9.2 1.2 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 56 Table of Contents WAFD, INC. AND SUBSIDIARIES The following table shows the geographic distribution by state of the loan portfolio and the change from the prior fiscal year end. March 31, 2026 September 30, 2025 Change Washington 27.3 % 27.6 % (0.3) California 13.7 14.0 (0.3) Oregon 11.5 12.2 (0.7) Arizona 11.2 11.3 (0.1) Utah 9.0 9.4 (0.4) Texas 12.3 11.4 0.9 New Mexico 4.0 3.9 0.1 Idaho 4.4 4.5 (0.1) Nevada 3.9 4.0 (0.1) Other 1 2.7 1.7 1.0 100 % 100 % 1 Includes loans from outside of our nine state footprint. Non-performing assets - Non-performing assets decreased $11,038,000 during the six months ended March 31, 2026 to $131,984,000 from $143,022,000 at September 30, 2025. The change is due to a $4,769,000 decrease in non-accrual loans combined with a $2,959,000 decrease in real estate owned and a $3,310,000 decrease in other property owned. Non-performing assets as a percentage of total assets was 0.48% at March 31, 2026 compared to 0.54% at September 30, 2025. The following table sets forth information regarding non-performing assets. March 31, 2026 September 30, 2025 ($ in thousands) Non-accrual loans: Multi - family $ 34,385 27.8 % $ 19,121 14.9 % Commercial real estate 4,682 3.8 69,972 54.4 Commercial & industrial 54,728 44.0 11,047 8.6 Construction — — 3,400 2.6 Land - acquisition & development — — — — Single-family residential 28,188 22.8 23,741 18.5 Construction - custom 760 0.6 760 0.6 Land - consumer lot loans 325 0.3 23 — HELOC 593 0.5 412 0.3 Consumer 198 0.2 152 0.1 Total non-accrual loans 123,859 100 % 128,628 100 % Real estate owned 8,125 11,084 Other property owned — 3,310 Total non-performing assets $ 131,984 $ 143,022 Total non-performing assets as a percentage of total assets 0.48 % 0.54 % 57 Table of Contents WAFD, INC. AND SUBSIDIARIES The Company would have recognized interest income of $3,916,000 for the six months ended March 31, 2026 had non-accrual loans performed according to their original contract terms. In addition to the non-accrual loans reflected in the above table, the Company had $404,010,000 of loans that were less than 90 days delinquent at March 31, 2026 but were classified as substandard for one or more reasons. If these loans were deemed non-performing, the Company's ratio of total NPAs as a percent of total assets would have increased to 1.94% at March 31, 2026. For the six months ended March 31, 2026, the Company recognized $844,000 in interest income on cash payments received from borrowers on non-accrual loans. Loans may be modified as the result of borrowers experiencing financial difficulty needing relief from the contractual terms of their loan. Most loan modifications to borrowers experiencing financial difficulty are accruing and performing loans where the borrower has approached the Company about modification due to temporary financial difficulties. Each request for modification is individually evaluated for merit and likelihood of success. Often a term extension is needed in the short term in order to evaluate the need for further corrective action. Payment delays and interest-only payments may also be approved during the modification period. Principal forgiveness is not an available option for restructured loans. For commercial loans, six consecutive payments on newly restructured loan terms are generally required prior to returning the loan to accrual status. In some instances after the required six consecutive payments are made, a management assessment will conclude that collection of the entire principal balance is still in doubt. In those instances, the loan will remain on non-accrual. Homogeneous loans may or may not be on accrual status at the time of restructuring, but all are placed on accrual status upon the restructuring of the loan. Homogeneous loans are restructured only if the borrower can demonstrate the ability to meet the restructured payment terms; otherwise, collection is pursued and the loan remains on non-accrual status until liquidated. If the homogeneous restructured loan does not perform, it will be placed in non-accrual status when it is 90 days delinquent. Allowance for credit losses - The following table shows the composition of the Company’s allowance for credit losses and the change since the prior fiscal year end. March 31, 2026 September 30, 2025 Change Allowance for credit losses: ($ in thousands) ($ in thousands) $ % Commercial loans Multi-family $ 25,923 12.8 % $ 25,953 13.0 % $ (30) (0.1) % Commercial real estate 41,503 20.6 41,988 21.0 (485) (1.2) Commercial & industrial 68,662 33.9 59,163 29.6 9,499 16.1 Construction 16,712 8.3 18,136 9.1 (1,424) (7.9) Land - acquisition & development 7,692 3.9 6,894 3.5 798 11.6 Total commercial loans 160,492 79.5 152,134 76.2 8,358 5.5 Consumer loans Single-family residential 33,679 16.7 38,880 19.5 (5,201) (13.4) Construction - custom 302 — 610 0.3 (308) (50.5) Land - consumer lot loans 1,821 0.9 2,104 1.1 (283) (13.5) HELOC 2,850 1.5 3,069 1.5 (219) (7.1) Consumer 2,806 1.4 2,923 1.5 (117) (4.0) Total consumer loans 41,458 20.5 47,586 23.8 (6,128) (12.9) Total allowance for loan losses 201,950 100.0 % 199,720 100.0 % 2,230 1.1 Reserve for unfunded commitments 22,500 21,500 1,000 4.7 Total allowance for credit losses $ 224,450 $ 221,220 $ 3,230 1.5 % Management believes the allowance for credit losses of $224,450,000, or 1.05% of gross loans, is sufficient to absorb estimated losses inherent in the portfolio of loans and unfunded commitments. See Note E and Note I for further details of the allowance for loan losses and reserve for unfunded commitments as of and for the periods ended March 31, 2026 and September 30, 2025. Real estate owned ("REO") - REO decreased during the six months ended March 31, 2026 by $2,959,000 to $8,125,000. The decrease was due to the sale of properties. 58 Table of Contents WAFD, INC. AND SUBSIDIARIES Intangible assets - Intangible assets increased to $445,511,000 as of March 31, 2026 from $442,093,000 as of September 30, 2025 as the result of small acquisitions made by the Company's insurance subsidiary. This was offset by normal amortization. Customer accounts - Customer accounts decreased $313,485,000, or 1.5%, to $21,124,151,000 at March 31, 2026 compared with $21,437,636,000 at September 30, 2025. Transaction accounts increased by $440,389,000 or 3.6% during that period, while time deposits decreased $753,874,000, or 8.3%, consistent with our strategy to shift away from time deposits in favor of transaction accounts. The following table shows the composition of the Bank’s customer accounts by deposit type. March 31, 2026 September 30, 2025 Deposit Account Balance As a % of Total Deposits Weighted Average Rate Deposit Account Balance As a % of Total Deposits Weighted Average Rate ($ in thousands) Non-interest checking $ 2,577,976 12.2 % — % $ 2,567,539 12.0 % — % Interest checking 5,151,103 24.3 2.37 4,865,808 22.7 2.55 Savings 726,630 3.6 0.29 701,558 3.3 0.22 Money market 4,291,212 20.2 2.01 4,171,627 19.4 2.14 Time deposits 8,377,230 39.7 3.55 9,131,104 42.6 3.74 Total $ 21,124,151 100 % 2.41 % $ 21,437,636 100 % 2.60 % Borrowings - Borrowings were $3,114,548,000 as of March 31, 2026, an increase from $1,817,249,000 as of September 30, 2025. The increase was utilized to support asset growth. The weighted average effective rate for borrowings was 3.01% as of March 31, 2026 and 2.50% at September 30, 2025. Shareholders' equity - The Company’s shareholders' equity at March 31, 2026 was $2,981,283,000, or 10.81% of total assets. This is a decrease of $58,292,000 from September 30, 2025 when shareholders' equity was $3,039,575,000, or 11.38% of total assets. The Company’s shareholders' equity was impacted in the six months ended March 31, 2026 by net income of $129,744,000, the payment of $40,519,000 in common stock dividends, payment of $7,313,000 in preferred stock dividends, treasury stock purchases of $145,224,000, as well as a decrease in other comprehensive income of $1,865,000. RESULTS OF OPERATIONS Net Income - The Company recorded net income of $65,548,000 for the three months ended March 31, 2026 compared to $56,252,000 for the prior year quarter. All driving factors are described below. Net Interest Income - For the three months ended March 31, 2026, net interest income was $177,570,000, which is an increase of $16,660,000 from the same quarter of the prior year. Net interest margin increased to 2.81% for the quarter ended March 31, 2026 compared to 2.55% for the quarter ended March 31, 2025. The increase in net interest income is largely due to decreased rates on interest-bearing liabilities partially offset by the decrease in rate earned on interest-earning assets. The rate paid on interest-bearing liabilities decreased by 50 basis points while the rate earned on interest-earning assets fell by 19 basis points. The following table sets forth certain information explaining changes in interest income and interest expense for the period indicated compared to the same period one year ago. For each category of interest-earning asset and interest-bearing liability, information is provided on changes attributable to (1) changes in volume (changes in volume multiplied by old rate) and (2) changes in rate (changes in rate multiplied by old volume). The change in interest income and interest expense attributable to changes in both volume and rate has been allocated proportionately to the change due to volume and the change due to rate. 59 Table of Contents WAFD, INC. AND SUBSIDIARIES Rate / Volume Analysis : Comparison of Three Months Ended 3/31/2026 and 3/31/2025 Comparison of Six Months Ended 3/31/2026 and 3/31/2025 ($ in thousands) Volume Rate Total Volume Rate Total Interest income: Loans receivable $ (13,323) $ (6,606) $ (19,929) $ (27,034) $ (15,285) $ (42,319) Mortgage-backed securities 19,061 1,354 20,415 37,710 3,270 40,980 Investments (1) (9,481) (2,355) (11,836) (27,320) (5,312) (32,632) All interest-earning assets (3,743) (7,607) (11,350) (16,644) (17,327) (33,971) Interest expense: Customer accounts (2,909) (23,040) (25,949) (3,551) (48,334) (51,885) Borrowings 1,296 (3,357) (2,061) (4,878) (9,548) (14,426) All interest-bearing liabilities (1,613) (26,397) (28,010) (8,429) (57,882) (66,311) Change in net interest income $ (2,130) $ 18,790 $ 16,660 $ (8,215) $ 40,555 $ 32,340 ___________________ (1) Includes interest on cash equivalents and dividends on FHLB stock. Provision for Credit Losses - The Company recorded a $4,000,000 provision for credit losses for the three months ended March 31, 2026, compared with $2,750,000 provision for credit losses for the three months ended March 31, 2025. The provision recorded in the three months ended March 31, 2026 was the result of increased commercial originations during the quarter. This provision increased the reserve to 1.05% of gross loans compared with 1.01% at March 31, 2025. Non-Interest Income - The results for the three months ended March 31, 2026 included total non-interest income of $19,813,000 compared to $18,881,000 for the same period one year ago, a $932,000 increase. The increase was primarily due to increased fee income on loans and deposits. Non-Interest Expense - Non-interest expense was $109,857,000 for the three months ended March 31, 2026, an increase of $5,025,000 from $104,832,000 for the prior year quarter, largely a result of increased compensation and technology expenses, reflecting annual merit increases and continued investment in operational efficiency. Non-interest expense for the three months ended March 31, 2026 and March 31, 2025 equaled 1.61% and 1.53%, respectively, of average assets. Gain (Loss) on Real Estate Owned - Results for the three months ended March 31, 2026 include a net gain on REO of $280,000, compared to a net loss of $199,000 for the prior year quarter. Income Tax Expense - Income tax expense totaled $18,258,000 for the three months ended March 31, 2026, compared to $15,758,000 for the prior year quarter. The effective tax rate was 21.79% and 21.88% for the three months ended March 31, 2026 and March 31, 2025, respectively. The Company’s effective tax rate varies from the statutory rate mainly due to state taxes, tax-exempt income, tax-credit investments, miscellaneous non-deductible expenses and discrete tax adjustments for prior periods. On July 4, 2025, the One Big Beautiful Bill Act, officially designated as H.R. 1, was enacted into law. This legislation includes significant changes to federal tax law and other regulatory provisions. Key provisions include the permanent extension of several business tax benefits originally introduced under the 2017 Tax Cuts and Jobs Act. The Company has evaluated the provisions of the new law and believes it will generally have no material impact on our financial position, results of operations and cash flows. We account for our portfolio of LIHTC investments under the proportional amortization method. The tax benefits from pass-through tax credits and losses from our LIHTC investments are included in our estimate of income tax liability for the year, and therefore reflected in the Income Tax Expense line of the statement of operations. We currently estimate that the total amount of tax benefits from our LIHTC investment portfolio that will be recognized during this fiscal year is about $20.0 million. The amortization of LIHTC investments is a component of our income tax expense and therefore also reflected in the Income Tax Expense line. We expect the total amount of amortization expense that will be recognized during this fiscal year is approximately $15.9 million. 60 Table of Contents WAFD, INC. AND SUBSIDIARIES