Slide 1: Investor Presentation As of June 30, 2024
Investor Presentation As of June 30, 2024 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Washington Federal’s management and are subject to signif
Slide 2: Overview of WaFd Bank
Overview of WaFd Bank Overview Geographic Overview • Established in 1917; IPO in 1982 • Washington State Charter Commercial Bank – WA DFI, FDIC, FRB, CFPB Regulated • Headquartered in Seattle, WA; is the second largest bank headquartered in the Pacific Northwest • 210 branches across 9 western state
Slide 3: WaFd Bank Executive Management Committee
WaFd Bank Executive Management Committee Brent Beardall Kelli Holz Cathy Cooper President and Chief Executive SEVP Chief Financial Officer EEVP Chief Consumer Banker Officer James Endrizzi Kim Robison Ryan Mauer EVP Chief Commercial EVP Chief Operating Officer EVP Chief Credit Officer Banker 3 3
Slide 4: WaFd Bank Demographics
WaFd Bank Demographics Our markets are among the most desirable in the US and create a foundation for loan growth without excessive risk Projected Median Projected Company Deposit Percent of Total Population Population HH HH Income Number Deposits Market National Population Change Change Income Chan
Slide 5: Completion of Luther Burbank Merger
Completion of Luther Burbank Merger Two great organizations coming together. • Merger effective March 1, 2024 • Successful systems conversion completed and branches re-branded by March 4th with minimal disruption • WaFd Assets at March 31, 2024 - $30.1 billion • Preliminary Stats: • Consideration -
Slide 6: Net Promoter Score Approaching Best in Class
Net Promoter Score Approaching Best in Class Our investments in customer service, usability and technology are translating into high customer satisfaction levels Peer Net Promoter Score 1 WaFdaa Net Promoter Score 1 75 57 51 57 48 48 44 34 17 15 3 (1) 2017 2018 2019 2020 2021 2022 2023 (6) (12) (24)
Slide 7: Commitment to ESG & Diversity
Commitment to ESG & Diversity We believe our enduring franchise comes from core principles focused on helping the neighborhoods we serve and creating long- term value for all stakeholders led by a Board, management and employee base that bring together a diversity of backgrounds Board Composition Ge
Slide 8: 5 Year Change by Percentage in Each Geographical Area
5 Year Change by Percentage in Each Geographical Area From September 30, 2019, to June 30, 2024 8
Slide 9: Loan and Deposit Balances by Geographical Area
Loan and Deposit Balances by Geographical Area As of June 30, 2024 $ In Millions 9
Slide 10: Loan Growth – Through Different Interest Rate Environments
Loan Growth – Through Different Interest Rate Environments $ in millions. New Loan Originations Loan Growth • Originations overall are reduced due to both rising • Although originations have slowed, they are keeping interest rates and an intentional slowing to temper up with repayments largely throu
Slide 11: Non-Performing Assets Near Record Lows
Non-Performing Assets Near Record Lows We have retained a strong ACL while NPAs have declined since 2010 • ACL at 6/30/2024 amounted to $204 million, representing 296% of total NPAs 1 • Non-performing assets $69 million as of 6/30/2024, 0.24% of Total Assets Non-Performing Assets to Total Assets and
Slide 12: Strong Credit Quality
Strong Credit Quality Strong Credit Quality Characterized by Limited Charge-Offs The Bank experienced nine consecutive years of net recoveries, fiscal 2014 through fiscal 2022, during which net recoveries totaled $74.8 million. Although we experienced net charge-offs in fiscal 2023, these have been
Slide 13: Net Loan Portfolio Average Current LTV
Net Loan Portfolio Average Current LTV As of June 30, 2024 $ In Thousands % % of WTD Avg Delinquent Net Balance Loans Current LTV based on $ Multifamily $ 4,488,124 22% 54% 0.15% CRE - Office 787,850 4% 61% 0.00% CRE - Other 2,919,339 14% 44% 0.02% CRE Construction - Multifamily 815,587 4% 43% 0.00%
Slide 14: CRE – Other Property Types as % of Total Net Loans
CRE – Other Property Types as % of Total Net Loans As of June 30, 2024 14
Slide 15: Significant Liquidity and High-Quality Securities Portfolio
Significant Liquidity and High-Quality Securities Portfolio High quality, $5.4 billion cash and investment portfolio with $7.7 billion remaining collateral and lines as a source of additional potential liquidity Cash and Securities Composition Cash & Securities / Total Assets1 June 30, 2024 High Qua
Slide 16: Investment Portfolio
Investment Portfolio High quality, $2.9 Billion investment portfolio with a duration of 2.9 years. Portfolio is 51% variable rate. HTM Investments Fair Value Gain/Loss WAL Expected Yield Agency MBS $ 398,005 $ (49,633) 8 3.11% AFS Investments Fair Value Gain/Loss WAL Expected Yield Agency MBS $ 1,35
Slide 17: Highly Diversified Deposit Base - % of Deposits by Industry
Highly Diversified Deposit Base - % of Deposits by Industry Top 20 depositors make up 10% of total deposits. 24.7 % of total deposits are uninsured and not collateralized as of June 30, 2024. 17
Slide 18: Deposit Trends
Deposit Trends Shifting away from time deposits in favor of transaction accounts. Checking accounts now make up 33% Core Deposits = 81.8% of Total 18
Slide 19: Deposit Flows
Deposit Flows Overall changes by quarter and balances by type Customer Deposit Ac c ounts 6 /3 0 /2 0 2 2 9 /3 0 /2 0 2 2 1 2 /3 1 /2 0 2 2 3 /3 1 /2 0 2 3 6 /3 0 /2 0 2 3 9 /3 0 /2 0 2 3 1 2 /3 1 /2 0 2 3 3 /3 1 /2 0 2 4 6 /3 0 /2 0 2 4 Chec king - Noninterest Bearing 3 ,2 5 1 ,6 0 3 3 ,2 6 9 ,7 7
Slide 20: Borrowings and Debt Outstanding & Weighted Rate
Borrowings and Debt Outstanding & Weighted Rate Borrowings are 61% FHLB and 35% Fed’s Bank Term Funding 4% TruPS and Sr Debt, and are used in part to manage interest rate risk. Current period increase reflects the addition of borrowings and debt in the LBC merger. Acquired debt and borrowings increa
Slide 21: Cost of Deposits in the Rising Rate Environment
Cost of Deposits in the Rising Rate Environment Avg Fed Cost of Interest- Actual Funds bearing Cost of All Deposits Cumulative (Upper) Deposits Beta 12/31/2021 0.25% 0.27% 0.21% -- 3/31/2022 0.29% 0.26% 0.21% -- 6/30/2022 0.94% 0.29% 0.23% 3% 9/30/2022 2.35% 0.53% 0.42% 10% 12/31/2022 3.82% 1.00% 0.
Slide 22: AOCI vs our Peers
AOCI vs our Peers Total Accumulated Other Comprehensive Income as a percent of Equity 20% -10% -20% -70% 2 2 9 So Pp Dd > Dd» Dd DD D > op > oD nh ob eg ge gs ws? eG gh eg oP 8h oh eg” oh gs Pe a ga gy WAFD COLB WAL BANR ZION WaFdBai
Slide 23: Income Statement Comparison
Income Statement Comparison $ In thousands Three Months Ended, 6/30/2024 6/30/2023 $ Change % Change INTEREST INCOME Loans.............................................................................................. $ 337,118 $ 232,167 $ 104,951 45% Mortgage-backed securities.......................
Slide 24: Income Statement Comparison
Income Statement Comparison In thousands Three Months Ended, 6/30/2024 6/30/2023 $ Change % Change NON-INTEREST INCOME $ 17,255 $ 13,771 $ 3,484 25.3% NON-INTEREST EXPENSE Compensation and benefits........................................................... 57,169 50,456 6,713 13.3% Occupancy........
Slide 25: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income in thousands. IRR measures as of June 30, 2024: • Net Interest Income (NII) would increase by 7.2% in +200 bps immediate and parallel shock and would increase by 1.6% in a -100 bps immediate parallel shock. • Net Portfolio Value (NPV) a
Slide 26: Net Income and Common Earnings Per Share
Net Income and Common Earnings Per Share Annual Quarterly March 31, 2024 Net Income and EPS reflect merger-related expenses of $25 million and the preliminary ACL provision of $16 million. 26
Slide 27: Non-Interest Income
Non-Interest Income Diverse sources of Non-Interest Income provide steady growth and balance our revenue profile Non-Interest Income for Quarter-Ended 06/30/2024 Non-Interest Income Over Time ($MM) Loan Fees 3% $30.7 … $10.1 $33.2 Other $24.1 $28.6 Deposit Fees $23.2 $23.3 $23.1 Income $14.7 56% 40%
Slide 28: Non-Interest Expense Over Time
Non-Interest Expense Over Time Annual and Quarterly - Expenses in thousands Annual Quarterly Other expense includes FDIC premiums, product delivery & IT related costs and other miscellaneous expenses. The quarter-ended March 31, 2024 includes merger related expenses and other non-operating expenses.
Slide 29: Breakout of Other Expense
Breakout of Other Expense Expenses in millions Other Expense includes: • FDIC Premiums • Product Delivery • Information Technology • Miscellaneous ‘Other’ line-item expenses include professional services, marketing and administrative costs. 29
Slide 30: Capital Ratios
Capital Ratios WAFD does not seek to maximize leverage. Rather, we aspire to be the bank that can best weather the next storm on the horizon. • Source: SNL Financial, Company Filings 30
Slide 31: Returning Capital to Shareholders
Returning Capital to Shareholders Return of Income to Common Shareholders Common Dividend as a % of Net Income 42.9% 38.3% 38.0% 30.4% 30.1% 27.5% 27.8% 26.3% 2016 2017 2018 2019 2020 2021 2022 2023 Share Repurchases Recent Capital Activities • Current cash dividend of $0.26 provides a yield of 3.15
Slide 32: Stock Price & Book Value Per Share
Stock Price & Book Value Per Share As of 06/30/2024: Book Value per Share $32.76 Tangible Book Value per Share $27.18 Price to BV: 0.861 Price to TBV: 1.04 32
Slide 33: Perspective through the last Credit Cycle
Perspective through the last Credit Cycle Managing Capital Text Text Text Tex 33
Slide 34: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Washington Federal’s management and are subject to significant risks and uncertainties. The forward