Wafd, Inc. · NASDAQ:WAFD
Wafd — Investor Presentation (February 2024)
36 slides from Wafd's investor presentation, Feb 15, 2024
Slide 1: Investor Presentation As of December 31, 2023
Investor Presentation As of December 31, 2023 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 si
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 • 198 branches across 8 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: Vision 2025
Vision 2025 Our Objective: A highly‐profitable, digital‐first bank that leverages data to anticipate financial needs and empower our clients by creating frictionless experiences across all interactions and devices. Our Values: Integrity, Teamwork, Ownership, Service, Simplicity & Discipline 5
Slide 6: Evolution of Our Franchise
Evolution of Our Franchise 10 years of investment has put us on glide path to an even stronger balance sheet and deeper client relationships 2025 Vision 2007‐2018 Digital Focus Leverage data 1917‐2007 to anticipate financial needs Commercial and empower Relationship our clients deposits and diversif
Slide 7: 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 8: Speed Matters – Website Is the New Storefront
Speed Matters – Website Is the New Storefront wafdbank.com Google page speed scores 8
Slide 9: Getting Customers to Your Website is Mission Critical
Getting Customers to Your Website is Mission Critical WaFd Bank's online presence and domain authority have been growing significantly year over year. 9
Slide 10: 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 Composition1 G
Slide 11: 5 Year Change by Percentage in Each Geographical Area
5 Year Change by Percentage in Each Geographical Area From September 30, 2019, to December 31, 2023 11
Slide 12: Loan and Deposit Balances by Geographical Area
Loan and Deposit Balances by Geographical Area As of December 31, 2023 $ In Millions $1,939 12
Slide 13: 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 are slowing, they are interest rates and an intentional slowing to temper keeping up with repayments largely throu
Slide 14: 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 12/31/2023 amounted to $179 million, representing 324% of total NPAs 1 • Non‐performing assets $55 million as of 12/31/2023, 0.24% of Total Assets Non‐Performing Assets to Total Assets a
Slide 15: 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 have experienced net charge‐offs in fiscal 2023, these have
Slide 16: Net Loan Portfolio Average Current LTV
Net Loan Portfolio Average Current LTV As of December 31, 2023 $ In Thousands % % of WTD Avg Delinquent Net Balance Loans Current LTV based on $ Multifamily $ 3,008,665 17% 52% 0.00% CRE ‐ Office 763,868 4% 62% 0.00% CRE ‐ Other 2,539,418 14% 43% 0.99% CRE Construction ‐ Multifamily 1,006,022 6% 51%
Slide 17: Significant Liquidity and High‐Quality Securities Portfolio
Significant Liquidity and High‐Quality Securities Portfolio High quality, $3.6 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 Sept 30, 2023 Source:
Slide 18: Investment Portfolio
Investment Portfolio High quality, $2.4 Billion investment portfolio with a duration of 2.9 years. Portfolio is 47% variable rate. 18
Slide 19: Highly Diversified Deposit Base ‐ % of Deposits by Industry
Highly Diversified Deposit Base ‐ % of Deposits by Industry Top 20 depositors make up 11% of total deposits. 26 % of total deposits are uninsured and not collateralized as of December 31, 2023. 19
Slide 20: Deposit Trends
Deposit Trends Shifting away from time deposits in favor of transaction accounts. Checking accounts now make up 42%. Core Deposits = 87.6% of Total 20
Slide 21: Deposit Flows
Deposit Flows Overall changes by quarter and balances by type • Deposit flows have fluctuated over the prior 2 years with the balance hovering around $16 billion • Negative Quarterly deposit net inflows as of 12/31/2023 • 74% of deposits are collateralized or insured *(Balances $ in thousands) 21
Slide 22: Borrowings Outstanding & Weighted Rate
Borrowings Outstanding & Weighted Rate Borrowings are 73% FHLB and 27% Fed’s Bank Term Funding and are used in part to manage interest rate risk. Current period increase reflects increased use of short‐term borrowings to fund loan growth. Rates have increased with market rates. Increase in borrowing
Slide 23: Cost of Deposits in the Rising Rate Environment
Cost of Deposits in the Rising Rate Environment Cost of Avg Fed Actual Interest‐ Cost of All Funds Cumulative bearing Deposits (Upper) Beta Deposits 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 24: AOCI vs our Peers
AOCI vs our Peers Total Accumulated Other Comprehensive Income as a percent of Equity 20% oN PPK Pgh Ho WAFD BANR ZION WAL COLB WaFd Bank
Slide 25: Income Statement Comparison
Income Statement Comparison $ In thousands 25 25
Slide 26: Income Statement Comparison
Income Statement Comparison In thousands Efficiency Ratio of 58.02% for YTD fiscal year 2024 up from 46.78% for the same period of the prior year. Effective tax rate year to date ended December 2023 is 18.46% compared to 22.0% from the same period ended December 2022 26
Slide 27: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Net interest income in thousands. IRR measures as of Dec 31, 2023: • Net Interest Income (NII) would decrease by 1.0% in +200 bps immediate and parallel shock and would increase by 3.5% in a ‐100 pbs immediate parallel shock. • Net Portfolio Value (NPV) af
Slide 28: Net Income and Common Earnings Per Share
Net Income and Common Earnings Per Share Annual Quarterly 28
Slide 29: 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 12/31/2023 Non‐Interest Income Over Time ($MM) Loan Fees $30.7 6% $10.1 $33.2 Other $24.1 $28.6 $23.2 $23.3 $23.1 Income $14.7 46% Deposit Fees $25.9
Slide 30: 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. See additional details on the next page. 30
Slide 31: 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. 31
Slide 32: 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 32
Slide 33: 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 $0.25 provides a yield of 3.53
Slide 34: Stock Price & Book Value Per Share
Stock Price & Book Value Per Share As of 12/31/2023: Book Value per Share $33.49 Tangible Book Value per Share $28.65 Price to BV: 0.984 Price to TBV: 1.15 34
Slide 35: Perspective through the last Credit Cycle
Perspective through the last Credit Cycle Managing Capital Text Text Text Tex 35
Slide 36: 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