Wafd

None of the warning signs we check for were found.

We look for five warning signs: doubt it can keep going, weak checks on its own accounts, a notice that its past accounts can't be relied on, a change of auditor, and one customer bringing in a big share of sales. We don't check lawsuits, investigations or debt yet.

We checked the auditor's report, internal controls, restatement notices, auditor changes and big customers in the 10-K filed 18 Nov 2025, plus the 10-Q filed 4 Aug 2026 and 16 later 8-Ks.

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• events and other events beyond our control.

  Could happen

  A major catastrophe, such as an earthquake, tsunami, flood, fire, or other natural disaster, including those caused or exacerbated by climate change, public health issues such as the COVID-19 or other pandemics, or other events beyond our control, could result in a prolonged interruption of our business. For example, our headquarters is located in Seattle, Washington and we have operations throughout the western United States, a geographical region that has been or may be affected by earthquakes, wildfires, tsunamis, and flooding activity. Because we primarily serve individuals and businesses in our nine-state footprint, a natural disaster likely would have a greater impact on our business, operations, and financial condition than if our business were more geographically diverse throughout the United States. The occurrence of any of these natural disasters could negatively impact our performance by disrupting our operations or the operations of our customers, which could have a material adverse effect on our financial condition, results of operations, and cash flows.

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• impact on our operating results and financial condition.

  Already happened

  In January 2025, we made a significant shift in focus to our business model and announced that WaFd Bank would be exiting the single-family mortgage lending market to focus on commercial loans, including small business and SBA loans. We made this determination for several reasons: first because home loans are seen as a commodity, with the majority of originations sold to US government sponsored enterprises like Freddie Mac and Fannie Mae, which has caused our profitability to decrease and credit risk to increase, and second, because technology has made it easy for consumers to refinance, increasing our interest rate risk. While we have estimated annual expense savings of approximately $17 million from our exit from the single-family mortgage business, this change involves a number of risks, including costs and expenses (including a $5.4 million restructuring charge), the potential loss of customer relationships, community goodwill and revenues and earnings. Exiting this business could impact future earnings if we are unable to offset the loss of revenue associated with the single-family mortgage business against the anticipated expense savings. In addition, the shift in business focus to commercial loans will require varying levels of management resources, which may divert our attention from other business operations. If we are unable to realize the expected benefits of these types of changes in our business operations, or execute on other strategic plans and initiatives, our consolidated financial position, results of operations and cash flows could be negatively impacted.

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• employees, we could experience a disruption in our business.

  Could happen

  The effects of climate change continue to raise significant concerns about the state of the environment. However, under the new administration, federal policy has shifted to reduce the emphasis on climate change initiatives and environmental regulations. This includes scaling back federal participation in international agreements, and reducing regulatory pressures on businesses, including banks, to address climate-related risks. Federal legislative and regulatory proposals aimed at combating climate change have and may continue to face greater scrutiny or diminished priority. However, state and local regulations or guidance relating to climate change, as well as changes in consumers’ and businesses’ behaviors and business preferences, continue to affect our business operations.

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• Current uncertain economic conditions pose challenges, and could adversely affect our business, financial condition and

  We are operating in an uncertain and rapidly changing economic environment. Global trade tensions, AI impacts, and inflation risks continue to affect the global economic environment. The recent U.S. government shutdown has negatively impacted U.S. economic growth, and the suspension of government data collection and publication left policymakers without access to the latest data on employment, inflation, and economic growth, increasing the risk that a wrong decision will be made.

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• may increase our costs and adversely affect our business and operations.

  Could happen

  New appointments to the Federal Reserve Board of Governors could also affect monetary policy and interest rates. Future legislation, regulation, and changes in trade and fiscal policy, including uncertainty surrounding the ongoing operations of the CFPB, could affect the banking industry as a whole, including our business and results of operations. It is difficult to predict future changes in regulation or the competitive impact that any such changes would have on our business. Any new laws, rules and regulations could make compliance more difficult, expensive, costly to implement or may otherwise adversely affect our business, financial condition or growth prospects. Other changes to statutes, regulations, or regulatory policies, including changes in interpretation or implementation of statutes, regulations, or policies, could affect us in substantial and unpredictable ways including subjecting us to additional costs, limiting the types of financial services and products we may offer, and increasing the ability of non-banks to offer competing financial services and products.

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