8-K: WaFd Bank Elevates CRA Rating to Satisfactory After Appeal

WaFd Bank successfully appealed its Community Reinvestment Act (CRA) rating, upgrading its overall composite score from 'Needs to Improve' to 'Satisfactory'.

Summary

• WaFd Bank, a wholly-owned subsidiary of WaFd, Inc., announced that its appeal of its Community Reinvestment Act (CRA) rating was granted by the Supervision Appeals Review Committee (SARC) of the Federal Deposit Insurance Corporation (FDIC).
• The Bank's CRA lending test component rating was upgraded from 'Needs to Improve' to 'Low Satisfactory'.
• The overall composite CRA rating for WaFd Bank was elevated from 'Needs to Improve' to 'Satisfactory'.
• The original 'Needs to Improve' rating was issued on December 27, 2024, for the period spanning June 3, 2020, to March 26, 2024.
• The SARC issued its decision on January 16, 2026.
• As of December 31, 2025, the Company operated 208 branches and reported $27.3 billion in assets, $21.4 billion in deposits, and $3.0 billion in shareholders' equity.

Sentiment

Score: 9

Explanation: The successful appeal and upgrade of the CRA rating from 'Needs to Improve' to 'Satisfactory' is a significant positive development, removing a major regulatory overhang and potential operational restrictions. This is a strong positive signal for the company's regulatory standing and future flexibility.

Positives

• The successful appeal elevates WaFd Bank's overall CRA rating from 'Needs to Improve' to 'Satisfactory', removing significant regulatory restrictions.
• The lending test component rating improved from 'Needs to Improve' to 'Low Satisfactory'.
• The upgrade allows WaFd Bank to continue meeting community credit needs without the limitations associated with a lower CRA rating.
• Management expressed appreciation for the independent review process and felt heard regarding their arguments about peer group comparison and community development lending credit.

Risks

• Statements in this report that speak to future performance or financial condition constitute forward-looking statements, which are based on current assumptions and involve known and unknown risks, uncertainties, and other important factors.
• Actual results, performance, or achievements may be materially different from any future results, performance, or achievements expressed or implied by forward-looking statements.
• Important factors that could cause actual results to differ materially are identified under the heading 'Risk Factors' in the Company's Annual Report on Form 10-K for the year ended September 30, 2025, and other SEC filings.

Future Outlook

WaFd Bank looks forward to continuing to meet the credit needs of its communities in a safe and sound manner, now without the restrictions associated with a 'Needs to Improve' CRA rating. The company emphasizes its commitment to operations for its 109th year.

Management Comments

• WaFd Bank CEO Brent Beardall stated, "When we met in Washington, D.C, in early December, I shared with the senior leadership of the FDIC how appreciative I was of having an independent process to review significant regulatory determinations."
• Beardall added, "Regardless of outcome, being able to make our case that examiners were not comparing WaFd to a proper peer group and not giving enough credit to our community development lending, we felt heard."
• Beardall expressed gratitude that "the review process ultimately resulted in an upgrade for WaFd Bank to an overall Satisfactory CRA rating."
• Beardall affirmed, "We look forward to continuing to meet the credit needs of our communities in a safe and sound manner without the restrictions associated with a Needs to Improve CRA rating."

Industry Context

Community Reinvestment Act (CRA) ratings are crucial for banks as they assess how well financial institutions meet the credit needs of the communities they serve, particularly lowand moderate-income neighborhoods. A 'Needs to Improve' rating can impose significant regulatory restrictions, including limitations on mergers, acquisitions, and branch expansions, hindering a bank's growth and operational flexibility. An upgrade to 'Satisfactory' removes these impediments, signaling regulatory confidence and improving the bank's standing within the industry and with its stakeholders.

Comparison to Industry Standards

• The filing highlights WaFd Bank's contention that the initial FDIC examiners were not comparing the bank to a proper peer group.
• The bank also argued that it was not given enough credit for its community development lending.
• The filing does not provide specific comparable companies, projects, or results to global benchmarks, but rather addresses the internal assessment process.

Legal Proceedings

• WaFd Bank successfully appealed its Community Reinvestment Act (CRA) rating to the Supervision Appeals Review Committee (SARC) of the Federal Deposit Insurance Corporation (FDIC), resulting in an upgrade of its overall composite CRA rating.

Stakeholder Impact

• Shareholders: The removal of regulatory restrictions associated with a 'Needs to Improve' CRA rating enhances the bank's operational flexibility and strategic options, potentially leading to improved long-term value.
• Customers and Communities: The bank can continue its community development lending and meet credit needs without regulatory impediments, benefiting the communities it serves.
• Employees: A stable regulatory environment can contribute to job security and growth opportunities within the company.
• Regulators: The successful appeal demonstrates the effectiveness of the independent review process within the FDIC and the bank's commitment to compliance.

Next Steps

• WaFd Bank will continue to meet the credit needs of its communities in a safe and sound manner.
• The company will operate without the restrictions previously associated with a 'Needs to Improve' CRA rating.

Key Dates

Recommendation

The upgrade of WaFd Bank's CRA rating from 'Needs to Improve' to 'Satisfactory' is a material positive event. A 'Needs to Improve' rating can severely restrict a bank's ability to grow, merge, or acquire, acting as a significant impediment to strategic initiatives. The removal of this regulatory overhang unlocks potential for the bank, improves its reputation, and signals a stronger regulatory standing. This positive resolution should be viewed favorably by investors, suggesting an improved outlook for the company's operational and strategic flexibility.

Keywords

WaFd Bank, CRA rating, Community Reinvestment Act, FDIC, Supervision Appeals Review Committee, SARC, bank regulation, financial services, commercial bank, regulatory compliance, banking industry