WAFD (WAFD) risk factors, FY2024 10-K

Operational Risks

1. 01Fluctuating interest rates could adversely affect our business
2. 02We are exposed to risks related to fraud and cyber-attacks
3. 03Inflationary pressures and rising prices may affect our results of operations and financial condition
4. 04Integrating Luther Burbank with the Company may prove more difficult, costly or time consuming than expected, and the anticipated benefits and cost savings of the Merger may not be realized
5. 05Current uncertain economic conditions pose challenges, and could adversely affect our business, financial condition and results of operations
6. 06Changes to monetary policy by the Federal Reserve could adversely impact our results of operations
7. 07Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations
8. 08Our allowance for credit losses ("ACL") may not be adequate to cover future loan losses, which could adversely affect our financial condition and results of operations
9. 09We are exposed to risks related to our operational, technological, and third-party provided technology infrastructure
10. 10We are subject to complex state and federal laws, rules, regulations and standards regarding data privacy and cybersecurity, which impact how we conduct our business
11. 11The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact our business
12. 12If we are not able to retain or attract key employees, or if we were to suffer the loss of a significant number of employees, we could experience a disruption in our business
13. 13Our risk management framework may not be effective in mitigating risks and losses to us
14. 14Climate change could adversely affect our business, affect client activity levels and damage our reputation
15. 15The spread of COVID-19 created a global public-health crisis that resulted in significant economic uncertainty, and impacted household, business, economic, and market conditions across the world, including in the western United States where we conduct nearly all of our business

Regulatory and Litigation Risks

1. 16class action litigation. Any of these actions could have a material adverse effect on our business, financial condition and results of operations
2. 17Failure to comply with the 2020 and 2013 Consent Orders from the Consumer Financial Protection Bureau regarding our Home Mortgage Disclosure Act submissions could result in additional regulatory enforcement action
3. 18We operate in a highly regulated industry, which limits the manner and scope of our business activities
4. 19Recent national and state legislation and regulatory initiatives to support the financial services industry have been coupled with numerous restrictions and requirements that could detrimentally affect our business
5. 20Deposit insurance premiums could increase further in the future
6. 21We are subject to various claims and litigation, which could result in significant expenses, losses and damage to our reputation
7. 22Our real estate lending also exposes us to the risk of environmental liabilities

Market and Industry Risks

1. 23Recent negative developments affecting the banking industry, and resulting media coverage, have eroded customer confidence in the banking system
2. 24A downturn in the real estate market would hurt our business
3. 25Changes in retail distribution strategies and consumer behavior may adversely impact our business, financial condition and results of operations
4. 26We may suffer losses in our loan portfolio due to inadequate or faulty underwriting and loan collection practices
5. 27Our operations are focused in the western United States, subjecting us to the risks of general economic conditions in these market areas
6. 28Our liquidity may be adversely impacted by issues arising from certain industry deficiencies in foreclosure practices, including delays and challenges in the foreclosure process
7. 29Impairment of goodwill may adversely impact future results of operations
8. 30The Bank faces strong competition from other financial institutions and new market participants, offering services similar to those offered by the Bank
9. 31We may not be able to continue to grow organically or through acquisitions
10. 32Our entry into California may present increased risk that may adversely impact our business, prospects and financial condition
11. 33Our ability to pay dividends is subject to limitations that may affect our ability to continue to pay dividends to shareholders
12. 34Our 4.875% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”) ranks senior to our Common Stock, and we are prohibited from paying dividends on our Common Stock unless we have paid dividends on our Series A Preferred
13. 35The market price for our Common Stock may be volatile
14. 36There may be future sales or other dilution of the Company's equity, which may adversely affect the market price of our Common Stock or depositary shares
15. 37may be issued, including voting rights, dividend rights, and preferences over the Common Stock with respect to dividends or upon our dissolution, winding up and liquidation and other terms
16. 38We rely, in part, on external financing to fund our operations and the unavailability of such funding in the future could adversely impact our growth and prospects
17. 39A person holding our Common Stock could have the voting power of their shares of Common Stock on all matters significantly reduced under Washington's anti-takeover statutes, if the person acquires 10% or more of the voting stock of the Company
18. 40The Company’s business or the value of its common shares could be negatively affected as a result of actions by activist shareholders