WAFD INCWAFD
WAFD INC Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
Lease Commitments - The Company’s lease commitments consist primarily of real estate property for branches and office space
under various non-cancellable operating leases that expire between 2026 and 2070. The majority of the leases contain renewal
options and provisions for increases in rental rates based on a predetermined schedule or an agreed upon index. If, at lease
inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the
extended term in the calculation of the right-of-use asset and lease liability.
Operating lease liabilities and right-of-use assets are recognized on the lease commencement date based on the present value of
the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that represents the
Company's collateralized borrowing rate for financing instruments of a similar term and are included in
other liabilities. The related right-of-use asset is included in .
The table below presents the Company’s operating lease right-of-use asset and the related lease liability.
(In thousands) | September 30, 2025 | September 30, 2024 |
Operating lease asset | $48,038 | $37,486 |
Operating lease liability | $52,179 | $40,788 |
As of September 30, 2025, the Company’s operating leases have a weighted average remaining lease term of 9.1 years and a
weighted average discount rate of 3.94%. Cash paid for amounts included in the measurement of the above operating lease
liability was $10,758,000 and $9,627,000 for the twelve months ended September 30, 2025 and 2024, respectively. Right-of-
use assets obtained in exchange for new operating lease liabilities during the twelve months ended September 30, 2025 and
2024 were $19,280,000 and $12,890,000. Right-of-use assets obtained in the Merger for the twelve months ended September
30, 2024 were valued at $11,478,000.
The following table presents the components of net lease costs, a component of Occupancy expense. The Company elected not
to separate lease and non-lease components and instead account for them as a single lease component. Variable lease costs
include subsequent increases in index-based rents and variable payments such as common area maintenance.
(In thousands) | ||
2025 | 2024 | |
Operating lease cost | $10,827 | $8,521 |
Variable lease cost | 2,068 | 2,504 |
Sublease income | (444) | (405) |
Net lease cost | $12,451 | $10,620 |
The following table shows future minimum payments for operating leases as of September 30, 2025 for the respective periods.
(In thousands) | Year ending September 30, |
2026 | $10,983 |
2027 | 10,034 |
2028 | 8,223 |
2029 | 6,226 |
2030 | 5,202 |
Thereafter | 22,435 |
Total minimum payments | 63,103 |
Amounts representing interest | (10,924) |
Present value of minimum lease payments | $52,179 |
Rental expense, including amounts paid under month-to-month cancelable leases, amounted to $12,894,000 and $11,025,000 in
2025, and 2024, respectively.
Financial Instruments with Off-Balance Sheet Risk - Off-balance-sheet credit exposures for the Company unfunded loan
commitments and letters of credit from the FHLB - DM and the FHLB - SF. As of September 30, 2025, the Bank was
obligated on FHLB letters of credit totaling $62,606,000 and unfunded loan commitments of $2,841,596,000. As of September
30, 2024 FHLB letter of credit obligations were $902,606,000 and unfunded loan commitments were $2,928,697,000. The
reserve for unfunded commitments was $21,500,000 as of September 30, 2025, which is unchanged from September 30, 2024.
See Note A "Summary of Significant Accounting Policies" for details regarding the reserve methodology.
Legal Proceedings - The Company and its subsidiaries are from time to time defendants in and are threatened with various legal
proceedings arising from regular business activities. Management, after consulting with legal counsel, is of the opinion that the
ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on
the financial statements of the Company.
LIHTC Investments - The Company has LIHTC investments which are designed to promote qualified affordable housing
projects. These investments provide a return through the generation of income tax credits and other income tax benefits and
support the Company's regulatory compliance with the Community Reinvestment Act. The Company has evaluated its
involvement with the low-income housing projects and determined it does not have the ability to exercise significant influence
over or participate in the decision-making activities related to the management of the projects, and therefore, is not the primary
beneficiary, and does not consolidate these interests. LIHTC investments are accounted for using the proportional amortization
method.
Investments in affordable housing partnerships of $157,249,000 and $112,342,000 as of September 30, 2025 and September
30, 2024, respectively, are recorded as a component of on the Consolidated Statements of Financial Condition and
uses the proportional amortization method to account for the investments. The Company's unfunded contribution commitments
to these investments were $73,123,000 and $41,702,000 as of September 30, 2025 and September 30, 2024, respectively, which
are recorded as a component of other liabilities on the Consolidated Statements of Financial Condition. Both the tax benefits
and the amortization expense related to these investments are reflected in the provision for income taxes on the Consolidated
Statements of Operations.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 18, 2025 | Showing above |
| 2024 | Nov 20, 2024 | |
| 2023 | Nov 17, 2023 | |
| 2022 | Nov 18, 2022 | |
| 2021 | Nov 19, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.