WaFd, Inc. Common Stock M&A announcement

Good morning, everybody. Thanks for joining us for an update about WaFd Bank and the announcement about our strategic merger with EverBank. You can find our press release about the announcement, which we issued yesterday on our website at wafedbank.com. Additional supplemental information about the announcement can be found in our Form 8-K filing with Securities and Exchange Commission, which is also available on our website. During today's call, we will make forward-looking statements which are subject to risks and uncertainties and are intended to be covered by the safe harbor provisions of federal securities law. Information on risk factors that could cause actual results to differ is available from the announcement press release, again, that was issued yesterday, and our Form 8-K. Forward statements are effective only as the date they are made, and WaFd assumes no obligation to update information concerning its expectations.

We will also reference non-GAAP financial measures. With us this morning are WaFd Bank's CEO and Vice Chairman, Brent Beardall, Chief Financial Officer Kelli Holz, and Greg Seibly, Chief Executive Officer of EverBank, and Pat Rusnak, EverBank's Chief Financial Officer. I would now like to hand the call over to Mr. Beardall.

Thank you, Brad, and thank you all for joining us today to talk about the strategic merger of WaFd Bank and EverBank. I am very pleased to be joined today by my longtime friend and Pacific Northwest banking colleague, Greg Seibly, EverBank's CEO. Greg and I met nearly 20 years ago when he was president and CEO at Sterling Bank in Spokane. Also joining us is Pat Rusnak, EverBank's CFO, who like Greg, has a long history in Western banking, including serving as a CFO of Sterling Bank in Spokane and PacWest Bancorp. When Greg and I first started talking about the potential of this strategic combination several months ago, it became immediately clear to us our two banks would be stronger together in every way. It is not that our banks are identical. We are different than one another.

But I think you will see with what we present this morning, those differences are actually very complementary of one another. Our conviction about this has only grown more resolute as we move through this process and both banks completed rigorous due diligence. Greg, welcome back to Seattle.

Thanks so much, Brent. It's great to be back in the Pacific Northwest, having spent nearly a decade here from 2007 to 2016. And it's really great to be here with the WaFd Bank team.

We have a great story to tell. I'm looking forward to getting into the details and talking about why EverBank and WaFd Bank truly are stronger together and poised to achieve great results for our investors, our clients, our employees, and the communities we serve. First, I want to say it is a privilege every day to work side by side with the WaFd team of bankers. This opportunity to partner with EverBank is an elegant fit. It allows us to carry forward the ethos of WaFd and deliver improved returns for our shareholders. Both banks bring exceptional credit quality and strong capital to the partnership. WaFd Bank and EverBank complement one another in several key strategic priorities you will hear about in the coming slides. I have no doubt that we will be stronger together.

I'm honored to work with Greg and the teams at WaFd Bank and EverBank to challenge the status quo for the banking industry in the years to come.

I couldn't agree more, Brent. EverBank and WaFd Bank truly are stronger together. Since 2023, when EverBank was purchased by our private equity owners and I became CEO, EverBank has been on a journey to transform into a high-performing institution. We're incredibly proud of what we've accomplished over the past three years. Today, we're starting down an exciting new path, the merger of EverBank and WaFd Bank. The combination of EverBank and WaFd Bank will open many new opportunities for nationwide growth and improved financial performance. By joining forces, we'll leverage our existing scalable consumer and commercial platforms to deliver high-value products and services to clients across the country. All of us at EverBank are looking forward to partnering with the WaFd Bank team to accomplish even greater things in the years ahead.

We have a lot of ground to cover today, so let's get started. Greg, Pat, Kelly, and I will focus on the highlights included in our investor presentation. Then we will be happy to answer your questions.

We'll start on page 6. EverBank and WaFd Bank have complementary business models, and the combination of the two banks will bring together and align consumer and commercial capabilities and strategies. The merger enhances both franchises, accelerating the profitability ramp while providing lending and funding diversification. Combined, the franchise will be a $75 billion asset, multi-channel bank with scale and reach, diverse lending products, a bank footprint in highly attractive markets, and a very evolved digital bank that provides durable liquidity to support our lending businesses. The merger will also strengthen the bank's return profile, resulting in greater operational scale and increased efficiencies, expand their array of products, and provide access to new markets for both organizations, as outlined in the key statistics portion of the slide shown on the right-hand side of the page.

Turning to page 7. We believe the combination of EverBank and WaFd is highly accretive to WaFd earnings per share, with robust earnings power and profitability that would not be possible for at least the next five years as a standalone company. The enhanced financial performance of the combined bank implies a 25%-45% increase in value creation for our shareholders. For 2027, we forecast fully synergized earnings per share accretion of approximately 29%, a 15%+ return on average tangible common equity, and run rate earnings of $865 million to common shareholders for the combined franchise. This materially enhanced profitability drives a short tangible book value earn back period of two years, and excess capital generation for the combined bank. We project approximately 8.6% tangible book value per share dilution as a result of the transaction.

We are forecasting the new EverBank will generate approximately 90 basis points of annual CET1 before returning capital to shareholders.

Turning to page 8. We truly are stronger together. We are bringing complementary institutions to create a highly profitable and high growth franchise with several key attributes. First, a multi-channel relationship driven strategy. Second, strategically located in attractive high growth markets, servicing clients nationally and locally. Third, scale and funding to navigate a rapidly evolving banking environment. Fourth, strong EPS accretion return profile and earnings power to support robust growth and capital return to our shareholders. Fifth, an efficient cost structure and a flexible funding model. Sixth, experienced management teams with significant integration experience in deep local and national expertise. I would like to turn things over to Pat Rusnak, who will cover the key highlights of the transaction.