WaFd, Inc. Receives Regulatory Approval for Acquisition of Luther Burbank Corporation
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The regulatory approval for the merger between WaFd, Inc. and Luther Burbank Corporation marks a significant development in the banking sector. This strategic move is expected to enhance WaFd Bank's presence, particularly with the addition of ten California branches. From a financial perspective, the merger could potentially lead to cost synergies, improved operational efficiency and a broader customer base, which may result in increased revenue streams. It is also pertinent to consider the competitive landscape; the expansion could provide WaFd with a stronger foothold against regional competitors.
Investors should monitor the execution of the merger, as the integration process is often fraught with challenges that can affect short-term performance. However, successful integration could lead to long-term shareholder value creation. The market typically responds to such news with a focus on the potential for increased earnings per share and improved return on equity post-merger. Additionally, the welcoming of two directors from Luther Burbank to WaFd's Boards may bring new insights and governance practices, which could be beneficial for strategic decision-making.
The merger's impact extends beyond financial metrics; it is likely to alter the competitive dynamics within the banking industry in the western United States. The expansion of WaFd Bank’s footprint to nine states presents opportunities for market share growth and diversification of its portfolio. The addition of technology-enabled financial solutions and an expanded geographic footprint could attract a new segment of customers seeking digital banking services. This is particularly relevant as the banking industry continues to evolve with technological advancements.
Market analysts will be interested in how the merger will affect customer retention and satisfaction, as system and brand integration can be a critical phase for maintaining trust and loyalty. The anticipated quick and efficient access to WaFd Bank’s platform for Luther Burbank customers will be a key factor in the success of the merger from a market perspective. The ability of WaFd to leverage Luther Burbank’s established customer relationships and brand equity in California could be a major advantage in a highly competitive market.
The consolidation of banking entities like WaFd and Luther Burbank can have broader economic implications. Such mergers can lead to increased economic efficiency through the elimination of duplicate operations and economies of scale. The resultant larger institution may have a greater ability to invest in technology and innovation, potentially driving economic growth in the communities they serve.
However, it is important to consider the potential downsides of banking consolidation, such as reduced competition and the possibility of too-big-to-fail institutions. Economists would analyze the merger's impact on the local banking markets, including loan availability, interest rates and services offered to consumers and small businesses. The long-term economic health of the banking sector is influenced by the balance between consolidation benefits and the maintenance of a competitive landscape that ensures consumer choice and financial stability.
“Regulatory approval of this merger with Luther Burbank affirms WaFd Bank’s position as an important financial resource for the communities we serve,” said Brent Beardall, President, and Chief Executive Officer of WaFd Bank. “A lot has transpired in the fourteen months since we announced this combination, but the more we have worked with the Luther Burbank team, the more convinced we are our combined bank will create significant opportunities for current and future customers and shareholders.”
The merger is expected to be completed by February 29, 2024, subject to the satisfaction or waiver of the remaining closing conditions set forth in the Merger Agreement. System and brand integration efforts are expected to be completed in the first week of March 2024 so that Luther Burbank customers can quickly and efficiently access the WaFd Bank platform and service offerings.
As previously announced, WaFd will be welcoming two directors from Luther Burbank to join the WaFd, Inc. and WaFd Bank Boards of Directors. Mr. Brad Shuster and Mr. Max Yzaguirre will join the Boards following the closing. Mr. Stephen Graham, Chairman of WaFd, said “We are pleased to have the opportunity to welcome Mr. Shuster and Mr. Yzaguirre to our Boards; their depth of knowledge and industry experience is outstanding.”
“Our core strength has been our deep commitment to acting with integrity,” said Simone Lagomarsino, President and Chief Executive Officer of Luther Burbank Savings. “We believe we have found a long-term partner in WaFd whose values align with ours, can offer our customers a wider range of technology-enabled financial solutions and expanded geographic footprint that will help our customers thrive.”
About WaFd, Inc.
WaFd, Inc. is the parent company of Washington Federal Bank, a federally insured
About Luther Burbank Corporation
Luther Burbank is headquartered in
This press release contains certain forward-looking statements, including but not limited to, certain plans, expectations, goals, projections and statements about the benefits of the merger, the plans, objectives, expectations and intentions of WaFd and Luther Burbank, the expected timing of completion of the merger, and other statements that are not historical facts. Such statements are subject to numerous assumptions, risks, and uncertainties. All statements other than statements of historical fact, including statements about beliefs and expectations, are forward-looking statements. Forward-looking statements may be identified by words such as “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan,” “target,” “goal,” or similar expressions, or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” “could,” or similar variations. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on WaFd’s and Luther Burbank’s current expectations and assumptions regarding WaFd’s and Luther Burbank’s businesses, the economy and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Many possible events or factors could affect WaFd’s and Luther Burbank’s future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others, those identified in the joint proxy statement/prospectus relating to the merger, initially filed with the
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Investor Relations Contacts:
WaFd, Inc.
Brad Goode
Chief Marketing Officer
Investor Relations
(206) 626-8178
brad.goode@wafd.com
or
Luther Burbank Corporation
Bradley Satenberg
Investor Relations
(844) 446-8201
investorrelations@lbsavings.com
Source: WaFd, Inc.
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