Three months after WaFd Inc.
The $27.6 billion-asset WaFd has hired a pair of former Small Business Administration executives to spearhead the new initiative. It reported making 382 small business loans in the three months ending March 31 — up from zero the prior quarter.
"We are enthusiastic about the shift toward business banking … and are pleased to see early successes," Beardall said Friday in the company's quarterly earnings release.
WaFd Chief Marketing and Communications Officer Brad Goode said all 382 loans the bank originated in the first quarter were conventional loans, part of its own small business express loan program. The company hopes to book "a healthy mix" of conventional and SBA 7(a) loans going forward, he added.
WaFd did not disclose an aggregate asset size of its recent small business lending.
One of the two former SBA executives to join WaFd recently is Scott Bossom, who has a long history of small business lending in Oregon and Washington state. Bossom worked at the SBA from 2011 to 2017.
WaFd's move appears likely to add fuel to what is turning into an exceptionally strong year for the SBA and its flagship 7(a) lending program. The agency approved 42,758 loans for $18.7 billion through the first six months of its 2025 fiscal year, which began Oct. 1. That loan volume was up 41% from the same period in fiscal 2024.
The 7(a) program offers guarantees of 50% to 85% on loans of up to $5 million. WaFd has participated for more than four decades but never made the program a significant line of business, according to Goode.
Goode described WaFd's current emphasis on small business lending as a "strategic pivot" made in the wake of the bank's exit from home lending — a line of business WaFd had pursued since its founding in 1917.
"We're so well-known in the markets we serve, we decided, let's really go after small business," Goode said. "That's when the light bulb went off that we'd be a natural SBA lender."
WaFd was an active participant in the pandemic-era Paycheck Protection Program, which was managed by the SBA. It made more than 9,000 PPP loans to small businesses in 2020 and 2021, but reverted to its traditional consumer focus once the emergency program ended.
Goode stopped short of disclosing any growth targets for the new SBA business, but he said WaFd was hoping for a keen reception in a number of markets — like Tucson, Arizona; Boise, Idaho; and Salt Lake City — that are seeing high levels of small business activity.
"We understand that our continued evolution toward higher margin business lines will be measured in years, not quarters, but we are off to a good start," Beardall said in the press release.
WaFd is not the only bank eyeing a bigger footprint in 7(a) lending. A little more than a month ago, the $216.6 million-asset Community Bancshares in LaGrange, Georgia, said it was planning a
WaFd, corporate parent to WaFd Bank, reported quarterly net income totaling $56.3 million, up 19% from the quarter ending Dec. 31, 2024. Results from the first quarter of 2024 were impacted by more than $25 million in expenses connected to the bank's
WaFd linked its decision to quit the mortgage business to increasing levels of commoditization, as well as the impact of technology on the sector and a growing regulatory burden. Detroit-based Ally Financial and Long Island-based Flagstar Financial also announced mortgage-lending exits in recent months.
WaFd was an active home lender right up until its decision to quit, originating $156.1 million of mortgage loans in the quarter ending Dec. 31. Single-family loans still made up 39% of its $20.9 billion loan portfolio on March 31.
