<PAGE>
THE SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
WASHINGTON MUTUAL BANK, FA
(as Seller and Servicer under certain Pooling and
Servicing Agreements providing for the issuance of Mortgage
Pass-Through Certificates, issuable in series)
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
-------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------- -----------
Commission file number
-------------------------------
WASHINGTON MUTUAL BANK, FA
- --------------------------------------------------------
(Exact name of registrant as specified in its charter)
Federal Charter 68-0172274
- --------------------------------------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Third Avenue, Seattle, Washington 98101
- ---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(206) 461-2000
- ---------------------------------------------------------
Bank's telephone number, including area code)
Securities registered pursuant to Section 12(b) of
the Act: None
Securities registered pursuant to Section 12(g) of
the Act: None
<PAGE>
<PAGE>
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
DOCUMENTS INCORPORATED BY REFERENCE: NONE
NOTE: Registrant is filing this Annual Report on Form 10-K with
reduced disclosure format pursuant to exemptive orders obtained
from the Securities and Exchange Commission on September 4, 1987
and January 12, 1989.
<PAGE>
<PAGE>
PART I
ITEM 1. BUSINESS. On July 1, 1997, Great Western Financial
Corporation ("GWFC"), a Delaware corporation and parent company of
Great Western Bank, a Federal Savings Bank ("GWB"), a federally
chartered savings institution, merged (the "Merger") with and into
New American Capital, Inc., a Delaware corporation and wholly owned
subsidiary of Washington Mutual, Inc. ("WMI"), a publicly traded
savings and loan holding company incorporated under the laws of the
state of Washington. As a result, GWB became an indirect wholly
owned subsidiary of WMI.
On October 1, 1997, GWB merged with and into American Savings
Bank, FA ("ASB"), a federally chartered savings institution and
wholly owned subsidiary of WMI, with ASB as the surviving entity.
In connection with the Merger, ASB changed its name to Washington
Mutual Bank, FA.
On March 17, 1998, Washington Mutual, Inc. announced an
agreement to acquire by merger H. F. Ahmanson & Company
("Ahmanson"). Ahmanson is engaged in the savings bank business and
related financial services activities. With consolidated assets of
$46.7 billion at December 31, 1997, the California based
corporation operates through its principal subsidiary, Home Savings
of America, FSB ("Home Savings"), a federally chartered savings
bank.
Under the agreement, Ahmanson will merge with and into
Washington Mutual in a tax-free exchange, pursuant to which, among
other things, each outstanding share of common stock of Ahmanson
will be converted into 1.12 shares of common stock in Washington
Mutual. This transaction has been unanimously approved by the
boards of directors of both companies. It is anticipated that this
transaction will be accounted for as a pooling of interests.
Washington Mutual expects the merger will be completed during the
third quarter of 1998, pending the receipt of regulatory approval
from the OTS and the approval of the stockholders of both
companies. It is currently anticipated that, following the merger
between Washington Mutual, Inc. and Ahmanson, Home Savings will
merge with and into WMBFA.
Washington Mutual Bank, FA, as successor of Great Western
Bank, A Federal Savings Bank (the "Registrant") is filing this
Annual Report on Form 10-K (the "Annual Report") in its capacity as
servicer of certain adjustable rate, 1-4 unit residential loans
under Pooling and Servicing Agreements (collectively, the
"Agreements") between the Registrant and Banker's Trust Co. of
California, as trustee (the "Trustee"), each of which established
a separate mortgage loan pool (each, a "Mortgage Pool"). Mortgage
Pass-Through Certificates, Class A, Series 1987-1, Series 1988-1,
Series 1988-2, Series 1988-3, Series 1988-4, Series 1988-5 and
Series 1989-1 (each, a "Certificate Series," and collectively, the
"Class A Certificates"), have been issued pursuant to the
<PAGE>
Agreements, with each such series evidencing an undivided
beneficial interest in the Mortgage Pool established by the related
Agreement.
In filing this Annual Report, the Registrant is using a
reduced disclosure format pursuant to exemptive orders obtained
from the Securities and Exchange Commission on September 4, 1987
and January 12, 1989 (the "Orders").
ITEM 2. PROPERTIES. Pursuant to the terms of the Orders,
reference is hereby made to the annual statement as to compliance
delivered to the Trustee with respect to the Mortgage Pools (the
"Annual Statement as to Compliance"), filed as Exhibit 28.1 to this
Annual Report.
ITEM 3. LEGAL PROCEEDINGS. There are no material pending
legal proceedings involving any Mortgage Pool, the Trustee or the
Registrant relating to any Certificate Series.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No vote or consent of holders of any Certificate Series was
solicited for any purpose during the calendar year covered by this
Annual Report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS. To the best knowledge of the Registrant, the
Class A Certificates are traded in the secondary market.
As of December 31, 1997, based on information provided to the
Registrant by the Trustee, the Class A Certificates were held of
record by the number of holders specified in the following table:
<TABLE>
<CAPTION>
Certificate Number of
Series Holders
------------ ----------
<S> <C>
1987-1 5
1988-1 5
1988-2 3
1988-3 3
1988-4 3
1988-5 5
1989-1 4
</TABLE>
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pursuant to the terms of the Orders, reference is hereby made to
the annual independent public accountants' servicing report
delivered to the Trustee with respect to the Mortgage Pools (the
"Annual Independent Accountants' Servicing Report"), filed as
Exhibit 28.2 to this Annual Report.
ITEM 9. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANTS.
Prior to October 1, 1997, Registrant had no reporting obligations
under the Securities Exchange Act of 1934, as amended (the "1934
Act"). On October 1, 1997, Great Western Bank, a Federal Savings
Bank, ("GWB"), a federally-chartered savings institution with
reporting obligations under the 1934 Act, merged with and into
Registrant, with Registrant as the surviving entity. Thereafter,
Registrant assumed GWB's reporting obligations to the Securities
and Exchange Commission under the 1934 Act.
KPMG Peat Marwick LLP was previously the independent auditors for
American Savings Bank, F.A. and subsidiaries. On December 20, 1996
that firm's appointment as independent auditors was terminated and
Deloitte & Touche LLP was engaged as independent auditors. The
decision to change accountants was approved by the Registrant's
Board of Directors.
In connection with the audit of the year ended December 31, 1995,
and the subsequent interim period through December 19, 1996, there
were no disagreements with KPMG Peat Marwick LLP on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedures, which disagreements if not
resolved to their satisfaction would have caused them to make
references in connection with their opinion to the subject matter
of the disagreement.
The audit report of KPMG Peat Marwick LLP on the consolidated
financial statements of American Savings Bank, F.A. and
subsidiaries for the year ended December 31, 1995, did not contain
any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting
principles. A letter from KPMG Peat Marwick LLP is attached as
Exhibit 16.
PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
The Registrant does not maintain records regarding persons known to
it to be the record owners of more than 5% of each Certificate
Series. Pursuant to the Orders, the record owners of more than 5%
of each Certificate Series as of December 31, 1997 are set forth
below. Such information has been provided to the Registrant by the
Trustee.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Percent of
Certificate
Certificate Name and Address Amount Held
Series
Series of Record Holder of Record Held
of Record
- ----------- ---------------- ------------
- --------------
<S> <C> <C>
<C>
1987-1 Cede & Co $118,825,000
58.11
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
1987-1 Guaranty Federal Bank FSB 52,400,000
25.63
Attn: Patricia King
8333 Douglas Avenue
Dallas, TX 75225
1987-1 Guarantee Federal 22,750,000
11.12
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
1988-1 Cede & Co 157,875,000
81.53
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
1988-1 Guaranty Federal Bank FSB 10,000,000
5.16
Attn: Patricia King
8333 Douglas Avenue
Dallas, TX 75225
1988-1 Guaranty Federal 21,750,000
11.23
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
<PAGE>
<PAGE>
1988-2 Cede & Co. 81,000,000
40.81
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
1988-2 Bankcan & Co. 117,450,000
59.18
Bankers Trust Company
Attn. FHLB Unit
16 Wall Street
New York, NY 10015
1988-3 Cede & Co. 44,300,000
44.27
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
1988-3 Guaranty Federal 55,750,000
55.71
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
1988-4 Cede & Co. 43,000,000
42.98
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
1988-4 Guaranty Federal 57,000,000
56.98
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
1988-5 Cede & Co. 66,000,000
65.95
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
<PAGE>
<PAGE>
1988-5 Guaranty Federal 19,000,000
18.99
Bank FSB
Attn: Patricia King
8333 Douglas Avenue
Dallas, TX 75225
1988-5 Guaranty Federal 14,050,000
14.04
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
1989-1 Guaranty Federal 15,000,000
14.99
Savings Bank
Attn: Kathy Kitchen
TIFS Accounting
P. O. Box 1149
Austin, TX 78767
1989-1 Cede & Co. 84,000,000
83.96
c/o Depository Trust Co.
Dividend Announcements
7 Hanover Square, 22nd Fl
New York, NY 10004
</TABLE>
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON
FORM 8-K.
(a) and (c) Exhibits. Pursuant to the Orders, the Registrant
includes as exhibits to this Annual Report the Annual Statement as
to
Compliance and the Annual Independent Accountants' Servicing
Report.
<TABLE>
<CAPTION>
Exhibit
No.
- -------
<S> <C>
28.1 Annual Statement as to Compliance for Certificate
Series 1987-1 through 1989-1
28.2 Supplemental Report of Independent Accountants on
Agreed Upon Procedures Relating to Requirements
of Certain Pooling and Servicing Agreements for
Mortgage Pass-Through Certificates
</TABLE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED
PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
BY
REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION
12 OF THE SECURITIES EXCHANGE ACT OF 1934.
No annual report or proxy material with respect to the period
covered by this Annual Report on Form 10-K has been sent to the
holders
of the Class A Certificates.
<PAGE>
<PAGE> SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, Washington Mutual Bank, FA has duly caused
this
report to be signed on its behalf by the undersigned, thereunto
duly
authorized on February 20, 1998.
WASHINGTON MUTUAL BANK, FA
/s/ Kerry K. Killinger
- ---------------------------------------------------------
Kerry K. Killinger, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this
report has been signed below on March 31, 1998, by the following
persons
on behalf of Washington Mutual Bank, FA and in the capacities
indicated
on February 20, 1998.
/s/ Kerry K. Killinger
- -----------------------------------------------------------------
- ------
Kerry K. Killinger, Chairman, President and Chief Executive Officer
Director (Principal Executive Officer)
/s/ William A. Longbrake
- -----------------------------------------------------------------
- ---------
William A. Longbrake, Executive Vice President and Chief Financial
Officer
(Principal Financial Officer)
/s/ Richard M. Levy
- -------------------------------------------------------
Richard M. Levy, Senior Vice President and Controller
(Principal Accounting Officer)
/s/ Douglas P. Beighle
- ---------------------------------
- ---------------------------------
Douglas P. Beighle, Director William P. Gerberding,
Director
/s/ David Bonderman /s/ Enrique Hernandez, Jr.
- ---------------------------------
- ---------------------------------
David Bonderman, Director Enrique Hernandez, Jr.,
Director
/s/ J. Taylor Crandall /s/ Dr. Samuel B. McKinney
- ---------------------------------
- ---------------------------------
J. Taylor Crandall, Director Dr. Samuel B. McKinney,
Director
/s/ Roger H. Eigsti /s/ Michael K. Murphy
- ---------------------------------
- ---------------------------------
Roger H. Eigsti, Director Michael K. Murphy, Director
/s/ John W. Ellis /s/ William G. Reed, Jr.
- ---------------------------------
- ---------------------------------
John W. Ellis, Director William G. Reed, Jr.,
Director
/s/ Daniel J. Evans /s/ James H. Stever
- ---------------------------------
- ---------------------------------
Daniel J. Evans, Director James H. Stever, Director
/s/ Anne V. Farrell /s/ Willis B. Wood
- ---------------------------------
- ---------------------------------
Anne V. Farrell, Director Willis B. Wood, Director
/s/ Stephen E. Frank
- ---------------------------------
Stephen E. Frank, Director
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. DESCRIPTION
- -------- -------------------------------------------------
<S> <C>
28.1 Annual Statement as to Compliance for Certificate
Series 1987-1 through 1989-1
28.2 Supplemental Report of Independent Accountants on
Management's Assertion Relating to Requirements
of Certain Pooling and Servicing Agreements for
Mortgage Pass-Through Certificates
</TABLE>
<PAGE>
EXHIBIT 28.1
ANNUAL STATEMENT AS TO COMPLIANCE
Marangal I. Domingo, Senior Vice President and Treasurer and
David Imig, Senior Vice President and Director of Loan Servicing,
both of Washington Mutual Bank, FA, (the "Bank"), pursuant to
Section 3.10 of certain Pooling and Servicing Agreements between
the Bank, as seller and servicer, and Banker's Trust Co. of
California, as trustee, dated as of the respective dates set forth
below (the "Pooling and Servicing Agreements") pursuant to which
Mortgage Pass-Through Certificates of the indicated Series were
issued:
<TABLE>
<CAPTION>
Date of Pooling and Mortgage Pass-Through
Servicing Agreement Certificates, Series
------------------- ----------------------
<S> <C>
July 1, 1987 1987-1
March 1, 1988 1988-1
April 1, 1988 1988-2
June 1, 1988 1988-3
August 1, 1988 1988-4
December 1, 1988 1988-5
January 1, 1989 1989-1
</TABLE>
do hereby certify that:
(i) a review of the activities of the Bank for the year
ended December 31, 1997 and of performance under the Pooling and
Servicing Agreements has been made under our supervision, and
(ii) to the best of our knowledge, based on such review, the
Bank has fulfilled all of its obligations under each Pooling and
Servicing Agreement throughout such year.
IN WITNESS WHEREOF, we have hereunto signed our names as of
this 20th day of February 1998.
/s/ Marangal I. Domingo
------------------------------
Marangal I. Domingo
Senior Vice President
and Treasurer
/s/ David Imig
------------------------------
David Imig
Senior Vice President
and Director of Loan Servicing
<PAGE>
EXHIBIT 28.2
SUPPLEMENTAL REPORT OF INDEPENDENT ACCOUNTANTS
ON MANAGEMENT'S ASSERTION RELATING TO REQUIREMENTS
OF CERTAIN POOLING AND SERVICING AGREEMENTS
FOR MORTGAGE PASS-THROUGH CERTIFICATES
February 20, 1998
To the Board of Directors and Audit Committee of
Washington Mutual Bank, FA
Seattle, Washington
Dear Members of the Audit Committee:
We have performed the procedures enumerated below, which were
agreed to by Washington Mutual Bank, FA (the "Bank") as of
December 31, 1997, in connection with the Bank's role as Master
Servicer for the following Adjustable Rate Mortgage Pass-Through
Certificates (collectively, the "Certificates"):
<TABLE>
<CAPTION>
Date of Pooling and Mortgage Pass-Through
Servicing Agreement: Certificates Series:
-------------------- ----------------------
<S> <C>
July 1, 1987 1987-1
March 1, 1988 1988-1
April 1, 1988 1988-2
June 1, 1988 1988-3
August 1, 1988 1988-4
December 1, 1988 1988-5
January 1, 1989 1989-1
</TABLE>
The procedures enumerated below have been performed solely to
assist in evaluating management's assertion about the Bank's
compliance with the requirements of the Pooling and Servicing
Agreements outlined above (the "Agreements"), included in its
representation letter dated February 20, 1998. The Agreements are
between the Bank (the Seller and Servicer) and Bankers Trust
Company of California.
The sufficiency of the procedures is solely the responsibility of
the specified users of the report. Consequently, we make no
representation regarding the sufficiency of the procedures
described below either for the purpose for which this report has
been requested or for any other purpose.
<PAGE>
The procedures that we performed and our findings are as follows:
1. We obtained representation from the management of the
Bank
that it has not received any unfavorable findings or
been
suspended by any investor, regulatory agency, or the
Department of Housing and Urban Development at any time
during the twelve-month period ended
December 31, 1997.
2. We compared the fidelity and mortgagee's errors and
omissions
insurance policies maintained by the Bank with the
coverage
requirements set forth in the February 27, 1996 Master
Agreement with the Federal Home Loan Mortgage
Corporation
("Freddie Mac") as renewed effectively in April, 1997.
We
noted that the coverage met the requirements for the
Bank to
continue operating as a Freddie Mac Seller/Servicer as
required by the Agreements.
3. We read the title for each demand deposit account
("DDA")
used for the seven Certificates as outlined above and
noted
that it was titled to identify the purpose of the
account.
We further noted that each DDA was held at the Bank
which is
insured by the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation.
4. We compared the aggregate principal balance of the
mortgage
loans on the Bank's Monthly Accounting Report (CPI
report
#62-C) as of September 30, 1997 for each of the seven
Certificates to the balance reported on the Statements
to
Certificate Holders of Washington Mutual Bank, FA dated
October 25, 1997, and noted that the balances agreed.
These agreed-upon procedures are substantially less in scope than
an examination, the objective of which is the expression of an
opinion on management's assertion about the Bank's compliance with
the requirements of the Agreements. Accordingly, we do not
express such an opinion. Had we performed additional procedures,
other matters might have come to our attention that would have
been reported to you.
This report is intended solely for the use of the Board of
Directors, management and the trustee and should not be used by
those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their
purposes.
Yours truly,
/s/ DELOITTE & TOUCHE LLP
Los Angeles, California
February 20, 1998
