<PAGE> 1
As filed with the Securities and Exchange Commission on May 22, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
AMENDMENT NO. 3
TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
------------------------------------
GREAT WESTERN
FINANCIAL CORPORATION
(Name of Subject Company)
GREAT WESTERN
FINANCIAL CORPORATION
(Name of Person Filing Statement)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ACCOMPANYING PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
391442100
(CUSIP Number of Class of Securities)
------------------------------------
J. LANCE ERIKSON, ESQ.
EXECUTIVE VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
GREAT WESTERN FINANCIAL CORPORATION
9200 OAKDALE AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 775-3411
(Name, Address and Telephone Number of Person
Authorized to Receive Notice and Communications
on Behalf of the Person Filing Statement)
------------------------------------
COPY TO:
PETER ALLAN ATKINS, ESQ.
FRED B. WHITE III, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
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- --------------------------------------------------------------------------------
<PAGE> 2
Great Western Financial Corporation ("Great Western") hereby amends and
supplements its statement on Schedule 14D-9 initially filed with the Securities
and Exchange Commission on May 20, 1997, as amended by Amendment No. 1 and
Amendment No. 2 thereto.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
Exhibit 18: Newspaper Advertisement, dated May 22, 1997.
Exhibit 19: Institutional Shareholder Services Talking Points Outline,
dated May 22, 1997.
Exhibit 20: Materials to be used by Great Western in a presentation to the
Institutional Shareholder Services.
Exhibit 21: Materials to be used by Great Western in presentations to the
investment community.
Exhibit 22: Newspaper Advertisement, dated May 22, 1997.
1
<PAGE> 3
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
GREAT WESTERN FINANCIAL CORPORATION
By: /s/ J. Lance Erikson
--------------------------------------------
J. Lance Erikson
Executive Vice President, Secretary
and General Counsel
Dated: May 22, 1997
2
<PAGE> 1
Exhibit 18
[NEWSPAPER ADVERTISEMENT]
[THE FOLLOWING IS A TRANSLATION OF AN AD APPEARING IN SPANISH]
Thank you, California, for your warm support of Washington Mutual and Great
Western.
[Graphic: Excerpts from letters.]
"I further move that the City Clerk be instructed to notify the Office of Thrift
Supervision of the City of Los Angeles opposition to the hostile takeover by H.
F. Ahmanson due to significant financial impact on the City of Los Angeles and
the expected loss of over 3,000 jobs."
Hal Bernson-Councilman, 12th District
Los Angeles City Council Motion passed unanimously, 4/2/97
"Like all good legacies, the proposed [Great Western/Washington Mutual] merger
has garnered our support because it will enable the good works of both
institutions to continue in underserved communities."
Lori Gay-
Los Angeles Neighborhood Housing Services, 4/17/97
"We prefer that mergers be non-hostile and interested not only in shareholder
values but also in stakeholder values...We perceive the Washington Mutual/Great
Western merger as a promise to continue and grow the stake."
Steven D. Johnson-
First African Methodist Episcopal Church, 4/18/97
"...we are writing to state our full support of the proposed merger between
Great Western Bank and Washington Mutual."
John W. Johnson-
San Diego Urban League, Inc., 4/17/97
"I am writing on behalf of Consumer Action (CA), a non-profit consumer education
and advocacy organization with offices in San Francisco and Los Angeles, to
oppose the proposed hostile takeover of Great Western by H.F. Ahmanson."
Ken McEldowney-
Consumer Action, 4/4/97
"I am writing to you to urge the approval of Washington Mutual's merger with
Great Western Bank. I believe that this merger is one that will greatly benefit
not only the two entities in question, but the public as well."
Dolores Sanchez-
Eastern Group Publications, Inc., 4/17/97
"The purpose of this letter is to support the merger of Great Western Bank and
Washington Mutual...[Great Western/Washington Mutual] we applaud and appreciate
their mutual commitment to America's lower income communities."
Dean L. Rohrbach-
San Diego Neighborhood Housing Service, 4/21/97
<PAGE> 2
These are just a few of the many letters we have received supporting Washington
Mutual and Great Western.
The community has spoken.
WASHINGTON MUTUAL/GREAT WESTERN FINANCIAL: BUILDING A PARTNERSHIP
WITH THE COMMUNITY
[Washington Mutual logo] [Great Western logo]
May 22, 1997
<PAGE> 1
EXHIBIT 19
May 22, 1997
[INSTITUTIONAL SHAREHOLDER SERVICES
TALKING POINTS OUTLINE]
GREAT WESTERN FINANCIAL CORPORATION
Summary of Issues Relating to Solicitation by
H.F. Ahmanson & Company For Three Seats on
Great Western's Board of Directors and in
Support of Five Separate By-law Amendments
1. Election of Directors
o Ahmanson repeatedly asserts that its three
nominees "are not committed to any particular
proposal" and "will in no way be controlled by
or acting at the direction of Ahmanson." This
is not credible. Despite the fact that, if
elected, Ahmanson's nominees will have fiducia-
ry duties to all Great Western shareholders,
they can be expected to serve Ahmanson's inter-
ests.
- On April 21, 1997, the press reported a statement by
Charles Rinehart that electing three directors to
Great Western's Board was key to Ahmanson's plan to
take over Great Western.
- In Ahmanson's lawsuit relating to the date
of the Annual Meeting, the Delaware Chanc-
ery Court, in a slip opinion, stated:
"Ahmanson was pressing the Court to ...
serve primarily Ahmanson's individual
strategic interests as a bidder, as dis-
tinguished from the interests of Great
Western shareholders generally."
o Throughout the past 3 months, the Great Western
Board has done exactly what a Board of Direc-
tors should do in responding to a bid for a
company. It has always acted in the best in-
terests of shareholders. There is no issue of
attempted entrenchment. The Washington Mutual
merger, based on comparative market prices of
Ahmanson and Washington Mutual on March 6 (the
day of announcement), delivered almost $700
<PAGE> 2
million of additional value to Great Western
stockholders.
- Without the Washington Mutual merger, Great Western
shareholders today would have an Ahmanson proposal
for 1.05 shares, which currently would be worth about
$830 million less than the Washington Mutual merger.
o Great Western's Board is overwhelmingly comprised of
independent directors. The Board has acted reasonably,
rationally, and in the best interests of its shareholders, in
determining that:
- Washington Mutual is the superior merger
partner, and
- The Washington Mutual merger will provide
superior value to shareholders
Even the current indicated values of the Ahmanson proposal and
the Washington Mutual merger are roughly equivalent.
o In order to induce Washington Mutual to enter
into the merger agreement, Great Western agreed
to a standard "no shop" clause. This enables
the Board to act in accordance with its fidu-
ciary duties, but does not permit Great Western
to enter into discussions with third parties,
including Ahmanson, except in accordance with
its fiduciary obligations. The Great Western
Board's decision not to enter into discussions
with Ahmanson is both reasonable and rational,
and consistent with Great Western's obligations
under the Washington Mutual merger agreement.
o In the event that Great Western shareholders do
not approve the Washington Mutual merger --
which the Board believes is unlikely -- the
Board will examine all available options. This
should be done by Great Western's independent
Board which will serve the interests of all
shareholders, without the three designees of a
potential acquiror (Ahmanson) seeking to influ-
ence the Board's decisions.
o There is no reason to question the motives or
decisions of Great Western's Board, nor is
there anything about Ahmanson's proposal that
2
<PAGE> 3
should cast any doubt on whether the Board has reasonably
acted in the shareholders' best interests.
2. Proposed By-law Amendments
o Ahmanson's five proposed By-law amendments are:
1. Calling of Special Meetings of Sharehold-
ers by the holders of 10% of Great
Western's stock.
2. Prohibiting persons previously defeated in
an election from being appointed to fill
vacancies on the Board.
3. Requiring an Ahmanson nominee, if elected,
to serve on any executive or comparable
committee of the Board.
4. Specifying that certain information be
included in notices of Board meetings.
5. Providing that only shareholders may amend
or repeal any By-laws adopted at the 1997
Annual Meeting.
o These proposed By-laws should be viewed in their totality as a
further effort by Ahmanson to restrict the Great Western
Board's ability and flexibility in responding to the Ahmanson
proposal and protecting the interests of shareholders.
o Ahmanson seeks to portray itself as an advocate of good
governance. This is empty rhetoric. These proposals are in
Ahmanson's interests; not the interests of Great Western's
shareholders. Not one of these proposed amendments is included
in Ahmanson's own By-laws.
- For example, Ahmanson already has proposed
ten separate By-law amendments or advisory
resolutions in the consent solicitation
and at the Annual Meeting. Ahmanson is
engaging in three separate contested so-
licitations (the consent solicitation; the
Annual Meeting; and the merger vote). The
proposed By-law relating to Special Meet-
ings of Shareholders could enable Ahmanson
to align itself with the holders of a
small minority of shares and repeatedly
3
<PAGE> 4
compel additional Special Meetings at which Ahmanson
could present additional resolutions and proposed
By-law amendments.
o If Great Western's shareholders approve the Washington Mutual
merger, these proposed By-law amendments will have no
relevance. If the merger is not approved, Ahmanson should not
be permitted to dictate or influence the Board's further
responses.
3. The "Tone" of the Contest
o Ahmanson is unfairly seeking to blame Great
Western for the "tone" of the contest. Great
Western is simply pursuing a strategic merger
its Board believes is in the best interests of
its shareholders. Ahmanson has attacked the
Washington Mutual merger on every front, and
has attacked Great Western, its directors, its
advisors and Washington Mutual.
o While the "tone" is irrelevant to the outcome and the
interests of Great Western's shareholders, a few points should
be made.
o Any confusion that may exist in connection with Ahmanson's
consent solicitation results from Ahmanson's own actions.
- Ahmanson, in fact, insisted at first that the 5.2
million double voted shares be counted twice. It was
only after Great Western brought a lawsuit that
Ahmanson changed its position.
- Ahmanson intentionally refused to cause a
record date to be set for two of its five
consent resolutions. It could easily have
done so.
o Ahmanson says Great Western did not want its
shareholders to vote. This is false. The
Annual Meeting was delayed until the situation
stabilized and shareholders could make informed
decisions. It is Ahmanson which is seeking to
delay the merger vote for several months (six
weeks after certification of the vote at the
Annual Meeting; the certification itself could
take approximately one month as was the case in
the consent solicitation). If Ahmanson were
4
<PAGE> 5
truly confident it had the superior proposal, it would welcome
a vote by our shareholders on the Washington Mutual merger.
5
<PAGE> 1
EXHIBIT 20
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
WASHINGTON MUTUAL, INC.
MERGER WITH
GREAT WESTERN FINANCIAL CORPORATION
THE EXECUTIVE SUMMARY*
ISS MEETING
MAY 22, 1997
* The following is an executive summary of certain more detailed information
contained in Great Western Financial Corporation's Current Report on Form 8-K
(the "Form 8- K") filed with the Securities and Exchange Commission on May 22,
1997. For further information concerning certain matters described herein see
the Form 8-K.
- --------------------------------------------------------------------------------
<PAGE> 2
The WAMU Transaction Is the Best For GWF Shareholders
- --------------------------------------------------------------------------------
o Creates immediate as well as ongoing value for GWF shareholders
o Creates a premier consumer banking franchise
o Represents the low risk execution alternative for GWF shareholders
o Ahmanson Proposal utilizes questionable assumptions and relies on
imprudent leverage
o Compared to Ahmanson, WAMU has a proven track record of successfully
integrating large acquisitions and delivering shareholder value
o The pro forma combined GWF/WAMU is financially superior to a combined
GWF/Ahmanson
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 3
Creates Immediate As Well As Ongoing Value for GWF Shareholders
- --------------------------------------------------------------------------------
o Highly accretive to earnings per share -- 56% projected 1999E accretion
per GWF share
o Earnings growth improved above what GWF shareholders could expect on a
stand-alone basis -- 32% 1997E-1999E forecasted EPS growth
o Capital ratios remain strong as excessive leverage is not required to
produce attractive financial returns -- pro forma tangible common ratio
is projected to be in excess of 5%
o Significant growth in net interest income driven by high projected loan
originations at reasonable margins
o WAMU has a consistent record of regular dividend increases -- 29%
average annual increase since 1991
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 4
Creates a Premier Consumer Banking Franchise
- --------------------------------------------------------------------------------
o Will rank in top three in deposit market share in California,
Washington and Oregon and 5th in Florida
o Number one-ranked originator of single family mortgage loans on a
combined basis in California, Washington and Oregon
o WAMU's proven consumer banking capabilities have produced cumulative
average growth rates since 1993 of 7% in consumer loans, 52% in
depositor fee income, 23% in retail checking accounts and 10% in total
households served. These capabilities will be applied to GWF's customer
base
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 5
Represents the Low Risk Execution Alternative For GWF Shareholders
- --------------------------------------------------------------------------------
o The WAMU management team has worked together for a significant number
of years and has considerably greater experience integrating large
acquisitions as compared to Ahmanson's management team
o GWF's systems are compatible with WAMU's, not with Ahmanson's
o WAMU will continue to use the GWF name in California, benefiting
customer retention
o WAMU is a friendly transaction in which integration planning has
already begun. Ahmanson is a hostile offer that has antagonized
employees
o A faster solution to the situation is better for shareholders,
employees and customers. WAMU is on track for a closing in late June or
early July
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 6
AHM Proposal Utilizes Questionable Assumptions and Relies On Imprudent Leverage
- --------------------------------------------------------------------------------
o Ahmanson's projected cost savings are $114 million or 34% greater than
WAMU's, a difference that cannot be supported by Ahmanson's proposed
100 additional branch closures
o Ahmanson's earnings are significantly more sensitive to achieving the
stated cost savings target than are WAMU's
o Ahmanson made significant changes in its operating assumptions when it
increased its bid; absent these changes the transaction is dilutive in
1999
o Ahmanson's EPS forecasts depend on massive share repurchases that leave
little room for error -- share repurchases plus dividends are projected
to equal 178% of net income through 1999
o Massive share repurchases will result in Ahmanson continuing to have
one of the lowest consolidated tangible common equity ratios in the
industry -- pro forma ranking of 92 out of 93 thrifts
o Ahmanson's intangibles will total 58% of total equity and the
amortization expense will be in excess of 25% of net income available
to common stock in 1998
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 7
Compared To Ahmanson, WAMU Has a Proven Track Record Of Successfully
Integrating Large Acquisitions and Delivering Shareholder Value
- --------------------------------------------------------------------------------
o WAMU has consistently produced greater returns to shareholders -- ten
year total return: 24% vs. 9%
o WAMU has consistently maintained stronger asset quality and reserve
coverage ratios -- NPA-to-assets: 0.93% vs. 2.06; Reserves-to-NPLs:
110% vs. 50%
o WAMU has delivered superior growth in earnings per share and dividends
per share -- annual dividend growth: 29% vs. 0%
o WAMU has a more attractive mix of loans and deposits and is
geographically more diversified -- consumer loans: 10% vs 3%;
transaction + money market + savings accounts: 42% vs. 32%
o WAMU's loan originations have been growing while Ahmanson's have been
declining -- 1994 to 1996 originations: 46% increase vs. 47% decrease
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 8
The Pro Forma Combined GWF/WAMU Is Superior To a Combined GWF/Ahmanson
- --------------------------------------------------------------------------------
o GWF shareholders, for each GWF share, will receive greater earnings and
book value in a WAMU transaction than in an Ahmanson transaction
o A combination with WAMU will produce higher growth rates in EPS and
book value than a combination with Ahmanson which should result in
higher valuation multiples
o Return on assets and equity are materially higher in a combination with
WAMU
o Capital, asset quality and reserve coverage ratios are significantly
stronger in a combination with WAMU
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 9
The Pro Forma Combined GWF/WAMU Is Superior To a Combined GWF/Ahmanson
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WAMU Ahmanson
Transaction Proposal
----------- --------
<S> <C> <C>
EPS
- ---
1999E Accretion to GWF Shareholder 56% 39%
1997E-1999E Growth 32% 20%
Capital
- -------
12/31/97E Tangible Common Equity Ratio 4.91% 3.46%
and projected to and projected
increase to be flat
12/31/97E Tangible Book Value per GWF $19.28 $12.22
Share
Returns
- -------
1999E Return on Assets 1.35% .98%
1999E Return on Common Equity 23.1% 11.7%
Asset Quality
- -------------
NPAs/Assets @ 3/31/97 0.94% 1.35%
Reserves/NPLs @ 3/31/97 119% 83%
</TABLE>
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 10
GWF Per Share Deal Value -- WAMU & Ahmanson
- --------------------------------------------------------------------------------
[Graph with two lines, one solid line for WAMU Transaction and one dotted line
for Ahmanson Proposal]
[Horizontal line: dates (2/18/97 - 5/19/97); Vertical line: Per GWF Share Deal
Value (0.00 - 60.00)]
<TABLE>
<CAPTION>
WAMU Ahmanson
Date Transaction Proposal
- ---- ----------- --------
<S> <C> <C>
2/18/97 50.63 47.12
3/03/97 46.69 43.71
3/14/97 45.34 42.26
3/27/97 44.61 44.85
4/10/97 42.98 45.00
4/23/97 42.08 43.95
5/06/97 47.42 48.90
5/19/97 50.29 49.80
</TABLE>
[Graphics: arrow pointing to Ahmanson Proposal line at coordinate (02/18/97,
47.12) with text box: 02/18/97 Ahmanson launches a hostile bid for GWF at an
exchange ratio of 1.05x; arrow pointing to WAMU Transaction line at coordinate
(03/06/97, 47.70) with text box: 03/06/97 WAMU announces merger agreement with
GWF at an exchange ratio of 0.9x; arrow pointing to Ahmanson Proposal line at
coordinate (03/17/97, 47.70) with text box: 03/17/97 Ahmanson increases exchange
ratio to collar (1.2x - 1.1x)]
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 11
Exchange Ratio Analysis -- Ahmanson Proposal
- --------------------------------------------------------------------------------
[Graph appears here. Horizontal line: Ahmanson Stock Price ($37.00 - $50.00);
Vertical line: Offer Value Per GWF Share ($44.00 - 56.00); To the right of
vertical line appears a subtitle: 1.20x Exchange Ratio; followed by a vertical
line: $41.67; followed by a subtitle: 1.20 to 1.10x Exchange Ratio $50 Offer;
followed by a vertical line: $45.45; followed by a subtitle: 1.10x Exchange
Ratio; Diagonal line from coordinates (37.00, 44.40) to (41.67, 50.00) becoming
a horizontal line from coordinates (41.67, 50.00) to (45.45, 50.00) becoming a
diagonal line from coordinates (45.45, 50.00) to (50.00, 55.00); graphic: arrow
with text: Current Ahmanson Price pointing to coordinate (40.875, 49.05) with
dashed vertical and horizontal lines from that coordinate to the horizontal and
vertical axes of the graph.]
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[Washington Mutual Logo] [Great Western Logo]
<PAGE> 12
Comparison of Upside Potential
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WAMU Transaction Ahmanson Proposal
-------------------------------------- -----------------------------------
Change In Exchange Implied Value Exchange Implied Value WAMU
Stock Price Price Ratio Per GWF Share Price Ratio Per GWF Share Superiority
- ----------- ----- ----- ------------- ----- ----- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Current (a) $55.56 .9x $50.01 $40.88 1.20x $49.05 $0.96
5% Appreciation 58.34 .9 52.51 42.92 1.16 50.00 2.51
10% Appreciation 61.12 .9 55.01 44.96 1.11 50.00 5.01
15% Appreciation 63.90 .9 57.51 47.01 1.10 51.71 5.80
</TABLE>
(a) As of May 20, 1997.
- --------------------------------------------------------------------------------
[Washington Mutual Logo] [Great Western Logo]
<PAGE> 1
Exhibit 21
Washington Mutual, Inc.
[LOGO] Merger With [LOGO]
Great Western Financial Corporation
HIGH GROWTH CONSUMER BANKING
May 22, 1997
<PAGE> 2
FORWARD-LOOKING INFORMATION
- --------------------------------------------------------------------------------
This presentation contains estimates of future operating results for 1997, 1998
and 1999 for both Washington Mutual, Inc. and Great Western Financial
Corporation on a stand-alone and pro forma combined basis, as well as estimates
of financial condition, operating efficiencies and revenue creation on a
combined basis. These estimates constitute forward-looking statements (within
the meaning of the Private Securities Litigation Reform Act of 1995), which
involve significant risks and uncertainties. Actual results may differ
materially from the results discussed in these forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in WAMU's Current Report on Form 8-K dated March 6, 1997, and
its Registration Statement on Form S-4, Registration No. 333-23221, as filed
with the Securities and Exchange Commission, to which reference is hereby made.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 2 GREAT WESTERN [LOGO]
<PAGE> 3
- --------------------------------------------------------------------------------
OVERVIEW OF
WASHINGTON MUTUAL
- --------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 3 GREAT WESTERN [LOGO]
<PAGE> 4
WAMU PROFILE
- --------------------------------------------------------------------------------
Mission - To Be the Premier Financial Services Organization in
the Western United States
Business Lines - Consumer Banking
- Small- to Mid-Size Commercial Banking
- Annuities
- Securities and Insurance Brokerage
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
4
<PAGE> 5
KEY STRATEGIES
- --------------------------------------------------------------------------------
- - Expand Consumer and Commercial Banking Franchises through Internal Growth and
Acquisitions
- - Maintain a High Quality Balance Sheet
- - Improve Operating Efficiency
- - Limit Sensitivity to Interest Rate Movements
- - Achieve Financial Targets
- ROCE: >18% NPA/Total Assets: <1.00%
- EPS Growth: 15% One-Year Gap: >(10%)
- Efficiency Ratio: <50% Common Equity/Assets: >5%
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 5 GREAT WESTERN [LOGO]
<PAGE> 6
EVOLUTION OF A
SUPER-REGIONAL FRANCHISE
- -------------------------------------------------------------------------------
[MAP OF THE WESTERN UNITED STATES]
1987(a)
Assets $5.7B
Loans 3.0B
Deposits 3.5B
Equity 211.9mm
Stock Price 6.28
Market Capitalization 390.0mm
[MAP OF THE WESTERN UNITED STATES]
1997: Q1
Assets $46.1B
Loans 32.2B
Deposits 24.3B
Equity 2.4B
Stock Price 48.31
Market Capitalization 5.7B
(a) As of and for the latest twelve months ended 12/31/87.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
6
<PAGE> 7
STOCK MARKET OUTPERFORMANCE
- -------------------------------------------------------------------------------
4/1/90 - 12/31/96 COMPARATIVE RETURN(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU ......... 34.0%
NOB .......... 28.5%
CCI .......... 28.4%
WFC .......... 26.2%
BAC .......... 24.5%
KEY .......... 23.8%
USBC ......... 21.5%
NB ........... 18.8%
ONE .......... 18.6%
S&P .......... 15.5%
AHM .......... 14.7%
GWF .......... 14.2%
GDW .......... 14.0%
WFSL ......... 13.9%
</TABLE>
Source: Bloomberg.
(a) Total return assumes reinvestment of dividends.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 7 GREAT WESTERN [LOGO]
<PAGE> 8
HISTORY OF STRONG EARNINGS AND
DIVIDEND GROWTH(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
CORE EPS(b) DIVIDENDS PER SHARE
(CAGR: 16.5%(c)) (CAGR: 28.5%(c))
WAMU WAMU
<S> <C> <C>
1992 $1.84 $0.33
1993 $2.30 $0.50
1994 $2.62 $0.70
1995 $2.76 $0.77
1996 $3.39 $0.90
96:Q1 $0.76 $0.21
+21% +19%
97:Q1 $0.92 $0.25
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude gains on sales, restructuring charges, the SAIF
recapitalization charge, one-time asset write-offs and preferred dividends.
(c) For years 1992 through 1996.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 8 GREAT WESTERN [LOGO]
<PAGE> 9
1997: Q1 UPDATE
- --------------------------------------------------------------------------------
($ in millions, except share data)
Percentage
1996:Q1 1997:Q1 Change
------- ------- ----------
Net Income $ 88.8 $114.1 +28%
Earnings per Share 0.74 0.93 +26%
Net Interest Income 287.0 317.0 +10%
Non Interest Income 57.0 75.4 +32%
Depositor Fees 22.5 28.6 +27%
Return on Average Common Equity 14.2% 19.4% --
Return on Average Assets 0.85% 1.01% --
Efficiency Ratio 52.6% 49.1% --
Net Interest Spread 2.75% 2.77% --
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
9
<PAGE> 10
1997: Q1 UPDATE (CONT'D)
- --------------------------------------------------------------------------------
($ in millions) Percentage
1996:Q1 1997:Q1 Change
------- ------- ----------
Average Assets $41,573 $45,025 +8%
Average Loans 24,719 31,086 +26%
Average Investments 14,910 12,035 (19%)
Loan Originations:
Total $2,993 $3,462 +16%
Higher Margin Loan Products(a) 731 1,057 +45%
Consumer 274 370 +35%
Commercial 37 148 +302%
Non Single-family/Total Originations 24% 31% --
NPAs $330 $335 +2%
NPAs/Assets 0.78% 0.73% --
Reserves/(NPAs less REO) 108% 153% --
(a) Includes construction, multi-family, commercial real estate, consumer and
commercial
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
10
<PAGE> 11
1997: Q1 UPDATE (CONT'D)
- --------------------------------------------------------------------------------
Percentage
1996:Q4 1997:Q1 Change
------- ------- ----------
Net New Checking Accounts Opened:
WMB and WMBfsb 31,520 34,358 +9%
American Savings 6,063 31,315 +416%
------- ------- ----------
Total 37,583 65,673 +75%
Retail Checking Accounts:
WMB and WMBfsb 608,365 651,474 +7%
American Savings 237,617 268,932 +13%
------- -------
Total Retail Checking Accounts 845,982 920,406 +9%
Households Served (2/28/97) (000s) 1,423 1,500 +5%
Transaction(a)/Total Deposits 40% 42% -
(a) Includes checking, savings and money market deposits
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
11
<PAGE> 12
FRANCHISE POTENTIAL OF AMERICAN
- ------------------------------------------------------------------------------
($ in millions; accounts in thousands)
[BAR GRAPH]
<TABLE>
<CAPTION>
Retail Checking Accounts
(CAGRs: 22.6%, 6.3%)(a)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 394 581
1995 489 721
1996 608 846
97:Q1 651 920
[BAR GRAPH]
<CAPTION>
Depositor Fee Income
(CAGRs: 52.4%, 10.3%)(a)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 $29 $ 45
1995 $58 $ 79
1996 $79 $103
96:Q1 $17 $ 22
+27.3%
97:Q1 $23 $ 29
</TABLE>
(a) For the three-year period from year-end 1993 to year-end 1996
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 12 GREAT WESTERN [LOGO]
<PAGE> 13
WAMU'S IMPROVING INTEREST RATE SENSITIVITY
================================================================================
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL
ASSETS REPRICING IN 1-YEAR
ONE YEAR GAP
------------------- ------
<S> <C> <C>
1994 46% -14.3%
1995 53% -14.4%
1996 73% - 3.6%
3/31/97 75% - 0.8%
Combined 3/31/97(a) 80% 2.93%
</TABLE>
- ----------
(A) Combined percentage for WAMU and GWF.
================================================================================
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
13
<PAGE> 14
- -----------------------------------------------------------------------------
GREAT WESTERN MERGER:
OVERVIEW
- -----------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
14
<PAGE> 15
TRANSACTION SUMMARY
- --------------------------------------------------------------------------------
Fixed Exchange Ratio: 0.9x
Implied Value Per GWF Share: $47.93(a)
Caps/Collars: None
Consideration: 100% common stock
Accounting/Tax Treatment: Pooling of interests/Tax-free exchange
Assumed Closing: 3rd Quarter 1997
Board Composition: Four GWF Directors to join WAMU Board
Termination Fee: Up to $175 million plus expenses
(a) Based on WAMU closing stock price of $53.25 on 3/5/97, the day prior to the
announcement. Implied value is $50.40 based on WAMU closing stock price of
$56.00 on 5/20/97.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 15 GREAT WESTERN [LOGO]
<PAGE> 16
COMBINATION CREATES STRENGTH AND SCALE
- --------------------------------------------------------------------------------
($ in billions)
At 3/31/97
--------------------------------------
WAMU GWF Pro Forma
-------- -------- ---------
Assets $46.0 $42.9 $88.5
Deposits $24.3 $28.2 $52.5
Market Capitalization at 3/5/97 $ 6.3 $ 6.2 $12.9
Banking and Lending Offices 557 571 1,128(a)
Consumer Finance Offices -- 502 502
Households (mm) 1.5 2.4 3.9
Mutual Funds Under Management $ 1.5 $ 3.1 $ 4.6
LTM(b) Single Family Mortgage
Originations $10.1 $ 6.5 $16.6
LTM(b) Total Loan Originations $14.1 $ 9.0 $23.1
(a) Before consolidations
(b) Latest twelve months
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 16 GREAT WESTERN [LOGO]
<PAGE> 17
BENEFITS OF THE TRANSACTION
- --------------------------------------------------------------------------------
PREMIER CONSUMER BANKING FRANCHISE
- - Geographically diversified West Coast powerhouse
- - National mortgage and consumer finance franchises
CREATES SHAREHOLDER VALUE
- - EPS accretion and accelerated earnings growth
- - Strong, low risk balance sheet
LOW RISK EXECUTION
- - Strong management team with proven track record
- - Thorough due diligence and business plan formulation
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 17 GREAT WESTERN [LOGO]
<PAGE> 18
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
A PREMIER CONSUMER
BANKING FRANCHISE
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
18
<PAGE> 19
STRONG WEST COAST AND FLORIDA FRANCHISES
- --------------------------------------------------------------------------------
[MAPS OF THE WESTERN UNITED STATES AND FLORIDA SHOWING BRANCH LOCATIONS]
<TABLE>
<CAPTION>
Deposits Deposit
State ($B)(a) Share Rank
- ------------ -------- ------- ----
<S> <C> <C> <C>
California $34.6 9.2% 3
Washington 8.1 15.4% 2
Oregon 2.8 10.0% 3
Florida 7.1 4.0% 5
Other States 0.6 NA NA
</TABLE>
Source: SNL Securities
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 19 GREAT WESTERN [LOGO]
<PAGE> 20
NATIONAL CONSUMER ORIGINATION FRANCHISE
- --------------------------------------------------------------------------------
[MAP OF THE UNITED STATES SHOWING MORTGAGE LOAN OFFICES
AND CONSUMER FINANCE LOCATIONS]
<TABLE>
<CAPTION>
Mortgage Consumer
Loan Finance
State Offices Locations
- ------------ -------- ---------
<S> <C> <C>
California 107 28
Washington 30 0
Oregon 13 0
Florida 20 35
Other States 123 439
--- ---
Total 293 502
=== ===
</TABLE>
Great Western:
Black Box - Retail Mortgage
Black Star - Wholesale Mortgage
Shaded Box - Aristar
Washington Mutual:
Bullet - Mortgage Loan Offices
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 20 GREAT WESTERN [LOGO]
<PAGE> 21
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
CALIFORNIA(a)
[BAR GRAPH]
<TABLE>
<S> <C>
BAC..........................8.8%
WAMU/GWF.....................6.7% (WAMU = 4.8%, GWF = 1.9%)
GDW..........................3.0%
NOB..........................2.8%
AHM..........................2.7%
</TABLE>
WASHINGTON(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF....................16.5% (WAMU = 14.6%, GWF = 1.8%)
NOB......................... 6.5%
BAC......................... 4.0%
MEL......................... 2.0%
CCR......................... 1.9%
</TABLE>
(a) Source: TRW Redi for year ended 12/31/96.
(b) Source: RMS Information Services for year ended 12/31/96.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 21 GREAT WESTERN [LOGO]
<PAGE> 22
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
OREGON(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................11.4% (WAMU=10.1%, GWF=1.3%)
NOB.......................... 5.9%
BAC.......................... 4.7%
MEL.......................... 3.2%
Premier Mortgage............. 2.5%
</TABLE>
WEST COAST ORIGINATIONS ($ B)(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................$11.8 (WAMU=$9.1, GWF=$2.7)
BAC..........................$11.4
NOB..........................$ 4.9
GDW..........................$ 3.6
AHM..........................$ 3.2
</TABLE>
(a) Source: RMS Information Services for year ended 12/31/96.
(b) Source: RMS Information Services and TRW Redi for year ended 12/31/96.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 22 GREAT WESTERN [LOGO]
<PAGE> 23
STRONG BUSINESS LINE FIT
- -------------------------------------------------------------------------------
- -- CONSUMER LOAN PRODUCTS
- Home Equity [WASHINGTON MUTUAL LOGO]
- Consumer Finance [GREAT WESTERN LOGO]
- Manufactured Housing [WASHINGTON MUTUAL LOGO]
- Auto/Other [WASHINGTON MUTUAL LOGO]
- -- NON-BANKING SERVICES
- Mutual Funds [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Annuities [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Securities Brokerage [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Credit Insurance [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- BUSINESS BANKING PRODUCTS
- Small Business Lending [GREAT WESTERN LOGO]
- Business Checking [GREAT WESTERN LOGO]
- Community Banking [WASHINGTON MUTUAL LOGO]
- -- RETAIL BANKING PRODUCTS
- Transaction Accounts [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Certificates/Savings [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- MORTGAGE LENDING
- Single Family [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Residential Construction [WASHINGTON MUTUAL LOGO]
- Multi-Family [WASHINGTON MUTUAL LOGO]
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 23 GREAT WESTERN [LOGO]
<PAGE> 24
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
SHAREHOLDER VALUE CREATION
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN[LOGO]
24
<PAGE> 25
TESTED ASSUMPTIONS -- ATTRACTIVE RETURNS
- -------------------------------------------------------------------------------
Assumptions Results
- ------------------------------ ------------------------------
- - Cost savings of $340 - Double digit accretion
million in 1999 in 1999
- - Additional fee income [ARROW] - Strong operating
of $88 million in 1999 fundamentals
- - Surplus capital - Maintains solid capital
supports increased loan levels and flexibility
retention
- Strong NPA, loss
reserve ratios
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 25 GREAT WESTERN [LOGO]
<PAGE> 26
EPS ACCRETION BASED ON DUE
DILIGENCED ASSUMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share data) 1997P 1998P 1999P
----- ----- -----
<S> <C> <C> <C>
WAMU Estimated Net Income(a) $471 $556 $623
GWF Estimated Net Income(a) 397 434 470
----- ------ ------
Total Estimated Net Income 868 990 1,093
Net Income Available to Common 847 987 1,093
Cost Savings 9 125 204
Fee Income Increases 0 36 53
Incremental Net Interest Income 0 68 148
----- ------ ------
Estimated Combined Net Income $856 $1,216 $1,497
===== ====== ======
Stand Alone EPS $3.84 $4.58 $5.13
Estimated Combined EPS(b) $4.81 $5.90
% Accretion to First Call 5.0% 15.0%
% EPS Growth 25.3% 22.7%
</TABLE>
(a) First Call estimates as of March 6, 1997 for 1997 and 1998 before preferred
dividends. 1999 estimates based on IBES growth rate of 12% and 10.5% for
WAMU and GWF.
(b) Based on 252.1mm pro forma shares outstanding in 1997, 253.1mm in 1998, and
253.8mm in 1999. EPS figures include 9.1mm GWF option shares. EPS accretion
using option shares under the treasury stock method would be 6.3% and 16.6%
in 1998 and 1999.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 26 GREAT WESTERN [LOGO]
<PAGE> 27
CONFIDENCE IN EXECUTION
- --------------------------------------------------------------------------------
/ / Unique experience as an acquiror (22 transactions)
/ / Integration plan is underway
/ / Deposit/mortgage servicing systems are the same
/ / Network infrastructure is the same
/ / WAMU partnerships with:
o IBM
o EDS
o ALLTEL
/ / Track record of fully integrating within 6 months of close
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 27 GREAT WESTERN [LOGO]
<PAGE> 28
ASB Integration: Case Study
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2/19/97: 4/7/97: 6/2/97: 7/7/97:
Investment Network 4/30/97: Account Network/
7/22/96 Portfolio Technology Sales/ Conversion Branch
Announced 12/20/96: Converted Hardware Employee Materials Technology
Definitive Transaction to WAMU Installation Training to Goes
Agreement Closed Platform Began Completed Customers Online
7/24/96- 1/17/97 3/31/97: 4/14/97 5/17/97: 7/3/97: 8/6/97:
12/15/96: WAMU Payroll/ Loan Deposit Deposit Loan
Integration Marketing Human Servicing Systems Account Account
Planning Strategy Resources Test Conversion Conversion Conversion
Introduced Systems Test
in CA Conversion
- ---------------------------------------------------------------------------------------------
</TABLE>
[WASHINGTON MUTUAL LOGO] 28 [GREAT WESTERN LOGO]
<PAGE> 29
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions)
% of GWF
1999 Op. Exp(a)
------ ----------
<S> <C> <C>
Administration/Finance $65 51%
Lending 69 49
Corporate Operations 96 43
Retail Banking 99 27
Subsidiaries 11 7
----
Total Pretax Cost Savings $340
Aftertax Cost Savings $204
Pretax Cost Savings as a % of:
GWF Net Operating Expenses(b) 38%
Combined 1997 G&A(c) 21%
</TABLE>
(a) Based on GWF budgeted 1997 gross operating expenses.
(b) Net operating expenses are net of loan origination costs which are deferred
and amortized over the life of the loans and various reimbursable costs.
(c) 1997 G&A net expense base of $900mm for GWF and $745mm for WAMU based on
sampling of analyst reports.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 29 GREAT WESTERN [LOGO]
<PAGE> 30
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1999
Savings
-------
<S> <C>
CORPORATE ADMINISTRATION/FINANCE
- - Consolidation of duplicate functions/premises
- Corporate properties $16
- Executive management 7
- Corporate administrative staff 42
---
$65
===
LENDING
- - Loan office consolidations (approximately 100(a)) and alignment of GWF's
loan origination cost structure with WAMU's $52
- - Reduced servicing cost per loan 17
---
$69
===
</TABLE>
(a) Includes 38 loan offices already scheduled for closure by Great Western as
part of its pre-merger plans.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 30 GREAT WESTERN[LOGO]
<PAGE> 31
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1999
Savings
-------
<S> <C>
CORPORATE OPERATIONS
- - Consolidation and implementation of WAMU technology platform $50
- - Align GWF's cost of branch operations/economies of scale 26
- - Lower loan origination support and credit administration costs 20
---
$96
===
CORPORATE MARKETING/RETAIL BANK
- - Retail branch consolidation (approximately 100) $50
- - Advertising synergies 25
- - Duplicate staff functions 24
---
$99
===
</TABLE>
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 31 GREAT WESTERN[LOGO]
<PAGE> 32
MERGER-RELATED CHARGES
FACILITATE COST SAVINGS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions)
<S> <C>
Additional Loan Loss Reserves $100
Severance and Management Payments 145
Facilities and Equipment 106
Other Expenses 92
----
Total Expenses $443
Tax Effect (125)
----
Aftertax Expenses $318
====
- -------------------------------------------------------------------------------
</TABLE>
[LOGO] Washington Mutual 32 GREAT WESTERN [LOGO]
<PAGE> 33
CONSUMER BANKING FEE INCOME OPPORTUNITIES
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Checking fee parity with WAMU fees
(existing accounts) $13 $13
Implementation of WAMU free checking
(new accounts) and cross-selling
of related products 30 52
Improved sales/fees in securities
subsidiaries 13 16
Enhanced fees from expanded loan production 4 7
--- ---
Total Pretax $60 $88
Total Aftertax $36 $53
</TABLE>
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
33
<PAGE> 34
NET INTEREST INCOME GROWTH
- --------------------------------------------------------------------------------
- - Earnings retention results in strong capital growth
- - Strong historical and projected loan originations create net loan growth
- - Capital retention plus net loan growth at reasonable margins leads to
increased net interest income
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
34
<PAGE> 35
STRONG CAPITAL GENERATION AND GROWTH POTENTIAL
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
12/31/96 1997P 1998P 1999P
-------- ----- ----- -----
<S> <C> <C> <C> <C>
Beginning Combined Common
Equity $4,710 $5,026 $5,926
Pro Forma Net Income 856 1,216 1,497
Aftertax Restructuring Charge (318) -- --
Common Dividends @ 26% Payout (223) (316) (389)
------ ------ ------ ------
Ending Combined Common
Equity $4,710 $5,026 $5,926 $7,034
====== ====== ====== ======
Asset Excess Common Equity Above 5%
Growth Rate(a) Common Equity/Assets Ratio
-------------- -----------------------------
8% $305 $827 $1,527
10% 217 636 1,215
12% 130 442 892
14% 42 245 557
</TABLE>
(a) Annual growth from 12/31/96 pro forma total assets of $87.4 billion
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
35
<PAGE> 36
STRONG ORIGINATION CAPABILITIES
- --------------------------------------------------------------------------------
($ in billions)
TOTAL LOAN ORIGINATIONS
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
---- ----- ----------
<S> <C> <C> <C>
1995.......... $ 9.4 $9.7 $19.1
+16%
1996.......... $13.6 $8.5 $22.1
96:Q1......... $ 3.0 $1.7 $ 4.7
+21%
97:Q1......... $ 3.5 $2.2 $ 5.7
</TABLE>
NET ORIGINATIONS(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
----- ----- ----------
<S> <C> <C> <C>
1995.......... $6.5 $4.5 $11.0
1996.......... $9.2 $2.2 $11.4
96:Q1......... $2.1 $0.3 $ 2.4
97:Q1......... $2.5 $0.8 $ 3.3
</TABLE>
(a) Total originations less REO transfers, prepayments and paydowns. Net
originations are not reduced for loans sold.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 36 GREAT WESTERN [LOGO]
<PAGE> 37
1997:Q1 - ATTRACTIVE TRENDS IN LOAN
ORIGINATION MIX AT WAMU
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART] [PIE CHART]
1996:Q1 1997:Q1
<S> <C> <C>
Single-family 75.6% 69.5%
Multi-family/CRE 5.7% 6.1%
Construction 8.3% 9.4%
Consumer 9.2% 10.7%
Commercial 1.2% 4.3%
</TABLE>
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
37
<PAGE> 38
LOAN RETENTION DRIVES GROWTH IN
NET INTEREST INCOME
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1996A 1997P 1998P 1999P
------- ------- ------- --------
<S> <C> <C> <C> <C>
Combined Net Loan Growth $7,011(c) $6,600(d) $11,000 $11,400
Street Expectations of Net Loan
Growth(a) -- $3,500 $ 3,600 3,800
------ ------- -------
Net Loan Growth Above Street
Expectations -- $3,100 $ 7,400 $ 7,600
Cumulative Average Net Loan
Growth Above Street
Expectations(b) $ 6,800 $14,300
</TABLE>
(a) Assumes 4% asset (in loans) growth of combined companies.
(b) Equals 100% of prior years and 50% of current year.
(c) Combined net loan growth for 1996 was $11.8 billion before sales and
securitization of $4.8 billion.
(d) Combined net loan growth for 1997: Q1 was $2.3 billion ($3.3 billion before
sales of $1.0 billion) or approximately 35% of 1997P.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
38
<PAGE> 39
INCREMENTAL NET INTEREST INCOME
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1999
---------------- ----------------
Average Average
Balance Yield Balance Yield
------- ----- ------- -----
<S> <C> <C> <C> <C>
Incremental Loans $6.8 7.25%(a) $14.3 7.25%(a)
Incremental Liabilities 6.5 5.79 13.6 5.79
Incremental Capital(b) 0.3 0.00 0.7 0.00
Net Interest Income (Pretax) $113 $246
Net Interest Income (Aftertax) $ 68 $148
Net Interest Spread 1.46% 1.46%
Net Interest Margin 1.66% 1.72%
</TABLE>
(a) Net yield after deducting origination, servicing and credit costs.
(b) Includes only the incremental capital supplied by Great Western
acquisition.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 39 GREAT WESTERN [LOGO]
<PAGE> 40
1996 WAMU/ASB LOAN SPREADS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Net Spread to
% of Wholesale
Production Matched Funding(a)
------------- ------------------
Residential Mortgage
Fixed Rate 27% 1.25%
COFI ARM's 28 1.35
Treasury ARM's 18 1.73
Multifamily 4 2.37
Construction -- Custom 6 1.91
Construction -- Builder 4 5.54
Consumer
Home Equity 5 2.47
Mfd Housing 2 2.54
Other 2 3.54
Business and Commercial
Real Estate 4 2.29
---
Total 100% 1.78%(b)
</TABLE>
(a) Net spread after deducting origination, servicing and credit costs
(b) Equivalent margin estimated to be 15-30 bps higher depending on capital
allocation.
- --------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
40
<PAGE> 41
1997: Q1 NET INTEREST SPREAD
<TABLE>
<CAPTION>
ASB WMB WMI(a)
--- --- ------
<S> <C> <C> <C>
Loan yield 7.45% 8.50% 7.98%
Deposit rate 4.69 3.98 4.38
---- ---- ----
Spread 2.76% 4.52% 3.60%
Loan yield 7.45% 8.50% 7.98%
Borrowing rate 5.65 5.44 5.62
---- ---- ----
Spread 1.80% 3.06% 2.36%
</TABLE>
(a) WMI includes ASB, WMB, WMBfsb and WM Life as well as other subsidiaries and
holding company activity
- -------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 41 [LOGO] GREAT WESTERN
<PAGE> 42
STRONG ASSET QUALITY AND RESERVES
- ----------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
At March 31, 1997
---------------------------------------------------------
<S> <C> <C> <C> <C>
WAMU GWF Adjustments Pro Forma
---- --- ----------- ---------
Non-Accrual $240 $424 - $664
Loans(a)
Real Estate Owned 94 77 - 171
---- ---- ----
NPAs $334 $501 - $835
==== ==== ====
NPAs/Assets 0.73% 1.17% - 0.94%
Loan Loss Reserves $367 $321 $100 $788
Reserves/NPLs(a) 153% 76% - 119%
(a) Excluding restructured loans
- ---------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
</TABLE>
42
<PAGE> 43
A COMPELLING VALUATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997P 1998P 1999P
----- ----- -----
<S> <C> <C> <C>
EPS Estimates Before Great Western(a) $3.84 $4.58 $5.13
P/E Multiple(b) 14.6x 12.2x 10.9x
EPS Pro Forma for Great Western $4.81 $5.90
P/E Multiple(b) 11.6x 9.5x
</TABLE>
(a) First Call estimates as of March 6, 1997 for 1997 and 1998. 1999 based on
IBES growth rate of 12%.
(b) Based on closing stock price of $56.00 on 5/20/97.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 43 GREAT WESTERN [LOGO]
<PAGE> 44
- -----------------------------------------------------------------------------
A SUPERIOR ALTERNATIVE
- -----------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
44
<PAGE> 45
================================================================================
AHMANSON'S PROJECTIONS:
CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS
AND INCONSISTENT ANALYSIS
================================================================================
[LOGO] Washington Mutual 45 GREAT WESTERN [LOGO]
<PAGE> 46
AHMANSON'S PROJECTIONS: CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS AND INCONSISTENT ANALYSIS
================================================================================
- - Ahmanson's forecasts are dependent on maintaining one of the lowest
-----------------
consolidated tangible common equity ratios in the industry.
-----------------------------------------------------------
- - To keep its equity ratios from being even lower, Ahmanson's projections
assume negative asset growth for the rest of the decade.
-------------------------------------------------
- Wall Street expects annual asset growth of 1% for Ahmanson and 3% for
Great Western
- Wall Street EPS forecasts are premised on this asset growth
- The required offset to negative asset growth is a combined pro
forma net interest margin of approximately 20 bps over the level of
Wall Street expectations
- - Ahmanson's EPS forecasts depend on massive share repurchases that leave
-----
little margin for error
-----------------------
- - Ahmanson's plan calls for the repurchase of 20% of the shares outstanding
after the acquisition.
- - Combined with Ahmanson's planned dividends, the repurchase program
translates into a cash outlay of $3.2 billion over 9 quarters, an amount
equal to 178% of the projected net income to common equity over the same
time period and 125% of the cash net income to common equity
================================================================================
[LOGO] Washington Mutual 46 GREAT WESTERN [LOGO]
<PAGE> 47
AHMANSON'S MOST RECENT "REVISED"
ASSUMPTIONS ARE NOT CREDIBLE
================================================================================
<TABLE>
<CAPTION>
($ in millions)
AHM Original AHM Revised WAMU
Proposal Proposal Transaction Discussion
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expense Savings $404 $454 $340 AHM's sole advantage is 100 additional branch closures,
an advantage that GWF believes is worth less than $50
million. In all other respects, WAMU has an advantage by
virtue of its superior and more compatible technology.
Revenue Synergies -- $50 $88(a) AMH (in direct contrast to WAMU) has provided no details on
its revenue synergies and has no demonstrated ability to
generate incremental revenues through a transaction.
Share Repurchase Amount $2.0 bn $2.8 bn -- AHM's offer is predicted on massive cash outlays for the
repurchase of stock. These repurchases, combined with
dividend payments, exceed even the forecast cash net
income to common equity and would depress the company's
capital ratios for years. WAMU's forecasts contemplate
no share buybacks and strong capital ratios.
</TABLE>
(a) Includes fee income opportunities only.
================================================================================
[LOGO] Washington Mutual 47 GREAT WESTERN [LOGO]
<PAGE> 48
AHMANSON'S PROPOSAL RELIES ON IMPRUDENT LEVERAGE
- -------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
Pro Forma December 31,
------------------------------------------------
1997E 1998E 1999E
-------------- -------------- -------------
<S> <C> <C> <C>
WASHINGTON MUTUAL -- "PRUDENT LEVERAGE"(a)
Tangible Assets(b) $95,220 $104,742 $115,216
Tangible Common Equity(c) 4,671 5,636 6,810
Tangible Common/Tangible Assets 4.91% 5.38% 5.91%
AHMANSON PROPOSAL -- "A LEVERAGED BUYOUT"(d)
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity(c) 3,146 3,128 3,118
Tangible Common/Tangible Assets(e) 3.46% 3.45% 3.46%
Ahmanson Tangible Equity Required to
Equal Washington Mutual's Ratio $ 4,455 $ 4,884 $ 5,321
Change from Ahmanson Base 1,309 1,756 2,203
</TABLE>
(a) Based on data presented in or underlying Washington Mutual's S-4
Registration Statement dated March 13, 1997 and recent transaction-related
analyst presentations. See appendix for further details.
(b) Assumes 10% annual growth rate, for illustrative purposes.
(c) Tangible common equity equals common equity minus intangible assets.
(d) Based on data presented in Ahmanson's March 25, 1997 press release.
(e) In its March 25, 1997 press release, Ahmanson computes the ratio by
deducting intangible assets on a tax-affected basis. The above ratios are
shown using a more conventional method of deducting intangible assets prior
to any tax effect.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 48 GREAT WESTERN [LOGO]
<PAGE> 49
AHMANSON'S CONSOLIDATED TANGIBLE COMMON EQUITY RATIO IS AMONG THE LOWEST IN THE
INDUSTRY(a)
===============================================================================
- ---------------------------------------------------------------
Rank out of 93 institutions with more than $1 billion in assets
- ---------------------------------------------------------------
Tangible Common/
Bottom 10 Institutions Tangible Assets
- ---------------------------- -------------------------------------
93. Coastal Bancorp 2.75%
- -------------------------------------------------------------------------------
92. H.F. AHMANSON 3.31/3.46%(b)
- -------------------------------------------------------------------------------
91. Sterling Financial 3.58
90. Bank United Financial 3.65
89. Chevy Chase Bank 3.80
88. Sovereign Bancorp(c) 3.88
87. Webster Financial 3.93
86. FirstFed Financial 4.63
85. Bank United 4.79
84. Coast Savings 4.81
(a) Source: SNL Securities. At December 31, 1996.
(b) Pro forma at 12/31/99 for acquisition of Great Western. Based on
Ahmanson's March 25, 1997 press release.
(c) Pro forma for acquisition of Bankers Corp.
================================================================================
[LOGO] Washington Mutual 49 GREAT WESTERN [LOGO]
<PAGE> 50
FASTER PROJECTED PRO FORMA EPS GROWTH
- -------------------------------------------------------------------------------
[Bar Graph]
WAMU/GWF
EPS Accretion/
CAGR = 32% EPS (Dilution)
----- -----
1997E..........................$3.40
1998E..........................$4.81 5%
1999E..........................$5.90 15%
[Bar Graph]
AHM/GWF -- 3/25/97 PRESS RELEASE
CAGR = 20%
EPS Accretion/
EPS (Dilution)
----- -----
1997E..........................$2.68
1998E..........................$3.13 (11)%
1999E..........................$3.97 2 %
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
50
<PAGE> 51
AHMANSON'S OFFER IS DILUTIVE TO REPORTED EPS THROUGH 1999
===============================================================================
<TABLE>
<CAPTION>
REPORTED EPS CASH EPS
ACCRETION/(DILUTION) ACCRETION/(DILUTION)
------------------- --------------------
1998E 1999E 1998E 1999E
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Ahmanson's Assumptions:
3/25/97 Press Release (11.0)% 2.0 % 9.0 % 21.0%
Adjusted for WAMU Capital Level(a) (15.0)% (5.0)% 3.0 % 11.0%
Adjusted for Original Synergies(b) (16.0)% (5.0)% 4.0 % 14.0%
Adjusted for WAMU Capital/
Original Synergies(c) (19.0)% (11.0)% (2.0)% 5.0%
</TABLE>
(a) Tangible common equity ratio assumed to be equal to Washington Mutual's pro
forma ratio. Share repurchases made at prices consistent with Ahmanson's
March 25, 1997 press release (approximately 12.25x cash EPS). Assumes, for
illustrative purposes only, that Ahmanson fully realizes its revised
synergies. See appendix for further details.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements. We believe this to be a more realistic synergy level. Share
repurchases made at prices consistent with Ahmanson's March 25, 1997 press
release (approximately 12.25x cash EPS). See appendix for further details.
(c) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchase made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS). See appendix for further details.
===============================================================================
[LOGO] WASHINGTON MUTUAL 51 GREAT WESTERN [LOGO]
<PAGE> 52
- --------------------------------------------------------------------------------
THE WAMU/GWF
COMBINATION IS
SIGNIFICANTLY STRONGER
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
52
<PAGE> 53
STRONGER WAMU CAPITAL/ASSET QUALITY -
LONG TERM DRAG ON AHM EARNINGS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WAMU/GWF AHM/GWF
Merger Proposal
- --------------------------------------------------------------------------------
<S> <C> <C>
Tangible Common Equity to Assets 4.55%(a) 3.46%(b)
Intangibles to Total Equity 9%(a) 58%(b)
NPAs to Assets(c) 0.94% 1.35%
Reserves to NPLs(c)(d) 119% 83%
High Risk Real Estate Loans to Loans(e) 11% 22%
Tangible Common Equity to Assets
With Equal Reserve to NPL Coverage 4.55%(a) 3.24%(b)
</TABLE>
- ------------
(a) Pro forma at March 31, 1997. Reflects $318 million in after-tax
restructuring charges.
(b) Projected at December 31, 1997 based on data presented in Ahmanson's March
25, 1997 press release.
(c) Pro forma at March 31, 1997. NPL and NPA ratios exclude restructured loans.
(d) Reflects $100 million increase in loan loss reserves.
(e) At December 31, 1996. Includes construction, multi-family, commercial real
estate and land loans and REO/REI. Loans include REO/REI.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 53 GREAT WESTERN [LOGO]
<PAGE> 54
BETTER OPERATING PERFORMANCE(a)
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
WAMU/GWF AHM/GWF
Merger Proposal
- --------------------------------------------------------------------------------
<S> <C> <C>
Net Income $1,497 $ 938
Cash Flow 1,556 1,164
Return on Assets 1.35%(b) 0.98%
Return on Common Equity 23.1% 11.7%
Cash Return on Tangible Common 25.1% 37.3%
Cash Return on Tangible Common -
Equal Leverage(c) 25.1% 24.7%
</TABLE>
(a) Projected results are for 1999 and are presented in Washington Mutual's S-4
registration statement dated March 13, 1997 and Ahmanson's press release
dated March 25, 1997.
(b) Assumes 10% asset growth rate, for illustrative purposes.
(c) Assumes Ahmanson's tangible common equity to tangible assets ratio
increases to 5.91% (equal to Washington Mutual's) in 1999.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 54 GREAT WESTERN [LOGO]
<PAGE> 55
FAILURE TO ACHIEVE SYNERGIES HAS A GREATER
IMPACT ON THE AHMANSON PROPOSAL.
- -------------------------------------------------------------------------------
1999E GAAP EPS ACCRETION/(DILUTION)
-----------------------------------
[Bar Graphs]
WAMU AHM
---- ---------------------------------------------------
Base 15% Base 2% Base 2%
10% 17% 22%
50% 5% 50% (15%) 50% (20%)
Synergies(a) Synergies Synergies/
WAMU Capital
(a) Includes expected cost savings and non-interest revenue enhancements.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 55 GREAT WESTERN [LOGO]
<PAGE> 56
FAILURE TO ACHIEVE SYNERGIES HAS A GREATER
IMPACT ON THE AHMANSON PROPOSAL
- -------------------------------------------------------------------------------
1999E CASH EPS ACCRETION/(DILUTION)
-----------------------------------
[Bar Graphs]
WAMU AHM
---- ---------------------------------------------------
Base 17% Base 21% Base 21%
10% 16% 25%
50% 7% 50% 5% 50% (4%)
Synergies(a) Synergies Synergies/
WAMU Capital
(a) Includes expected cost savings and non-interest revenue enhancements.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 56 GREAT WESTERN [LOGO]
<PAGE> 57
- --------------------------------------------------------------------------------
THE WAMU TRANSACTION
IS THE BEST FOR
GWF SHAREHOLDERS
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
57
<PAGE> 58
EPS PER GWF SHARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AHM/GWF Merger
------------------------------------------------
Ahmanson Assumptions:
------------------------------------------------
Adjusted for
GWF WAMU/ Adjusted for WAMU Capital/
Stand- GWF 3/25/97 WAMU Capital Original
Alone Merger Press Release Level(a) Synergies(b)
------ ------ ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Exchange Ratio -- 0.90x 1.20x 1.20x 1.20x
1998E GAAP EPS per GWF Share $3.09 $4.33 $3.76 $3.59 $3.41
Percent Change(c) 40% 22% 16% 10%
1999E GAAP EPS per GWF Share $3.40 $5.31 $4.72 $4.40 $4.12
Percent Change(c) 56% 39% 30% 21%
1998E Cash EPS per GWF Share $3.35 $4.56 $4.80 $4.50 $4.31
Percent Change(c) 36% 43% 34% 29%
1999E Cash EPS per GWF Share $3.66 $5.55 $5.86 $5.36 $5.08
Percent Change(c) 51% 60% 47% 39%
</TABLE>
Source: Prospective buyers' respective presentations to analysts.
(a) Tangible common equity ratio equal to Washington Mutual's pro forma ratio.
Share repurchases made at prices consistent with Ahmanson's March 25, 1997
press release (approximately 12.25x cash EPS). Assumes, for illustrative
purposes, that Ahmanson fully realizes its revised synergies. See appendix
for further details.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchases made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS). See appendix for further details.
(c) Relative to First Call mean estimates for 1998. 1999 assumes 10% EPS growth
over 1998 First Call mean estimate. Cash EPS figures add back intangible
amortization.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 58 GREAT WESTERN [LOGO]
<PAGE> 59
- --------------------------------------------------------------------------------
WAMU'S TRACK RECORD IS
SUPERIOR IN EVERY WAY
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
59
<PAGE> 60
SENIOR MANAGEMENT WITH MORE EXPERIENCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name Position Tenure
- ---- -------- ------
<S> <C> <C>
Washington Mutual
Kerry K. Killinger Chairman, President & CEO 14 years
S. Liane Wilson EVP, Corporate Operations 12 years
Lee D. Lannoye EVP, Corporate Administration & Credit 9 years
Deanna Oppenheimer EVP, Corporate Marketing & Consumer Bank
Distribution 12 years
William A. Longbrake(a) EVP & CFO 15 years
Craig E. Tall EVP, Corporate Development & Commercial
Banking 12 years
H.F. Ahmanson
Charles R. Rinehart Chairman & CEO 8 years
Bruce G. Willison President & COO 1 year
Kevin M. Twomey Senior EVP and CFO 4 years
Anne-Drue M. Anderson EVP, Treasurer 4 years
Carl Forsythe EVP, Director of Personal Financial
Services 1 year
Madeleine A. Kleiner EVP, General Counsel & Secretary 2 years
E. Nancy Markle EVP 3 years
</TABLE>
(a) Includes time served as CFO of the FDIC from March, 1995 to September,
1996.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 60 GREAT WESTERN[LOGO]
<PAGE> 61
GREATER ACQUISITION EXPERIENCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGREGATE
ANNOUNCEMENT TYPE OF CONSIDERATION CONSIDERATION/ TYPE OF IN MARKET/
DATE TARGET ACQUISITION ($MM) MARKET CAP CONSIDERATION MARKET EXTENSION
- ------------ ------ ----------- ------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
WASHINGTON MUTUAL(a)
09/96 United Western Whole $ 80 3% Cash In Market
06/96 Keystone Holdings Whole 1,647 77 Stock Extension
03/96 Utah Federal Whole 15 1 Stock In Market
10/95 Western Bank Whole 177 10 Stock Extension
06/95 Enterprise Bank(b) Whole 24 2 Stock Extension
07/94 Olympus Capital Whole 48 4 Stock Extension
06/94 Summit Bancorp Whole 26 2 Stock In Market
10/92 Pacific First Bank Whole 663 81 Cash In Market/
Extension
08/92 Pioneer Savings Whole 170 24 Stock In Market
09/91 GNW Financial Whole 68 13 49% Cash/ In Market
51% Stock
11/90 VanFed Whole 23 13 Cash In Market
AHMANSON(a)
03/96 First Interstate Branch $ 206 7% Cash In Market
02/95 Household Bank Branch 53 3 Cash In Market
09/94 Western Federal Bank RTC 87 4 Cash In Market
01/93 HomeFed RTC N.A. N.A. Cash In Market
03/92 County Bank of
Santa Barbara RTC 4 0 Cash In Market
01/91 Coast Federal Bank Branch 20 1 Cash In Market
04/90 Home Savings Bank Whole 292 17 Stock In Market
</TABLE>
(a) Includes only branch acquisitions with more than $200 million of deposits
or 10 branches.
(b) Acquired remaining 90.1% interest that it did not already own.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual GREAT WESTERN [LOGO]
61
<PAGE> 62
SUPERIOR TOTAL RETURNS
- -------------------------------------------------------------------------------
COMPOUNDED ANNUAL TOTAL RETURN(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU AHM
---- ---
<S> <C> <C>
1 Year 54% 27%
3 Years 26% 23%
5 Years 27% 18%
10 Years ...... 24% 9%
</TABLE>
(a) Stock price appreciation plus reinvestment of dividends. As of the
respective periods ending December 31, 1996.
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual 62 GREAT WESTERN [LOGO]
<PAGE> 63
LOWER LEVEL OF NPAs/
BETTER RESERVE COVERAGE(a)
- ------------------------------------------------------------------------------
[BAR GRAPH]
<TABLE>
<CAPTION>
Reserves/NPLs(b)
WAMU(c) AHM
------ --------
<S> <C> <C>
1993 .... 135% 50%
1994 .... 180% 50%
1995 .... 161% 43%
1996 .... 107% 50%
97:Q1.... 110% 50%
<CAPTION>
NPAs + Restructured Loans/Assets
WAMU(c) AHM
------ ----
<S> <C> <C>
1993 .... 0.75% 2.09%
1994 .... 0.49% 1.79%
1995 .... 0.51% 2.20%
1996 .... 0.99% 2.07%
97:Q1.... 0.93% 2.06%
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for
pooling transactions).
(b) NPLs including nonaccrual loans and restructured loans.
(c) Impacted in 1996 by American Savings Bank.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 63 GREAT WESTERN [LOGO]
<PAGE> 64
MORE CONSISTENT/FASTER GROWING EPS
AND DIVIDENDS(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
RECURRING EPS(b) DIVIDENDS PER SHARE
WAMU AHM WAMU AHM
<S> <C> <C> <C> <C>
1993 $2.30 -$1.73 $0.50 $0.88
1994 $2.62 $1.73 $0.70 $0.88
1995 $2.76 $1.47 $0.77 $0.88
1996 $3.39 $1.90 $0.90 $0.88
97:Q1 $0.92 $0.77
1997 Indicated(c) $1.04 $0.88
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude non-recurring items including gains on sales,
restructuring charges, the SAIF recapitalization charge, one-time asset
write-offs and preferred dividends. 1993 and 1996 Ahmanson figures
adjusted to reflect tax rate of 40.0%
(c) Annualized from common dividends declared in the second quarter of $0.26
and $0.22, respectively.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 64 GREAT WESTERN [LOGO]
<PAGE> 65
FAST GROWING VS. DECLINING
TOTAL LOAN ORIGINATIONS
- ------------------------------------------------------------------------------
($ in billions)
[Bar Graph]
<TABLE>
<CAPTION>
WAMU Ahmanson
---- --------
<S> <C> <S> <C>
1994 $ 9.3 1994 $10.3
1995 $ 9.4 1995 $ 6.4
1996 $13.6 1996 $ 5.5
1997:Q1 $ 3.5 1997:Q1 $ 1.1
</TABLE>
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
65
<PAGE> 66
MORE "BANK-LIKE"/LOWER RISK
LOAN COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART] [PIE CHART]
WASHINGTON MUTUAL(a) AHMANSON(b)
<S> <C> <C>
Commercial 1% >1%
Commercial Real Estate 12% 35%
Consumer 10% 3%
1-4 Family Residential(c) 77% 62%
</TABLE>
(a) At March 31, 1996.
(b) At March 31, 1996.
(c) Includes residential and other construction.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
66
<PAGE> 67
MORE "BANK-LIKE" DEPOSIT COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART]
[PIE CHART]
WASHINGTON MUTUAL(a) AHMANSON(b)
<S> <C> <C> <C>
Total Term 58% 68% (71%)
Total Savings + MMDA 29% 22% (22%)
Total Checking 13% 10% (16%)
</TABLE>
(a) At March 31, 1997. Includes deposits of American Savings Bank.
(b) At March 31, 1997. Approximately 3% of current checking deposits, 2% of
current savings and MMDA deposits, and 2% of currrent term deposits are from
the acquisition of 61 First Interstate branches. Acquired deposits totaled
$2.5 billion, or approximately 7% current deposits. First Interstate data
from analyst presentation on March 28, 1996. Parenthetical entries denote
deposit composition prior to acquisition of First Interstate branches.
----------------------------------------------------------------------------
[LOGO]Washington Mutual 67 GREAT WESTERN [LOGO]
<PAGE> 68
AHMANSON WILL HAVE
DIFFICULTY EXECUTING
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
68
<PAGE> 69
INTEGRATION RISKS ARE VERY SUBSTANTIAL
WITH AN AHM/GWF COMBINATION
- -------------------------------------------------------------------------------
- - Elimination of Great Western name
- - Hostile offer/antagonized employees
- - Disruptive branch closures
- Substantial deposit runoff
- Customer losses
- - Questionable systems capabilities
- - Management's lack of integration experience
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 69 GREAT WESTERN [LOGO]
<PAGE> 70
CONCLUSIONS
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
70
<PAGE> 71
GREAT WESTERN'S STRATEGIC ALTERNATIVES
- ------------------------------------------------------------------------------
WAMU Merger AHM Proposal
- --------------------------------- ----------------------------------
- - Strong growth and profitability - Mediocre operating performance
- - Attractive earnings and EPS - Cash EPS growth, reported EPS
growth dilution
- - Transaction economics: - Transaction economics:
- Realistic cost cuts - Cost cutting
- Fee income opportunities - Aggressive stock buyback
- Loan retention
- - Strong, low risk balance sheet - Weak, high risk balance sheet
- - Low risk integration - High risk integration
- - Flexible strategic alternatives - Unclear exit strategies
- - Strong insider ownership - Low insider ownership
(discipline)
- - Strong diversified currency - Increased CA thrift exposure
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
71
<PAGE> 72
Washington Mutual, Inc.
[LOGO] Merger With [LOGO]
Great Western Financial Corporation
HIGH GROWTH CONSUMER BANKING
May 22, 1997
72
<PAGE> 73
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
73
<PAGE> 74
CONSOLIDATED LOAN ORIGINATIONS
- ------------------------------------------------------------------------------
($ IN BILLIONS)
[BAR GRAPH]
<TABLE>
<CAPTION>
45% INCREASE 17% INCREASE
YTD YTD
1994 1995 1996 APR. 96 APR. 97
<S> <C> <C> <C> <C>
9.3 9.4 13.6 4.3 5.0
</TABLE>
- ------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 74 GREAT WESTERN [LOGO]
<PAGE> 75
WAMU Lending Activity
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SFR Mortgage Activity(a) Consumer Lending Activity(b)
($ in billions) ($ in millions)
[BAR GRAPH] [BAR GRAPH]
46% Increase 8% Increase 43% Increase 33% Increase
Apr. 96 Apr. 97 Apr. 96 Apr. 97
1994 1995 1996 YTD YTD 1994 1995 1996 YTD YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$6.3 $6.8 $9.9 $3.2 $3.5 $839 $888 $1,268 $357 $476
</TABLE>
- -----------------
(a) Consolidated lending
(b) WMB and WMBfsb
- --------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] 75 [GREAT WESTERN LOGO]
<PAGE> 76
WAMU CONSTRUCTION ACTIVITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BUILDER CONSTRUCTION ACTIVITY(a) CUSTOM CONSTRUCTION ACTIVITY(a)
($ in millions) ($ in millions)
---------------------------------- ----------------------------------
20% INCREASE 35% INCREASE
---------------- ----------------
45% INCREASE YTD YTD 34% INCREASE YTD YTD
1994 1995 1996 Apr. 96 Apr. 97 1994 1995 1996 Apr. 96 Apr. 97
---- ---- ---- ------- ------- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$329 $352 $510 $176 $211 $706 $584 $780 $185 $250
</TABLE>
(a) WMB and WMB fsb
- -------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] 76 [GREAT WESTERN LOGO]
<PAGE> 77
STRONG DEPOSIT SHARE IN ATTRACTIVE MARKETS(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
California
- -------------------------------------------------------------
<S> <C>
BAC .................................................. 20.9%
WFC .................................................. 14.9%
WAMU/GWF ............................................. 9.2%
AHM .................................................. 7.6%
UNBC ................................................. 4.8%
</TABLE>
<TABLE>
<CAPTION>
[BAR GRAPH]
Washington
- -------------------------------------------------------------
<S> <C>
BAC .................................................. 22.8%
WAMU/GWF ............................................. 15.4%
USBC ................................................. 13.8%
KEY .................................................. 11.4%
WFC .................................................. 5.7%
</TABLE>
Source: SNL Securities.
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 77 GREAT WESTERN [LOGO]
<PAGE> 78
STRONG DEPOSIT SHARE IN ATTRACTIVE MARKETS(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
Oregon
- -------------------------------------------------------------
<S> <C>
USBC ................................................. 32.6%
WFC .................................................. 18.4%
WAMU/GWF ............................................. 10.0%
BAC .................................................. 9.3%
KEY .................................................. 8.6%
</TABLE>
<TABLE>
<CAPTION>
[BAR GRAPH]
Florida
- -------------------------------------------------------------
<S> <C>
BBI .................................................. 19.2%
FTU .................................................. 17.1%
NB ................................................... 12.1%
STI .................................................. 10.4%
WAMU/GWF ............................................. 4.0%
</TABLE>
Source: SNL Securities.
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 78 [GREAT WESTERN LOGO]
<PAGE> 79
AHMANSON'S PROJECTED COMBINED FINANCIAL DATA(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income Available to Common(b) $ 423 $ 819 $ 938
Intangible Amortization 68 226 226
------ ------ ------
Projected Cash Earnings Available to Common $ 491 $ 1,045 $1,164
Projected GAAP EPS $ 2.75 $ 3.13 $ 3.93
% Pick-Up / (Dilution) (10)% (11)% 2%
Projected Cash EPS $ 3.19 $ 3.99 $ 4.88
% Pick-Up / (Dilution) 1% 9% 21%
Cash Generated to Buy Back Common $ 386 $ 845 $ 978
Additional Borrowings to Fund Buyback 359 320 38
------ ------ ------
Total Buyback $ 745 $1,165 $1,016
Average Shares 154 262 239
Beginning Shares 115 270 246
Shares Issued 174 12 1
Shares Repurchased 19 24 17
Change in Common Stock Equivalents 0 (12) 0
------ ------ ------
Ending Shares 270 246 230
Average Shares 154 262 239
</TABLE>
(a) All data based on Ahmanson's March 25, 1997 press release.
(b) 1997 and 1998 are adjusted to exclude non-recurring items.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 79 GREAT WESTERN [LOGO]
<PAGE> 80
AHMANSON'S OFFER -- ORIGINAL SYNERGIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Net Income Available to Common (a) $ 417 $ 773 $ 874
Intangible Amortization (a) 68 226 226
------- ------- -------
Cash Earnings Available to Common $ 485 $ 999 $ 1,100
Projected GAAP EPS $ 2.71 $ 2.96 $ 3.66
% Pick-Up / (Dilution) (11)% (16)% (5)%
Projected Cash EPS $ 3.15 $ 3.82 $ 4.61
% Pick-Up / (Dilution) 0% 4% 14%
Base Cash Generated to Buy Back Common (a) $ 386 $ 845 $ 978
Change in Cash(b) (6) (56) (65)
Additional Borrowings to Fund Planned Buyback 359 320 38
------- ------- -------
Revised Buy Back / (Issuance) $ 739 $1,119 $ 951
Beginning Shares 115 270 246
Shares Issued 174 12 1
Shares Repurchased / (Issued) 19 24 17
Change in Common Stock Equivalents 0 (12) 0
------- ------- -------
Ending Shares 270 246 229
Average Shares 154 261 239
Calculated Share Repurchase Price $ 39.57 $ 46.82 $ 56.45
Multiple of Cash EPS 12.6x 12.3x 12.2x
</TABLE>
Note: Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements. We believe this to be a more realistic synergy level.
Share repurchases made at prices consistent with March 25, 1997 Ahmanson
press release (approximately 12.25x cash EPS).
(a) Based on Ahmanson's March 25, 1997 press release. 1997 and 1998 are
adjusted to exclude non-recurring items.
(b) Net effect of dividends on additional shares issued and reduced synergies
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 80 GREAT WESTERN[LOGO]
<PAGE> 81
AHMANSON'S OFFER -- WAMU CAPITAL/ORIGINAL SYNERGIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Net Income Available to Common (a) $ 417 $ 773 $ 874
Earnings on Additional Capital (b) 13 74 95
------- ------- -------
Revised Net Income to Common $ 430 $ 847 $ 969
Intangible Amortization (a) 68 226 226
------- ------- -------
Revised Cash Earnings Available to Common $ 498 $ 1,073 $ 1,195
Projected GAAP EPS $ 2.65 $ 2.84 $ 3.43
% Pick-Up / (Dilution) (13)% (19)% (11)%
Projected Cash EPS $ 3.07 $ 3.59 $ 4.23
% Pick-Up / (Dilution) (2)% (2)% 5 %
Base Cash Generated to Buy Back Common (a) $ 386 $ 845 $ 978
Change in Cash (c) 0 (5) (9)
Additional Borrowings to Fund Planned Buyback 359 320 38
Additional Capital Required (d) (1,309) (447) (447)
------- ------- -------
Revised Buy Back / (Issuance) $ (564) $ 713 $ 561
Beginning Shares 115 304 287
Shares Issued 174 12 1
Shares Repurchased / (Issued) (15) 16 11
Change in Common Stock Equivalents 0 (12) 0
------- ------- -------
Ending Shares 304 287 276
Average Shares 162 299 283
Calculated Share Repurchase Price $ 38.57 $ 44.01 $ 51.78
Multiple of Cash EPS 12.6x 12.3x 12.2x
</TABLE>
Note: Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchases made at
prices consistent with Ahmanson's March 25, 1997 press release (approximately
12.25x cash EPS).
(a) Based on Ahmanson's March 25, 1997 press release. 1997 and 1998 are
adjusted to exclude non-recurring items.
(b) Assumes 8% earnings rate and 40% tax rate.
(c) Net effect of earnings on additional capital, dividends on additional
shares issued and reduced synergies.
(d) Additional capital required to equal Washington Mutual's projected capital
ratios.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 81 GREAT WESTERN [LOGO]
<PAGE> 82
COMPARISON OF CAPITAL STRUCTURES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions)
1997E 1998E 1999E
--------------------------------------------
<S> <C> <C> <C>
WAMU/GWF
Tangible Assets(a) $95,220 $104,742 $115,216
Tangible Common Equity 4,671 5,636 6,810
Ending Primary Shares 242 243 244
Tangible Book Value per Share $ 19.28 $ 23.17 $ 27.91
AHM/GWF -- 3/25/97 Press Release
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity 3,146 3,128 3,118
Ending Primary Shares 257 246 230
Tangible Book Value per Share $ 12.22 $ 12.72 $ 13.59
AHM/GWF -- Adjusted for WAMU Capital/Original Synergies(b)
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity(c) 4,455 4,884 5,321
Ending Primary Shares 291 287 276
Tangible Book Value per Share $ 15.33 $ 17.03 $ 19.25
</TABLE>
(a) Assumes 10% annual growth rate for illustrative purposes.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchase made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS).
(c) Tangible common equity required to equal Washington Mutual tangible common
equity ratio.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
82
<PAGE> 1
EXHIBIT 22
[Newspaper Advertisement]
GRAPH TITLE: Total Return to Stockholders(1)
From: 12/29/89 to 4/30/97
[Graph appears here with two lines, one for Washington Mutual and the second
for Ahmanson]
[Horizontal line: dates (12/29/89 - 4/30/97); Vertical line: percentage (-100%
through 700%)]
<TABLE>
<CAPTION>
Date Washington Mutual Ahmanson
- ---- ----------------- --------
<S> <C> <C>
12/29/89 0.00% 0.00%
3/30/90 -12.24% -6.83%
6/29/90 - 6.91% 10.28%
9/28/90 41.82% 27.12%
12/31/90 -32.93% -25.18%
3/29/91 11.51% 3.19%
6/28/91 40.92% 2.92%
9/30/91 101.57% 5.58%
12/31/91 91.26% 1.41%
3/31/92 85.90% -8.42%
6/30/92 124.59% 21.00%
9/30/92 124.60% 15.05%
12/31/92 191.77% 18.31%
3/31/93 177.89% 17.23%
6/30/93 201.33% 9.22%
9/30/93 258.55% 26.31%
12/31/93 220.82% 26.18%
3/31/94 157.66% 9.85%
6/30/94 178.44% 24.31%
9/30/94 177.52% 38.86%
12/30/94 132.29% 8.68%
3/31/95 179.15% 22.77%
6/30/95 230.01% 51.51%
9/29/95 275.10% 76.37%
12/29/95 311.89% 85.70%
3/29/96 327.32% 71.58%
6/28/96 332.52% 92.67%
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
9/30/96 492.70% 101.54%
12/31/96 534.61% 135.49%
3/31/97 611.13% 164.98%
4/30/97 630.59% 177.73%
</TABLE>
[End of Graph]
WHY WASHINGTON MUTUAL?
BOY, THAT'S A HEAD-SCRATCHER.
Just look at the figures.
Since 1990, Washington Mutual has delivered to its stockholders a total
return greater than 600%. That's right, more than 600%.
Take this history of superior long-term performance and combine it with
the fact that Washington Mutual was rated the number one most admired savings
institution in the country by its peers in Fortune(2) magazine, and you get what
you call a "no brainer."
These could be a few of the reasons why Great Western's Board of
Directors chose Washington Mutual to be their merger partner.
[Washington Mutual Logo]
The friend of the family [TM]
FDIC Insured
(1) Source: Bloomberg Financial Markets. Return includes reinvestment
of dividends.
(2) From an article titled "America's Most Admired Companies," Fortune
magazine March 3, 1997. America's Most Admired Companies and Fortune
magazine are trademarks belonging to Time, Inc.
