<PAGE> 1
SCHEDULE 14A INFORMATION
REVOCATION STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement (Revocation of Consent Statement)
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14s-6(e)(2))
/ / Definitive Proxy Statement (Revocation of Consent Statement)
Definitive Additional Materials
/x/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WASHINGTON MUTUAL, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14s-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE> 2
[(c) 1997 Business Wire | www.businesswire.com]
- --------------------------------------------------------------------------------
BW0020 APR 15, 1997 4:32 PACIFIC 7:32 EASTERN
(BW)(WASHINGTON-MUTUAL)(WAMU) Washington Mutual announces record first quarter
results; board of directors increases cash dividend
Business Editors
SEATTLE--(BUSINESS WIRE)--April 15, 1997--
Strong Operating Fundamentals Result In 28 Percent Increase in
Earnings and 19.42 Percent Return on Common Equity
Washington Mutual, Inc. (Nasdaq: WAMU) announced today record first-quarter
earnings of $114.1 million, an increase of 28 percent from earnings of $88.8
million a year earlier. Fully diluted earnings per share were 93 cents, an
increase from 74 cents per share in the first quarter of 1996.
Reflecting Washington Mutual's continued strong profitability and capital
position, the company's board of directors declared a cash dividend on the
common stock of 26 cents per share, an increase from the previous quarterly cash
dividend of 25 cents per share.
The board also declared dividends of 57 cents per share on the Series C
preferred stock (Nasdaq: WAMUO) and 47.5 cents per share on the Series E
preferred stock (Nasdaq: WAMUM). Dividends on the common and preferred stock are
payable May 15, 1997, to shareholders of record on April 30, 1997.
"Washington Mutual's record first-quarter financial results reflect continued
strong operating performance driven by profitable growth in all areas of our
consumer banking business, along with improved operating efficiency," said Kerry
Killinger, the company's chairman, president and chief executive officer. "In
addition, Washington Mutual continues to maintain strong capital and asset
quality positions and low exposure to interest rate risk.
"Highlights of the quarter included an annualized 19.42 percent return on
common equity and an operating efficiency ratio of 49.1 percent. In addition, we
produced 16 percent growth in loan originations over first quarter 1996,
including a 45 percent increase in loan originations other than single-family
residential mortgages. Solid origination volumes resulted in a 26 percent
increase in average loan balances outstanding over the first quarter of 1996.
"Meanwhile, we continued to expand our customer base by opening a record
number of checking accounts. This activity resulted in an increase of more than
65,000 accounts to our retail checking account base during the quarter. We also
continued the integration of American Savings Bank, which has produced results
exceeding our initial expectations. Finally, we took steps to significantly
expand our business by announcing a merger agreement with Great Western
<PAGE> 3
Financial Corporation, which will create one of the nation's premier consumer
banking organizations and place our company in an even stronger competitive
position.
"Together with solid operating fundamentals, these achievements have set the
stage for what we believe will be an outstanding year for Washington Mutual."
FIRST-QUARTER FINANCIAL RESULTS
Net Interest And Other Income
Growth in the loan portfolio, accompanied by an improved net interest spread,
produced net interest income of $317.0 million for the first quarter of 1997, up
10 percent from $287.0 million a year earlier. The spread during the quarter was
2.77 percent, up from 2.75 percent last year.
Killinger noted that the company's strategy to manage interest rate risk, as
well as its adjustable-rate and consumer loan origination capabilities and
strong capital position, should limit the effect of recent increases in interest
rates on net interest income. He added that the percentage of fixed-rate assets
in the company's loan and mortgage-backed securities portfolio has been
dramatically reduced in recent years, providing added protection against
potential future increases in interest rates.
Total other income, driven primarily by higher depositor and loan servicing
fees, was $75.4 million, up 32 percent from $57.0 million in last year's first
quarter. Depositor fees increased 27 percent to $28.6 million during the
quarter, versus $22.5 million a year earlier. Killinger pointed out that over
the past year, the company has made progress in re-mixing its deposit base by
replacing time deposits with core transaction accounts, which produce higher fee
income and help reduce the company's cost of deposits and borrowings. At March
31, 1997, transaction account balances, including checking, savings and money
market deposits, represented 42 percent of total deposits, compared with 40
percent a year earlier.
The increase in loan servicing fees was primarily the result of a larger
number of loans serviced for others as well as the reclassification of $3.3
million of income that would have been accounted for as net interest income by
American Savings Bank, but that Washington Mutual classifies as loan servicing
income.
Loan Originations/Balance Sheet Growth
The company's growing franchise, aggressive marketing strategy and
state-of-the-art technology, combined with positive regional economies in the
West, helped to produce record total loan originations of $3.5 billion for the
quarter, up 16 percent from $3.0 billion a year ago.
In addition to increased originations in the Northwest, the company's
American Savings Bank subsidiary posted significantly stronger loan originations
in the first quarter of 1997 -- $1.5 billion for the period just ended, compared
with $1.3 billion from last year, a 16 percent increase. "When we announced the
American
<PAGE> 4
acquisition, we stated our belief that loan originations would be greater at
American once the transaction was completed and that the combined company's
strong capital position would facilitate greater retention of those loans,"
Killinger said. "The results of the first quarter reflect the successful
execution of that strategy."
On Jan. 15, Washington Mutual acquired Salt Lake City-based United Western
Financial Group, Inc. Had United Western been part of the company in 1996,
Washington Mutual would have been the No. 1 residential mortgage lender in the
state of Utah. The company already holds the top position in residential
mortgage originations in both Washington and Oregon, and the No. 2 position in
California.
Further reflecting the company's successful consumer banking strategy, loan
originations other than single-family residential loans increased to 31 percent
of total originations, up from 24 percent in last year's first quarter. The
company originated substantially greater volume in shorter-term, higher-yielding
consumer loans during the quarter -- $369.8 million, up 35 percent from $273.6
million a year ago. Residential construction lending for the period was $325.1
million, up 30 percent from $249.7 million in first quarter 1996.
Operating Efficiency
Higher revenues, combined with prudent expense management, enabled the
company to operate more efficiently during the quarter. Washington Mutual's
operating efficiency ratio (other expense as a percentage of net interest income
and other income) improved to 49.1 percent versus 52.6 percent a year ago. Total
other expense for the quarter was $192.6 million, or 1.71 percent of average
assets, compared with $181.1 million, or 1.74 percent of average assets, in last
year's first quarter.
Credit Quality and Capital
"Consistent with our goal of maintaining excellent credit quality, we
continue to exercise solid underwriting standards with the long-term target of
keeping the ratio of nonperforming assets to total assets below 1 percent,"
Killinger said.
Total nonperforming assets were $334.6 million at March 31, 1997, compared
with $329.5 million at Dec. 31, 1996. Nonperforming assets as a percentage of
total assets were 0.73 percent, compared with 0.74 percent at Dec. 31, 1996.
The quarterly provision for loan losses was $15.5 million. At March 31, 1997,
loan loss reserves totaled $367.2 million. Reserves as a percentage of
nonperforming assets were 109.8 percent, and as a percentage of nonperforming
assets, less REO, were 152.9 percent.
Consolidated assets at March 31, 1997, were $46.1 billion, up from $44.6
billion at Dec. 31, 1996, while total deposits were $24.3 billion, up from $24.1
billion at the end of fourth quarter 1996. Stockholders' equity at March 31,
1997, was $2.4 billion, or 5.27 percent of assets, and capital ratios of the
company's banking subsidiaries continued to exceed the FDIC's requirements for
classification as "well-capitalized," the highest regulatory standard.
<PAGE> 5
Commercial Banking/Nonbanking Activities
With Western Bank serving as the platform for the company's commercial
banking activities in the Northwest, the commercial banking division's loan
portfolio grew in the first quarter from $896.8 million to $1.0 billion or a 14
percent increase over Dec. 31, 1996.
Annuities underwritten by WM Life Insurance Co., the company's insurance
underwriting subsidiary, were $877.8 million; while assets of the Composite
Group of mutual funds, managed by Composite Research & Management Co., the
company's investment management firm, increased slightly to $1.5 billion at
March 31, 1997.
FRANCHISE GROWTH
The company's focus on gaining new households through aggressive marketing of
checking accounts produced excellent results in each of its markets during the
quarter. Total households served grew by more than 76,000 to 1.5 million through
February and included 24,000 non-acquisition-related households.
Excluding acquisitions, the company added more than 65,000 checking accounts
to its base during the first quarter. This figure included more than 31,000 net
new accounts generated at American, which in all of 1996 added only 5,700 net
checking accounts to its base. "We are extremely pleased with the positive
results that our consumer banking strategy is achieving in California. Checking
account openings have exceeded our original projections and we believe that the
opportunities for gaining further market share in the state, as well as our
other markets, are very promising," Killinger said.
Great Western Definitive Merger Agreement Signed
On March 6, Washington Mutual and Great Western Financial Corporation (NYSE:
GWF) signed a definitive merger agreement that will create the nation's largest
savings institution and one of the premier consumer banking franchises in the
country. The agreement calls for 0.9 shares of Washington Mutual common stock to
be exchanged for each share of Great Western common stock. The agreement has
been unanimously approved by the boards of directors of both companies.
The merger, which requires regulatory approval and the approval of both
companies' shareholders, is scheduled to close in the third quarter of this
year. The company has filed with the appropriate regulators all applications
required for the merger. Special meetings for the shareholders of both companies
to approve the transaction are anticipated to be held in June.
OUTLOOK
"The operating results for the first quarter provided solid
<PAGE> 6
momentum for our organization as we begin the second quarter," Killinger said.
"Our capital position is strong, and our growth strategy provides the foundation
for increasing our market share both internally and through acquisitions. We
will continue to focus on the core strategies of our business plan and strive to
achieve -- and surpass -- the aggressive set of long-term financial targets
we've established for ourselves," he added.
With a history dating back to 1889, Washington Mutual is a regional financial
services company that provides a diversified line of products and services to
consumers and small- to mid-sized businesses. Its subsidiaries provide consumer
and commercial banking services, securities brokerage, mutual fund management,
property/casualty and life insurance sales, and underwriting for insurance
annuities. At March 31, 1997, Washington Mutual and its subsidiaries had
consolidated assets of $46.1 billion. The company operates more than 500 offices
in nine western states.
EDITOR'S NOTE: Washington Mutual's press releases are available at no charge
through the company's News On Demand Plus System. For a menu of Washington
Mutual press releases or to retrieve a specific release, call 1-800-329-6236. On
the Internet, press releases may be accessed at
http://www.businesswire.com/cnn/wamu.htm
This press release contains forward-looking statements regarding the benefits
of the merger of Washington Mutual and Great Western, including cost savings to
be realized, earnings accretion, transaction charges and additional loan-loss
reserves and revenue enhancement opportunities following the merger. Actual
results may vary materially from the forward-looking statements as described in
Washington Mutual's Current Report on Form 8-K dated March 6, 1997, and its Form
S-4 Registration Statement dated March 13, 1997, to which reference is made.
These factors include without limitation possible delays in integration of Great
Western operations into Washington Mutual's, increases in interest rates which
could reduce net interest margin, competitive factors which could adversely
affect consumer banking strategy and general economic conditions which
negatively impact the volume of loan origination and amount of loan losses.
Washington Mutual ("Washington Mutual") and other certain persons named below
may be deemed to be participants in the solicitation of proxies in connection
with the merger of Great Western Financial Corporation ("Great Western") and a
wholly-owned subsidiary of Washington Mutual pursuant to which each outstanding
share of Great Western common stock would be converted into 0.9 shares of
Washington Mutual common stock ("the Merger"). The participants may include the
directors of Washington Mutual (Douglas P. Beighle, David Bonderman, Herbert M.
Bridge, J. Taylor Crandall, Roger H. Eigsti, John W. Ellis, Daniel J. Evans,
Anne V. Farrell, William P. Gerberding, Kerry K. Killinger, Samuel B. McKinney,
Michael K. Murphy, Louis H. Pepper, William G. Reed, Jr. and James E. Stever);
the following executive officers of Washington Mutual: Craig S. Davis, Steven P.
Freimuth, Lee D. Lannoye, William A. Longbrake, Deanna W. Oppenheimer, Craig E.
Tall and S. Liane Wilson; and the following other members of management of
Washington Mutual: Karen Christensen, JoAnn DeGrande, William Ehrlich, James B.
Fitzgerald, Marc Kittner, and Douglas G. Wisdorf (collectively, the "Washington
Mutual Participants"). As of the date of this communication, David Bonderman, J.
Taylor Crandall and Kerry K. Killinger beneficially
<PAGE> 7
owned 1,894,141 shares, 6,549,755 shares and 1,044,224 shares of Washington
Mutual common stock, respectively. The remaining Washington Mutual Participants
do not beneficially own, individually or in the aggregate, in excess of 1% of
Washington Mutual's equity securities.
Other participants in the solicitation include Great Western and may include
the directors of Great Western (James F. Montgomery, John F. Maher, Dr. David
Alexander, H. Frederick Christie, Stephen E. Frank, John V. Giovenco, Firmin A.
Gryp, Enrique Hernandez, Jr., Charles D. Miller, Dr. Alberta E. Siegel and
Willis B. Wood, Jr.); the following executive officers of Great Western: J.
Lance Erikson, Carl F. Geuther, Michael M. Pappas, A. William Schenck III, Ray
W. Sims and Jaynie M. Studenmund; and the following other members of management
of Great Western: Stephen F. Adams, Bruce F. Antenberg, Barry R. Barkley, Ian D.
Campbell, Charles Coleman, Allen D. Meadows and John A. Trotter (collectively,
the "Great Western Participants"). As of the date of this communication, James
F. Montgomery and John F. Maher beneficially owned 680,488 shares and 611,762
share of Great Western common stock, respectively (including shares subject to
stock options exercisable within 60 days). The remaining Great Western
Participants do not beneficially own, individually or in the aggregate, in
excess of 1% of Great Western's equity securities.
Washington Mutual has retained Lehman Brothers Inc. ("Lehman Brothers") to
act as its financial advisor in connection with the Merger for which it received
and may receive substantial fees as well as reimbursement of reasonable
out-of-pocket expenses. In addition, Washington Mutual has agreed to idemnify
Lehman Brothers and certain persons related to it against certain liabilities,
including certain liabilities under the federal securities laws, arising out of
its engagement. Lehman Brothers is an investment banking firm that provides a
full range of financial services for institutional and individual clients.
Lehman Brothers does not admit that it or any of its directors, officers or
employees is a "participant" as defined in Schedule 14A promulgated under the
Securities Exchange Act of 1934, as amended, in the proxy solicitation, or that
Schedule 14A requires the disclosure of certain information concerning Lehman
Brothers. In connection with Lehman Brothers' role as financial advisor to
Washington Mutual, Lehman Brothers and the following investment banking
employees of Lehman Brothers may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons who
are stockholders of Washington Mutual and Great Western: Steven B. Wolitzer,
Philip R. Erlanger, Sanjiv Sobti, David J. Kim, Craig P. Sweeney and Daniel A.
Trznadel. In the normal course of its business Lehman Brothers regularly buys
and sells securities issued by Washington Mutual and its affiliates ("Washington
Mutual Securities") and Great Western and its affiliates ("Great Western
Securities") for its own account and for the account of its customers, which
transactions may result from time to time in Lehman Brothers and its associates
having a net "long" or net "short" position in Washington Mutual Securities,
Great Western Securities, or option contracts or other derivatives in or
relating to Washington Mutual Securities or Great Western Securities. As of
April 7, 1997, Lehman Brothers had positions in Washington Mutual Securities and
Great Western Securities as principal as follows: (i) net "short" 224 of
Washington Mutual's common shares; (ii) net "long" 27,434 shares of Washington
Mutual's 9.12% preferred stock; (iii) net "long" 124,964 shares of Washington
Mutual's 7.60% preferred stock; (iv) net "short" 3,509 of Great Western's common
shares; and (v) net "long" 160,000 shares of Great Western's 8.30% preferred
stock.
<PAGE> 8
Great Western has retained Goldman, Sachs & Co. ("Goldman Sachs") and Merrill
Lynch & Co. ("Merrill Lynch") to act as its financial advisors in connection
with the Merger, as well as the merger proposal by H.F. Ahmanson & Company, for
which they received and may receive substantial fees, as well as reimbursement
of reasonable out-of-pocket expenses. In addition, Great Western has agreed to
indemnify Goldman Sachs and Merrill Lynch and certain persons related to them
against certain liabilities under the federal securities laws, arising out of
their engagement. Each of Goldman Sachs and Merrill Lynch is an investment
banking firm that provides a full range of financial services for institutional
and individual clients. Neither Goldman Sachs nor Merrill Lynch admits that it
or any of its directors, officers or employees is a "participant" as defined in
Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended,
in the proxy solicitation, or that Schedule 14A requires the disclosure of
certain information concerning Goldman Sachs and Merrill Lynch. In connection
with Goldman Sachs' role as financial advisor to Great Western, Goldman Sachs
and the following investment banking employees of Goldman Sachs may communicate
in person, by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stock holders of Great Western: Joe Wender,
John Mahoney, Andy Gordon, Todd Owens and Andrea Vitorelli. In connection with
Merrill Lynch's role as financial advisor to Great Western, Merrill Lynch and
the following investment banking employees of Merrill Lynch may communicate in
person, by telephone or otherwise with a limited number of institutions, brokers
or other persons who are stockholders of Great Western: Herb Lurie, Louis S.
Wolfe, Paul Wetzel, Frank V. McMahon, John Esposito, Alex Sun, Christopher
Del-Moral Niles and Kavita Gupta. In the normal course of their respective
businesses Goldman Sachs and Merrill Lynch regularly buy and sell Great Western
Securities and Washington Mutual Securities for its own account and for the
accounts of its customers, which transactions may result from time to time in
Goldman Sachs and its associates and Merrill Lynch and its associates having a
net "long" or net "short" position in Great Western Securities, Washington
Mutual Securities, or option contracts or other derivatives in or relating to
Great Western Securities or Washington Mutual Securities.
As of April 7, 1997, Goldman Sachs had positions in Great Western Securities
and Washington Mutual Securities as principal as follows: (i) net "long" 8,973
of Great Western's common shares; (ii) net "long" $1 million of Great Western's
deposit notes; and (iii) net "long" 1,098 of Washington Mutual's common shares.
As of April 7, 1997, Merrill Lynch had positions in Great Western Securities and
Washington Mutual Securities as principal as follows: (i) net "long" 7,125 of
Great Western's common shares and (ii) net "long" 1,526 of Washington Mutual's
common shares.
<PAGE> 9
Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in thousands, except for per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Quarter ended
March 31,
1997 1996
<S> <C> <C>
Interest Income
Loans $ 619,496 $ 496,729
Available-for-sale securities 154,244 211,123
Held-to-maturity securities 52,599 55,929
Cash equivalents 394 841
Total interest income 826,733 764,622
Interest Expense
Deposits 257,712 274,050
Borrowings 252,068 203,570
Total interest expense 509,780 477,620
Net interest income 316,953 287,002
Provision for loan losses 15,526 20,889
Net interest income after
provision for loan losses 301,427 266,113
Other Income
Depositor fees 28,640 22,498
Securities, annuity & other
service fees 12,812 13,083
Loan servicing fees 14,280 8,477
Other operating income 13,689 7,766
Gain on sale of loans 5,725 4,380
Gain (loss) on sale of
other assets 243 806
Total other income 75,389 57,010
Other Expense
Salaries and employee benefits 86,819 81,835
Occupancy and equipment 32,864 27,675
Outside telecommunications and
data processing services 24,949 12,186
Regulatory assessments 4,066 11,572
Other operating expense 39,261 37,624
Amortization of goodwill
and other intangible assets 6,789 6,968
Real estate owned (REO) operations,
inclusive of write-downs (2,116) 3,234
Total other expense 192,632 181,094
Income before income taxes 184,184 142,029
Income taxes 70,112 49,695
Income before minority interest 114,072 92,334
Minority interest in earnings of
consolidated subsidiaries -- (3,527)
Net Income $ 114,072 $ 88,807
Net Income Attributable to
Common Stock $ 111,567 $ 84,202
Net income per common share:
Primary $ 0.93 $ 0.75
Fully Diluted 0.93 0.74
Financial Ratios
Return on average assets 1.01% 0.85%
Return on average equity 18.88 13.97
Return on average common equity 19.42 14.24
</TABLE>
<PAGE> 10
Washington Mutual, Inc.
Selected Financial Information
(dollars in thousands, except for per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Quarter ended
March 31,
1997 1996
<S> <C> <C>
Data Used To Compute Per
Share Amounts
Net income $ 114,072 $ 88,807
Preferred stock dividends:
Noncumulative Perpetual,
Series C (1,569) (1,569)
Noncumulative Perpetual,
Series E (936) (936)
Noncumulative Convertible
Perpetual, Series D -- (2,100)
Net income available to
primary common stock $ 111,567 $ 84,202
Net income $ 114,072 $ 88,807
Preferred stock dividends:
Noncumulative Perpetual,
Series C (1,569) (1,569)
Noncumulative Perpetual,
Series E (936) (936)
Net income available to
fully diluted common stock $ 111,567 $ 86,302
Average common shares used
to calculate earnings
per share:
Primary 120,277,744 111,797,730
Fully diluted 120,292,563 117,216,977
Net Interest Spread
Yield on loans and
note receivable 7.98% 8.04%
Yield on investments 6.88 7.19
Combined yield on
earning assets 7.68 7.72
Cost of deposits 4.38 4.53
Cost of borrowings 5.62 5.69
Combined cost of funds 4.91 4.97
Net interest spread 2.77% 2.75%
Net interest margin 2.88% 2.90%
Average Balances
Loans $ 31,086,400 $ 24,718,530
Investments 12,035,248 14,910,308
Total earning assets 43,121,648 39,628,838
Deposits 24,071,680 24,186,572
Borrowings 18,027,984 14,308,546
Total interest bearing
liabilities 42,099,664 38,495,118
Total assets 45,025,200 41,573,446
Stockholders' equity 2,416,232 2,542,743
</TABLE>
<PAGE> 11
Washington Mutual, Inc.
Consolidated Statements of Financial Position
(dollars in thousands, except for per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1997 1996
<S> <C> <C>
Assets
Cash and cash equivalents $ 532,671 $ 831,063
Trading account securities 2,804 1,647
Available-for-sale securities 8,942,084 9,111,274
Held-to-maturity securities 2,807,352 2,860,347
Loans, net of allowance for
loan losses 32,018,457 30,103,386
Loans held for sale 212,506 227,390
Real estate owned 94,498 103,111
Bank premises and equipment 495,186 482,391
Goodwill and other
intangible assets 130,698 133,509
Other assets 814,769 697,807
Total assets $ 46,051,025 $ 44,551,925
Liabilities
Deposits:
Checking accounts $ 3,164,963 $ 2,979,962
Savings and money
market accounts 7,121,545 6,842,061
Time certificates 14,012,013 14,258,118
Total deposits 24,298,521 24,080,141
Annuities 877,841 878,057
Federal funds purchased 1,230,000 1,052,000
Securities sold under
agreements to repurchase 7,561,220 7,835,453
Advances from the Federal
Home Loan Bank 8,643,363 7,241,492
Other borrowings 501,846 676,986
Other liabilities 510,391 389,908
Total liabilities 43,623,182 42,154,037
Stockholders' Equity
Preferred stock, no
par value: 10,000,000
shares authorized -
4,722,500 and 4,722,500
shares issued and outstanding -- --
Common stock, no par value:
350,000,000 shares authorized -
126,247,850 and 126,142,285
shares outstanding -- --
Capital surplus 957,233 952,747
Valuation reserve for
available-for-sale securities (12,935) 41,666
Retained earnings 1,483,545 1,403,475
Total stockholders'
equity 2,427,843 2,397,888
Total liabilities and
stockholders' equity $ 46,051,025 $ 44,551,925
Book value per common share $ 19.53 $ 19.30
Tangible book value per
common share 18.43 18.17
</TABLE>
<PAGE> 12
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31, Sep. 30, Jun. 30,
1997 1996 1996 1996
<S> <C> <C> <C> <C>
Interest Sensitivity
One-year interest
sensitivity using
principal balances
as a % of total
assets (0.8)% (3.6)% (1.0)% n.a.
Capital Adequacy
Washington Mutual, Inc.:
Stockholders'
equity/total assets 5.27% 5.38% 5.54% 5.21%
Tangible stockholders'
equity/total
tangible assets 5.00 5.10 5.24 4.88
Retail Checking Account
Activity (No.)
New accounts opened
during the quarter:
WMB and WMBfsb 62,395 58,011 61,811 52,955
ASB 41,474 17,895 14,931 12,408
103,869 75,906 76,742 65,363
Net new accounts
opened during
the quarter
WMB and WMBfsb 34,358 31,520 35,506 29,221
ASB 31,315 6,063 2,193 (89)
65,673 37,583 37,699 29,132
New accounts acquired
during the quarter 8,751 2,353 -- --
Retail Checking
Accounts (No.)
WMB and WMBfsb 651,474 608,365 574,492 538,986
ASB 268,932 237,617 231,554 229,361
Total retail
checking accounts 920,406 845,982 806,046 768,347
Households Served (No.)/a
WMB and WMBfsb 898,918 830,425 795,898 768,943
ASB 600,799 592,916 591,935 579,572
Total households
served 1,499,717 1,423,341 1,387,833 1,348,515
</TABLE>
(a) March figures for households served are as of Feb. 28, 1997
<PAGE> 13
<TABLE>
<CAPTION>
Quarter ended
March 31,
1997 1996
<S> <C> <C>
Nonbanking Subsidiary Pretax
Operating Income
Securities $ 4.3 $ 4.9
Insurance 4.3 4.5
Recognition of deferred
gain on sale of travel
agency subsidiary -- 4.1
Net income before
taxes, amortization
of goodwill and
other intangible
assets, and elimination
of intercompany
transactions $ 8.6 $ 13.5
</TABLE>
<PAGE> 14
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
<TABLE>
<CAPTION>
Quarter ended
March 31,
1997 1996 % Change
<S> <C> <C> <C>
Loan Originations
Single-family
residential (SFR):
Adjustable-rate $ 1,573.0 $ 1,314.8 20%
Fixed-rate 832.2 947.0 (12)
Total single-family
residential 2,405.2 2,261.8 6
SFR - custom construction 168.3 125.1 35
SFR - builder construction 156.8 124.6 26
Multi-family residential 139.7 130.1 7
Nonresidential real estate 73.7 40.4 82
Consumer 369.8 273.6 35
Commercial business 148.4 36.9 302
Total loan
originations $ 3,461.9 $ 2,992.5 16%
As a % of total
originations:
Single-family
residential 69% 76%
All other 31 24
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Change from
Dec. 31, 1996 Mar. 31, Dec. 31, Sep. 30, Jun. 30,
to Mar. 31, 1997 1997 1996 1996 1996
<S> <C> <C> <C> <C> <C>
Loans By
Property Type
Single-family
residential:
Adjustable-
rate $ 1,216.6 $18,173.4 $16,956.8 $15,792.1 $14,256.3
Fixed-rate 267.2 5,971.1 5,703.9 5,185.1 5,083.2
Total single-
family
residential 1,483.8 24,144.5 22,660.7 20,977.2 19,339.5
SFR - custom
construction 28.5 453.9 425.4 380.2 362.2
SFR - builder
construction 30.8 329.0 298.2 288.8 272.2
Multi-family
residential 311.0 2,869.8 2,558.8 2,473.9 2,433.5
Nonresidential
real estate (175.3) 1,076.9 1,252.2 1,258.8 1,346.1
Consumer 144.6 3,303.3 3,158.7 3,056.9 2,846.4
Commercial
business 80.6 420.8 340.2 295.3 270.4
Loan loss
reserves (3.8) (367.2) (363.4) (234.3) (234.3)
Total loans
outstanding $ 1,900.2 $32,231.0 $30,330.8 $28,496.8 $26,636.0
Change in Loans
Outstanding
Loans originated $ 3,461.9 $ 3,607.8 $ 3,446.1 $ 3,601.2
Loans purchased
or acquired 312.2 139.8 110.4 40.5
Loans
securitized (14.5) (56.8) -- (464.9)
Loans sold (558.3) (387.7) (583.8) (693.4)
Loan payments
and other (1,301.1) (1,469.1) (1,111.9) (1,267.0)
Change in
loans outstanding $ 1,900.2 $ 1,834.0 $1,860.8 $ 1,216.4
As a % of total loans
at beginning of
quarter 6% 6% 7% 5%
As a % of total assets
at beginning of quarter 4 4 4 3
</TABLE>
<PAGE> 16
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
<TABLE>
<CAPTION>
Mar. 31, Dec. 31, Sep. 30, Jun. 30,
1997 1996 1996 1996
<S> <C> <C> <C> <C>
Reserve For Loan Losses
Balance at beginning
of quarter $ 363.4 $ 234.3 $ 234.3 $ 232.9
Provision for loan losses 15.5 143.4 17.1 20.1
Reserves charged off,
net of recoveries (20.0) (15.4) (17.1) (18.7)
Reserves added through
business combinations 8.3 1.1 -- --
Balance at end of quarter $ 367.2 $ 363.4 $ 234.3 $ 234.3
Allocated reserves:
Multi-family residential
and nonresidential
real estate $ 82.9 $ 77.0 $ 21.6 $ 18.0
Builder construction -- -- 0.2 0.2
Commercial business 1.9 1.3 1.7 --
Total allocated
reserves 84.8 78.3 23.5 18.2
Unallocated reserves 282.4 285.1 210.8 216.1
Total reserve for
loan losses $ 367.2 $ 363.4 $ 234.3 $ 234.3
Reserve for loan losses
as a % of:
Nonperforming assets 109.76% 110.29% 72.53% 72.48%
Nonperforming assets,
less real estate owned 152.90 160.52 108.33 110.43
Nonperforming Assets
Nonaccrual assets $ 240.2 $ 226.4 $ 216.3 $ 212.1
REO:
REO 100.8 110.2 113.4 117.9
Reserve for losses (6.4) (7.1) (6.6) (6.8)
Net REO 94.4 103.1 106.8 111.1
Total nonperforming
assets $ 334.6 $ 329.5 $ 323.1 $ 323.2
Nonperforming assets by
property type:
Single-family
residential $ 254.9 $ 253.3 $ 241.1 $ 237.8
SFR - custom construction 5.2 2.5 2.8 1.3
SFR - builder construction 8.3 8.4 6.0 6.9
Multi-family residential 21.4 22.2 27.3 34.3
Nonresidential real estate 27.8 25.0 35.5 35.8
Consumer 21.8 24.1 16.0 13.2
Commercial business 1.6 1.1 1.0 0.7
Reserve for REO losses (6.4) (7.1) (6.6) (6.8)
Total nonperforming
assets $ 334.6 $ 329.5 $ 323.1 $ 323.2
As a % of total loans 1.04% 1.09% 1.13% 1.21%
As a % of total assets 0.73 0.74 0.74 0.76
Troubled Debt Restructurings $ 94.7 $ 112.3 $ 95.1 $ 78.5
As a % of total loans 0.29% 0.37% 0.33% 0.29%
As a % of total assets 0.21 0.25 0.22 0.18
</TABLE>
CONTACT: Libby Hutchinson, 800/228-9268 or 206/461-2484
Investors: JoAnn DeGrande, 206/461-3186
KEYWORD: WASHINGTON CALIFORNIA UTAH MONTANA IDAHO OREGON
INDUSTRY KEYWORD: BANKING EARNINGS
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