<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)
/x/ Definitive Additional Materials
/x/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
WASHINGTON MUTUAL
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transactions:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
Washington Mutual, Inc.
[LOGO] Merger With [LOGO]
Great Western Financial Corporation
HIGH GROWTH CONSUMER BANKING
April 1997
<PAGE> 3
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> 4
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 $43.31 based on WAMU closing stock price of
$48.125 on 4/1/97.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 3 GREAT WESTERN [LOGO]
<PAGE> 5
COMBINATION CREATES STRENGTH AND SCALE
- --------------------------------------------------------------------------------
($ in billions)
At 12/31/96
--------------------------------------
WAMU GWF Combined
-------- -------- --------
Assets $44.6 $42.9 $87.0
Deposits $24.1 $28.6 $52.7
Market Capitalization at 3/5/97 $ 6.3 $ 6.2 $12.9
Banking and Lending Offices 557 571 1,028
Consumer Finance Offices -- 502 502
Households (mm) 1.4 2.7 4.1
Mutual Funds Under Management $ 1.4 $ 3.4 $ 4.8
1996 Single Family Mortgage
Originations $10.0 $ 6.1 $16.1
1996 Total Loan Originations $13.6 $ 8.5 $22.1
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 4 GREAT WESTERN [LOGO]
<PAGE> 6
BENEFITS OF THE TRANSACTION
- --------------------------------------------------------------------------------
CREATES SHAREHOLDER VALUE
- - EPS accretion and accelerated earnings growth
- - Strong, low risk balance sheet
PREMIER CONSUMER BANKING FRANCHISE
- - Geographically diversified West Coast powerhouse
- - National mortgage and consumer finance franchises
LOW RISK EXECUTION
- - Strong management team with proven track record
- - Thorough due diligence and business plan formulation
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 5 GREAT WESTERN [LOGO]
<PAGE> 7
- --------------------------------------------------------------------------------
CREATES
SHAREHOLDER VALUE
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN[LOGO]
6
<PAGE> 8
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 $88 million in 1999 fundamentals
- - Surplus capital - Maintains solid capital
supports increased loan levels and flexibility
retention
- Strong NPA, loss
reserve ratios
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 7 GREAT WESTERN [LOGO]
<PAGE> 9
EPS ACCRETION BASED ON DUE
DILIGENCED ASSUMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ 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 Opportunities 0 36 53
Earnings from Retained Capital and Loans 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 $5.90
% Accretion to First Call 5.0% 15.0%
% EPS Growth 25.3% 22.7%
</TABLE>
(a) First Call estimates for 1997 and 1998 before preferred dividends. 1999
estimates based on IBES growth rate of 12% and 10.5% for WAMU and GWF.
(b) Based on 252.1mm pro forma shares outstanding in 1997, 253.1mm in 1998, and
253.8mm in 1999. EPS figures include 9.1mm GWF option shares. EPS accretion
using option shares under the treasury stock method would be 6.3% and 16.6%
in 1998 and 1999.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 8 GREAT WESTERN [LOGO]
<PAGE> 10
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions) 1998 1999
------------------ ------------------
% of GWF % of GWF
Amount Op. Exp(a) Amount Op. Exp(a)
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Administration/Finance $52 41% $65 51%
Lending 15 11 69 49
Corporate Operations 56 25 96 43
Retail Banking 77 21 99 27
Subsidiaries 8 5 11 7
---- ----
Total Pretax Cost Savings $208 $340
Aftertax Cost Savings $125 $204
Pretax Cost Savings as a % of:
GWF Net Operating Expenses(b) 23% 38%
Combined 1997 G&A(c) 13% 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 $745mm for WAMU based on
sampling of analyst reports.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 9 GREAT WESTERN [LOGO]
<PAGE> 11
CONFIDENCE IN EXECUTION
- --------------------------------------------------------------------------------
/ / Unique experience as an acquiror (22 transactions)
/ / Integration plan is underway
/ / Deposit/mortgage servicing systems are the same
/ / Network infrastructure is the same
/ / WAMU partnerships with:
o IBM
o EDS
o ALLTEL
/ / Track record of fully integrating within 6 months of close
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 10 GREAT WESTERN [LOGO]
<PAGE> 12
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ 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) and alignment of GWF's
loan origination cost structure with WAMU's $52
- - Reduced servicing cost per loan 17
---
$69
===
</TABLE>
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[LOGO]Washington Mutual 11 GREAT WESTERN[LOGO]
<PAGE> 13
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ 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
---
$99
===
</TABLE>
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 12 GREAT WESTERN[LOGO]
<PAGE> 14
MERGER-RELATED CHARGES
FACILITATE COST SAVINGS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ 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 $318
====
- -------------------------------------------------------------------------------
</TABLE>
[LOGO] Washinton Mutual 13 GREAT WESTERN [LOGO]
<PAGE> 15
CONSUMER BANKING FEE INCOME OPPORTUNITIES
- --------------------------------------------------------------------------------
($ 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 $53
</TABLE>
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
14
<PAGE> 16
NET INTEREST INCOME GROWTH
- --------------------------------------------------------------------------------
- - Earnings retention results in strong capital growth
- - Strong historical and projected loan originations support net loan growth
- - Margin assumptions are conservative relative to current lending spreads:
- Adjusted for origination, servicing and credit costs
- Wholesale match-funding assumed to neutralize interest rate risk
- - Result: net interest income grows from retaining loans at reasonable margins
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 15 GREAT WESTERN [LOGO]
<PAGE> 17
STRONG CAPITAL GENERATION AND GROWTH POTENTIAL
- --------------------------------------------------------------------------------
($ 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
====== ====== ====== ======
Excess Common Equity Above 5%
Common Equity/Assets Ratio
Assuming the Following
Asset Growth Rate(a): 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 $87.4 billion
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
16
<PAGE> 18
STRONG ORIGINATIONS DRIVE NET LOAN GROWTH
- --------------------------------------------------------------------------------
($ in billions)
TOTAL LOAN ORIGINATIONS
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU & GWF
WAMU GWF WAMU & GWF Paydowns/Prepayments
---- ----- ---------- --------------------
<S> <C> <C> <C> <C>
1994.......... 9.3 $10.3 $19.6 $10.0
1995.......... 9.4 9.7 19.1 8.6
1996.......... 13.6 8.5 22.1 11.4
</TABLE>
NET ORIGINATIONS(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
----- ----- ----------
<S> <C> <C> <C>
1994.......... $5.6 $3.1 $ 8.7
1995.......... 6.5 3.4 9.9
1996.......... 9.2 0.9 10.1
</TABLE>
(a) Total originations less REO transfers, prepayments and paydowns. Net
originations are not reduced for loans sold.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 17 GREAT WESTERN [LOGO]
<PAGE> 19
1996 WAMU/ASB LOAN SPREADS
- ----------------------------------------------------------------------------
% of Net Spread to
Resi/Consumer Wholesale
Production Matched Funding(a)
------------- ------------------
Residential Mortgage
Fixed Rate 28% 1.15%
COFI ARM's 36 1.35
Treasury ARM's 12 1.71
Multifamily 4 2.57
Construction - Custom 6 1.91
Construction - Spec. 4 5.54
Consumer
Home Equity 5 2.48%
Mfd Housing 3 1.61
Other 2 3.24
---
Total 100% 1.69%(b)
(a) Net spread after deducting origination, servicing and credit costs.
(b) Equivalent margin estimated to be 15-30 bps higher depending on capital
allocation.
- ----------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
18
<PAGE> 20
LOAN RETENTION DRIVES GROWTH IN
NET INTEREST INCOME
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1997P 1998P 1999P
------- ------- -------
<S> <C> <C> <C>
Combined Net Loan Growth
(Street Expectations)(a) $3,500 $ 3,600 $ 3,800
Additional Net Loan Growth 3,100 7,400 7,600
------ ------- -------
Total Net Loan Growth $6,600 $11,000 $11,400
Cumulative Average Additional Net Loan
Growth (Above Street Expectations)(b) $ 6,800 $14,300
Pretax Margin(c) 1.66% 1.72%
------- -------
Incremental Net Interest Income $ 113 $ 246
Aftertax Incremental Net Interest Income $ 68 $ 148
</TABLE>
(a) Assumes 4% asset (in loans) growth of combined companies.
(b) Equals 100% of prior years and 50% of current year.
(c) Net of estimated provision for loan losses and associated operating
expenses. Equivalent pretax interest spread estimated to be approximately
150bps.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
19
<PAGE> 21
STRONG ASSET QUALITY AND RESERVES
- ----------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
At December 31, 1996
---------------------------------------------------------
<S> <C> <C> <C> <C>
WAMU GWF Adjustments Pro Forma
---- --- ----------- ---------
Non-Performing $226 $352 - $578
Loans(a)
Real Estate Owned 103 120 - 223
---- ---- ----
NPAs $329 $472 - $801
==== ==== ====
NPAs/Assets 0.74% 1.10% - 0.92%
Loan Loss Reserves $363 $314 $100 $777
Reserves/NPLs(a) 161% 89% - 134%
(a) Excluding restructured loans
- ---------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
</TABLE>
20
<PAGE> 22
- --------------------------------------------------------------------------------
PREMIER CONSUMER
BANKING FRANCHISE
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
21
<PAGE> 23
STRONG WEST COAST AND FLORIDA FRANCHISES
- --------------------------------------------------------------------------------
[MAPS OF THE WESTERN UNITED STATES AND FLORIDA SHOWING BRANCH LOCATIONS]
<TABLE>
<CAPTION>
Deposits Banking Deposit
State ($B)(a) Locations Share Rank
- ------------ -------- --------- ------- ----
<S> <C> <C> <C> <C>
California $34.6 562 9.2% 3
Washington 8.1 189 15.4% 2
Oregon 2.8 135 10.0% 3
Florida 7.1 140 4.0% 5
Other States 0.6 20 NA NA
</TABLE>
Source: SNL Securities
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 22 GREAT WESTERN [LOGO]
<PAGE> 24
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 23 GREAT WESTERN [LOGO]
<PAGE> 25
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 24 GREAT WESTERN [LOGO]
<PAGE> 26
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 25 GREAT WESTERN [LOGO]
<PAGE> 27
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 26 GREAT WESTERN [LOGO]
<PAGE> 28
- ------------------------------------------------------------------------------
WASHINGTON MUTUAL'S
POSITIONING
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
27
<PAGE> 29
EVOLUTION OF A
SUPER-REGIONAL FRANCHISE
- -------------------------------------------------------------------------------
[MAP OF THE WESTERN UNITED STATES]
1987(a)
Assets $5.7B
Loans 3.0B
Deposits 3.5B
Equity 316.9mm
Stock Price 6.28
Market Capitalization 390.0mm
[MAP OF THE WESTERN UNITED STATES]
1996(a)
Assets $44.6B
Loans 30.3B
Deposits 24.1B
Equity 2.4B
Stock Price 43.31
Market Capitalization 5.1B
(a) As of and for the latest twelve months ended 12/31/87 and 12/31/96.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
28
<PAGE> 30
AMERICAN'S INTEGRATION IS WELL UNDERWAY
- --------------------------------------------------------------------------------
- - Closed transaction on time
- - Integration on schedule
- - Effectively capitalizing on product opportunities with ASB customers
- - Consumer banking strategy showing clear signs of success
- 16,000 net new checking accounts opened in first two months of 1997
(compares to net account loss in first two months of 1996)
- Majority of accounts opened represent new households
- - Strengthening of senior and middle management
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 29 GREAT WESTERN [LOGO]
<PAGE> 31
FRANCHISE POTENTIAL OF AMERICAN
- ------------------------------------------------------------------------------
($ in millions)
[BAR GRAPH]
<TABLE>
<CAPTION>
Consumer Lending
(CAGRs: 7.3%, -2.4%)
WAMU WAMU & American
---- ---------------
<S> <C> <C>
1993 $ 957 $ 980
1994 $ 998 $1,054
1995 $ 968 $ 997
1996 $1,268 $1,289
<CAPTION>
Depositor Fee Income
(CAGRs: 52.4%, 10.4%)
WAMU WAMU & American
---- ---------------
<S> <C> <C>
1993 $22 $ 40
1994 $29 $ 45
1995 $58 $ 79
1996 $79 $103
</TABLE>
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 30 GREAT WESTERN [LOGO]
<PAGE> 32
FRANCHISE POTENTIAL OF AMERICAN
- ------------------------------------------------------------------------------
(in thousands)
[BAR GRAPH]
<TABLE>
<CAPTION>
Retail Checking Accounts
(CAGRs: 22.6%, 2.3%)
WAMU WAMU & American
---- ---------------
<S> <C> <C>
1993 330 569
1994 394 611
1995 489 744
1996 608 864
<CAPTION>
Households Served
(CAGRs: 10.0%, 2.7%)
WAMU WAMU & American
---- ---------------
<S> <C> <C>
1993 623 1,170
1994 653 1,197
1995 737 1,323
1996 830 1,423
</TABLE>
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 31 GREAT WESTERN [LOGO]
<PAGE> 33
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 32 GREAT WESTERN [LOGO]
<PAGE> 34
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) 12.5x 10.5x 9.4x
EPS with Great Western $4.81 $5.90
P/E Multiple(b) 10.0x 8.2x
</TABLE>
(a) First Call estimates for 1997 and 1998. 1999 based on IBES growth rate of
12%.
(b) Based on closing stock price of $48.125 on 4/1/97.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 33 GREAT WESTERN [LOGO]
<PAGE> 35
- -----------------------------------------------------------------------------
A SUPERIOR ALTERNATIVE
- -----------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
34
<PAGE> 36
================================================================================
AHMANSON'S PROJECTIONS:
CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS
AND INCONSISTENT ANALYSIS
================================================================================
[LOGO] Washington Mutual 35 GREAT WESTERN [LOGO]
<PAGE> 37
AHMANSON'S PROJECTIONS: CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS AND INCONSISTENT ANALYSIS
================================================================================
- - Ahmanson made significant changes in operating assumptions to support
its higher revised proposal. Absent revised assumptions, the
-------------------------------
transaction is dilutive through 1999
------------------------------------
- Overly-aggressive cost savings
- Unsubstantiated revenue synergies
- - 40% increase in its share repurchase assumptions (from $2.0 billion to $2.8
billion) made just one day after filing its revised joint proxy
statement/prospectus on March 18, 1997
- - Ahmanson's forecasts dependent on maintaining one of the lowest consolidated
------------------------------
tangible common equity ratios in the industry
---------------------------------------------
- Current ratio already one of the lowest among major savings and loan
holding companies
- Pro forma projected ratio of tangible common to tangible assets would
also be among the lowest
================================================================================
[LOGO] Washington Mutual 36 GREAT WESTERN [LOGO]
<PAGE> 38
AHMANSON'S PROJECTIONS: CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS AND INCONSISTENT ANALYSIS
================================================================================
- - To keep its equity ratios from being even lower, Ahmanson's projections
assume negative asset growth for the rest of the decade. This assumption
-------------------------------------------------
is inconsistent with the baseline EPS assumed by Ahmanson in its pro formas
- 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 forecast depend on massive share repurchases that leave
-----
little margin for error
-----------------------
- Share repurchases plus common dividends aggregate 180% of cumulative
pro forma net income to common (a shortfall of $1.4 billion) and 125%
of cumulative pro forma tangible common equity generated (a shortfall
of $575 million) through 1999
- Ahmanson has virtually no flexibility--we believe it can only
undershoot its share repurchase targets and miss its pro forma EPS
forecasts
================================================================================
[LOGO] Washington Mutual 37 GREAT WESTERN [LOGO]
<PAGE> 39
AHMANSON'S PROJECTIONS: CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS AND INCONSISTENT ANALYSIS
================================================================================
- - Pro forma EPS forecasts as per March 25 press release
inexplicably lower than March 17 analyst presentation
- 1999E pro forma EPS per March 17 presentation $3.97
- 1999E pro forma EPS per March 25 press release $3.93
- - Tangible common equity ratio from March 25 press
release used a non-standard definition (ratios at 12/31/99E)
- Unconventional calculation by Ahmanson(a) 3.74%
- Straightforward market-accepted calculation 3.46%
- Straightforward market-accepted calcualtion using
Wall Street consensus asset growth of 2% for the
combined company 3.19%
(a) In computing the ratio, AHM deducts intangibles on a tax-effected basis.
===============================================================================
[LOGO] Washington Mutual 38 GREAT WESTERN [LOGO]
<PAGE> 40
AHMANSON'S MOST RECENT "REVISED"
ASSUMPTIONS ARE NOT CREDIBLE
================================================================================
<TABLE>
<CAPTION>
($ 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 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 $2.8 bn -- AHM's original per share repurchase price was unreasonably
low. In order to increase the per share repurchase price
and still make the numbers work they had to either (i)
reduce the aggregate number of shares repurchased, or (ii)
increase the aggregate dollar amount of the share
repurchase. The former would result in lower pro forma
earnings per share, the latter would result in reduced
capital levels; AHM elected the latter
</TABLE>
- --------------------------------------------------------------------------------
Key Considerations
- ------------------
- - Why didn't AHM present its revised assumptions as part of its original
proposal?
- - The revised proposal would be permanently dilutive to AHM shareholders absent
the most recent assumptions
- --------------------------------------------------------------------------------
(a) Includes fee income opportunities only.
================================================================================
[LOGO] Washington Mutual 39 GREAT WESTERN [LOGO]
<PAGE> 41
AHMANSON'S COST SAVINGS ARE OVERLY
AGGRESSIVE
================================================================================
<TABLE>
($ in millions)
AHM WAMU AHM
Projected Projected Excess over
Savings(a) Savings(b) WAMU
---------- ---------- -----------
<S> <C> <C> <C>
Administration/Operations $167 $161 $ 6
Lending/Servicing 81 69 12
Retail Banking 144 99 45
Subsidiaries 12 11 1
---- ---- ----
Itemized Cost Savings $404 $340 $ 64
Additional Savings(c) 50 -- 50
---- ---- ----
Total $454 $340 $114
==== ==== ====
</TABLE>
(a) From February 18, 1997 analyst presentation.
(b) From Form S-4 filed on March 13, 1997.
(c) From March 17, 1997 analyst presentation.
================================================================================
[LOGO] Washington Mutual 40 GREAT WESTERN [LOGO]
<PAGE> 42
AHMANSON'S SHARE REPURCHASE PLANS --
WHAT'S THE STORY?
- -------------------------------------------------------------------------------
February 18
- - "Repurchasing over $2 billion of common through 1999"
- Ahmanson investor presentation, page 38, dated February 18, 1997
- - ". . . Ahmanson [expects] to repurchase shares of Ahmanson common stock
having an aggregate market value of approximately $2 billion over the nine
------------------------
fiscal quarters beginning October 1, 1997."
- Ahmanson Joint Proxy Statement/Prospectus, page 22, dated February 18,
1997 and reaffirmed in its Amendment No. 1 dated March 18, 1997
March 19
- - "Ahmanson assumes $2.8 billion -- not $2 billion -- in share
repurchases. . ."
- Ahmanson press release dated March 19, 1997
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 41 GREAT WESTERN [LOGO]
<PAGE> 43
UNREALISTICALLY LOW SHARE REPURCHASE PRICE IN ORIGINAL ANALYST PRESENTATION
- -------------------------------------------------------------------------------
($ in millions, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1997E 1998E 1999E
---------- ---------- ----------
Cash Generated to Buy Back Common(a) $ 258 $ 866 $ 916
Average Shares Outstanding (millions)(a) 147.8 241.2 219.6
Implied # Shares Repurchased (millions)(b) 7.5 22.9 20.3
Implied Repurchase Price(c) $34.47 $37.79 $45.16
Current Year P/E Multiple (d) 12.2x 11.4x 11.0x
</TABLE>
(a) From Ahmanson's analyst presentation dated February 18, 1997.
(b) Number of shares that must be repurchased in order to match Ahmanson's
projected average share amount.
(c) "Cash Generated to Buy Back Common" divided by "Implied # Shares
Repurchased".
(d) Based on market data as of February 14, 1997, Ahmanson's 1996 P/E ratio is
17.5x (based on recurring EPS of $2.31) and its 1997E P/E ratio is 13.7x
(based on First Call EPS of $2.96).
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual [LOGO] GREAT WESTERN
42
<PAGE> 44
AHMANSON'S PROPOSAL RELIES ON IMPRUDENT LEVERAGE
- -------------------------------------------------------------------------------
($ 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 4,671 5,636 6,810
Tangible Common/Tangible Assets 4.91% 5.38% 5.91%
AHMANSON PROPOSAL -- "A LEVERAGED BUYOUT"(c)
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity 3,146 3,128 3,118
Tangible Common/Tangible Assets 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
presentations. See appendix for further details.
(b) Assumes 10% annual growth rate, for illustrative purposes.
(c) Based on data presented in Ahmanson's March 25, 1997 press release.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 43 GREAT WESTERN [LOGO]
<PAGE> 45
AHMANSON'S CONSOLIDATED TANGIBLE COMMON EQUITY RATIO IS AMONG THE LOWEST IN THE
INDUSTRY(a)
===============================================================================
- ---------------------------------------------------------------
Rank out of 93 institutions with more than $1 billion in assets
- ---------------------------------------------------------------
Tangible Common/
Bottom 10 Institutions Tangible Assets
- ---------------------------- -------------------------------------
93. Coastal Bancorp 2.75%
- -------------------------------------------------------------------------------
92. H.F. AHMANSON 3.31/3.46%(b)
- -------------------------------------------------------------------------------
91. Sterling Financial 3.58
90. Bank United Financial 3.65
89. Chevy Chase Bank 3.80
88. Sovereign Bancorp(c) 3.88
87. Webster Financial 3.93
86. FirstFed Financial 4.63
85. Bank United 4.79
84. Coast Savings 4.81
(a) Source: SNL Securities. At December 31, 1996.
(b) Pro forma @ 12/31/99 for acquisition of Great Western. From Ahmanson's
March 25, 1997 press release.
(c) Pro forma for acquisition of Bankers Corp.
================================================================================
[LOGO] Washington Mutual 44 GREAT WESTERN [LOGO]
<PAGE> 46
AHMANSON'S FORECAST DEPENDS ON MASSIVE
SHARE REPURCHASES (a)
<TABLE>
<CAPTION>
==============================================================================================================
($ and shares in millions)
197EQ4 1998E 1999E CUMULATIVE
------ ----- ----- ----------
<S> <C> <C> <C> <C>
Net Income to Common $ 64 $ 807 $ 938 $1,809
Cash Net Income to Common 121 1,033 1,164 2,318
--------
Repurchases + Common Dividends $621 $1,381 $1,218 $3,220
--------
Repurchases + Common Dividends
Net of Reissuances 613 1,077 1,203 2,893
Repurchases + Common Dividends
--------
% of net income to common 970% 171% 130% 178%
--------
Repurchases + Common Dividends Net of Reissuances
--------
% of cash net income to common 507% 104% 103% 125%
--------
# Shares Repurchased 13.8 23.8 17.0 54.6
--------
% of initials shares 5% 9% 6% 20%
--------
(a) All data from Ahmanson's March 25, 1997 press release.
==============================================================================================================
</TABLE>
[LOGO] WASHINGTON MUTUAL 45 GREAT WESTERN [LOGO]
<PAGE> 47
AHMANSON'S FORECAST DEPENDS ON MASSIVE
SHARE REPURCHASES(a)
===============================================================================
($ and shares in millions)
<TABLE>
<CAPTION>
1997EQ4 1998E 1999E CUMULATIVE
------- ----- ----- ----------
<S> <C> <C> <C> <C>
Net Income to Common $ 64 $ 807 $ 938 $1,809
Cash Net Income to Common 121 1,033 1,164 2,318
Repurchases + Common Dividends $621 $1,381 $1,218 $3,220
Repurchases + Common Dividends ------
Net of Reissuances 613 1,077 $1,203 2,893
Repurchases + Common Dividends
% of net income to common 970% 171% 130% 178%
-----
Repurchases + Common Dividends Net of Reissuances
% of cash net income to common 507% 104% 103% 125%
------
# Shares Repurchased
% of initial shares 13.8 23.8 17.0 54.6
5% 9% 6% 20%
------
(a) All data from Ahmanson's March 25, 1997 press release.
</TABLE>
================================================================================
[LOGO] Washington Mutual 46 GREAT WESTERN [LOGO]
<PAGE> 48
AHMANSON'S FORECAST DEPENDS ON MASSIVE
SHARE REPURCHASES
================================================================================
- - Over $3.2 billion in share repurchases plus common dividends through 1999--
nearly 90% of tangible common equity at closing
- - Share repurchases plus common dividends through 1999 aggregate nearly 180%
of its cumulative net income during the period
- - Share repurchases plus common dividends through 1999 aggregate nearly 125%
of the cumulative tangible common equity generated during the period
- - Nearly 14 mm in repurchases during the fourth quarter of 1997, an amount
which represents 44% of fourth quarter 1996 trading volume (adjusted for
repurchases)
- - Nearly 55 mm in share repurchases through 1999--over one-fifth of the
shares outstanding at closing
- - The magnitude of the share repurchases exceeds that in both the Wells Fargo/
First Interstate and NationsBank/Boatmen's transactions
================================================================================
[LOGO] Washington Mutual 47 GREAT WESTERN [LOGO]
<PAGE> 49
AHMANSON'S OFFER IS DILUTIVE THROUGH 1999
- -------------------------------------------------------------------------------
($ in millions, except per share amounts)
<TABLE>
<CAPTION> Ahmanson's Assumptions Adjusted
Ahmanson's Assumptions(a) for WAMU Capital Level(b)
------------------------- -------------------------
1998E 1999E 1998E 1999E
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Pro Forma Net Income(c) $ 819 $ 938 $ 893 $1,034
Average Shares (millions) 262 239 298 282
Tangible Common Equity/Tangible Assets 3.45% 3.46% 5.38% 5.91%
Ahmanson Stand-Alone EPS $3.51(d) $3.85(d) $3.51(d) $3.85(d)
Pro Forma EPS 3.13 3.93 2.99 3.67
Accretion/(Dilution) (11)% 2% (15)% (5)%
Ahmanson Stand-Alone Cash EPS $3.66(d) $4.03(d) $3.66(d) $4.03(d)
Pro Forma Cash EPS 3.99 4.88 3.75 4.47
Accretion/(Dilution) 9% 21% 3% 11%
</TABLE>
(a) Based on Ahmanson's March 25, 1997 press release.
(b) Tangible common equity ratio assumed to be equal to Washington Mutual's pro
forma ratio. Share repurchases made at prices consistent with Ahmanson's
March 25, 1997 press release (approximately 12.25x cash EPS). Assumes, for
illustrative purposes only, that Ahmanson fully realizes its revised
synergies. See appendix for further details.
(c) 1997 and 1998 are adjusted to exclude non-recurring items.
(d) As implied by the March 17, 1997 analyst presentation.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 46 GREAT WESTERN [LOGO]
<PAGE> 50
AHMANSON'S OFFER IS DILUTIVE THROUGH 1999
- --------------------------------------------------------------------------------
($ in millions, except per share amounts)
<TABLE>
<CAPTION>
Ahmanson's Assumptions Adjusted
Ahmanson's Assumptions(a) to Reflect Original Synergies(b)
------------------------- --------------------------------
1998E 1999E 1998E 1999E
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Pro Forma Net Income (c) $819 $938 $773 $874
Average Shares (millions) 262 239 261 239
Tangible Common Equity/Tangible Assets 3.45% 3.46% 3.45% 3.46%
Ahmanson Stand-Alone EPS $3.51(d) $3.85(d) $3.51(d) $3.85(d)
Pro Forma EPS 3.13 3.93 2.96 3.66
Accretion/(Dilution) (11)% 2% (16)% (5)%
Ahmanson Stand-Alone Cash EPS $3.66(d) $4.03(d) $3.66(d) $4.03(d)
Pro Forma Cash EPS 3.99 4.88 3.82 4.61
Accretion/(Dilution) 9% 21% 4% 14%
</TABLE>
(a) Based on Ahmanson's March 25, 1997 press release.
(b) Assumes originally-announced synergies. Share repurchases made at prices
consistent with Ahmanson's March 25, 1997 press release (approximately
12.25x cash EPS). See appendix for further details.
(c) 1997 and 1998 are adjusted to exclude non-recurring items.
(d) As implied by the March 17, 1997 analyst presentation.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 47 GREAT WESTERN [LOGO]
<PAGE> 51
AHMANSON'S OFFER IS DILUTIVE THROUGH 1999
- -------------------------------------------------------------------------------
($ in millions, except per share amounts)
<TABLE>
<CAPTION>
Ahmanson's
Assumptions
Adjusted for
WAMU Capital
Level and
Original
Ahmanson's Assumptions(a) Synergies(b)
------------------------- -------------------------
1998E 1999E 1998E 1999E
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Pro Forma Net Income (c) $ 819 $ 938 $ 847 $ 969
Average Shares (millions) 262 239 299 283
Tangible Common Equity/Tangible Assets 3.45% 3.46% 5.38% 5.91%
Ahmanson Stand-Alone EPS $3.51(d) $3.85(d) $3.51(d) $3.85(d)
Pro Forma EPS 3.13 3.93 2.84 3.43
Accretion/(Dilution) (11)% 2% (19)% (11)%
Ahmanson Stand-Alone Cash EPS $3.66(d) 4.03(d) $3.66(d) $4.03(d)
Pro Forma Cash EPS 3.99 4.88 3.59 4.23
Accretion/(Dilution) 9% 21% (2)% 5%
</TABLE>
(a) Based on Ahmanson's March 25, 1997 press release.
(b) Tangible common equity ratio assumed to be equal to Washington Mutual's pro
forma ratio. Assumes originally-announced synergies. Share repurchases made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS). Tangible assets are adjusted from
unrealistic assumptions used by Ahmanson. See appendix for further details.
(c) 1997 and 1998 are adjusted to exclude non-recurring items.
(d) As implied by the March 17, 1997 analyst presentation.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 48 GREAT WESTERN [LOGO]
<PAGE> 52
- --------------------------------------------------------------------------------
THE WAMU/GWF
COMBINATION IS
SIGNIFICANTLY STRONGER
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
49
<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 4.59%(a) 3.46%(b)
Intangibles to Total Equity 9 (a) 58 (b)
NPAs to Assets(c) 0.92% 1.37%
Reserves to NPLs(c)(d) 134 84
High Risk Real Estate Loans to Loans(e) 11 22
Tangible Common Equity to Assets
With Equal Reserve to NPL Coverage 4.59%(a) 3.16%(b)
</TABLE>
- ------------
(a) At December 31, 1996. Reflects $318 million in after-tax restructuring
charges.
(b) Projected at December 31, 1997E based on data presented in Ahmanson's March
25, 1997 press release.
(c) At December 31, 1996. NPL and NPA ratios exclude restructured loans.
(d) Reflects $100 million increase in loan loss reserves.
(e) At September 30, 1996 for Ahmanson; at December 31, 1996 for Washington
Mutual and Great Western. Includes construction, multi-family, commercial
real estate and land loans and REO/REI. Loans include REO/REI.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 50 GREAT WESTERN [LOGO]
<PAGE> 54
BETTER OPERATING PERFORMANCE(a)
- --------------------------------------------------------------------------------
($ 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) Results are for 1999 as 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 51 GREAT WESTERN [LOGO]
<PAGE> 55
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 -- Ahmanson
Assumptions
CAGR = 20%
EPS Accretion/
EPS (Dilution)
----- -----
1997E..........................$2.75
1998E..........................$3.13 (11)%
1999E..........................$3.93 2 %
[Bar Graph]
AHM/GWF -- Reasonable
Assumptions (a)
CAGR = 14%
EPS Accretion/
EPS (Dilution)
----- -----
1997E..........................$2.65
1998E..........................$2.84 (19)%
1999E..........................$3.43 (11)%
(a) Adjusted to reflect leverage consistent with Washington Mutual and
originally announced synergies. See appendix for further details.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
52
<PAGE> 56
FASTER PROJECTED GROWTH IN TANGIBLE BOOK VALUE PER SHARE
- -------------------------------------------------------------------------------
[Bar Graph]
WAMU/GWF
CAGR = 15%
1996...........................$18.17
1997E..........................$19.28
1998E..........................$23.17
1999E..........................$27.91
[Bar Graph]
AHM/GWF -- Ahmanson
Assumptions
CAGR = (5)%
1996...........................$16.07
1997E..........................$12.22
1998E..........................$12.72
1999E..........................$13.59
[Bar Graph]
AHM/GWF -- Reasonable
Assumptions (a)
CAGR = 6%
1996...........................$16.07
1997E..........................$15.33
1998E..........................$17.03
1999E..........................$19.25
(a) Adjusted to reflect leverage consistent with Washington Mutual. Assumes
originally-announced synergies. See appendix for further details.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
53
<PAGE> 57
- --------------------------------------------------------------------------------
THE WAMU TRANSACTION
IS THE BEST FOR
GWF SHAREHOLDERS
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
54
<PAGE> 58
EPS PER GWF SHARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AHM/GWF Proposal
-----------------------------------------------
Ahmanson's
Assumptions
Adjusted for
WAMU Capital
GWF WAMU/ Level and
Stand- GWF Ahmanson WAMU Capital Original
Alone Merger Assumptions Level(a) Synergies(c)
------ ------ ----------- ----------- --------------
<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(b) 40% 22% 16% 10%
1999E GAAP EPS per GWF Share $3.40 $5.31 $4.72 $4.40 $4.12
Percent Change(b) 56% 39% 30% 21%
1998E Cash EPS per GWF Share $3.35 $4.56 $4.80 $4.50 $4.31
Percent Change(b) 36% 43% 34% 29%
1999E Cash EPS per GWF Share $3.66 $5.55 $5.86 $5.36 $5.08
Percent Change(b) 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) 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.
(c) Assumes originally-announced synergies 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.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 55 GREAT WESTERN [LOGO]
<PAGE> 59
- --------------------------------------------------------------------------------
WAMU'S TRACK RECORD IS
SUPERIOR IN EVERY WAY
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
56
<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 57 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]
58
<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 59 GREAT WESTERN [LOGO]
<PAGE> 63
HIGHER CAPITAL RATIOS/
FASTER TANGIBLE BOOK GROWTH(a)
- ------------------------------------------------------------------------------
[BAR GRAPH]
<TABLE>
<CAPTION>
Tangible Common Equity/
Tangible Assets(b)
(in percentages)
WAMU AHM
---- --------
<S> <C> <C>
1992 .... 6.1% 4.4%
1993 .... 4.6% 3.7%
1994 .... 4.7% 3.5%
1995 .... 5.5% 4.5%
1996 .... 4.8% 3.3%
<CAPTION>
Tangible Book Value/
Share
(in dollars)
WAMU AHM
---- ----
<S> <C> <C>
1992 .... $13.91 $17.94
1993 .... $13.54 $15.94
1994 .... $14.74 $15.70
1995 .... $18.39 $19.47
1996 .... $18.17 $16.07
</TABLE>
(a) Reflects numbers as originally reported
(prior to restatement for pooling transactions).
(b) Excludes goodwill and other intangibles.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 60 GREAT WESTERN [LOGO]
<PAGE> 64
LOWER LEVEL OF NPAs/
BETTER RESERVE COVERAGE(a)
- ------------------------------------------------------------------------------
[BAR GRAPH]
<TABLE>
<CAPTION>
Reserves/NPLs(b)
WAMU(c) AHM
------ --------
<S> <C> <C>
1992 .... 96% 24%
1993 .... 135% 50%
1994 .... 180% 50%
1995 .... 161% 43%
1996 .... 107% 50%
<CAPTION>
NPAs + Restructured Loans/Assets
WAMU(c) AHM
------ ----
<S> <C> <C>
1992 .... 1.52% 4.74%
1993 .... 0.75% 2.09%
1994 .... 0.49% 1.79%
1995 .... 0.51% 2.20%
1996 .... 0.99% 2.07%
</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 61 GREAT WESTERN [LOGO]
<PAGE> 65
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>
1992 $1.84 $1.00 $0.33 $0.88
1993 $2.30 -$1.73 $0.50 $0.88
1994 $2.62 $1.38 $0.70 $0.88
1995 $2.76 $1.47 $0.77 $0.88
1996 $3.39 $1.90 $0.90 $0.88
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude non-recurring items including gains on sales,
restructuring charges, the SAIF recapitalization charge and one-time asset
write-offs. 1993 and 1996 Ahmanson figures adjusted to reflect tax rate of
40.0%
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 62 GREAT WESTERN [LOGO]
<PAGE> 66
MORE CONSISTENT/FASTER GROWING NET INCOME(a)
- --------------------------------------------------------------------------------
($ in millions)
[BAR GRAPH]
<TABLE>
<CAPTION>
RECURRING NET INCOME
RECURRING NET INCOME ADJUSTED FOR CREDIT LOSSES(b)
WAMU AHM WAMU AHM
<S> <C> <C> <C> <C>
1992 $ 90 $ 117 $100 $417
1993 150 -203 177 407
1994 173 190 185 380
1995 192 180 194 320
1996 401 232 460 403
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions). Adjusted to exclude non-recurring items including gains on
sales, restructuring charges, the SAIF capitalization charge and one-time
asset write-offs. 1993 and 1996 Ahmanson figures adjusted to reflect tax
rate of 40.0%.
(b) Further adjusted to exclude provision for loan losses and real estate held
for investment (REI) and sale (REO).
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 63 GREAT WESTERN [LOGO]
<PAGE> 67
FAST GROWING VS. DECLINING
TOTAL LOAN ORIGINATIONS
- ------------------------------------------------------------------------------
($ 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
</TABLE>
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
64
<PAGE> 68
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% 34%
Consumer 11% 2%
1-4 Family Residential(c) 76% 64%
</TABLE>
(a) At December 31, 1996.
(b) At September 30, 1996.
(c) Includes residential and other construction.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
65
<PAGE> 69
MORE "BANK-LIKE" DEPOSIT COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART]
[PIE CHART]
WASHINGTON MUTUAL(a) AHMANSON(b)
<S> <C> <C> <C> <C> <C> <C>
ASB WAMU Total FIB AHM Total
Total Term 37% 22% 59% (47%) 2% 66% 68% (71%)
Total Savings + MMDA 11% 17% 28% (38%) 2% 21% 23% (23%)
Total Checking 6% 7% 13% (15%) 3% 6% 9% (6%)
</TABLE>
(a) At December 31, 1996. Shaded areas represent deposits from the acquisition
of American Savings Bank. Acquired deposits totaled $12.9 billion, or
approximately 54% of current deposits.
(b) At September 30, 1996. Shaded areas represent deposits from the acquisition
of 61 First Interstate branches. Data from analyst presentation on March 28,
1996. Acquired deposits totaled $2.5 billion, or approximately 7% of current
deposits.
----------------------------------------------------------------------------
[LOGO]Washington Mutual 66 GREAT WESTERN [LOGO]
<PAGE> 70
Ahmanson Will Have
Difficulty Executing
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
67
<PAGE> 71
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 integration experience
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 68 GREAT WESTERN [LOGO]
<PAGE> 72
Conclusions
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
69
<PAGE> 73
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]
70
<PAGE> 74
Washington Mutual, Inc.
[LOGO] Merger With [LOGO]
Great Western Financial Corporation
HIGH GROWTH CONSUMER BANKING
April 1997
71
<PAGE> 75
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
72
<PAGE> 76
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 73 GREAT WESTERN [LOGO]
<PAGE> 77
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 74 [GREAT WESTERN LOGO]
<PAGE> 78
AHMANSON'S PROJECTED PRO FORMA 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 $1,016
Average Shares 154 262 239
Beginning Shares 115 270 246
Shares Issued 174 12 1
Shares Repurchased 19 24 17
Change in Common Stock Equivalents 0 (12) 0
------ ------ ------
Ending Shares 270 246 230
Average Shares 154 262 239
</TABLE>
(a) All data from Ahmanson's March 25, 1997 press release.
(b) 1997 and 1998 are adjusted to exclude non-recurring items.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 75 GREAT WESTERN [LOGO]
<PAGE> 79
AHMANSON'S OFFER -- ORIGINAL SYNERGIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ 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: Cost savings as presented on February 18, 1997. No revenue enhancements.
Share repurchases made at prices consistent with March 25, 1997 Ahmanson
press release (approximately 12.25x cash EPS).
(a) Derived from 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 76 GREAT WESTERN[LOGO]
<PAGE> 80
AHMANSON'S OFFER --
REASONABLE ASSUMPTIONS
- --------------------------------------------------------------------------------
<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: Tangible common equity ratio equal to WAMU's pro forma ratio. Cost savings
as presented on February 18, 1997. No revenue enhancements. Share repurchases
made at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS).
(a) Derived from 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 77 GREAT WESTERN [LOGO]
<PAGE> 81
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 -- AHMANSON ASSUMPTIONS(b)
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 -- REASONABLE ASSUMPTIONS(c)
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) Assumed 10% annual growth rate for illustrative purposes.
(b) Taken from March 25, 1997 press release.
(c) Based on March 25, 1997 press release. Adjusted to achieve WAMU's
tangible common ratio and originally announced synergies.
(d) Tangible common equity required to equal Washington Mutual tangible common
equity ratio.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
78
<PAGE> 82
Great Western Financial Corporation ("Great Western") and certain other
persons named below may be deemed to be participants in the solicitation of
proxies in connection with the merger of Great Western and a wholly-owned
subsidiary of Washington Mutual, Inc. ("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
in this solicitation 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 shares 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.
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, including 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
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 stockholders of Great Western: Joe Wender,
John Mahoney, Andy Gordon, Todd Owens and Andrea Vittorelli. 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
securities issued by Great Western and its affiliates ("Great Western
Securities") and Washington Mutual and its affiliates ("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.
<PAGE> 83
As of March 31, 1997, Goldman Sachs held positions in Great Western
Securities and Washington Mutual Securities as principal as follows: (i) net
"long" 18,173 of Great Western's common shares; (ii) net "long" $1 million of
Great Western's deposit notes; and (iii) net "long" 1,098 shares of Washington
Mutual's common stock. As of March 31, 1997, Merrill Lynch had positions in
Great Western Securities and Washington Mutual Securities as principal as
follows: (i) net "long" 6,026 of Great Western's common shares; (ii) net "long"
150 shares of Great Western's 8.30% cumulative perpetual preferred stock; and
(iii) net "long" 1,526 of Washington Mutual's common shares.
Other participants in the solicitation include Washington Mutual and may
include the directors of Washington Mutual (Douglas P. Beighle, David
Bounderman, Herbert M. Bridge, J. Taylor Crandall, Robert 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: 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 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. The Washington Mutual 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
indemnify 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
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 Washington Mutual Securities and 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 March 31, 1997, Lehman Brothers had positions in Washington Mutual
Securities and Great Western Securities as follows: (i) net "short" 224 of
Washington Mutual's common shares; (ii) net "long" 27,434 shares of Washington
Mutual's 9.12% preffered stock; (iii) net "long" 124,964 shares of Washington
Mutual's 7.60% preferred stock; (iv) net "long" 12,629 of Great Western's
common shares; and (v) net "long" 160,000 shares of Great Western's 8.30%
preferred stock.
