<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.
- --------------------------------------------------------------------------------
(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 28, 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.
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[LOGO] Washington Mutual 2 GREAT WESTERN [LOGO]
<PAGE> 4
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OVERVIEW OF
WASHINGTON MUTUAL
- --------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 3 GREAT WESTERN [LOGO]
<PAGE> 5
WAMU PROFILE
- --------------------------------------------------------------------------------
Mission - To Be the Premier Financial Services Organization in
the Western United States
Business Lines - Consumer Banking
- Small- to Mid-Size Commercial Banking
- Annuities
- Securities and Insurance Brokerage
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
4
<PAGE> 6
KEY STRATEGIES
- --------------------------------------------------------------------------------
- - Expand Consumer and Commercial Banking Franchises through Internal Growth and
Acquisitions
- - Maintain a High Quality Balance Sheet
- - Improve Operating Efficiency
- - Limit Sensitivity to Interest Rate Movements
- - Achieve Financial Targets
- ROCE: >18% NPA/Total Assets: <1.00%
- EPS Growth: 15% One-Year Gap: >(10%)
- Efficiency Ratio: <50% Common Equity/Assets: >5%
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 5 GREAT WESTERN [LOGO]
<PAGE> 7
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]
Q1: 1997
Assets $46.1B
Loans 32.2B
Deposits 24.3B
Equity 2.4B
Stock Price 48.31
Market Capitalization 5.7B
(a) As of and for the latest twelve months ended 12/31/87.
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[LOGO] Washington Mutual GREAT WESTERN [LOGO]
6
<PAGE> 8
HISTORY OF STRONG EARNINGS AND
DIVIDEND GROWTH(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
CORE EPS(b) DIVIDENDS PER SHARE
(CAGR: 16.5%) (CAGR: 28.5%)
WAMU WAMU
<S> <C> <C>
1992 $1.84 $0.33
1993 $2.30 $0.50
1994 $2.62 $0.70
1995 $2.76 $0.77
1996 $3.39 $0.90
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude gains on sales, restructuring charges, the SAIF
recapitalization charge and one-time asset write-offs.
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[LOGO] Washington Mutual 7 GREAT WESTERN [LOGO]
<PAGE> 9
STOCK MARKET OUTPERFORMANCE
- -------------------------------------------------------------------------------
4/1/90 - 12/31/96 COMPARATIVE RETURN(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU ......... 34.0%
NOB .......... 28.5%
CCI .......... 28.4%
WFC .......... 26.2%
BAC .......... 24.5%
KEY .......... 23.8%
USBC ......... 21.5%
NB ........... 18.8%
ONE .......... 18.6%
S&P .......... 15.5%
AHM .......... 14.7%
GWF .......... 14.2%
GDW .......... 14.0%
WFSL ......... 13.9%
</TABLE>
Source: Bloomberg.
(a) Total return assumes reinvestment of dividends.
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[LOGO] Washington Mutual 8 GREAT WESTERN [LOGO]
<PAGE> 10
1997: Q1 UPDATE
- --------------------------------------------------------------------------------
($ in millions, except share data)
Percentage
1996:Q1 1997:Q1 Change
------- ------- ----------
Net Income $ 88.8 $114.1 +28%
Earnings per Share 0.74 0.93 +26%
Net Interest Income 287.0 317.0 +10%
Non Interest Income 57.0 75.4 +32%
Depositor Fees 22.5 28.6 +27%
Return on Average Common Equity 14.2% 19.4% --
Return on Average Assets 0.85% 1.01% --
Efficiency Ratio 52.6% 49.1% --
Net Interest Spread 2.75% 2.77% --
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
9
<PAGE> 11
1997: Q1 UPDATE (CONT'D)
- --------------------------------------------------------------------------------
($ in millions) Percentage
1996:Q1 1997:Q1 Change
------- ------- ----------
Average Assets $41,573 $45,025 +8%
Average Loans 24,719 31,086 +26%
Average Investments 14,910 12,035 (19%)
Loan Originations:
Total $2,993 $3,462 +16%
Higher Margin Loan Products(a) 481 732 +52%
Consumer 274 370 +35%
Commercial 37 148 +302%
Non Single-family/Total Originations 24% 31% --
NPAs $330 $335 +2%
NPAs/Assets 0.78% 0.73% --
Reserves/(NPAs less REO) 108% 153% --
(a) Includes construction, multi-family, commercial real estate, consumer and
commercial
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
10
<PAGE> 12
1997: Q1 UPDATE (CONT'D)
- --------------------------------------------------------------------------------
Percentage
1996:Q4 1997:Q1 Change
------- ------- ----------
Net New Checking Accounts Opened:
WMB and WMBfsb 31,520 34,358 +9%
American Savings 6,063 31,315 +416%
------- ------- ----------
Total 37,583 65,673 +75%
Retail Checking Accounts:
WMB and WMBfsb 608,365 651,474 +7
American Savings 237,617 268,932 +13%
------- -------
Total Retail Checking Accounts 845,982 920,406 +9
Households Served (2/28/97) (000s) 1,423 1,500 +5%
Transaction(a)/Total Deposits 40% 42% -
(a) Includes checking, savings and money market deposits
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
11
<PAGE> 13
FRANCHISE POTENTIAL OF AMERICAN
- ------------------------------------------------------------------------------
($ in millions; accounts in thousands)
[BAR GRAPH]
<TABLE>
<CAPTION>
Retail Checking Accounts
(CAGRs: 22.7%, 8.3%)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 394 581
1995 489 721
1996 608 846
97:Q1 651 920
[BAR GRAPH]
<CAPTION>
Depositor Fee Income
(CAGRs: 66.5%, 18.5%)(a)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 $29 $ 45
1995 $58 $ 79
1996 $79 $103
96:Q1 $17 $ 22
+27.3%
97:Q1 $23 $ 29
</TABLE>
(a) For the two-year period from year-end 1994 to year-end 1996
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[LOGO] Washington Mutual 12 GREAT WESTERN [LOGO]
<PAGE> 14
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GREAT WESTERN MERGER:
OVERVIEW
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Washington Mutual [LOGO] GREAT WESTERN [LOGO]
13
<PAGE> 15
TRANSACTION SUMMARY
- --------------------------------------------------------------------------------
Fixed Exchange Ratio: 0.9x
Implied Value Per GWF Share: $47.93(a)
Caps/Collars: None
Consideration: 100% common stock
Accounting/Tax Treatment: Pooling of interests/Tax-free exchange
Assumed Closing: 3rd Quarter 1997
Board Composition: Four GWF Directors to join WAMU Board
Termination Fee: Up to $175 million plus expenses
(a) Based on WAMU closing stock price of $53.25 on 3/5/97, the day prior to the
announcement. Implied value is $42.08 based on WAMU closing stock price of
$46.75 on 4/23/97.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 14 GREAT WESTERN [LOGO]
<PAGE> 16
COMBINATION CREATES STRENGTH AND SCALE
- --------------------------------------------------------------------------------
($ in billions)
At 3/31/97
--------------------------------------
WAMU GWF Pro Forma
-------- -------- ---------
Assets $46.0 $42.9 $88.5
Deposits $24.3 $28.2 $52.5
Market Capitalization at 3/5/97 $ 6.3 $ 6.2 $12.9
Banking and Lending Offices 557 571 1,128(a)
Consumer Finance Offices -- 502 502
Households (mm) 1.5 2.7 4.2
Mutual Funds Under Management $ 1.5 $ 3.1 $ 4.6
LTM(b) Single Family Mortgage
Originations $10.1 $ 6.5 $16.6
LTM(b) Total Loan Originations $14.1 $ 9.0 $23.1
(a) Before consolidations
(b) Latest twelve months
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[LOGO] Washington Mutual 15 GREAT WESTERN [LOGO]
<PAGE> 17
BENEFITS OF THE TRANSACTION
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PREMIER CONSUMER BANKING FRANCHISE
- - Geographically diversified West Coast powerhouse
- - National mortgage and consumer finance franchises
CREATES SHAREHOLDER VALUE
- - EPS accretion and accelerated earnings growth
- - Strong, low risk balance sheet
LOW RISK EXECUTION
- - Strong management team with proven track record
- - Thorough due diligence and business plan formulation
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 16 GREAT WESTERN [LOGO]
<PAGE> 18
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
A PREMIER CONSUMER
BANKING FRANCHISE
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[LOGO] Washington Mutual GREAT WESTERN [LOGO]
17
<PAGE> 19
STRONG WEST COAST AND FLORIDA FRANCHISES
- --------------------------------------------------------------------------------
[MAPS OF THE WESTERN UNITED STATES AND FLORIDA SHOWING BRANCH LOCATIONS]
<TABLE>
<CAPTION>
Deposits Deposit
State ($B)(a) Share Rank
- ------------ -------- ------- ----
<S> <C> <C> <C>
California $34.6 9.2% 3
Washington 8.1 15.4% 2
Oregon 2.8 10.0% 3
Florida 7.1 4.0% 5
Other States 0.6 NA NA
</TABLE>
Source: SNL Securities
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
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[LOGO] Washington Mutual 18 GREAT WESTERN [LOGO]
<PAGE> 20
NATIONAL CONSUMER ORIGINATION FRANCHISE
- --------------------------------------------------------------------------------
[MAP OF THE UNITED STATES SHOWING MORTGAGE LOAN OFFICES
AND CONSUMER FINANCE LOCATIONS]
<TABLE>
<CAPTION>
Mortgage Consumer
Loan Finance
State Offices Locations
- ------------ -------- ---------
<S> <C> <C>
California 107 28
Washington 30 0
Oregon 13 0
Florida 20 35
Other States 123 439
--- ---
Total 293 502
=== ===
</TABLE>
Great Western:
Black Box - Retail Mortgage
Black Star - Wholesale Mortgage
Shaded Box - Aristar
Washington Mutual:
Bullet - Mortgage Loan Offices
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 19 GREAT WESTERN [LOGO]
<PAGE> 21
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
CALIFORNIA(a)
[BAR GRAPH]
<TABLE>
<S> <C>
BAC..........................8.8%
WAMU/GWF.....................6.7% (WAMU = 4.8%, GWF = 1.9%)
GDW..........................3.0%
NOB..........................2.8%
AHM..........................2.7%
</TABLE>
WASHINGTON(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF....................16.5% (WAMU = 14.6%, GWF = 1.8%)
NOB......................... 6.5%
BAC......................... 4.0%
MEL......................... 2.0%
CCR......................... 1.9%
</TABLE>
(a) Source: TRW Redi for year ended 12/31/96.
(b) Source: RMS Information Services for year ended 12/31/96.
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[LOGO] Washington Mutual 20 GREAT WESTERN [LOGO]
<PAGE> 22
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
OREGON(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................11.4% (WAMU=10.1%, GWF=1.3%)
NOB.......................... 5.9%
BAC.......................... 4.7%
MEL.......................... 3.2%
Premier Mortgage............. 2.5%
</TABLE>
WEST COAST ORIGINATIONS ($ B)(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................$11.8 (WAMU=$9.1, GWF=$2.7)
BAC..........................$11.4
NOB..........................$ 4.9
GDW..........................$ 3.6
AHM..........................$ 3.2
</TABLE>
(a) Source: RMS Information Services for year ended 12/31/96.
(b) Source: RMS Information Services and TRW Redi for year ended 12/31/96.
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[LOGO] Washington Mutual 21 GREAT WESTERN [LOGO]
<PAGE> 23
STRONG BUSINESS LINE FIT
- -------------------------------------------------------------------------------
- -- CONSUMER LOAN PRODUCTS
- Home Equity [WASHINGTON MUTUAL LOGO]
- Consumer Finance [GREAT WESTERN LOGO]
- Manufactured Housing [WASHINGTON MUTUAL LOGO]
- Auto/Other [WASHINGTON MUTUAL LOGO]
- -- NON-BANKING SERVICES
- Mutual Funds [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Annuities [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Securities Brokerage [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Credit Insurance [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- BUSINESS BANKING PRODUCTS
- Small Business Lending [GREAT WESTERN LOGO]
- Business Checking [GREAT WESTERN LOGO]
- Community Banking [WASHINGTON MUTUAL LOGO]
- -- RETAIL BANKING PRODUCTS
- Transaction Accounts [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Certificates/Savings [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- MORTGAGE LENDING
- Single Family [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Residential Construction [WASHINGTON MUTUAL LOGO]
- Multi-Family [WASHINGTON MUTUAL LOGO]
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[LOGO] Washington Mutual 22 GREAT WESTERN [LOGO]
<PAGE> 24
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
SHAREHOLDER VALUE CREATION
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN[LOGO]
23
<PAGE> 25
TESTED ASSUMPTIONS -- ATTRACTIVE RETURNS
- -------------------------------------------------------------------------------
Assumptions Results
- ------------------------------ ------------------------------
- - Cost savings of $340 - Double digit accretion
million in 1999 in 1999
- - Additional fee income [ARROW] - Strong operating
of $88 million in 1999 fundamentals
- - Surplus capital - Maintains solid capital
supports increased loan levels and flexibility
retention
- Strong NPA, loss
reserve ratios
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 24 GREAT WESTERN [LOGO]
<PAGE> 26
EPS ACCRETION BASED ON DUE
DILIGENCED ASSUMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share data) 1997P 1998P 1999P
----- ----- -----
<S> <C> <C> <C>
WAMU Estimated Net Income(a) $471 $556 $623
GWF Estimated Net Income(a) 397 434 470
----- ------ ------
Total Estimated Net Income 868 990 1,093
Net Income Available to Common 847 987 1,093
Cost Savings 9 125 204
Fee Income 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 $5.90
% Accretion to First Call 5.0% 15.0%
% EPS Growth 25.3% 22.7%
</TABLE>
(a) First Call estimates for 1997 and 1998 before preferred dividends. 1999
estimates based on IBES growth rate of 12% and 10.5% for WAMU and GWF.
(b) Based on 252.1mm pro forma shares outstanding in 1997, 253.1mm in 1998, and
253.8mm in 1999. EPS figures include 9.1mm GWF option shares. EPS accretion
using option shares under the treasury stock method would be 6.3% and 16.6%
in 1998 and 1999.
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[LOGO] Washington Mutual 25 GREAT WESTERN [LOGO]
<PAGE> 27
CONFIDENCE IN EXECUTION
- --------------------------------------------------------------------------------
/ / Unique experience as an acquiror (22 transactions)
/ / Integration plan is underway
/ / Deposit/mortgage servicing systems are the same
/ / Network infrastructure is the same
/ / WAMU partnerships with:
o IBM
o EDS
o ALLTEL
/ / Track record of fully integrating within 6 months of close
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 26 GREAT WESTERN [LOGO]
<PAGE> 28
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions) 1999
------------------
% of GWF
Amount Op. Exp(a)
------ ----------
<S> <C> <C>
Administration/Finance $65 51%
Lending 69 49
Corporate Operations 96 43
Retail Banking 99 27
Subsidiaries 11 7
----
Total Pretax Cost Savings $340
Aftertax Cost Savings $204
Pretax Cost Savings as a % of:
GWF Net Operating Expenses(b) 38%
Combined 1997 G&A(c) 21%
</TABLE>
(a) Based on GWF budgeted 1997 gross operating expenses.
(b) Net operating expenses are net of loan origination costs which are deferred
and amortized over the life of the loans and various reimbursable costs.
(c) 1997 G&A net expense base of $900mm for GWF and $745mm for WAMU based on
sampling of analyst reports.
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[LOGO] Washington Mutual 27 GREAT WESTERN [LOGO]
<PAGE> 29
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ 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
---
$69
===
</TABLE>
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[LOGO]Washington Mutual 28 GREAT WESTERN[LOGO]
<PAGE> 30
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ 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
---
$99
===
</TABLE>
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[LOGO]Washington Mutual 29 GREAT WESTERN[LOGO]
<PAGE> 31
MERGER-RELATED CHARGES
FACILITATE COST SAVINGS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions)
<S> <C>
Additional Loan Loss Reserves $100
Severance and Management Payments 145
Facilities and Equipment 106
Other Expenses 92
----
Total Expenses $443
Tax Effect (125)
----
Aftertax Expenses $318
====
- -------------------------------------------------------------------------------
</TABLE>
[LOGO] Washington Mutual 30 GREAT WESTERN [LOGO]
<PAGE> 32
CONSUMER BANKING FEE INCOME OPPORTUNITIES
- --------------------------------------------------------------------------------
($ 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 $53
</TABLE>
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
31
<PAGE> 33
NET INTEREST INCOME GROWTH
- --------------------------------------------------------------------------------
- - Earnings retention results in strong capital growth
- - Strong historical and projected loan originations create net loan growth
- - Capital retention plus net loan growth at reasonable margins leads to
increased net interest income
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
32
<PAGE> 34
STRONG CAPITAL GENERATION AND GROWTH POTENTIAL
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
12/31/96 1997P 1998P 1999P
-------- ----- ----- -----
<S> <C> <C> <C> <C>
Beginning Combined Common
Equity $4,710 $5,026 $5,926
Pro Forma Net Income 856 1,216 1,497
Aftertax Restructuring Charge (318) -- --
Common Dividends @ 26% Payout (223) (316) (389)
------ ------ ------ ------
Ending Combined Common
Equity $4,710 $5,026 $5,926 $7,034
====== ====== ====== ======
Asset Excess Common Equity Above 5%
Growth Rate(a) Common Equity/Assets Ratio
-------------- -----------------------------
8% $305 $827 $1,527
10% 217 636 1,215
12% 130 442 892
14% 42 245 557
</TABLE>
(a) Annual growth from 12/31/96 pro forma total assets of $87.4 billion
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
33
<PAGE> 35
STRONG ORIGINATION CAPABILITIES
- --------------------------------------------------------------------------------
($ in billions)
TOTAL LOAN ORIGINATIONS
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
---- ----- ----------
<S> <C> <C> <C>
1995.......... $ 9.4 $9.7 $19.1
+16%
1996.......... $13.6 $8.5 $22.1
96:Q1......... $ 3.0 $1.7 $ 4.7
+21%
97:Q1......... $ 3.5 $2.2 $ 5.7
</TABLE>
NET ORIGINATIONS(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
----- ----- ----------
<S> <C> <C> <C>
1995.......... $6.5 $4.5 $11.0
1996.......... $9.2 $2.2 $11.4
96:Q1......... $2.1 $0.3 $ 2.4
97:Q1......... $2.5 $0.8 $ 3.3
</TABLE>
(a) Total originations less REO transfers, prepayments and paydowns. Net
originations are not reduced for loans sold.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 34 GREAT WESTERN [LOGO]
<PAGE> 36
1997:Q1 - ATTRACTIVE TRENDS IN LOAN
ORIGINATION MIX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART] [PIE CHART]
1996:Q1 1997:Q1
<S> <C> <C>
Single-family 75.6% 69.5%
Multi-family/ECRE 5.7% 6.2%
Construction 8.3% 9.4%
Consumer 9.1% 10.7%
Commercial 1.2% 4.3%
</TABLE>
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
35
<PAGE> 37
LOAN RETENTION DRIVES GROWTH IN
NET INTEREST INCOME
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1996A 1997P 1998P 1999P
------- ------- ------- --------
<S> <C> <C> <C> <C>
Combined Net Loan Growth $7,011 $6,600(c) $11,000 $11,400
Street Expectations of Net Loan
Growth(a) -- $3,500 $ 3,600 3,800
------ ------- -------
Net Loan Growth Above Street
Expectations -- $3,100 $ 7,400 $ 7,600
Cumulative Average Net Loan
Growth Above Street
Expectations(b) $ 6,800 $14,300
</TABLE>
(a) Assumes 4% asset (in loans) growth of combined companies.
(b) Equals 100% of prior years and 50% of current year.
(c) Combined net loan growth for 1997: Q1 was $2,288 million or approximately
35 percent of 1997P.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
36
<PAGE> 38
INCREMENTAL NET INTEREST INCOME
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1999
---------------- ----------------
Average Average
Balance Yield Balance Yield
------- ----- ------- -----
<S> <C> <C> <C> <C>
Incremental Loans $6.8 7.25% $14.3 7.25%
Incremental Liabilities 6.5 5.79 13.6 5.79
Incremental Capital(a) 0.3 0.00 0.7 0.00
Net Interest Income (Pretax) $113 $246
Net Interest Income (Aftertax) $ 68 $148
Net Interest Spread 1.46% 1.46%
Net Interest Margin 1.66% 1.72%
</TABLE>
(a) Includes the incremental capital supplied by Great Western acquisition
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 37 GREAT WESTERN [LOGO]
<PAGE> 39
1996 WAMU/ASB LOAN SPREADS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
% of Net Spread to
Resi/Consumer Wholesale
Production Matched Funding(a)
------------- ------------------
Residential Mortgage
Fixed Rate 28% 1.15%
COFI ARM's 36 1.35
Treasury ARM's 12 1.71
Multifamily 4 2.57
Construction -- Custom 6 1.91
Construction -- Spec. 4 5.54
Consumer
Home Equity 5 2.48%
Mfd Housing 3 1.61
Other 2 3.24
---
Total 100% 1.69%(b)
</TABLE>
(a) Net spread after deducting origination, servicing and credit costs
(b) Equivalent margin estimated to be 15-30 bps higher depending on capital
allocation.
- --------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
38
<PAGE> 40
STRONG ASSET QUALITY AND RESERVES
- ----------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
At March 31, 1997
---------------------------------------------------------
<S> <C> <C> <C> <C>
WAMU GWF Adjustments Pro Forma
---- --- ----------- ---------
Non-Accrual $240 $424 - $664
Loans(a)
Real Estate Owned 94 77 - 171
---- ---- ----
NPAs $334 $501 - $835
==== ==== ====
NPAs/Assets 0.73% 1.17% - 0.94%
Loan Loss Reserves $367 $321 $100 $788
Reserves/NPLs(a) 153% 76% - 119%
(a) Excluding restructured loans
- ---------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
</TABLE>
39
<PAGE> 41
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) 12.2x 10.2x 9.1x
EPS Pro Forma for Great Western $4.81 $5.90
P/E Multiple(b) 9.7x 7.9x
</TABLE>
(a) First Call estimates for 1997 and 1998. 1999 based on IBES growth rate of
12%.
(b) Based on closing stock price of $46.75 on 4/23/97.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 40 GREAT WESTERN [LOGO]
<PAGE> 42
Washington Mutual, Inc. ("Washington Mutual") 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 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
in this solicitation may include the directors of Washington Mutual (Douglas P.
Beighle, David Bonderman, 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, William G. Reed, Jr. and James H.
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 R. 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 394,141 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.
Great Western and certain other persons named below may be deemed to be
participants in the solicitation of proxies in connection with 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. Siegal 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.
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 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
41
<PAGE> 43
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 21, 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 Great Western's 8.30% preferred stock.
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 proxy
solicitation, or that Schedule 14A requires the disclosure of certain
information concerning Goldman Sachs and Merrill Lynch. In connection with
Goldman Sach's 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, 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 21, 1997, Goldman Sachs had positions in Great Western
Securities and Washington Mutual Securities as principal as follows: (i) net
"long" 9,173 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 shares. As of April 21, 1997, Merrill Lynch had positions in
Great Western Securities and Washington Mutual Securities as principal as
follows: (i) net "long" 7,126 of Great Western's common shares; (ii) net "long"
1,600 shares of Great Western's 8.30% preferred stock; and (iii) net "long"
1,526 of Washington Mutual's common shares.
42
