<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
/ / 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
May 22, 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
- --------------------------------------------------------------------------------
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 211.9mm
Stock Price 6.28
Market Capitalization 390.0mm
[MAP OF THE WESTERN UNITED STATES]
1997: Q1
Assets $46.1B
Loans 32.2B
Deposits 24.3B
Equity 2.4B
Stock Price 48.31
Market Capitalization 5.7B
(a) As of and for the latest twelve months ended 12/31/87.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
6
<PAGE> 8
STOCK MARKET OUTPERFORMANCE
- -------------------------------------------------------------------------------
4/1/90 - 12/31/96 COMPARATIVE RETURN(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU ......... 34.0%
NOB .......... 28.5%
CCI .......... 28.4%
WFC .......... 26.2%
BAC .......... 24.5%
KEY .......... 23.8%
USBC ......... 21.5%
NB ........... 18.8%
ONE .......... 18.6%
S&P .......... 15.5%
AHM .......... 14.7%
GWF .......... 14.2%
GDW .......... 14.0%
WFSL ......... 13.9%
</TABLE>
Source: Bloomberg.
(a) Total return assumes reinvestment of dividends.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 7 GREAT WESTERN [LOGO]
<PAGE> 9
HISTORY OF STRONG EARNINGS AND
DIVIDEND GROWTH(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
CORE EPS(b) DIVIDENDS PER SHARE
(CAGR: 16.5%(c)) (CAGR: 28.5%(c))
WAMU WAMU
<S> <C> <C>
1992 $1.84 $0.33
1993 $2.30 $0.50
1994 $2.62 $0.70
1995 $2.76 $0.77
1996 $3.39 $0.90
96:Q1 $0.76 $0.21
+21% +19%
97:Q1 $0.92 $0.25
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude gains on sales, restructuring charges, the SAIF
recapitalization charge, one-time asset write-offs and preferred dividends.
(c) For years 1992 through 1996.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 8 GREAT WESTERN [LOGO]
<PAGE> 10
1997: Q1 UPDATE
- --------------------------------------------------------------------------------
($ 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) 731 1,057 +45%
Consumer 274 370 +35%
Commercial 37 148 +302%
Non Single-family/Total Originations 24% 31% --
NPAs $330 $335 +2%
NPAs/Assets 0.78% 0.73% --
Reserves/(NPAs less REO) 108% 153% --
(a) Includes construction, multi-family, commercial real estate, consumer and
commercial
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
10
<PAGE> 12
1997: Q1 UPDATE (CONT'D)
- --------------------------------------------------------------------------------
Percentage
1996:Q4 1997:Q1 Change
------- ------- ----------
Net New Checking Accounts Opened:
WMB and WMBfsb 31,520 34,358 +9%
American Savings 6,063 31,315 +416%
------- ------- ----------
Total 37,583 65,673 +75%
Retail Checking Accounts:
WMB and WMBfsb 608,365 651,474 +7%
American Savings 237,617 268,932 +13%
------- -------
Total Retail Checking Accounts 845,982 920,406 +9%
Households Served (2/28/97) (000s) 1,423 1,500 +5%
Transaction(a)/Total Deposits 40% 42% -
(a) Includes checking, savings and money market deposits
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
11
<PAGE> 13
FRANCHISE POTENTIAL OF AMERICAN
- ------------------------------------------------------------------------------
($ in millions; accounts in thousands)
[BAR GRAPH]
<TABLE>
<CAPTION>
Retail Checking Accounts
(CAGRs: 22.6%, 6.3%)(a)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 394 581
1995 489 721
1996 608 846
97:Q1 651 920
[BAR GRAPH]
<CAPTION>
Depositor Fee Income
(CAGRs: 52.4%, 10.3%)(a)
WAMU WAMU & American
---- --------------
<S> <C> <C>
1994 $29 $ 45
1995 $58 $ 79
1996 $79 $103
96:Q1 $17 $ 22
+27.3%
97:Q1 $23 $ 29
</TABLE>
(a) For the three-year period from year-end 1993 to year-end 1996
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 12 GREAT WESTERN [LOGO]
<PAGE> 14
WAMU'S IMPROVING INTEREST RATE SENSITIVITY
================================================================================
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL
ASSETS REPRICING IN 1-YEAR
ONE YEAR GAP
------------------- ------
<S> <C> <C>
1994 46% -14.3%
1995 53% -14.4%
1996 73% - 3.6%
3/31/97 75% - 0.8%
Combined 3/31/97(a) 80% 2.93%
</TABLE>
- ----------
(A) Combined percentage for WAMU and GWF.
================================================================================
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
13
<PAGE> 15
- -----------------------------------------------------------------------------
GREAT WESTERN MERGER:
OVERVIEW
- -----------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
14
<PAGE> 16
TRANSACTION SUMMARY
- --------------------------------------------------------------------------------
Fixed Exchange Ratio: 0.9x
Implied Value Per GWF Share: $47.93(a)
Caps/Collars: None
Consideration: 100% common stock
Accounting/Tax Treatment: Pooling of interests/Tax-free exchange
Assumed Closing: 3rd Quarter 1997
Board Composition: Four GWF Directors to join WAMU Board
Termination Fee: Up to $175 million plus expenses
(a) Based on WAMU closing stock price of $53.25 on 3/5/97, the day prior to the
announcement. Implied value is $50.40 based on WAMU closing stock price of
$56.00 on 5/20/97.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 15 GREAT WESTERN [LOGO]
<PAGE> 17
COMBINATION CREATES STRENGTH AND SCALE
- --------------------------------------------------------------------------------
($ in billions)
At 3/31/97
--------------------------------------
WAMU GWF Pro Forma
-------- -------- ---------
Assets $46.0 $42.9 $88.5
Deposits $24.3 $28.2 $52.5
Market Capitalization at 3/5/97 $ 6.3 $ 6.2 $12.9
Banking and Lending Offices 557 571 1,128(a)
Consumer Finance Offices -- 502 502
Households (mm) 1.5 2.4 3.9
Mutual Funds Under Management $ 1.5 $ 3.1 $ 4.6
LTM(b) Single Family Mortgage
Originations $10.1 $ 6.5 $16.6
LTM(b) Total Loan Originations $14.1 $ 9.0 $23.1
(a) Before consolidations
(b) Latest twelve months
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 16 GREAT WESTERN [LOGO]
<PAGE> 18
BENEFITS OF THE TRANSACTION
- --------------------------------------------------------------------------------
PREMIER CONSUMER BANKING FRANCHISE
- - Geographically diversified West Coast powerhouse
- - National mortgage and consumer finance franchises
CREATES SHAREHOLDER VALUE
- - EPS accretion and accelerated earnings growth
- - Strong, low risk balance sheet
LOW RISK EXECUTION
- - Strong management team with proven track record
- - Thorough due diligence and business plan formulation
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 17 GREAT WESTERN [LOGO]
<PAGE> 19
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
A PREMIER CONSUMER
BANKING FRANCHISE
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
18
<PAGE> 20
STRONG WEST COAST AND FLORIDA FRANCHISES
- --------------------------------------------------------------------------------
[MAPS OF THE WESTERN UNITED STATES AND FLORIDA SHOWING BRANCH LOCATIONS]
<TABLE>
<CAPTION>
Deposits Deposit
State ($B)(a) Share Rank
- ------------ -------- ------- ----
<S> <C> <C> <C>
California $34.6 9.2% 3
Washington 8.1 15.4% 2
Oregon 2.8 10.0% 3
Florida 7.1 4.0% 5
Other States 0.6 NA NA
</TABLE>
Source: SNL Securities
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 19 GREAT WESTERN [LOGO]
<PAGE> 21
NATIONAL CONSUMER ORIGINATION FRANCHISE
- --------------------------------------------------------------------------------
[MAP OF THE UNITED STATES SHOWING MORTGAGE LOAN OFFICES
AND CONSUMER FINANCE LOCATIONS]
<TABLE>
<CAPTION>
Mortgage Consumer
Loan Finance
State Offices Locations
- ------------ -------- ---------
<S> <C> <C>
California 107 28
Washington 30 0
Oregon 13 0
Florida 20 35
Other States 123 439
--- ---
Total 293 502
=== ===
</TABLE>
Great Western:
Black Box - Retail Mortgage
Black Star - Wholesale Mortgage
Shaded Box - Aristar
Washington Mutual:
Bullet - Mortgage Loan Offices
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 20 GREAT WESTERN [LOGO]
<PAGE> 22
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
CALIFORNIA(a)
[BAR GRAPH]
<TABLE>
<S> <C>
BAC..........................8.8%
WAMU/GWF.....................6.7% (WAMU = 4.8%, GWF = 1.9%)
GDW..........................3.0%
NOB..........................2.8%
AHM..........................2.7%
</TABLE>
WASHINGTON(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF....................16.5% (WAMU = 14.6%, GWF = 1.8%)
NOB......................... 6.5%
BAC......................... 4.0%
MEL......................... 2.0%
CCR......................... 1.9%
</TABLE>
(a) Source: TRW Redi for year ended 12/31/96.
(b) Source: RMS Information Services for year ended 12/31/96.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 21 GREAT WESTERN [LOGO]
<PAGE> 23
SINGLE FAMILY MORTGAGE LENDING LEADERSHIP
- -------------------------------------------------------------------------------
OREGON(a)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................11.4% (WAMU=10.1%, GWF=1.3%)
NOB.......................... 5.9%
BAC.......................... 4.7%
MEL.......................... 3.2%
Premier Mortgage............. 2.5%
</TABLE>
WEST COAST ORIGINATIONS ($ B)(b)
[BAR GRAPH]
<TABLE>
<S> <C>
WAMU/GWF.....................$11.8 (WAMU=$9.1, GWF=$2.7)
BAC..........................$11.4
NOB..........................$ 4.9
GDW..........................$ 3.6
AHM..........................$ 3.2
</TABLE>
(a) Source: RMS Information Services for year ended 12/31/96.
(b) Source: RMS Information Services and TRW Redi for year ended 12/31/96.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 22 GREAT WESTERN [LOGO]
<PAGE> 24
STRONG BUSINESS LINE FIT
- -------------------------------------------------------------------------------
- -- CONSUMER LOAN PRODUCTS
- Home Equity [WASHINGTON MUTUAL LOGO]
- Consumer Finance [GREAT WESTERN LOGO]
- Manufactured Housing [WASHINGTON MUTUAL LOGO]
- Auto/Other [WASHINGTON MUTUAL LOGO]
- -- NON-BANKING SERVICES
- Mutual Funds [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Annuities [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Securities Brokerage [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Credit Insurance [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- BUSINESS BANKING PRODUCTS
- Small Business Lending [GREAT WESTERN LOGO]
- Business Checking [GREAT WESTERN LOGO]
- Community Banking [WASHINGTON MUTUAL LOGO]
- -- RETAIL BANKING PRODUCTS
- Transaction Accounts [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Certificates/Savings [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- -- MORTGAGE LENDING
- Single Family [WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
- Residential Construction [WASHINGTON MUTUAL LOGO]
- Multi-Family [WASHINGTON MUTUAL LOGO]
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 23 GREAT WESTERN [LOGO]
<PAGE> 25
- --------------------------------------------------------------------------------
GREAT WESTERN MERGER:
SHAREHOLDER VALUE CREATION
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN[LOGO]
24
<PAGE> 26
TESTED ASSUMPTIONS -- ATTRACTIVE RETURNS
- -------------------------------------------------------------------------------
Assumptions Results
- ------------------------------ ------------------------------
- - Cost savings of $340 - Double digit accretion
million in 1999 in 1999
- - Additional fee income [ARROW] - Strong operating
of $88 million in 1999 fundamentals
- - Surplus capital - Maintains solid capital
supports increased loan levels and flexibility
retention
- Strong NPA, loss
reserve ratios
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 25 GREAT WESTERN [LOGO]
<PAGE> 27
EPS ACCRETION BASED ON DUE
DILIGENCED ASSUMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share data) 1997P 1998P 1999P
----- ----- -----
<S> <C> <C> <C>
WAMU Estimated Net Income(a) $471 $556 $623
GWF Estimated Net Income(a) 397 434 470
----- ------ ------
Total Estimated Net Income 868 990 1,093
Net Income Available to Common 847 987 1,093
Cost Savings 9 125 204
Fee Income Increases 0 36 53
Incremental Net Interest Income 0 68 148
----- ------ ------
Estimated Combined Net Income $856 $1,216 $1,497
===== ====== ======
Stand Alone EPS $3.84 $4.58 $5.13
Estimated Combined EPS(b) $4.81 $5.90
% Accretion to First Call 5.0% 15.0%
% EPS Growth 25.3% 22.7%
</TABLE>
(a) First Call estimates as of March 6, 1997 for 1997 and 1998 before preferred
dividends. 1999 estimates based on IBES growth rate of 12% and 10.5% for
WAMU and GWF.
(b) Based on 252.1mm pro forma shares outstanding in 1997, 253.1mm in 1998, and
253.8mm in 1999. EPS figures include 9.1mm GWF option shares. EPS accretion
using option shares under the treasury stock method would be 6.3% and 16.6%
in 1998 and 1999.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 26 GREAT WESTERN [LOGO]
<PAGE> 28
CONFIDENCE IN EXECUTION
- --------------------------------------------------------------------------------
/ / Unique experience as an acquiror (22 transactions)
/ / Integration plan is underway
/ / Deposit/mortgage servicing systems are the same
/ / Network infrastructure is the same
/ / WAMU partnerships with:
o IBM
o EDS
o ALLTEL
/ / Track record of fully integrating within 6 months of close
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 27 GREAT WESTERN [LOGO]
<PAGE> 29
ASB Integration: Case Study
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2/19/97: 4/7/97: 6/2/97: 7/7/97:
Investment Network 4/30/97: Account Network/
7/22/96 Portfolio Technology Sales/ Conversion Branch
Announced 12/20/96: Converted Hardware Employee Materials Technology
Definitive Transaction to WAMU Installation Training to Goes
Agreement Closed Platform Began Completed Customers Online
7/24/96- 1/17/97 3/31/97: 4/14/97 5/17/97: 7/3/97: 8/6/97:
12/15/96: WAMU Payroll/ Loan Deposit Deposit Loan
Integration Marketing Human Servicing Systems Account Account
Planning Strategy Resources Test Conversion Conversion Conversion
Introduced Systems Test
in CA Conversion
- ---------------------------------------------------------------------------------------------
</TABLE>
[WASHINGTON MUTUAL LOGO] 28 [GREAT WESTERN LOGO]
<PAGE> 30
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions)
% of GWF
1999 Op. Exp(a)
------ ----------
<S> <C> <C>
Administration/Finance $65 51%
Lending 69 49
Corporate Operations 96 43
Retail Banking 99 27
Subsidiaries 11 7
----
Total Pretax Cost Savings $340
Aftertax Cost Savings $204
Pretax Cost Savings as a % of:
GWF Net Operating Expenses(b) 38%
Combined 1997 G&A(c) 21%
</TABLE>
(a) Based on GWF budgeted 1997 gross operating expenses.
(b) Net operating expenses are net of loan origination costs which are deferred
and amortized over the life of the loans and various reimbursable costs.
(c) 1997 G&A net expense base of $900mm for GWF and $745mm for WAMU based on
sampling of analyst reports.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 29 GREAT WESTERN [LOGO]
<PAGE> 31
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1999
Savings
-------
<S> <C>
CORPORATE ADMINISTRATION/FINANCE
- - Consolidation of duplicate functions/premises
- Corporate properties $16
- Executive management 7
- Corporate administrative staff 42
---
$65
===
LENDING
- - Loan office consolidations (approximately 100(a)) and alignment of GWF's
loan origination cost structure with WAMU's $52
- - Reduced servicing cost per loan 17
---
$69
===
</TABLE>
(a) Includes 38 loan offices already scheduled for closure by Great Western as
part of its pre-merger plans.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 30 GREAT WESTERN[LOGO]
<PAGE> 32
COST SAVINGS BREAKDOWN
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1999
Savings
-------
<S> <C>
CORPORATE OPERATIONS
- - Consolidation and implementation of WAMU technology platform $50
- - Align GWF's cost of branch operations/economies of scale 26
- - Lower loan origination support and credit administration costs 20
---
$96
===
CORPORATE MARKETING/RETAIL BANK
- - Retail branch consolidation (approximately 100) $50
- - Advertising synergies 25
- - Duplicate staff functions 24
---
$99
===
</TABLE>
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 31 GREAT WESTERN[LOGO]
<PAGE> 33
MERGER-RELATED CHARGES
FACILITATE COST SAVINGS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions)
<S> <C>
Additional Loan Loss Reserves $100
Severance and Management Payments 145
Facilities and Equipment 106
Other Expenses 92
----
Total Expenses $443
Tax Effect (125)
----
Aftertax Expenses $318
====
- -------------------------------------------------------------------------------
</TABLE>
[LOGO] Washington Mutual 32 GREAT WESTERN [LOGO]
<PAGE> 34
CONSUMER BANKING FEE INCOME OPPORTUNITIES
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Checking fee parity with WAMU fees
(existing accounts) $13 $13
Implementation of WAMU free checking
(new accounts) and cross-selling
of related products 30 52
Improved sales/fees in securities
subsidiaries 13 16
Enhanced fees from expanded loan production 4 7
--- ---
Total Pretax $60 $88
Total Aftertax $36 $53
</TABLE>
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
33
<PAGE> 35
NET INTEREST INCOME GROWTH
- --------------------------------------------------------------------------------
- - Earnings retention results in strong capital growth
- - Strong historical and projected loan originations create net loan growth
- - Capital retention plus net loan growth at reasonable margins leads to
increased net interest income
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
34
<PAGE> 36
STRONG CAPITAL GENERATION AND GROWTH POTENTIAL
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
12/31/96 1997P 1998P 1999P
-------- ----- ----- -----
<S> <C> <C> <C> <C>
Beginning Combined Common
Equity $4,710 $5,026 $5,926
Pro Forma Net Income 856 1,216 1,497
Aftertax Restructuring Charge (318) -- --
Common Dividends @ 26% Payout (223) (316) (389)
------ ------ ------ ------
Ending Combined Common
Equity $4,710 $5,026 $5,926 $7,034
====== ====== ====== ======
Asset Excess Common Equity Above 5%
Growth Rate(a) Common Equity/Assets Ratio
-------------- -----------------------------
8% $305 $827 $1,527
10% 217 636 1,215
12% 130 442 892
14% 42 245 557
</TABLE>
(a) Annual growth from 12/31/96 pro forma total assets of $87.4 billion
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
35
<PAGE> 37
STRONG ORIGINATION CAPABILITIES
- --------------------------------------------------------------------------------
($ in billions)
TOTAL LOAN ORIGINATIONS
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
---- ----- ----------
<S> <C> <C> <C>
1995.......... $ 9.4 $9.7 $19.1
+16%
1996.......... $13.6 $8.5 $22.1
96:Q1......... $ 3.0 $1.7 $ 4.7
+21%
97:Q1......... $ 3.5 $2.2 $ 5.7
</TABLE>
NET ORIGINATIONS(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU GWF WAMU & GWF
----- ----- ----------
<S> <C> <C> <C>
1995.......... $6.5 $4.5 $11.0
1996.......... $9.2 $2.2 $11.4
96:Q1......... $2.1 $0.3 $ 2.4
97:Q1......... $2.5 $0.8 $ 3.3
</TABLE>
(a) Total originations less REO transfers, prepayments and paydowns. Net
originations are not reduced for loans sold.
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] 36 GREAT WESTERN [LOGO]
<PAGE> 38
1997:Q1 - ATTRACTIVE TRENDS IN LOAN
ORIGINATION MIX AT WAMU
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART] [PIE CHART]
1996:Q1 1997:Q1
<S> <C> <C>
Single-family 75.6% 69.5%
Multi-family/CRE 5.7% 6.1%
Construction 8.3% 9.4%
Consumer 9.2% 10.7%
Commercial 1.2% 4.3%
</TABLE>
- --------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
37
<PAGE> 39
LOAN RETENTION DRIVES GROWTH IN
NET INTEREST INCOME
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
1996A 1997P 1998P 1999P
------- ------- ------- --------
<S> <C> <C> <C> <C>
Combined Net Loan Growth $7,011(c) $6,600(d) $11,000 $11,400
Street Expectations of Net Loan
Growth(a) -- $3,500 $ 3,600 3,800
------ ------- -------
Net Loan Growth Above Street
Expectations -- $3,100 $ 7,400 $ 7,600
Cumulative Average Net Loan
Growth Above Street
Expectations(b) $ 6,800 $14,300
</TABLE>
(a) Assumes 4% asset (in loans) growth of combined companies.
(b) Equals 100% of prior years and 50% of current year.
(c) Combined net loan growth for 1996 was $11.8 billion before sales and
securitization of $4.8 billion.
(d) Combined net loan growth for 1997: Q1 was $2.3 billion ($3.3 billion before
sales of $1.0 billion) or approximately 35% of 1997P.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
38
<PAGE> 40
INCREMENTAL NET INTEREST INCOME
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1999
---------------- ----------------
Average Average
Balance Yield Balance Yield
------- ----- ------- -----
<S> <C> <C> <C> <C>
Incremental Loans $6.8 7.25%(a) $14.3 7.25%(a)
Incremental Liabilities 6.5 5.79 13.6 5.79
Incremental Capital(b) 0.3 0.00 0.7 0.00
Net Interest Income (Pretax) $113 $246
Net Interest Income (Aftertax) $ 68 $148
Net Interest Spread 1.46% 1.46%
Net Interest Margin 1.66% 1.72%
</TABLE>
(a) Net yield after deducting origination, servicing and credit costs.
(b) Includes only the incremental capital supplied by Great Western
acquisition.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 39 GREAT WESTERN [LOGO]
<PAGE> 41
1996 WAMU/ASB LOAN SPREADS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Net Spread to
% of Wholesale
Production Matched Funding(a)
------------- ------------------
Residential Mortgage
Fixed Rate 27% 1.25%
COFI ARM's 28 1.35
Treasury ARM's 18 1.73
Multifamily 4 2.37
Construction -- Custom 6 1.91
Construction -- Builder 4 5.54
Consumer
Home Equity 5 2.47
Mfd Housing 2 2.54
Other 2 3.54
Business and Commercial
Real Estate 4 2.29
---
Total 100% 1.78%(b)
</TABLE>
(a) Net spread after deducting origination, servicing and credit costs
(b) Equivalent margin estimated to be 15-30 bps higher depending on capital
allocation.
- --------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] [GREAT WESTERN LOGO]
40
<PAGE> 42
1997: Q1 NET INTEREST SPREAD
<TABLE>
<CAPTION>
ASB WMB WMI(a)
--- --- ------
<S> <C> <C> <C>
Loan yield 7.45% 8.50% 7.98%
Deposit rate 4.69 3.98 4.38
---- ---- ----
Spread 2.76% 4.52% 3.60%
Loan yield 7.45% 8.50% 7.98%
Borrowing rate 5.65 5.44 5.62
---- ---- ----
Spread 1.80% 3.06% 2.36%
</TABLE>
(a) WMI includes ASB, WMB, WMBfsb and WM Life as well as other subsidiaries and
holding company activity
- -------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 41 [LOGO] GREAT WESTERN
<PAGE> 43
STRONG ASSET QUALITY AND RESERVES
- ----------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
At March 31, 1997
---------------------------------------------------------
<S> <C> <C> <C> <C>
WAMU GWF Adjustments Pro Forma
---- --- ----------- ---------
Non-Accrual $240 $424 - $664
Loans(a)
Real Estate Owned 94 77 - 171
---- ---- ----
NPAs $334 $501 - $835
==== ==== ====
NPAs/Assets 0.73% 1.17% - 0.94%
Loan Loss Reserves $367 $321 $100 $788
Reserves/NPLs(a) 153% 76% - 119%
(a) Excluding restructured loans
- ---------------------------------------------------------------------------------
Washington Mutual [LOGO] GREAT WESTERN [LOGO]
</TABLE>
42
<PAGE> 44
A COMPELLING VALUATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997P 1998P 1999P
----- ----- -----
<S> <C> <C> <C>
EPS Estimates Before Great Western(a) $3.84 $4.58 $5.13
P/E Multiple(b) 14.6x 12.2x 10.9x
EPS Pro Forma for Great Western $4.81 $5.90
P/E Multiple(b) 11.6x 9.5x
</TABLE>
(a) First Call estimates as of March 6, 1997 for 1997 and 1998. 1999 based on
IBES growth rate of 12%.
(b) Based on closing stock price of $56.00 on 5/20/97.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 43 GREAT WESTERN [LOGO]
<PAGE> 45
- -----------------------------------------------------------------------------
A SUPERIOR ALTERNATIVE
- -----------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
44
<PAGE> 46
================================================================================
AHMANSON'S PROJECTIONS:
CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS
AND INCONSISTENT ANALYSIS
================================================================================
[LOGO] Washington Mutual 45 GREAT WESTERN [LOGO]
<PAGE> 47
AHMANSON'S PROJECTIONS: CONSTANTLY CHANGING,
UNREALISTIC ASSUMPTIONS AND INCONSISTENT ANALYSIS
================================================================================
- - Ahmanson's forecasts are dependent on maintaining one of the lowest
-----------------
consolidated tangible common equity ratios in the industry.
-----------------------------------------------------------
- - To keep its equity ratios from being even lower, Ahmanson's projections
assume negative asset growth for the rest of the decade.
-------------------------------------------------
- Wall Street expects annual asset growth of 1% for Ahmanson and 3% for
Great Western
- Wall Street EPS forecasts are premised on this asset growth
- The required offset to negative asset growth is a combined pro
forma net interest margin of approximately 20 bps over the level of
Wall Street expectations
- - Ahmanson's EPS forecasts depend on massive share repurchases that leave
-----
little margin for error
-----------------------
- - Ahmanson's plan calls for the repurchase of 20% of the shares outstanding
after the acquisition.
- - Combined with Ahmanson's planned dividends, the repurchase program
translates into a cash outlay of $3.2 billion over 9 quarters, an amount
equal to 178% of the projected net income to common equity over the same
time period and 125% of the cash net income to common equity
================================================================================
[LOGO] Washington Mutual 46 GREAT WESTERN [LOGO]
<PAGE> 48
AHMANSON'S MOST RECENT "REVISED"
ASSUMPTIONS ARE NOT CREDIBLE
================================================================================
<TABLE>
<CAPTION>
($ in millions)
AHM Original AHM Revised WAMU
Proposal Proposal Transaction Discussion
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expense Savings $404 $454 $340 AHM's sole advantage is 100 additional branch closures,
an advantage that GWF believes is worth less than $50
million. In all other respects, WAMU has an advantage by
virtue of its superior and more compatible technology.
Revenue Synergies -- $50 $88(a) AMH (in direct contrast to WAMU) has provided no details on
its revenue synergies and has no demonstrated ability to
generate incremental revenues through a transaction.
Share Repurchase Amount $2.0 bn $2.8 bn -- AHM's offer is predicted on massive cash outlays for the
repurchase of stock. These repurchases, combined with
dividend payments, exceed even the forecast cash net
income to common equity and would depress the company's
capital ratios for years. WAMU's forecasts contemplate
no share buybacks and strong capital ratios.
</TABLE>
(a) Includes fee income opportunities only.
================================================================================
[LOGO] Washington Mutual 47 GREAT WESTERN [LOGO]
<PAGE> 49
AHMANSON'S PROPOSAL RELIES ON IMPRUDENT LEVERAGE
- -------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
Pro Forma December 31,
------------------------------------------------
1997E 1998E 1999E
-------------- -------------- -------------
<S> <C> <C> <C>
WASHINGTON MUTUAL -- "PRUDENT LEVERAGE"(a)
Tangible Assets(b) $95,220 $104,742 $115,216
Tangible Common Equity(c) 4,671 5,636 6,810
Tangible Common/Tangible Assets 4.91% 5.38% 5.91%
AHMANSON PROPOSAL -- "A LEVERAGED BUYOUT"(d)
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity(c) 3,146 3,128 3,118
Tangible Common/Tangible Assets(e) 3.46% 3.45% 3.46%
Ahmanson Tangible Equity Required to
Equal Washington Mutual's Ratio $ 4,455 $ 4,884 $ 5,321
Change from Ahmanson Base 1,309 1,756 2,203
</TABLE>
(a) Based on data presented in or underlying Washington Mutual's S-4
Registration Statement dated March 13, 1997 and recent transaction-related
analyst presentations. See appendix for further details.
(b) Assumes 10% annual growth rate, for illustrative purposes.
(c) Tangible common equity equals common equity minus intangible assets.
(d) Based on data presented in Ahmanson's March 25, 1997 press release.
(e) In its March 25, 1997 press release, Ahmanson computes the ratio by
deducting intangible assets on a tax-affected basis. The above ratios are
shown using a more conventional method of deducting intangible assets prior
to any tax effect.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 48 GREAT WESTERN [LOGO]
<PAGE> 50
AHMANSON'S CONSOLIDATED TANGIBLE COMMON EQUITY RATIO IS AMONG THE LOWEST IN THE
INDUSTRY(a)
===============================================================================
- ---------------------------------------------------------------
Rank out of 93 institutions with more than $1 billion in assets
- ---------------------------------------------------------------
Tangible Common/
Bottom 10 Institutions Tangible Assets
- ---------------------------- -------------------------------------
93. Coastal Bancorp 2.75%
- -------------------------------------------------------------------------------
92. H.F. AHMANSON 3.31/3.46%(b)
- -------------------------------------------------------------------------------
91. Sterling Financial 3.58
90. Bank United Financial 3.65
89. Chevy Chase Bank 3.80
88. Sovereign Bancorp(c) 3.88
87. Webster Financial 3.93
86. FirstFed Financial 4.63
85. Bank United 4.79
84. Coast Savings 4.81
(a) Source: SNL Securities. At December 31, 1996.
(b) Pro forma at 12/31/99 for acquisition of Great Western. Based on
Ahmanson's March 25, 1997 press release.
(c) Pro forma for acquisition of Bankers Corp.
================================================================================
[LOGO] Washington Mutual 49 GREAT WESTERN [LOGO]
<PAGE> 51
FASTER PROJECTED PRO FORMA EPS GROWTH
- -------------------------------------------------------------------------------
[Bar Graph]
WAMU/GWF
EPS Accretion/
CAGR = 32% EPS (Dilution)
----- -----
1997E..........................$3.40
1998E..........................$4.81 5%
1999E..........................$5.90 15%
[Bar Graph]
AHM/GWF -- 3/25/97 PRESS RELEASE
CAGR = 20%
EPS Accretion/
EPS (Dilution)
----- -----
1997E..........................$2.68
1998E..........................$3.13 (11)%
1999E..........................$3.97 2 %
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
50
<PAGE> 52
AHMANSON'S OFFER IS DILUTIVE TO REPORTED EPS THROUGH 1999
===============================================================================
<TABLE>
<CAPTION>
REPORTED EPS CASH EPS
ACCRETION/(DILUTION) ACCRETION/(DILUTION)
------------------- --------------------
1998E 1999E 1998E 1999E
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Ahmanson's Assumptions:
3/25/97 Press Release (11.0)% 2.0 % 9.0 % 21.0%
Adjusted for WAMU Capital Level(a) (15.0)% (5.0)% 3.0 % 11.0%
Adjusted for Original Synergies(b) (16.0)% (5.0)% 4.0 % 14.0%
Adjusted for WAMU Capital/
Original Synergies(c) (19.0)% (11.0)% (2.0)% 5.0%
</TABLE>
(a) Tangible common equity ratio assumed to be equal to Washington Mutual's pro
forma ratio. Share repurchases made at prices consistent with Ahmanson's
March 25, 1997 press release (approximately 12.25x cash EPS). Assumes, for
illustrative purposes only, that Ahmanson fully realizes its revised
synergies. See appendix for further details.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements. We believe this to be a more realistic synergy level. Share
repurchases made at prices consistent with Ahmanson's March 25, 1997 press
release (approximately 12.25x cash EPS). See appendix for further details.
(c) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchase made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS). See appendix for further details.
===============================================================================
[LOGO] WASHINGTON MUTUAL 51 GREAT WESTERN [LOGO]
<PAGE> 53
- --------------------------------------------------------------------------------
THE WAMU/GWF
COMBINATION IS
SIGNIFICANTLY STRONGER
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
52
<PAGE> 54
STRONGER WAMU CAPITAL/ASSET QUALITY -
LONG TERM DRAG ON AHM EARNINGS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WAMU/GWF AHM/GWF
Merger Proposal
- --------------------------------------------------------------------------------
<S> <C> <C>
Tangible Common Equity to Assets 4.55%(a) 3.46%(b)
Intangibles to Total Equity 9%(a) 58%(b)
NPAs to Assets(c) 0.94% 1.35%
Reserves to NPLs(c)(d) 119% 83%
High Risk Real Estate Loans to Loans(e) 11% 22%
Tangible Common Equity to Assets
With Equal Reserve to NPL Coverage 4.55%(a) 3.24%(b)
</TABLE>
- ------------
(a) Pro forma at March 31, 1997. Reflects $318 million in after-tax
restructuring charges.
(b) Projected at December 31, 1997 based on data presented in Ahmanson's March
25, 1997 press release.
(c) Pro forma at March 31, 1997. NPL and NPA ratios exclude restructured loans.
(d) Reflects $100 million increase in loan loss reserves.
(e) At December 31, 1996. Includes construction, multi-family, commercial real
estate and land loans and REO/REI. Loans include REO/REI.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 53 GREAT WESTERN [LOGO]
<PAGE> 55
BETTER OPERATING PERFORMANCE(a)
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
WAMU/GWF AHM/GWF
Merger Proposal
- --------------------------------------------------------------------------------
<S> <C> <C>
Net Income $1,497 $ 938
Cash Flow 1,556 1,164
Return on Assets 1.35%(b) 0.98%
Return on Common Equity 23.1% 11.7%
Cash Return on Tangible Common 25.1% 37.3%
Cash Return on Tangible Common -
Equal Leverage(c) 25.1% 24.7%
</TABLE>
(a) Projected results are for 1999 and are presented in Washington Mutual's S-4
registration statement dated March 13, 1997 and Ahmanson's press release
dated March 25, 1997.
(b) Assumes 10% asset growth rate, for illustrative purposes.
(c) Assumes Ahmanson's tangible common equity to tangible assets ratio
increases to 5.91% (equal to Washington Mutual's) in 1999.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 54 GREAT WESTERN [LOGO]
<PAGE> 56
FAILURE TO ACHIEVE SYNERGIES HAS A GREATER
IMPACT ON THE AHMANSON PROPOSAL.
- -------------------------------------------------------------------------------
1999E GAAP EPS ACCRETION/(DILUTION)
-----------------------------------
[Bar Graphs]
WAMU AHM
---- ---------------------------------------------------
Base 15% Base 2% Base 2%
10% 17% 22%
50% 5% 50% (15%) 50% (20%)
Synergies(a) Synergies Synergies/
WAMU Capital
(a) Includes expected cost savings and non-interest revenue enhancements.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 55 GREAT WESTERN [LOGO]
<PAGE> 57
FAILURE TO ACHIEVE SYNERGIES HAS A GREATER
IMPACT ON THE AHMANSON PROPOSAL
- -------------------------------------------------------------------------------
1999E CASH EPS ACCRETION/(DILUTION)
-----------------------------------
[Bar Graphs]
WAMU AHM
---- ---------------------------------------------------
Base 17% Base 21% Base 21%
10% 16% 25%
50% 7% 50% 5% 50% (4%)
Synergies(a) Synergies Synergies/
WAMU Capital
(a) Includes expected cost savings and non-interest revenue enhancements.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 56 GREAT WESTERN [LOGO]
<PAGE> 58
- --------------------------------------------------------------------------------
THE WAMU TRANSACTION
IS THE BEST FOR
GWF SHAREHOLDERS
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
57
<PAGE> 59
EPS PER GWF SHARE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AHM/GWF Merger
------------------------------------------------
Ahmanson Assumptions:
------------------------------------------------
Adjusted for
GWF WAMU/ Adjusted for WAMU Capital/
Stand- GWF 3/25/97 WAMU Capital Original
Alone Merger Press Release Level(a) Synergies(b)
------ ------ ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Exchange Ratio -- 0.90x 1.20x 1.20x 1.20x
1998E GAAP EPS per GWF Share $3.09 $4.33 $3.76 $3.59 $3.41
Percent Change(c) 40% 22% 16% 10%
1999E GAAP EPS per GWF Share $3.40 $5.31 $4.72 $4.40 $4.12
Percent Change(c) 56% 39% 30% 21%
1998E Cash EPS per GWF Share $3.35 $4.56 $4.80 $4.50 $4.31
Percent Change(c) 36% 43% 34% 29%
1999E Cash EPS per GWF Share $3.66 $5.55 $5.86 $5.36 $5.08
Percent Change(c) 51% 60% 47% 39%
</TABLE>
Source: Prospective buyers' respective presentations to analysts.
(a) Tangible common equity ratio equal to Washington Mutual's pro forma ratio.
Share repurchases made at prices consistent with Ahmanson's March 25, 1997
press release (approximately 12.25x cash EPS). Assumes, for illustrative
purposes, that Ahmanson fully realizes its revised synergies. See appendix
for further details.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchases made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS). See appendix for further details.
(c) Relative to First Call mean estimates for 1998. 1999 assumes 10% EPS growth
over 1998 First Call mean estimate. Cash EPS figures add back intangible
amortization.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 58 GREAT WESTERN [LOGO]
<PAGE> 60
- --------------------------------------------------------------------------------
WAMU'S TRACK RECORD IS
SUPERIOR IN EVERY WAY
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
59
<PAGE> 61
SENIOR MANAGEMENT WITH MORE EXPERIENCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name Position Tenure
- ---- -------- ------
<S> <C> <C>
Washington Mutual
Kerry K. Killinger Chairman, President & CEO 14 years
S. Liane Wilson EVP, Corporate Operations 12 years
Lee D. Lannoye EVP, Corporate Administration & Credit 9 years
Deanna Oppenheimer EVP, Corporate Marketing & Consumer Bank
Distribution 12 years
William A. Longbrake(a) EVP & CFO 15 years
Craig E. Tall EVP, Corporate Development & Commercial
Banking 12 years
H.F. Ahmanson
Charles R. Rinehart Chairman & CEO 8 years
Bruce G. Willison President & COO 1 year
Kevin M. Twomey Senior EVP and CFO 4 years
Anne-Drue M. Anderson EVP, Treasurer 4 years
Carl Forsythe EVP, Director of Personal Financial
Services 1 year
Madeleine A. Kleiner EVP, General Counsel & Secretary 2 years
E. Nancy Markle EVP 3 years
</TABLE>
(a) Includes time served as CFO of the FDIC from March, 1995 to September,
1996.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual 60 GREAT WESTERN[LOGO]
<PAGE> 62
GREATER ACQUISITION EXPERIENCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGREGATE
ANNOUNCEMENT TYPE OF CONSIDERATION CONSIDERATION/ TYPE OF IN MARKET/
DATE TARGET ACQUISITION ($MM) MARKET CAP CONSIDERATION MARKET EXTENSION
- ------------ ------ ----------- ------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
WASHINGTON MUTUAL(a)
09/96 United Western Whole $ 80 3% Cash In Market
06/96 Keystone Holdings Whole 1,647 77 Stock Extension
03/96 Utah Federal Whole 15 1 Stock In Market
10/95 Western Bank Whole 177 10 Stock Extension
06/95 Enterprise Bank(b) Whole 24 2 Stock Extension
07/94 Olympus Capital Whole 48 4 Stock Extension
06/94 Summit Bancorp Whole 26 2 Stock In Market
10/92 Pacific First Bank Whole 663 81 Cash In Market/
Extension
08/92 Pioneer Savings Whole 170 24 Stock In Market
09/91 GNW Financial Whole 68 13 49% Cash/ In Market
51% Stock
11/90 VanFed Whole 23 13 Cash In Market
AHMANSON(a)
03/96 First Interstate Branch $ 206 7% Cash In Market
02/95 Household Bank Branch 53 3 Cash In Market
09/94 Western Federal Bank RTC 87 4 Cash In Market
01/93 HomeFed RTC N.A. N.A. Cash In Market
03/92 County Bank of
Santa Barbara RTC 4 0 Cash In Market
01/91 Coast Federal Bank Branch 20 1 Cash In Market
04/90 Home Savings Bank Whole 292 17 Stock In Market
</TABLE>
(a) Includes only branch acquisitions with more than $200 million of deposits
or 10 branches.
(b) Acquired remaining 90.1% interest that it did not already own.
- --------------------------------------------------------------------------------
[LOGO]Washington Mutual GREAT WESTERN [LOGO]
61
<PAGE> 63
SUPERIOR TOTAL RETURNS
- -------------------------------------------------------------------------------
COMPOUNDED ANNUAL TOTAL RETURN(a)
[BAR GRAPH]
<TABLE>
<CAPTION>
WAMU AHM
---- ---
<S> <C> <C>
1 Year 54% 27%
3 Years 26% 23%
5 Years 27% 18%
10 Years ...... 24% 9%
</TABLE>
(a) Stock price appreciation plus reinvestment of dividends. As of the
respective periods ending December 31, 1996.
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual 62 GREAT WESTERN [LOGO]
<PAGE> 64
LOWER LEVEL OF NPAs/
BETTER RESERVE COVERAGE(a)
- ------------------------------------------------------------------------------
[BAR GRAPH]
<TABLE>
<CAPTION>
Reserves/NPLs(b)
WAMU(c) AHM
------ --------
<S> <C> <C>
1993 .... 135% 50%
1994 .... 180% 50%
1995 .... 161% 43%
1996 .... 107% 50%
97:Q1.... 110% 50%
<CAPTION>
NPAs + Restructured Loans/Assets
WAMU(c) AHM
------ ----
<S> <C> <C>
1993 .... 0.75% 2.09%
1994 .... 0.49% 1.79%
1995 .... 0.51% 2.20%
1996 .... 0.99% 2.07%
97:Q1.... 0.93% 2.06%
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for
pooling transactions).
(b) NPLs including nonaccrual loans and restructured loans.
(c) Impacted in 1996 by American Savings Bank.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 63 GREAT WESTERN [LOGO]
<PAGE> 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>
1993 $2.30 -$1.73 $0.50 $0.88
1994 $2.62 $1.73 $0.70 $0.88
1995 $2.76 $1.47 $0.77 $0.88
1996 $3.39 $1.90 $0.90 $0.88
97:Q1 $0.92 $0.77
1997 Indicated(c) $1.04 $0.88
</TABLE>
(a) Reflects numbers as originally reported (prior to restatement for pooling
transactions).
(b) Adjusted to exclude non-recurring items including gains on sales,
restructuring charges, the SAIF recapitalization charge, one-time asset
write-offs and preferred dividends. 1993 and 1996 Ahmanson figures
adjusted to reflect tax rate of 40.0%
(c) Annualized from common dividends declared in the second quarter of $0.26
and $0.22, respectively.
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 64 GREAT WESTERN [LOGO]
<PAGE> 66
FAST GROWING VS. DECLINING
TOTAL LOAN ORIGINATIONS
- ------------------------------------------------------------------------------
($ in billions)
[Bar Graph]
<TABLE>
<CAPTION>
WAMU Ahmanson
---- --------
<S> <C> <S> <C>
1994 $ 9.3 1994 $10.3
1995 $ 9.4 1995 $ 6.4
1996 $13.6 1996 $ 5.5
1997:Q1 $ 3.5 1997:Q1 $ 1.1
</TABLE>
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
65
<PAGE> 67
MORE "BANK-LIKE"/LOWER RISK
LOAN COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART] [PIE CHART]
WASHINGTON MUTUAL(a) AHMANSON(b)
<S> <C> <C>
Commercial 1% >1%
Commercial Real Estate 12% 35%
Consumer 10% 3%
1-4 Family Residential(c) 77% 62%
</TABLE>
(a) At March 31, 1996.
(b) At March 31, 1996.
(c) Includes residential and other construction.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
66
<PAGE> 68
MORE "BANK-LIKE" DEPOSIT COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[PIE CHART]
[PIE CHART]
WASHINGTON MUTUAL(a) AHMANSON(b)
<S> <C> <C> <C>
Total Term 58% 68% (71%)
Total Savings + MMDA 29% 22% (22%)
Total Checking 13% 10% (16%)
</TABLE>
(a) At March 31, 1997. Includes deposits of American Savings Bank.
(b) At March 31, 1997. Approximately 3% of current checking deposits, 2% of
current savings and MMDA deposits, and 2% of currrent term deposits are from
the acquisition of 61 First Interstate branches. Acquired deposits totaled
$2.5 billion, or approximately 7% current deposits. First Interstate data
from analyst presentation on March 28, 1996. Parenthetical entries denote
deposit composition prior to acquisition of First Interstate branches.
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[LOGO]Washington Mutual 67 GREAT WESTERN [LOGO]
<PAGE> 69
AHMANSON WILL HAVE
DIFFICULTY EXECUTING
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
68
<PAGE> 70
INTEGRATION RISKS ARE VERY SUBSTANTIAL
WITH AN AHM/GWF COMBINATION
- -------------------------------------------------------------------------------
- - Elimination of Great Western name
- - Hostile offer/antagonized employees
- - Disruptive branch closures
- Substantial deposit runoff
- Customer losses
- - Questionable systems capabilities
- - Management's lack of integration experience
- -------------------------------------------------------------------------------
[LOGO] Washington Mutual 69 GREAT WESTERN [LOGO]
<PAGE> 71
CONCLUSIONS
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
70
<PAGE> 72
GREAT WESTERN'S STRATEGIC ALTERNATIVES
- ------------------------------------------------------------------------------
WAMU Merger AHM Proposal
- --------------------------------- ----------------------------------
- - Strong growth and profitability - Mediocre operating performance
- - Attractive earnings and EPS - Cash EPS growth, reported EPS
growth dilution
- - Transaction economics: - Transaction economics:
- Realistic cost cuts - Cost cutting
- Fee income opportunities - Aggressive stock buyback
- Loan retention
- - Strong, low risk balance sheet - Weak, high risk balance sheet
- - Low risk integration - High risk integration
- - Flexible strategic alternatives - Unclear exit strategies
- - Strong insider ownership - Low insider ownership
(discipline)
- - Strong diversified currency - Increased CA thrift exposure
- ------------------------------------------------------------------------------
[LOGO] Washington Mutual GREAT WESTERN [LOGO]
71
<PAGE> 73
Washington Mutual, Inc.
[LOGO] Merger With [LOGO]
Great Western Financial Corporation
HIGH GROWTH CONSUMER BANKING
May 22, 1997
72
<PAGE> 74
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
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73
<PAGE> 75
CONSOLIDATED LOAN ORIGINATIONS
- ------------------------------------------------------------------------------
($ IN BILLIONS)
[BAR GRAPH]
<TABLE>
<CAPTION>
45% INCREASE 17% INCREASE
YTD YTD
1994 1995 1996 APR. 96 APR. 97
<S> <C> <C> <C> <C>
9.3 9.4 13.6 4.3 5.0
</TABLE>
- ------------------------------------------------------------------------------
[LOGO] WASHINGTON MUTUAL 74 GREAT WESTERN [LOGO]
<PAGE> 76
WAMU Lending Activity
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SFR Mortgage Activity(a) Consumer Lending Activity(b)
($ in billions) ($ in millions)
[BAR GRAPH] [BAR GRAPH]
46% Increase 8% Increase 43% Increase 33% Increase
Apr. 96 Apr. 97 Apr. 96 Apr. 97
1994 1995 1996 YTD YTD 1994 1995 1996 YTD YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$6.3 $6.8 $9.9 $3.2 $3.5 $839 $888 $1,268 $357 $476
</TABLE>
- -----------------
(a) Consolidated lending
(b) WMB and WMBfsb
- --------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] 75 [GREAT WESTERN LOGO]
<PAGE> 77
WAMU CONSTRUCTION ACTIVITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BUILDER CONSTRUCTION ACTIVITY(a) CUSTOM CONSTRUCTION ACTIVITY(a)
($ in millions) ($ in millions)
---------------------------------- ----------------------------------
20% INCREASE 35% INCREASE
---------------- ----------------
45% INCREASE YTD YTD 34% INCREASE YTD YTD
1994 1995 1996 Apr. 96 Apr. 97 1994 1995 1996 Apr. 96 Apr. 97
---- ---- ---- ------- ------- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$329 $352 $510 $176 $211 $706 $584 $780 $185 $250
</TABLE>
(a) WMB and WMB fsb
- -------------------------------------------------------------------------------
[WASHINGTON MUTUAL LOGO] 76 [GREAT WESTERN LOGO]
<PAGE> 78
STRONG DEPOSIT SHARE IN ATTRACTIVE MARKETS(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
California
- -------------------------------------------------------------
<S> <C>
BAC .................................................. 20.9%
WFC .................................................. 14.9%
WAMU/GWF ............................................. 9.2%
AHM .................................................. 7.6%
UNBC ................................................. 4.8%
</TABLE>
<TABLE>
<CAPTION>
[BAR GRAPH]
Washington
- -------------------------------------------------------------
<S> <C>
BAC .................................................. 22.8%
WAMU/GWF ............................................. 15.4%
USBC ................................................. 13.8%
KEY .................................................. 11.4%
WFC .................................................. 5.7%
</TABLE>
Source: SNL Securities.
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 77 GREAT WESTERN [LOGO]
<PAGE> 79
STRONG DEPOSIT SHARE IN ATTRACTIVE MARKETS(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
[BAR GRAPH]
Oregon
- -------------------------------------------------------------
<S> <C>
USBC ................................................. 32.6%
WFC .................................................. 18.4%
WAMU/GWF ............................................. 10.0%
BAC .................................................. 9.3%
KEY .................................................. 8.6%
</TABLE>
<TABLE>
<CAPTION>
[BAR GRAPH]
Florida
- -------------------------------------------------------------
<S> <C>
BBI .................................................. 19.2%
FTU .................................................. 17.1%
NB ................................................... 12.1%
STI .................................................. 10.4%
WAMU/GWF ............................................. 4.0%
</TABLE>
Source: SNL Securities.
(a) June 30, 1996 deposit data updated for announced acquisitions through
February 26, 1997.
- --------------------------------------------------------------------------------
[LOGO] Washington Mutual 78 [GREAT WESTERN LOGO]
<PAGE> 80
AHMANSON'S PROJECTED COMBINED FINANCIAL DATA(a)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income Available to Common(b) $ 423 $ 819 $ 938
Intangible Amortization 68 226 226
------ ------ ------
Projected Cash Earnings Available to Common $ 491 $ 1,045 $1,164
Projected GAAP EPS $ 2.75 $ 3.13 $ 3.93
% Pick-Up / (Dilution) (10)% (11)% 2%
Projected Cash EPS $ 3.19 $ 3.99 $ 4.88
% Pick-Up / (Dilution) 1% 9% 21%
Cash Generated to Buy Back Common $ 386 $ 845 $ 978
Additional Borrowings to Fund Buyback 359 320 38
------ ------ ------
Total Buyback $ 745 $1,165 $1,016
Average Shares 154 262 239
Beginning Shares 115 270 246
Shares Issued 174 12 1
Shares Repurchased 19 24 17
Change in Common Stock Equivalents 0 (12) 0
------ ------ ------
Ending Shares 270 246 230
Average Shares 154 262 239
</TABLE>
(a) All data based on Ahmanson's March 25, 1997 press release.
(b) 1997 and 1998 are adjusted to exclude non-recurring items.
- --------------------------------------------------------------------------------
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<PAGE> 81
AHMANSON'S OFFER -- ORIGINAL SYNERGIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Net Income Available to Common (a) $ 417 $ 773 $ 874
Intangible Amortization (a) 68 226 226
------- ------- -------
Cash Earnings Available to Common $ 485 $ 999 $ 1,100
Projected GAAP EPS $ 2.71 $ 2.96 $ 3.66
% Pick-Up / (Dilution) (11)% (16)% (5)%
Projected Cash EPS $ 3.15 $ 3.82 $ 4.61
% Pick-Up / (Dilution) 0% 4% 14%
Base Cash Generated to Buy Back Common (a) $ 386 $ 845 $ 978
Change in Cash(b) (6) (56) (65)
Additional Borrowings to Fund Planned Buyback 359 320 38
------- ------- -------
Revised Buy Back / (Issuance) $ 739 $1,119 $ 951
Beginning Shares 115 270 246
Shares Issued 174 12 1
Shares Repurchased / (Issued) 19 24 17
Change in Common Stock Equivalents 0 (12) 0
------- ------- -------
Ending Shares 270 246 229
Average Shares 154 261 239
Calculated Share Repurchase Price $ 39.57 $ 46.82 $ 56.45
Multiple of Cash EPS 12.6x 12.3x 12.2x
</TABLE>
Note: Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements. We believe this to be a more realistic synergy level.
Share repurchases made at prices consistent with March 25, 1997 Ahmanson
press release (approximately 12.25x cash EPS).
(a) Based on Ahmanson's March 25, 1997 press release. 1997 and 1998 are
adjusted to exclude non-recurring items.
(b) Net effect of dividends on additional shares issued and reduced synergies
- --------------------------------------------------------------------------------
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<PAGE> 82
AHMANSON'S OFFER -- WAMU CAPITAL/ORIGINAL SYNERGIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions) 1997E 1998E 1999E
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Net Income Available to Common (a) $ 417 $ 773 $ 874
Earnings on Additional Capital (b) 13 74 95
------- ------- -------
Revised Net Income to Common $ 430 $ 847 $ 969
Intangible Amortization (a) 68 226 226
------- ------- -------
Revised Cash Earnings Available to Common $ 498 $ 1,073 $ 1,195
Projected GAAP EPS $ 2.65 $ 2.84 $ 3.43
% Pick-Up / (Dilution) (13)% (19)% (11)%
Projected Cash EPS $ 3.07 $ 3.59 $ 4.23
% Pick-Up / (Dilution) (2)% (2)% 5 %
Base Cash Generated to Buy Back Common (a) $ 386 $ 845 $ 978
Change in Cash (c) 0 (5) (9)
Additional Borrowings to Fund Planned Buyback 359 320 38
Additional Capital Required (d) (1,309) (447) (447)
------- ------- -------
Revised Buy Back / (Issuance) $ (564) $ 713 $ 561
Beginning Shares 115 304 287
Shares Issued 174 12 1
Shares Repurchased / (Issued) (15) 16 11
Change in Common Stock Equivalents 0 (12) 0
------- ------- -------
Ending Shares 304 287 276
Average Shares 162 299 283
Calculated Share Repurchase Price $ 38.57 $ 44.01 $ 51.78
Multiple of Cash EPS 12.6x 12.3x 12.2x
</TABLE>
Note: Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchases made at
prices consistent with Ahmanson's March 25, 1997 press release (approximately
12.25x cash EPS).
(a) Based on Ahmanson's March 25, 1997 press release. 1997 and 1998 are
adjusted to exclude non-recurring items.
(b) Assumes 8% earnings rate and 40% tax rate.
(c) Net effect of earnings on additional capital, dividends on additional
shares issued and reduced synergies.
(d) Additional capital required to equal Washington Mutual's projected capital
ratios.
- --------------------------------------------------------------------------------
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<PAGE> 83
COMPARISON OF CAPITAL STRUCTURES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
($ in millions, except per share amounts; shares in millions)
1997E 1998E 1999E
--------------------------------------------
<S> <C> <C> <C>
WAMU/GWF
Tangible Assets(a) $95,220 $104,742 $115,216
Tangible Common Equity 4,671 5,636 6,810
Ending Primary Shares 242 243 244
Tangible Book Value per Share $ 19.28 $ 23.17 $ 27.91
AHM/GWF -- 3/25/97 Press Release
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity 3,146 3,128 3,118
Ending Primary Shares 257 246 230
Tangible Book Value per Share $ 12.22 $ 12.72 $ 13.59
AHM/GWF -- Adjusted for WAMU Capital/Original Synergies(b)
Tangible Assets $90,823 $ 90,767 $ 90,017
Tangible Common Equity(c) 4,455 4,884 5,321
Ending Primary Shares 291 287 276
Tangible Book Value per Share $ 15.33 $ 17.03 $ 19.25
</TABLE>
(a) Assumes 10% annual growth rate for illustrative purposes.
(b) Assumes cost savings as presented on February 18, 1997 and no revenue
enhancements and WAMU tangible common equity ratio. Share repurchase made
at prices consistent with Ahmanson's March 25, 1997 press release
(approximately 12.25x cash EPS).
(c) Tangible common equity required to equal Washington Mutual tangible common
equity ratio.
- -------------------------------------------------------------------------------
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82
