SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 3, 1998
Washington Mutual, Inc.
(Exact Name of Registrant as specified in its charter)
Washington 0-25188 91-1653725
(State or Other Jurisdiction (Commission File Number) IRS Identification No.
of Incorporation)
1201 Third Avenue, Seattle, Washington 98101
---------------------------------------------------------
Address of Principal Executive Office Postal Code
206-461-2000
Registrant's telephone number including area code
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 99.1 Materials presented to investors at a conference on June 3,
1998 marked to indicate corrections from materials previously filed on June 4,
1998 on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WASHINGTON MUTUAL, INC.
Date: June 18, 1998 By:/s/ Fay L. Chapman
Fay L. Chapman, Executive Vice President
and General Counsel
Slide Page 1
[Washington Mutual Logo]
Sanford C. Bernstein & Co., Inc.
Strategic Decisions Conference
The Plaza Hotel, New York
June 3, 1998
Kerry Killinger
Chairman, President and
Chief Executive Officer
Slide 1
<PAGE>
[Washington Mutual Logo]
A High-Growth Consumer Banking Company
Slide 2
<PAGE>
Forward-Looking Information
Statements contained in this presentation which are not historical facts and
which pertain to future operating results of Washington Mutual, Inc. and its
subsidiaries constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements 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 Form 10-K for the year ending Dec. 31, 1997, and
the Registration Statement on Form S-4, reg. No.
333-52785.
Slide 3
<PAGE>
WAMU Profile
Mission To Be One of the Nation's Premier
Financial Services Companies
Businesses Consumer Banking
Financial Services
Mortgage Lending
Commercial Banking
Consumer Finance
Size $103.1 Billion in Assets
Nation's Largest Savings Institution
Nation's 11th Largest Bank
Slide 4
<PAGE>
WAMU Profile
Key Strategies
Expand Businesses through Internal Growth
and Acquisitions
Maintain a High Quality Balance Sheet
Improve Operating Efficiency
Limit Sensitivity to Interest Rate Movements
Slide 5
<PAGE>
WAMU Profile
Five-Year Financial Targets: 1995 - 2000
Results
Target 3/31/98(a)
> 18.00% 19.68%
ROCE
EPS Growth > 15.00 29.24(b)
Operating Efficiency < 50.00 46.20
NPA/Total Assets < 1.00 0.78
Common Equity/Assets > 5.00 5.22
WAMU Return/S&P 500 >100.00
(a) Results based on earnings from operations which equal reported earnings
less transaction-related expenses (b) Increase in earnings from operations
from Q1 1997 to Q1 1998
Slide 6
<PAGE>
WAMU Consumer Banking Strategy
Building a Unique National Franchise
Retail Banking Alternative to Large, National
Commercial Banks
Mortgage Lending Alternative to Mortgage Banking
And GSEs
Slide 7
<PAGE>
Consumer Banking Strategy
Building a Unique National Franchise
Alternative to Large, National Commercial Banks
Broad-Based Product Line
National Convenience with Localized, High-Touch Customer
Service
Efficient Acquirer of Thrifts
Convert to Consumer Banking Platform
Move From Traditional Products
Traditional WAMU Consumer Bank
Savings/CDs Checking
Limited Lending Money Market
(in branches) (arrow) Consumer Loans
Mortgage Loans
Slide 8
<PAGE>
Consumer Banking
How the Competition is Viewed
Automated
Mechanized [Picture]
Overworked
Slide 9
<PAGE>
Consumer Banking
How the Competition is Viewed
Stiff
Arrogant [Picture]
Cold
Slide 10
<PAGE>
Consumer Banking
How Washington Mutual is Viewed
Casual
Comfortable [Picture]
At home
Slide 11
<PAGE>
Consumer Banking
How Washington Mutual is Viewed
Caring
Warm [Picture]
Personal
Slide 12
<PAGE>
Consumer Banking
Would Refer Their Bank to Friends
[Bar Graph]
WAMU Wells Fargo B of A
90% 46% 42%
Slide 13
<PAGE>
Consumer Banking
Broad Product Line
Deposit Products
Transaction Accounts
Time Deposits
Consumer Loan Products
Home Equity
Unsecured Lines
Manufactured Housing
Auto/Other
Mortgage Lending
Single-Family ARMs
Single-Family Fixed
Financial Services
Mutual Funds
Annuities
Securities Brokerage
Credit Insurance
Business Banking Products
Small Business Lending
Business Transaction Accounts
Slide 14
<PAGE>
Consumer Banking
Customer Acquisition/Cross-Selling Strategy
Strategies Offer Competitive Consumer-Oriented Products
Employ Aggressive Marketing Techniques
Increase Customer Contact Through Multiple Delivery Channels
Cross-Sell Customers
Utilize State of the Art Technology
Results Increase in Households Served
Increase in Checking Accounts
Increase in Fee Income
Increase in Consumer Loan Originations
Slide 15
<PAGE>
Consumer Banking
Distribution Network
[Map of Western United States and Florida]
Strong West Coast and Florida Franchises
<PAGE>
- -------------------------------------------------- ----------------------------
Deposits Deposit
State Branches (a) ($B)(b) Share(b)
- -------------------------------------------------- ----------------------------
- -------------------------------------------------- ----------------------------
California 364 $30.1 8.3%
- -------------------------------------------------- ----------------------------
- -------------------------------------------------- ----------------------------
Washington 172 7.7 14.5%
- -------------------------------------------------- ----------------------------
- -------------------------------------------------- ----------------------------
Florida 118 6.3 3.7%
- -------------------------------------------------- ----------------------------
- -------------------------------------------------- ----------------------------
Oregon 74 2.0 7.6
- -------------------------------------------------- ----------------------------
- -------------------------------------------------- ----------------------------
Other States 43 n/a n/a
- -------------------------------------------------- ----------------------------
(a) Branch count as of 3/31/98 net of pending consolidations
(b) Interest bearing deposits, exclusive of government deposits, as of
December 31, 1997
Slide 16
<PAGE>
Consumer Banking
Retail Checking Accounts
[Bar Graph]
<PAGE>
YEAR GW ASB WMB Total Households
1995 1.462 .232 .489 2.183 3.696
1996 1.488 .238 .608 2.334 3.736
1997 1.432 .321 .766 2.519 3.753
Q1 1998 1.501 .337 .799 2.637 3.822
CAGR 1994-1997
WMB: 24.8% ASB: 19.7%
GW: (1.4)%
% Change: 1/1/98-3/31/98
WMB: 4.3% ASB: 5.1%
GW: 4.8%
Slide 17
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Consumer Banking
Net New Checking Accounts - Northwest Operations
[Bar Graph]
1995 1996 1997 Q1 1998
- ---- ---- ---- -------
95,202 119,318 148,815 33,317
Slide 18
<PAGE>
Consumer Banking
Net New Checking Accounts - ASB
[Bar Graph]
1996 1997 Q1 1998
---- ---- -------
5,695 83,127 16,390
Slide 19
<PAGE>
Consumer Banking
Net New Checking Accounts - GW
[Bar Graph]
Q1 1997 Q2 1997 Q3 1997 Q4 1997 Q1 1998
- ------- ------- ------- ------- -------
(46,279) (51,359) (36,400) 78,870 68,357
Florida 42% Florida 54%
California 58% California 46%
Slide 20
<PAGE>
Consumer Banking
Depositor and Other Retail Banking Fee Income
[Bar Graph]
Dollars in Millions
1995 1996 1997 Q1 1997 Q1 1998
---- ---- ---- ------- -------
Southwest/Southeast(a) $176.4 $205.2 $253.9 $60.08 $59.0
Northwest(b) $ 57.5 $ 77.3 $112 $21.9 $33.3
Total $233.9 $282.5 $365.9 $82.7 $92.3
CAGR 1994-1997
NW: 57.8% SW/SE: 17.3%
% Change: Q1 '97 - Q1 '98
NW: 52.0% SW/SE: (3.1)%
(a) Southwest/Southeast refers to the operations of Washington Mutual Bank, FA
(California and Florida (b) Northwest refers to the combined operations of
Washington Mutual Bank and Washington Mutual Bank fsb
(Washington, Oregon, Idaho, Montana and Utah)
Slide 21
<PAGE>
Consumer Banking
Consumer Lending*
[Bar Graph]
Dollars in Millions
1995 1996 1997 Q1 1997 Q1 1998
---- ---- ---- ------- -------
Southwest/Southeast $ 312.7 $ 336.2 $ 646.8 $106.6 $170.7
Northwest $ 967.3 $1,268.3 $1,506.1 $333.1 $276.1
Total $ 1,280.0 $1,604.5 $2,152.9 $439.7 $446.8
CAGR 1994-1997
NW: 14.7% SW/SE: 26.7%
% Change: Q1 '97-Q1 '98
NW: (17.1)% SW/SE: 60.1%
* Consumer loan originations, not including SFR loans or loans originated
through the company's consumer finance subsidiaries.
Slide 22
<PAGE>
Mortgage Lending Strategy
Building a Unique National Franchise
Major Alternative to Mortgage Banking and GSE Combination
Limited Competition from Portfolio Lenders
WAMU Advantages
Multiple Distribution Channels
Efficient Originator and Servicer
High Quality Loans/Low Credit Costs
Higher Margins than Secondary Market Product
Opportunity to Generate 18%+ ROE
Slide 23
<PAGE>
Mortgage Lending
Distribution System
[Map of United States indicating location of Mortgage Loan Offices
and Wholesale Mortgage Offices]
States 29
Lending Offices 190
Loan Consultants 700
Account Managers 85
Slide 24
<PAGE>
Mortgage Lending
SFR Loan Origination Market Share - 1997
[Bar Graphs]
Washington Oregon California
WAMU 17.01% WAMU 13.06% WAMU 7.43%
Norwest 6.27% Norwest 5.50% B of A 6.74%
Countrywide 2.74% B of A 3.66% Countrywide 3.12%
Source: Experian
Slide 25
<PAGE>
Mortgage Lending
SFR Mortgage Loan Originations
[Bar Graph]
Dollars in Billions
1995 1996 1997 Q1 1997 Q1 1998
---- ---- ---- ------- -------
Fixed $ 3.6 $ 4.9 $ 6.7 $1.4 $4.0
ARMs $10.4 $11.1 $15.3 $2.6 $2.9
Total $14.0 $16.0 $22.0 $4.0 $6.9
Slide 26
<PAGE>
Mortgage Lending
Credit Quality - Improving Trends
Total Delinquencies Declining
NPAs at Lowest Levels in Years
Reduced REO Levels
Increasing Recoveries from Sales of REO
Slide 27
<PAGE>
Mortgage Lending
Credit Quality - SFR Loan Nonaccrual By Region
[Bar Graph]
Percentage as of 3/31/98
WAMU Market
California 1.06 1.19
Northwest 0.47 0.53
Northeast 0.91 1.26
Florida 1.04 1.35
Other 0.71 0.86
Source: Mortgage Information Corp. Database 2/98 (market data)
Slide 28
<PAGE>
Mortgage Lending
Operations - HLC Lending Channel
[Bar Graph]
"All-in" basis point cost per loan origination
Q1 1997 Q2 1997 Q3 1997 Q4 1997 Q1 1998
------- ------- ------- ------- -------
Southwest/Southeast 264 191 189 167 171
Northwest 130 116 123 123 117
Slide 29
<PAGE>
Mortgage Lending
Loan Servicing - Annualized Servicing Cost Per Loan
[Bar Graph]
In dollars
Goal Goal Goal
Q1 1997 Q2 1997 Q3 1997 Q4 1997 Q1 1998 Q2 1998 Q3 1998 Q4 1998
------- ------- ------- ------- ------- ------- ------- -------
Southwest/
Southeast 75 89 78 67 59 59 56 53
Northwest 45 43 43 46 48 48 48 46
Target 50 50 50 50 50 50 50 50
Slide 30
<PAGE>
- ------------------------------------------------------------------------------
Non-Banking Products
Distribution Network
[Map of Western United States and Florida]
Financial Consultants 350
Mutual Funds as of 3/31/98 $4.9B
Slide 31
<PAGE>
Community-Based Commercial Banking
Higher Margin Business
[Map of Washington, Oregon, Idaho and Utah]
Locations
Full-Service Offices 46
Business Banking Centers 24
Shared Transaction and Referral Financial Center 142
Assets as of 3/31/98 $ 1.4B
1997 Net Income $16.3M
Q1 1998 Net Income $ 4.2M
Slide 32
<PAGE>
Consumer Finance
National Franchise
[Map of United States with specific states highlighted]
Locations 493
Assets as of 3/31/98 $ 2.5B
1997 Net Income $45.5M
Q1 1998 Net Income $12.3M
Slide 33
<PAGE>
Successful Growth Through Acquisitions
Acquired Institution Assets Branches
(In Millions)
1988-92 10 Acquisitions $ 2,041.2 84
1993 Pioneer* 926.5 17
1993 Pacific First 5,861.3 129
1994-96 6 Acquisitions 1,674.4 66
1996 American* 21,893.5 224
1997 United Western 404.1 16
1997 Great Western* 43,769.8 636
Pending H.F. Ahmanson* 52,511.2 529
*Pooling transaction
Slide 34
<PAGE>
- -------------------------------------------------------------------------------
<PAGE>
Successful Growth Through Acquisitions
Acquisition Criteria
Active to Earnings Per Share
Consistent with Business Strategy
No Undue Operational Risks
Capital and Asset Quality Remain Strong
Slide 35
<PAGE>
Successful Growth Through Acquisitions
[Map of United States [Map of United States highlighting
highlighting Washington] all states except Wyoming,
Nebraska, Arkansas, Iowa, Maine
Wisconsin, North Dakota, South
Dakota and Vermont]
12/31/87 3/31/98
Assets $5.7 bn Assets $103.1 bn
Equity 316.9 mm Equity 5.4 bn
Stock Price $6.28 Stock Price $71.72
Market Cap 211.9 mm Market Cap 17.9 bn
Slide 36
<PAGE>
Stock Market Outperformance
- --------------------------------------------------------------------------------
Dividends Paid to Shareholders*
[Line Graph]
1986 1987 1988 1989 1990 1991 1992 1993
- ---- ---- ---- ---- ---- ---- ---- ----
$0.10 $0.13 $0.16 $0.16 $0.19 $0.23 $0.33 $0.50
1994 1995 1996 1997 Q1 1998
- ---- ---- ---- ---- -------
$0.77 $0.77 $0.90 $1.16 $1.20
* Adjusted for 50% stock dividends in 1986, 1987, 1992 and 1993
Slide 37
<PAGE>
Stock Market Outperformance
Cumulative Total Return Comparison*
(Assumes reinvestment of dividends)
[Line Graph]
<TABLE>
<CAPTION>
Base
Period
Company/Index Mar-83 Dec-83 Dec-84 Dec-85 Dec-86 Dec-87 Dec-88
- ------------------------ ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Washington Mutual Inc.(**) 100 106.00 92.99 137.02 281.20 263.99 268.61
S&P 500 Index 100 111.35 118.2 155.70 184.69 194.26 226.31
S&P Financial Index 100 99.18 108.49 154.84 167.02 139.02 164.23
</TABLE>
<TABLE>
<CAPTION>
Base
Company/Index Period
Dec-89 Dec-90 Dec-91 Dec-92 Dec-93
- -------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C>
Washington Mutual Inc. (**) 365.43 245.10 698.89 1066.19 1172.34
S&P 500 Index 297.80 288.51 378.04 404.86 445.45
S&P Financial Index 217.79 171.14 257.65 317.68 352.94
</TABLE>
<TABLE>
<CAPTION>
Base
Company/Index Period
Dec-94 Dec-95 Dec-96 Dec-97 Mar-98
<S> <C> <C> <C> <C> <C>
Washington Mutual Inc. (**) 848.84 1505.11 2318.92 3477.93 3926.52
S&P 500 Index 451.33 620.93 763.50 1018.22 1179.32
S&P Financial Index 340.45 524.37 708.78 1049.76 1160.26
</TABLE>
(**) 1983 Return uses an IPO price of $12.50, as provided by the company.
Standard and Poor's Compustat
*$100 Invested 3/83
Slide 38
<PAGE>
- -------------------------------------------------------------------------------
Stock Market Outperformance
Total Annual Return Peer Comparison 4/1/90 - 3/31/98
[Bar Graph]
WAMU 36.7%
USB 36.7%
NOB 34.4%
FTU 31.0%
CMB 29.9%
CCI 28.9%
BAC 28.6%
KEY 26.5%
AHM 25.5%
WFC 25.2%
ONE 23.2%
NB 22.0%
SPX 19.0%
GDW 17.9%
Source: Bloomberg
Slide 39
<PAGE>
[WAMU Logo]
