SCHEDULE 14A INFORMATION
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(Names of Registrant as Specified in Its Charter)
(Names of Person(s) Filing Proxy Statement, if other than the Registrant)
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<PAGE>
Q2 1988
[Washington Mutual Logo] WASHINGTON MUTUAL
Slide 1
<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 December 31, 1997,
and the Registration Statement on Form S-4, as amended, reg. no. 333-52785.
Slide 2
<PAGE>
WAMU PROFILE
Mission: To Be One of the Nation's Premier Financial Services Companies
Businesses: Consumer Banking
Financial Services
Mortgage Lending
Business and Commercial Real Estate
Consumer Finance
Size: $103.4 Billion in Assets
Nation's Largest Savings Institution
Nation's 11th Largest Bank
Slide 3
<PAGE>
WAMU PROFILE
Key Strategies
Expand Businesses through Internal Growth and Acquisitions
Maintain a High Quality Balance Sheet
Improve Operating Efficiency
Limit Sensitivity to Interest Rate Movements
Slide 4
<PAGE>
WAMU PROFILE
Five-Year Financial Targets: 1995-2000
Results
Target 6/30/98
ROCE >18.00% 19.99%(a)
EPS Growth >15.00 30.36(a)(b)
Operating Efficiency <50.00 46.98(a)(c)
NPA/Total Assets <1.00 0.74
Common Equity/Assets >5.00 5.40
WAMU Return/S&P 500 >100.00
(a) Results based on YTD earnings from operations which equal reported
earnings less transaction-related expenses (b) Increase in earnings from
operations from Q2 1997 to Q2 1998 (c) Excludes amortization of intangible
assets
Slide 5
<PAGE>
CONSUMER BANKING
Distribution Network
[Distribution sites marked in stars on maps of California, Washington,
Oregon, other West Coast states and Florida]
Deposits Deposit
State Branches(a) ($B)(b) Share(b)
California 366 $30.1 8.3%
Washington 173 7.7 14.5%
Florida 118 6.3 3.7%
Oregon 74 2.0 7.6%
Other States 44 n/a n/a
(a) Branch count as of 6/30/98
(b) Interest bearing deposits, exclusive of government deposits, as of
December 31, 1997
Slide 6
<PAGE>
CONSUMER BANKING
Broad Product Line
Deposit Products Financial Services
Transaction Accounts Mutual Funds
Time Deposits Annuities
Securities Brokerage
Consumer Loan Products Credit Insurance
Home Equity
Unsecured Lines Business Banking Products
Manufactured Housing Lines of Credit
Auto/Other Transaction Documents
Mortgage Lending
Single-Family ARMs
Single-Family Fixed
Slide 7
<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 Housholds Served
Increase in Checking Accounts
Increase in Fee Income
Increase in Consumer Loan Originations
Slide 8
<PAGE>
CONSUMER BANKING
Distribution Network - As of 6/30/98
Northwest CA FL Total
Traditional Branches 190 350 118 658
In-Store Branches
and Other 101 16 -- 117
ATMs 349 491 188 1,028
*Includes Washington, Oregon, Idaho, Montana and Utah
Slide 9
<PAGE>
CONSUMER BANKING
Retail Checking Accounts
[Bar Graph]
(In Thousands)
Southwest/
Southeast (a) Northwest(b) Total Households
1995 489 1,694 2,183 3,696
1996 608 1,726 2,334 3,736
1997 766 1,755 2,521 3,752
6/30/98 833 1,888 2,721 3,847(c)
CAGR 1994-1997
NW: 24.8% SW/SE: 1.5%
% Change 1/1/98 - 6/30/98
NW: 8.7% SW/SE: 7.6%
(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)
(c) Household data presented is for 5/31/98
Slide 10
<PAGE>
CONSUMER BANKING
Net New Checking Accounts - Northwest
[Bar Graph]
1995 95,202
1996 119,318*
1997 158,026*
YTD 6/30/98 67,076
* Includes 8,751 acquired accounts in 1997 and 2,353 in 1996
Slide 11
<PAGE>
CONSUMER BANKING
Net New Checking Accounts - Southwest/Southeast
% Net New
Southeast/ Checking
Southewest Accounts:
Combined Southwest Southeast
Q1 1997 (14,964)
Q2 1997 (24,873)
Q3 1997 (28,693
Q4 1997 97,941 66% 34%
Q1 1998 87,445 57% 43%
Q2 1998 45,468 72% 28%
Slide 12
<PAGE>
CONSUMER BANKING
Depositor and Other Retail Banking Fee Income
[Bar Graph]
(Dollars in Millions)
Southwest/
Northwest Southeast Total
1995 $57.5 $176.4 $233.9
1996 $77.3 $205.2 $282.5
1997 $112.0 $253.9 $365.9
YTD 6/3097 $48.0 $127.0 $175.0
YTD 6/30/98 $71.2 $126.8 $198.0
CAGR 1994-1997 -
NW: 57.8% SW/SE: 17.3%
% Change Q2 1997 - Q2 1998 -
NW: 48.4% SW/SE: (.17%)
(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 13
<PAGE>
CONSUMER BANKING
Consumer Lending*
[Bar Graph]
(Dollars in Millions)
Southwest/
Northwest Southeast Total
1995 $968.0 $312.0 $1,280.0
1996 $1,268.3 $336.3 $1,604.6
1997 $1,506.1 $646.8 $2,152.9
YTD 6/3097 $760.7 $315.7 $1,076.4
YTD 6/30/98 $654.8 $417.9 $1,072.7
CAGR 1994-1997 -
NW: 14.7% SW/SE: 26.7%
% Change Q2 1997 - Q2 1998 -
NW: (13.9%) SW/SE: 32.4%
* Consumer loan originations, not including SFR loans or loans originated
through the Company's consumer finance subsidiaries
Slide 14
<PAGE>
FINANCIAL SERVICES PRODUCTS
Distribution Network
Financial Consultants 329
Mutual Funds as of 6/30/98 $4.7B
[Map of network distribution locations in Florida, Montana, Idaho,
Washington, Oregon, California, Nevada and Utah]
Slide 15
<PAGE>
MORTGAGE LENDING
Distribution Network
[Map of United States with certain states highlighted]
States 29
Lending Offices 489
Slide 16
<PAGE>
MORTGAGE LENDING
Mortgage Origination Market Share - YTD 4/30/98
[Bar Graph]
Washington Oregon California
WAMU 16.69% 12.83% 5.45%
NOB 5.80% 4.40%
BAC 3.93% 4.39% 8.06%
Countrywide 5.49%
Source: RMS Information Services (Washington and Oregon); Experian
Information Solutions Inc. (California)
Slide 17
<PAGE>
MORTGAGE LENDING
Operations - Home Loan Center Channel*
"All-in" basis point cost per loan origination
[Bar Graph]
Northwest Southwest/Southeast
Q1 1997 130 264
Q2 1997 116 191
Q3 1997 123 189
Q4 1997 123 167
Q1 1998 117 171
*Home loan centers account for 46% of all originations in the first quarter
of 1998
Slide 18
<PAGE>
MORTGAGE LENDING
SFR Mortgage Loan Originations
[Bar Graph]
(Dollars in Billions)
ARMs Fixed Combined
1995 $10.4 $3.6 $14.0
1996 $11.1 $4.9 $16.0
1997 $15.2 $6.8 $22.0
YTD 6/30/97 $7.3 $2.8 $10.1
YTD 6/30/98 $7.4 $8.1 $15.5
Slide 19
<PAGE>
MORTGAGE LENDING
SFR Loan Principal Paydowns
<TABLE>
<CAPTION>
Annualized Principal Paydowns
-------------------------------------------------------
Quarter Month Ended Quarter
% of Ended ------------------------- Ended
Category Portfolio 3/31/98 4/30/98 5/31/98 6/30/98 6/30/98
<S> <C> <C> <C> <C> <C> <C>
Short-Term ARMs
Payment Capped 61% 17.5% 22.8% 24.3% 25.2% 24.1%
Rate Capped 9% 31.7% 34.4% 41.1% 40.5% 38.7%
Medium-Term ARMs 12% 22.7% 25.9% 23.3% 22.9% 24.9%
Fixed-Rate Mortgages 18% 15.2% 17.9% 15.8% 17.8% 17.1%
Average for the Period 100% 19.0% 23.5% 24.2% 25.0% 24.2%
</TABLE>
Slide 20
<PAGE>
MORTGAGE LENDING
Credit Quality - Improving Trends
NPAs Declining
Reduced REO Levels
Increasing Recoveries from Sales of REO
Slide 21
<PAGE>
Mortgage Lending
Credit Quality - SFR Loan Nonaccrual By Region
Percentage as of 6/30/98
[Bar Graph]
WAMU Market
California 0.79 1.07
Northwest 0.32 0.49
Northeast 0.95 1.17
Florida 0.83 1.25
Other 0.60 0.81
Source: Mortgage Information Corp. Database 5/98 (market data)
Slide 22
<PAGE>
BUSINESS AND COMMERCIAL REAL ESTATE LENDING
Total Loans Outstanding
[Bar Graph]
Dollars in Millions
Other
Commercial Commercial
Business Real Estate Apartments Total
12/31/95 $180 $2,396 $4,071 $6,647
12/31/96 $340 $2,440 $4,048 $6,828
12/31/97 $772 $2,426 $4,188 $7,386
6/30/98 $921 $2,374 $4,089 $7,384
Annual Growth Rate: 2.7% on 12/31/96
8.2% on 12/31/97
Slide 23
<PAGE>
CONSUMER FINANCE
National Franchise
[Map of United States with states of locations highlighted.]
Locations 509
Assets as of 6/30/98 2.5B
1997 Net Income 45.5M
YTD 1998 Net Income $26.32M
Slide 24
<PAGE>
FINANCIAL PERFORMANCE
Net Income(a)
[Bar Graph]
(Dollars in Millions)
<TABLE>
<CAPTION>
Reported Earnings[lt.shade] Total
<S> <C> <C> <C> <C>
1995 $550.9 $1.44
1996 $230.1 $413.7 $643.8 (b) $0.54/$1.70
1997 $481.8 $388.1 $869.9 (b) $1.24/$2.29
YTD 6/30/97 $370.8 $43.3 $414.1 (b) $0.99/$1.09
YTD 6/30/98 $517.7 $20.5 $538.2 (b) $1.37/$1.42
(a) EPS figures adjusted for 3-for-2 stock split distributed 6/1/98
(b) Excludes SAIF assessment, transaction-related expenses and increase in
credit provision in connection with acquisitions, which are shown in
the lighter shade on the bar graph.
</TABLE>
Slide 25
<PAGE>
FINANCIAL PERFORMANCE
Net Interest Income
[Bar Graph]
(Dollars in Millions)
Net Interest Income Net Interest Margin*
1995 $2,298.4 2.88%
1996 $2,572.9 3.11%
1997 $2,656.5 3.01%
YTD 6/30/97 $1,312.9 3.04%
YTD 6/30/98 $1,439.3 2.93%
*Calculation of net interest margin has been revised to exclude the loan
loss reserve from average interest-earning assets
Slide 26
<PAGE>
FINANCIAL PERFORMANCE
Operating Efficiency
[Bar Graph]
(Dollars in Millions)
OTHER EXPENSES
<TABLE>
<CAPTION>
Other Efficiency
Expenses See (b) below See (a) below Total Ratio (c)
<S> <C> <C> <C> <C> <C>
1995 $1,732.3 $2.0 (b) $68.6 (a) $1,802.9 59.7%
1996 $1,892.5 $470.7 (b) $65.4 (a) $2,428.6 58.6%
1997 $1,766.9 $431.1 (b) $63.6 (a) $2,261.6 50.9%
YTD 6/30/97 $877.9 $58.0 (b) $31.4 (a) $967.3 52.0%
YTD 6/30/98 $884.8 $33.1 (b) $27.0 (a) $944.9 47.0%
(a) Goodwill amortization
(b) SAIF assessment, transaction-related expenses and increase in credit
provision in connection with acquisitions
(c) Ratio calculated as Total Other Expense, excluding (a) and (b) above,
divided by Net Interest Income and Total Other Income
</TABLE>
Slide 27
<PAGE>
FINANCIAL PERFORMANCE
Nonperforming Assets
[Bar Graph]
NPAs NPA/Assets
1995 $991.6 1.14%
1996 $805.1 0.92%
1997 $806.6 0.83%
6/30/98 $768.6 0.74%
Slide 28
<PAGE>
FINANCIAL PERFORMANCE
Reserve for Loan Losses
[Bar Graph]
LLRs LLR/Nonaccrual Loans (b)
1995 $598.1 85%
1996 $677.1 118% 120% (a)
1997 $670.5 112% 119% (a)
6/30/98 $684.4 116% 124% (a)
(a) Coverage for losses on these obligations is provided through adjustment
to the balance of mortgage backed securities or contingent liabilities.
The total "loss coverage" ratio includes these adjustments, along with
the reserve for loan losses.
(b) Nonaccrual loans include loans that have been securitized, for which the
company retains the credit risk.
Slide 29
<PAGE>
FINANCIAL PERFORMANCE
Total Capitalization
[Bar Graph]
(Dollars in Millions)
<TABLE>
<CAPTION>
Common
Equity/
Total
Common Preferred Trust Preferred Senior Debt Total Assets
<S> <C> <C> <C> <C> <C> <C>
1995 $4,812 $632* $100 $1,186 $6,730 5.56%
1996 $4,710 $283 $100 $1,175 $6,268 5.39%
1997 $5,191 $118 $800 $822 $6,931 5.35%
6/30/98 $5,587 $49 $800 $822 $7,258 5.40%
</TABLE>
* Includes $80 million of preferred stock issued by second-tier holding company
Slide 30
<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 31
<PAGE>
SUCCESSFUL GROWTH THROUGH ACQUISITIONS
Acquisition Criteria
Accretive to Earnings Per Share
Consistent with Business Strategy
No Undue Operational Risks
Capital and Asset Quality Remain Strong
Slide 32
<PAGE>
SUCCESSFUL GROWTH THROUGH ACQUISITIONS
[Two maps of United States, with certain states highlighted]
12/31/87 6/30/98
Assets $5.7 bn Assets $ 103.4 bn
Equity 316.9 mm Equity 5.6 bn
Stock Price(a) $4.19 Stock Price(b) $43.44
Market Cap 211.9 mm Market Cap 16.3 bn
(a) Adjusted for 50% stock dividends in 1992 and 1993 and 3-for-2 stock
split distributed 6/1/98
(b) Adjusted for 3-for-2 stock split distributed 6/1/98
Slide 33
<PAGE>
STOCK MARKET OUTPERFORMANCE
Dividends Paid to Shareholders*
[Line Graph]
1986 $0.07
1987 $0.09
1988 $0.11
1989 $0.11
1990 $0.13
1991 $0.15
1992 $0.22
1993 $0.33
1994 $0.47
1995 $0.51
1996 $0.60
1997 $0.71
Q1 1998 $0.77
Q2 1998 $0.80
Q3 1998 $0.83
(a) Coverage for losses on these obligations is provided through adjustment
to the balance of mortgage backed securities or contingent liabilities. The
total "loss coverage" ratio includes these adjustments, along with the reserve
for loan losses.
(b) Nonaccrual loans include loans that have been securitized, for which
the company retains the credit risk.
Slide 34
<PAGE>
STOCK MARKET OUTPERFORMANCE
Cumulative Total Return Comparison*
(Assumes reinvestment of dividends)
[Line Graph]
WAMU S&P 500 Index S&P Financial Index
12/83 $ 106.00 $ 111.35 $ 99.18
12/84 92.99 118.28 108.49
12/85 137.02 156.70 154.64
12/86 281.20 184.69 167.02
12/87 263.99 194.26 139.02
12/88 268.61 226.31 164.23
12/89 365.43 297.80 217.79
12/90 245.10 288.51 171.14
12/91 698.89 376.04 257.65
12/92 1,066.19 404.66 317.68
12/93 1,172.34 445.45 352.94
12/94 848.84 451.33 340.45
12/95 1,505.11 620.93 524.37
12/96 2,318.95 763.50 708.78
12/97 3,477.91 1,018.22 1,049.76
6/98 3,582.55 1,198.57 1,218.95
Source: Standard & Poor's Compustat
* $100 invested 3/83
Slide 35
<PAGE>
STOCK MARKET OUTPERFORMANCE
Total Annual Return Peer Comparison (4/1/90 - 6/30/98)
USB 36.1%
WAMU 34.0%
NOB 31.6%
CMB 30.8%
FTU 30.4%
CCI 28.7%
BAC 28.4%
WFC 26.0%
KEY 24.6%
NB 22.1%
ONE 20.7%
GDW 18.8%
SPX 18.8%
Source: Bloomberg
Slide 36
<PAGE>
[LOGO OF WASHINGTON MUTUAL]
Slide 37
