January 16, 2001
FOR IMMEDIATE RELEASE
---------------------
WASHINGTON MUTUAL ANNOUNCES RECORD FOURTH-QUARTER AND ANNUAL EARNINGS;
INCREASED CASH DIVIDEND
SEATTLE -- Washington Mutual, Inc. (NYSE: WM) today announced record
fourth-quarter earnings of $496.9 million, or 94 cents per diluted share, for
the period ended Dec. 31, 2000, up from $450.3 million, or 80 cents per diluted
share for the same period a year ago.
Annual earnings were also a record at $1.90 billion, or $3.54 per
diluted share, versus $1.82 billion, or $3.16 per diluted share in 1999.
Other financial highlights for the fourth quarter and year 2000
included:
o return on average common equity of 20.56 percent for the fourth quarter
and 21.15 percent for the year;
o strong net checking account growth of over 106,000 checking accounts
in the fourth quarter and more than 514,000 checking accounts for the
year;
o increases in noninterest income of 30 percent and 31 percent for the
fourth quarter and year, respectively;
o record total loan volume of $66.01 billion, which includes record
volume in both single-family and other than single-family categories
for the year; and
o continued solid asset quality.
Based on continued strong operating fundamentals, the company's board of
directors declared an increase in the cash dividend on common stock to
31 cents per share, up from 30 cents the previous quarter. Dividends on
the common stock are payable on Feb. 15, 2001 to shareholders of record as
of Jan. 31, 2001.
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"The fourth quarter capped off an extraordinary year for Washington Mutual
highlighted by record profitability in a challenging interest rate environment,
significant internal growth and the continuation of the strong underlying
fundamentals driving our company," said Kerry Killinger, Washington Mutual's
chairman, president and chief executive officer. "We also took steps to further
solidify our national franchises in consumer banking and mortgage banking with
the proposed acquisitions of Bank United and PNC's mortgage operation. The Bank
United acquisition will strengthen our position in Texas and PNC Mortgage will
add scale to our mortgage operation, particularly in the Midwest and Eastern
Seaboard."
FOURTH-QUARTER RESULTS
NET INTEREST INCOME AND NONINTEREST INCOME
Net interest income in the fourth quarter of 2000 was $1.10 billion, up 4
percent from $1.06 billion in the prior year's fourth quarter. For the year, net
interest income totaled $4.31 billion, compared with $4.45 billion in 1999.
The net interest spread was 2.29 percent in the most recent quarter,
compared with 2.28 percent for the same period a year earlier. The margin was
2.42 percent in the most recent quarter versus 2.41 percent in fourth quarter
1999. Given the current interest rate environment, the company expects the
spread and margin expansion that began in the fourth quarter to continue in
2001.
Strong momentum in noninterest income continued in the fourth quarter,
fueled primarily by the expansion in the checking account base and expanded
mortgage activity. Total noninterest income in the fourth quarter was $549.4
million, up 30 percent from $423.2 million in last year's fourth quarter. Total
noninterest income was $1.98 billion in 2000, up 31 percent from $1.51 billion
for 1999.
The net increase of 514,042 checking accounts, year over year, contributed
to depositor and other retail banking fees of $269.1 million for the quarter, up
22 percent from $219.7 million for the same period one year ago. For the year,
depositor and other retail banking fees totaled $976.3 million, up from $763.6
million for 1999.
Reflecting the volatility in the stock market, securities fees and
commissions totaled $73.8 million in the most recent quarter, up slightly from
$71.6 million in the fourth quarter of last year. For the year, these fees and
commissions totaled $318.3 million, up 17 percent from 1999's $271.3 million.
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During the fourth quarter, the sale of current loan production resulted in
$64.2 million in gain on sale of loans. The sale of securities backed by
seasoned loans originated by Washington Mutual generated additional gains of
$2.4 million (reported as gain from securities). Collectively, the gains from
these sales of the company's loans totaled $66.6 million.
LENDING
For the year, Washington Mutual produced record loan volume, despite a
significant reduction in residential mortgage refinancing activity during the
first half of 2000. During the most recent quarter, total loan volume was $17.31
billion, versus $14.17 billion for the fourth quarter of 1999. For the year,
total loan volume was a record $66.01 billion, compared with $58.95 billion in
1999.
In the fourth quarter, single-family residential (SFR) volume totaled
$11.63 billion, versus $10.05 billion a year ago. SFR volume totaled $43.92
billion in 2000, as compared with $43.79 billion in 1999.
In the year 2000, new loan originations for home purchases were 65 percent
of the total originations, versus 50 percent for 1999. Of the SFR loan volume,
85 percent was adjustable-rate loans in 2000, versus just 76 percent the
previous year.
The volume of loans other than SFRs totaled $5.68 billion for the most
recent quarter, up 38 percent over $4.12 billion in the fourth quarter of 1999.
For the year, that volume was $22.10 billion, up 46 percent from $15.15 billion
for 1999.
EFFICIENCY RATIO
The company's efficiency ratio (defined as total noninterest expense,
excluding amortization of intangible assets, as a percentage of net interest
income and noninterest income) was 48.22 percent during the fourth quarter of
2000, compared with 47.67 percent for the fourth quarter of 1999. For the year,
the efficiency ratio was 47.97, versus 47.16 for the same period one year ago.
Noninterest expense for the fourth quarter of 2000 totaled $821.5 million,
compared with $731.6 million in the fourth quarter of 1999. For the year,
noninterest expense totaled $3.13 billion, as compared with $2.91 billion for
1999. The growth in expenses was more than offset by double-digit percentage
increases in noninterest income for both the fourth quarter and the year.
BALANCE SHEET AND CAPITAL MANAGEMENT
Washington Mutual's consolidated assets were $194.72 billion at Dec. 31,
2000, up from $186.51 billion at year-end 1999.
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At Dec. 31, 2000, transaction account balances, including checking,
savings and money market deposits, represented 57 percent of total deposits, up
from 55 percent at the end of the third quarter of 2000. The average deposit
balance during the fourth quarter was $79.86 billion, versus $81.69 billion
during the fourth quarter of 1999.
Stockholders' equity stood at $10.17 billion, or 5.22 percent of
consolidated assets at Dec. 31, 2000. In addition, capital ratios of the
company's banking subsidiaries continued to exceed the federal regulatory
requirements for classification as "well-capitalized" institutions, the highest
regulatory standard.
CREDIT QUALITY
In light of what appears to be a slowing national economy, Killinger said
the company continues to keep a watchful eye on credit quality. Nonperforming
assets were $1.04 billion at Dec. 31, 2000, as compared with $993.3 million at
Sept. 30, 2000, and $1.03 billion at year-end 1999. The ratio of nonperforming
assets to total assets was 0.53 percent at Dec. 31, 2000, versus 0.52 percent at
the end of the third quarter, and down from 0.55 percent at year-end 1999. In
the fourth quarter, the company made a $52.5 million provision for loan and
lease losses.
"The strength of our existing loan portfolio, still largely made up of
lower-risk residential mortgages, places our company in a good position to
weather a downturn in the economy," Killinger said.
COMPANY UPDATES
o The previously announced acquisition of Bank United Corp. is expected to be
completed in the first quarter of 2001, pending regulatory and shareholder
approval. Bank United shareholders will vote on the transaction at a meeting
scheduled for Feb. 8, 2001.
o On Oct. 2, the company announced its plans to acquire the mortgage operations
of PNC Financial Services Group. The transaction is expected to close during
the first quarter of 2001. The Bank United and PNC acquisitions will make
Washington Mutual the nation's second-largest mortgage originator and
fourth-largest servicer of residential mortgages, based on data for the first
nine months of 2000.
o During the fourth quarter, the company began the first deployment of its
proprietary OptisTM mortgage origination system. When fully implemented, the
Optis system will dramatically enhance the loan process by handling greater
loan volume in a more efficient system, and providing improved service,
flexibility and access for borrowers, brokers, realtors and correspondents.
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o In the next phase of its successful Occasio retail financial store concept,
the company will open the first of its 40 Phoenix-area financial stores
(branches) in the first quarter of 2001. Occasio, which debuted in Las Vegas
last April, has far outperformed the company's initial forecasts. While real
estate and construction costs are 20 percent lower than average for the
company's free-standing locations, deposits are growing at nearly three times
the rate and checking accounts are being opened at nearly twice the pace as
the average at new branches for the company.
OUTLOOK
"Washington Mutual enters 2001 with excellent momentum and a goal to
further extend its leading national franchises," said Killinger. "We'll look for
opportunities to grow these franchises through a combination of internal growth
and potential acquisitions that meet our criteria. While the economy appears to
be slowing, we begin the year from a position of strength in our asset quality
with the ratio of nonperforming assets to total assets well below our stated
five-year target.
"In addition, the company should benefit from expansion in the net
interest margin, a result of recent declines in short-term interest rates.
Consequently, we expect 2001 will be a very strong year for Washington Mutual."
With a history dating back to 1889, Washington Mutual is a national
financial services company that provides a diversified line of products and
services to consumers and small- to mid-sized businesses. At Dec. 31, 2000,
Washington Mutual and its subsidiaries had assets of $194.72 billion. The
company currently operates more than 2,000 consumer banking, mortgage lending,
commercial banking, consumer finance and financial services offices throughout
the nation. Washington Mutual's press releases are available at www.wamu.com.
To view a downloadable version of the fourth quarter earnings financial
supplement, click here.
# # #
WEBCAST INFORMATION: Investors may listen to Washington Mutual's investor
conference call on January 17, 2001, at 7:30 a.m. PST at www.wamu.com. A replay
will be available shortly after the completion of the call.
Media Contact: Libby Hutchinson
1-800-228-9268
(206) 461-2484
Investor Contacts: JoAnn DeGrande
(206) 461-3186
Ruthanne King
(206) 461-6421
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<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)
Quarter Ended Year Ended
---------------------------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2000 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans $2,533.3 $2,396.4 $2,179.5 $9,388.4 $8,348.1
Available-for-sale ("AFS") securities 712.1 703.4 651.9 2,810.4 2,481.5
Held-to-maturity ("HTM") securities 320.8 325.8 305.0 1,318.9 1,050.0
Other interest and dividend income 66.2 59.3 52.5 265.3 182.6
---------------------------------------------------------------------------------------------------------------------------------
Total interest income 3,632.4 3,484.9 3,188.9 13,783.0 12,062.2
INTEREST EXPENSE
Deposits 854.0 844.3 788.1 3,289.2 3,170.3
Borrowings 1,677.4 1,606.6 1,344.6 6,182.2 4,440.1
---------------------------------------------------------------------------------------------------------------------------------
Total interest expense 2,531.4 2,450.9 2,132.7 9,471.4 7,610.4
---------------------------------------------------------------------------------------------------------------------------------
Net interest income 1,101.0 1,034.0 1,056.2 4,311.6 4,451.8
Provision for loan and lease losses 52.5 47.6 41.7 185.3 167.1
---------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan and lease losses 1,048.5 986.4 1,014.5 4,126.3 4,284.7
NONINTEREST INCOME
Depositor and other retail banking fees 269.1 256.4 219.7 976.3 763.6
Securities fees and commissions 73.8 78.4 71.6 318.3 271.3
Insurance fees and commissions 11.0 10.7 11.6 44.0 43.1
Loan servicing income 36.7 37.7 38.5 146.8 112.3
Loan related income 33.7 30.1 24.8 116.8 102.8
Gain on sale of loans 64.2 55.5 28.4 261.6 109.4
Gain (loss) from securities 13.1 9.3 0.3 (0.9) (11.6)
Other income 47.8 32.8 28.3 120.7 118.1
---------------------------------------------------------------------------------------------------------------------------------
Total noninterest income 549.4 510.9 423.2 1,983.6 1,509.0
NONINTEREST EXPENSE
Compensation and benefits 342.9 339.0 288.4 1,347.8 1,186.4
Occupancy and equipment 157.3 145.5 153.3 603.4 564.6
Telecommunications and outsourced information services 86.8 82.0 67.8 323.1 276.0
Depositor and other retail banking losses 28.9 27.6 30.0 105.2 107.5
Transaction-related expense - - 22.7 - 95.7
Amortization of goodwill and other intangible assets 25.7 26.9 26.3 106.5 98.4
Other expense 179.9 163.7 143.1 640.1 580.9
---------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense 821.5 784.7 731.6 3,126.1 2,909.5
---------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 776.4 712.6 706.1 2,983.8 2,884.2
Income taxes 279.5 260.1 255.8 1,085.2 1,067.1
---------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 496.9 $ 452.5 $ 450.3 $1,898.6 $1,817.1
=================================================================================================================================
NET INCOME ATTRIBUTABLE TO COMMON STOCK $ 496.9 $ 452.5 $ 450.3 $1,898.6 $1,817.1
=================================================================================================================================
Net income per diluted common share: $0.94 $0.86 $0.80 $3.54 $3.16
Average common shares used to calculate diluted
earnings per share (in thousands): 530,977 528,888 564,828 536,463 574,553
</TABLE>
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WM - 7
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions, except share data)
(unaudited)
Quarter Ended
---------------------------------------------------------------------------------------------------------------
Dec. 31, 2000 Sept. 30, 2000 Dec. 31, 1999
Balance Rate Balance Rate Balance Rate
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AVERAGE BALANCES AND WEIGHTED AVERAGE
INTEREST RATES
Loans $122,619.0 8.26% $118,399.2 8.09% $116,858.7 7.45%
Mortgage-backed securities ("MBS") 56,230.1 7.20 58,102.3 7.00 56,801.2 6.67
Investment securities and other 5,196.8 6.67 4,398.4 6.46 4,136.7 5.96
---------------------------------------------------------------------------------------------------------------
Total interest-earning assets 184,045.9 7.89 180,899.9 7.70 177,796.6 7.17
Deposits:
Checking accounts 14,299.3 14,285.7 13,508.8
Savings accounts and money market
deposit accounts ("MMDAs") 30,242.5 29,698.6 30,589.5
Time deposit accounts 35,315.2 35,965.2 37,596.6
---------------------------------------------------------------------------------------------------------------
Total deposits 79,857.0 4.25 79,949.5 4.20 81,694.9 3.83
Borrowings 99,852.9 6.68 96,904.3 6.60 91,355.0 5.84
---------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 179,709.9 5.60 176,853.8 5.51 173,049.9 4.89
Net interest spread 2.29 2.19 2.28
Net interest margin 2.42 2.31 2.41
Total assets 192,127.8 188,014.5 183,722.2
Stockholders' equity 9,668.3 8,811.9 8,999.9
Year Ended
---------------------------------------------------------------------------------------------------------------
Dec. 31, 2000 Dec. 31, 1999
Balance Rate Balance Rate
---------------------------------------------------------------------------------------------------------------
AVERAGE BALANCES AND WEIGHTED AVERAGE INTEREST RATES
Loans $117,741.5 7.97% $112,859.5 7.40%
MBS 58,468.9 6.97 52,293.1 6.68
Investment securities and other 4,598.6 6.89 3,883.7 5.68
---------------------------------------------------------------------------------------------------------------
Total interest-earning assets 180,809.0 7.62 169,036.3 7.14
Deposits:
Checking accounts 14,120.0 13,644.5
Savings accounts and MMDAs 29,815.7 30,267.4
Time deposit accounts 36,340.4 39,182.8
---------------------------------------------------------------------------------------------------------------
Total deposits 80,276.1 4.10 83,094.7 3.82
Borrowings 96,109.4 6.43 80,469.1 5.52
---------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 176,385.5 5.37 163,563.8 4.66
---------------------------------------------------------------------------------------------------------------
Net interest spread 2.25 2.48
Net interest margin 2.38 2.63
Total assets 187,571.6 174,786.3
Stockholders' equity 8,978.9 9,243.8
</TABLE>
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<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in millions, except per share data)
(unaudited)
Dec. 31, 2000 Sept. 30, 2000 Dec. 31, 1999
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 2,621.8 $ 2,218.4 $ 3,040.2
AFS securities:
MBS 40,348.4 39,754.2 40,972.7
Investment securities 1,810.4 468.9 411.7
HTM securities:
MBS 16,428.1 17,138.4 19,263.4
Investment securities 136.5 136.7 138.0
Loans held for sale 3,403.9 6,185.8 793.5
Loans:
Loans held in portfolio 119,626.1 115,054.3 113,745.6
Allowance for loan and lease losses (1,013.8) (1,011.8) (1,041.9)
--------------------------------------------------------------------------------------------------------------------
Total loans, net of allowance for loan and lease losses 118,612.3 114,042.5 112,703.7
Mortgage servicing rights 1,017.3 899.3 643.2
Investment in Federal Home Loan Banks ("FHLBs") 3,260.1 3,195.9 2,916.7
Goodwill and other intangible assets 1,083.7 1,108.6 1,199.8
Other assets 5,993.5 5,631.5 4,430.7
--------------------------------------------------------------------------------------------------------------------
Total assets $194,716.0 $190,780.2 $186,513.6
====================================================================================================================
LIABILITIES
Deposits:
Checking accounts $ 14,499.8 $ 14,656.6 $ 13,489.5
Savings accounts and MMDAs 30,655.8 29,843.8 30,048.4
Time deposit accounts 34,418.2 35,952.9 37,591.9
--------------------------------------------------------------------------------------------------------------------
Total deposits 79,573.8 80,453.3 81,129.8
Federal funds purchased and commercial paper 4,114.7 3,913.7 866.5
Securities sold under agreements to repurchase ("repurchase agreements") 29,756.1 30,588.9 30,162.8
Advances from FHLBs 57,854.9 56,938.4 57,094.0
Other borrowings 9,930.3 6,907.2 6,203.2
Other liabilities 3,320.7 2,649.5 2,004.6
--------------------------------------------------------------------------------------------------------------------
Total liabilities 184,550.5 181,451.0 177,460.9
STOCKHOLDERS' EQUITY 10,165.5 9,329.2 9,052.7
--------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $194,716.0 $190,780.2 $186,513.6
====================================================================================================================
Common shares outstanding at end of period (in thousands)(1) 539,856 539,082 571,589
Book value per common share $19.26 $17.70 $16.18
Tangible book value per common share 17.49 15.89 14.32
Full-time equivalent employees at end of period 28,798 28,428 28,509
(1) Includes 12 million shares held in escrow that were not included in the book
value per share calculations.
</TABLE>
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WM - 9
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions, except per share amounts)
(unaudited)
NOTE: The following analysis of reported and operating earnings is based upon the Company's opinion and is intended to provide the
user additional information about the Company's operations. It is not intended to replace traditional financial statement
disclosures in accordance with generally accepted accounting principles and may not be comparable to similarly titled
measures reported by other companies.
Quarter Ended Year Ended
------------------------------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2000 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REPORTED FINANCIAL RESULTS
Net income $496.9 $452.5 $450.3 $1,898.6 $1,817.1
Net income per diluted common share $0.94 $0.86 $0.80 $3.54 $3.16
Financial ratios on reported financial results:
Return on average assets 1.03% 0.96% 0.98% 1.01% 1.04%
Return on average common equity 20.56 20.54 20.01 21.15 19.66
Efficiency ratio, excluding amortization of intangible assets 48.22 49.06 47.67 47.97 47.16
Efficiency ratio, including amortization of intangible assets 49.78 50.80 49.45 49.66 48.81
OPERATING FINANCIAL RESULTS, EXCLUDING TRANSACTION-RELATED EXPENSE
Reported pretax income $776.4 $712.6 $706.1 $2,983.8 $2,884.2
Transaction-related expense - - 22.7 - 95.7
------------------------------------------------------------------------------------------------------------------------------------
Adjusted pretax income 776.4 712.6 728.8 2,983.8 2,979.9
Provision for income taxes 279.5 260.1 264.0 1,085.2 1,102.5
------------------------------------------------------------------------------------------------------------------------------------
Earnings from operations, excluding transaction-related expense $496.9 $452.5 $464.8 $1,898.6 $1,877.4
====================================================================================================================================
Earnings per diluted common share $0.94 $0.86 $0.82 $3.54 $3.27
Financial ratios on operating financial results:
Return on average assets 1.03% 0.96% 1.01% 1.01% 1.07%
Return on average common equity 20.56 20.54 20.66 21.15 20.31
Efficiency ratio, excluding amortization of intangible assets 48.22 49.06 46.14 47.97 45.56
EARNINGS FROM OPERATIONS, EXCLUDING TRANSACTION-RELATED EXPENSE AND AMORTIZATION OF INTANGIBLE ASSETS
Earnings from operations, excluding transaction-related expense $496.9 $452.5 $464.8 $1,898.6 $1,877.4
Total amortization of intangible assets during the period 25.7 26.9 26.3 106.5 98.4
Tax benefit 6.0 6.3 3.5 24.5 17.9
------------------------------------------------------------------------------------------------------------------------------------
Amortization of intangible assets, net of tax 19.7 20.6 22.8 82.0 80.5
------------------------------------------------------------------------------------------------------------------------------------
Earnings from operations, excluding transaction-related
expense and amortization of intangible assets $516.6 $473.1 $487.6 $1,980.6 $1,957.9
====================================================================================================================================
Earnings per diluted common share $0.97 $0.89 $0.86 $3.69 $3.41
Financial ratios on earnings from operations:
Return on average assets 1.08% 1.01% 1.06% 1.06% 1.12%
Return on average common equity 21.37 21.48 21.67 22.06 21.18
</TABLE>
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WM - 10
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(unaudited)
Dec. 31, Sept. 30,
2000 2000
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL ADEQUACY
Stockholders' equity/total assets 5.22% 4.89%
Stockholders' equity (1)/total assets (1) 5.24 5.14
Estimated total risk-based capital (2) 11.07 11.15
(1) Excludes unrealized net loss on available-for-sale securities.
(2) Estimate of what WMI's total risk-based capital ratio would be if it were a
bank holding company that complies with Federal Reserve Board capital requirements.
Dec. 31, Sept. 30, Dec. 31,
2000 2000 1999
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RETAIL CHECKING ACCOUNTS (3)
WMB and WMBfsb 1,064,780 1,057,124 1,006,749
WMB, FA 3,744,195 3,645,811 3,288,184
---------------------------------------------------------------------------------------------------------------
Total retail checking accounts 4,808,975 4,702,935 4,294,933
===============================================================================================================
RETAIL CHECKING ACCOUNT ACTIVITY (3)
Net accounts opened during the quarter:
WMB and WMBfsb 7,656 16,274 11,024
WMB, FA 98,384 125,426 73,367
---------------------------------------------------------------------------------------------------------------
Net new retail checking accounts 106,040 141,700 84,391
===============================================================================================================
(3) Retail checking accounts exclude commercial business accounts. The information provided refers to the
number of accounts, not dollar volume.
</TABLE>
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WM - 11
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Quarter Ended Year Ended
--------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2000 2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LOAN VOLUME
Single-family residential ("SFR"):
Adjustable rate ("ARMs") $ 8,766.8 $10,329.8 $ 9,050.9 $37,285.9 $33,114.2
Fixed rate 2,860.4 1,638.9 994.5 6,631.2 10,677.9
SFR - construction 413.9 466.8 470.2 1,849.3 2,003.4
Second mortgage and other consumer:
Banking subsidiaries 1,426.1 1,381.5 839.4 5,003.7 2,946.4
Washington Mutual Finance 587.9 580.2 615.1 2,342.1 2,100.8
Specialty mortgage finance 1,913.4 2,351.3 1,349.8 8,249.4 5,008.9
Commercial business 806.3 738.7 364.9 2,695.1 1,186.0
Commercial real estate:
Apartment buildings 410.9 305.7 447.4 1,600.5 1,672.5
Other commercial real estate 124.0 99.9 35.8 357.7 236.0
--------------------------------------------------------------------------------------------------------------
Total loan volume $17,309.7 $17,892.8 $14,168.0 $66,014.9 $58,946.1
==============================================================================================================
As a percentage of total loan volume:
SFR, excluding SFR construction 67% 67% 71% 67% 74%
All other 33 33 29 33 26
SFR LOAN ORIGINATIONS (1)(2)
Short-term ARMs:
Treasury indices $ 6,451.5 $ 6,604.0 $5,598.7 $25,596.6 $14,485.2
COFI 1,434.4 2,624.2 257.0 6,035.8 745.9
Other 1.9 12.3 1.1 17.8 9.6
--------------------------------------------------------------------------------------------------------------
Total short-term ARMs 7,887.8 9,240.5 5,856.8 31,650.2 15,240.7
Medium-term ARMs 434.9 310.9 2,732.0 3,932.5 14,333.0
Fixed-rate mortgages 2,664.2 1,631.6 994.4 6,414.6 10,677.9
--------------------------------------------------------------------------------------------------------------
Total SFR loan originations $10,986.9 $11,183.0 $9,583.2 $41,997.3 $40,251.6
==============================================================================================================
(1) Does not include purchased SFR loans.
(2) Does not include Washington Mutual Finance and Long Beach Mortgage.
</TABLE>
<PAGE>
WM - 12
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Change from
Sept. 30, 2000 Dec. 31, Sept. 30, Dec. 31,
to Dec. 31, 2000 2000 2000 1999
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOANS AND MBS BY PROPERTY TYPE
Loans held in portfolio:
SFR $3,174.1 $ 80,180.7 $ 77,006.6 $ 80,234.4
SFR - construction 16.9 1,430.7 1,413.8 1,242.8
Second mortgage and other consumer:
Banking subsidiaries 495.2 7,991.7 7,496.5 6,393.3
Washington Mutual Finance 72.6 2,486.5 2,413.9 2,081.0
Specialty mortgage finance 596.2 6,783.2 6,187.0 4,105.1
Commercial business 197.7 2,273.6 2,075.9 1,451.5
Commercial real estate:
Apartment buildings 69.2 15,657.6 15,588.4 15,261.0
Other commercial real estate (50.1) 2,822.1 2,872.2 2,976.5
-----------------------------------------------------------------------------------------------------------------
Total loans held in portfolio 4,571.8 119,626.1 115,054.3 113,745.6
Less: allowance for loan and lease losses (2.0) (1,013.8) (1,011.8) (1,041.9)
Loans securitized and retained as MBS 1,352.7 34,768.8 33,416.1 33,505.4
-----------------------------------------------------------------------------------------------------------------
Total loans held in portfolio and loans
securitized and retained as MBS 5,922.5 153,381.1 147,458.6 146,209.1
Loans held for sale (2,781.9) 3,403.9 6,185.8 793.5
-----------------------------------------------------------------------------------------------------------------
Total loans and loans securitized and retained as MBS 3,140.6 156,785.0 153,644.4 147,002.6
Purchased MBS (1,468.8) 22,007.7 23,476.5 26,730.7
-----------------------------------------------------------------------------------------------------------------
Total loans and MBS $1,671.8 $178,792.7 $177,120.9 $173,733.3
=================================================================================================================
Dec. 31, 2000 Sept. 30, 2000 Dec. 31, 1999
---------------------------------------------------------------------------------------------------
MBS BALANCES BY ORIGINATED AND PURCHASED:
AFS MBS:
Originated $18,434.6 $16,391.0 $14,381.5
Purchased 21,913.8 23,363.2 26,591.2
---------------------------------------------------------------------------------------------------
$40,348.4 $39,754.2 $40,972.7
===================================================================================================
HTM MBS:
Originated $16,334.2 $17,025.1 $19,123.9
Purchased 93.9 113.3 139.5
---------------------------------------------------------------------------------------------------
$16,428.1 $17,138.4 $19,263.4
===================================================================================================
</TABLE>
<PAGE>
WM - 13
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Sept. 30, 2000 Dec. 31, 1999
to Dec. 31, 2000 to Dec. 31, 2000
--------------------------------------------------------------------------------------------------
<S> <C> <C>
ROLLFORWARD OF LOANS (HELD FOR SALE AND HELD IN PORTFOLIO)
Balance, beginning of period $121,240.1 $114,539.1
Loans originated and purchased 17,309.7 66,014.9
Loans sold or securitized (8,174.8) (31,830.5)
Loan payments and other (7,345.0) (25,693.5)
--------------------------------------------------------------------------------------------------
Change in loans 1,789.9 8,490.9
--------------------------------------------------------------------------------------------------
Balance, end of period $123,030.0 $123,030.0
==================================================================================================
ROLLFORWARD OF MORTGAGE SERVICING RIGHTS ("MSR")
Balance, beginning of period $ 899.3 $ 643.2
Additions 168.4 515.5
Amortization (41.7) (132.7)
Impairment adjustment (8.7) (8.7)
--------------------------------------------------------------------------------------------------
Balance, end of period $1,017.3 $1,017.3
==================================================================================================
ROLLFORWARD OF LOAN SERVICING PORTFOLIO WITH MSR (1)
Balance, beginning of period $72,788.1 $55,268.2
Additions 8,270.2 32,060.5
Loan payments and other (1,723.0) (7,993.4)
--------------------------------------------------------------------------------------------------
Balance, end of period $79,335.3 $79,335.3
==================================================================================================
(1) Rollforward does not include approximately $6.54 billion of loans sold or
securitized without capitalized MSR.
</TABLE>
<PAGE>
WM - 14
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Change from
Sept. 30, 2000 Dec. 31, Sept. 30, Dec. 31,
to Dec. 31, 2000 2000 % of total 2000 % of total 1999 % of total
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REAL ESTATE LOANS AND MBS
Short-term ARMs:
COFI $ (528.2) $ 42,557.7 27% $ 43,085.9 27% $ 55,838.7 35%
Treasury indices 1,726.1 44,752.0 28 43,025.9 27 29,844.7 18
Other (180.3) 8,553.5 (1) 5 8,733.8 (1) 5 6,530.0 4
------------------------------------------------------------------------------------------------------------------------------
Total short-term ARMs 1,017.6 95,863.2 60 94,845.6 59 92,213.4 57
Medium-term ARMs (762.0) 28,991.5 18 29,753.5 19 28,410.9 18
Fixed-rate loans 527.1 12,835.8 8 12,308.7 8 14,233.6 9
Fixed-rate MBS (470.6) 22,581.0 14 23,051.6 14 25,886.4 16
------------------------------------------------------------------------------------------------------------------------------
Total real estate loans and MBS $ 312.1 $160,271.5 100% $159,959.4 100% $160,744.3 100%
==============================================================================================================================
(1) At December 31, 2000, the balance included $2.75 billion of securities retained which bear COFI to LIBOR basis risk.
At September 30, 2000, the balance included $2.68 billion of securities retained which bear COFI to LIBOR basis risk.
Quarter Ended Year Ended
---------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2000 2000 1999 2000 1999
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME RELATED TO MORTGAGE LOANS
Loan related income $ 33.7 $ 30.1 $24.8 $116.8 $102.8
Loan servicing income 36.7 37.7 38.5 146.8 112.3
Gain on sale of loans 64.2 55.5 28.4 261.6 109.4
---------------------------------------------------------------------------------------------------------
Total income related to mortgage loans $134.6 $123.3 $91.7 $525.2 $324.5
=========================================================================================================
</TABLE>
<PAGE>
WM - 15
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Dec. 31, 2000 Sept. 30, 2000
-----------------------------------------------------------------------------------------------------------------------
Balance Term (1) Balance Term (1)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DEPOSITS, BORROWINGS AND DERIVATIVES OUTSTANDING (IN MONTHS) (IN MONTHS)
Deposits:
Noninterest-bearing checking accounts $ 8,575.3 NA $ 8,844.2 NA
Interest-bearing checking accounts, savings accounts and MMDAs 36,580.3 NA 35,656.2 NA
Time deposit accounts 34,418.2 7 35,952.9 7
-----------------------------------------------------------------------------------------------------------------------
Total deposits 79,573.8 80,453.3
Borrowings:
Adjustable (2) 57,219.1 1 57,284.4 1
Short-term fixed 30,456.6 2 28,930.0 2
Long-term fixed 13,980.3 48 12,133.8 52
-----------------------------------------------------------------------------------------------------------------------
Total borrowings 101,656.0 98,348.2
-----------------------------------------------------------------------------------------------------------------------
Total deposits and borrowings $181,229.8 $178,801.5
=======================================================================================================================
Notional amount of derivatives:
WM pay rate swaps:
Fixed rate $11,008.1 9 $12,658.0 11
Variable rate 2,890.0 2 2,090.0 1
-----------------------------------------------------------------------------------------------------------------------
Total swaps 13,898.1 14,748.0
Caps\Collars\Corridors 8,286.2 1 8,984.3 1
-----------------------------------------------------------------------------------------------------------------------
Total derivatives $22,184.3 $23,732.3
=======================================================================================================================
(1) Terms used are remaining term for deposits and term to reprice for
borrowings and notional amount of derivatives.
(2) Adjustable-rate borrowings included notional values of $13.20 billion and $8.10 billion of embedded
purchased interest rate floors at December 31, 2000 and September 30, 2000, respectively. Contractual
start dates for these floors range from December 2000 to July 2003. At December 31, 2000, $800.0 million
of these contracts were effective. Once effective, the floors reprice every three months.
</TABLE>
<PAGE>
WM - 16
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Quarter Ended
-------------------------------------------------------------------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2000 2000 2000 2000 1999
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR LOAN AND LEASE LOSSES
Balance, beginning of quarter $1,011.8 $1,009.7 $1,025.2 $1,041.9 $1,051.4
Provision for loan and lease losses 52.5 47.6 44.1 41.2 41.7
Identified allowance for loans sold or securitized (1) - (2.6) (17.1) (16.9) (6.4)
Loans charged off:
SFR and SFR construction (5.2) (3.1) (5.6) (6.8) (8.3)
Second mortgage and other consumer:
Banking subsidiaries (10.8) (11.6) (9.9) (10.6) (9.9)
Washington Mutual Finance (34.1) (30.2) (28.2) (27.1) (26.5)
Specialty mortgage finance (2.5) (0.8) (0.8) (0.6) (0.3)
Commercial business (3.0) (3.4) (3.7) (0.8) (1.1)
Commercial real estate:
Apartment buildings (0.3) (0.3) (0.5) (1.2) (2.2)
Other commercial real estate (0.3) (0.4) (0.6) (0.4) (4.7)
-------------------------------------------------------------------------------------------------------------------------------
Total loans charged off (56.2) (49.8) (49.3) (47.5) (53.0)
Recoveries of loans previously charged off:
SFR and SFR construction 0.2 0.3 0.8 0.1 1.4
Second mortgage and other consumer:
Banking subsidiaries 0.9 0.7 1.0 0.8 0.8
Washington Mutual Finance 3.9 4.4 4.3 4.4 4.0
Specialty mortgage finance - - - 0.5 0.3
Commercial business 0.3 0.3 0.4 0.2 0.2
Commercial real estate:
Apartment buildings - 0.8 - 0.5 1.4
Other commercial real estate 0.4 0.4 0.3 - 0.1
-------------------------------------------------------------------------------------------------------------------------------
Total recoveries of loans previously charged off 5.7 6.9 6.8 6.5 8.2
-------------------------------------------------------------------------------------------------------------------------------
Net charge offs (50.5) (42.9) (42.5) (41.0) (44.8)
-------------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter $1,013.8 $1,011.8 $1,009.7 $1,025.2 $1,041.9
===============================================================================================================================
Net charge offs (annualized) as a percentage of average loans 0.16% 0.14% 0.15% 0.14% 0.15%
(1) Allowance is due to loan sales and securitizations during the applicable quarters.
</TABLE>
<PAGE>
WM - 17
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Dec. 31, Sept. 30, Dec. 31,
2000 2000 1999
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ALLOWANCE FOR LOAN AND LEASE LOSSES AS A PERCENTAGE OF:
Nonaccrual loans 114% 121% 126%
Nonperforming assets 98 102 102
Changes in the liability for losses on loans securitized with recourse and retained or sold,
included in "Other liabilities," were as follows:
ALLOWANCE FOR EXPECTED RECOURSE OBLIGATIONS:
Balance, beginning of quarter $106.1 $106.3 $117.0
Charge offs, net of provision for recourse losses (1.8) (0.2) (3.9)
--------------------------------------------------------------------------------------------------------
Balance, end of quarter $104.3 $106.1 $113.1
========================================================================================================
The total loss coverage represents the allowance for loan and lease losses
and allowance for expected recourse obligations as a percentage of nonaccrual loans:
Total loss coverage percentage 126% 134% 140%
</TABLE>
<PAGE>
WM - 18
<TABLE>
<CAPTION>
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Dec. 31, 2000 Sept. 30, 2000 Dec. 31, 1999
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NONPERFORMING ASSETS ("NPAS")
Nonaccrual loans:
SFR and SFR construction $ 547.0 $551.7 $ 619.9
Second mortgage and other consumer:
Banking subsidiaries 51.2 41.6 43.3
Washington Mutual Finance 65.6 62.1 54.8
Specialty mortgage finance 178.5 131.3 57.2
Commercial business 12.3 14.1 9.8
Commercial real estate:
Apartment buildings 10.1 8.6 22.0
Other commercial real estate 21.0 27.3 20.0
------------------------------------------------------------------------------------------------------
Total nonaccrual loans 885.7 836.7 827.0
Foreclosed assets:
SFR and SFR construction 96.8 104.6 143.3
Second mortgage and other consumer:
Banking subsidiaries 16.2 17.4 15.4
Washington Mutual Finance 6.0 6.1 3.6
Specialty mortgage finance 23.9 16.1 6.6
Commercial real estate:
Apartment buildings 0.7 1.3 8.1
Other commercial real estate 9.6 11.1 22.0
------------------------------------------------------------------------------------------------------
Net foreclosed assets 153.2 156.6 199.0
------------------------------------------------------------------------------------------------------
Total NPAs $1,038.9 $993.3 $1,026.0
======================================================================================================
NPAs by property type:
SFR and SFR construction $ 643.8 $656.3 $ 763.2
Second mortgage and other consumer:
Banking subsidiaries 67.4 59.0 58.7
Washington Mutual Finance 71.6 68.2 58.4
Specialty mortgage finance 202.4 147.4 63.8
Commercial business 12.3 14.1 9.8
Commercial real estate:
Apartment buildings 10.8 9.9 30.1
Other commercial real estate 30.6 38.4 42.0
------------------------------------------------------------------------------------------------------
Total NPAs $1,038.9 $993.3 $1,026.0
======================================================================================================
NPAs as a percentage of:
Total loans, including loans held for sale 0.84% 0.82% 0.90%
Total loans and recourse loans and recourse MBS 0.73 0.70 0.75
Total assets 0.53 0.52 0.55
</TABLE>
