SEATTLE--(BUSINESS WIRE)--
WaMu (NYSE:WM) today announced a fourth quarter 2007 net loss of
$1.87 billion, or $2.19 per diluted share. The company attributed the
loss to the $1.6 billion after-tax charge to writedown Home Loans
goodwill and the higher level of provisioning stemming from the
housing market weakness. Due to fourth quarter results, the company
recorded a net loss of $67 million, or $0.12 per diluted share, for
all of 2007.
"We announced in December a series of proactive steps being taken
to manage through the unprecedented market conditions that this
company and others in the financial services industry face," said WaMu
Chairman and Chief Executive Officer Kerry Killinger.
"These actions included:
-- The raising of $2.9 billion in net proceeds through the
issuance of convertible preferred stock that increased the
year-end tangible capital to tangible asset ratio to 6.67
percent, $3.7 billion above the company's targeted ratio of
5.50 percent.
-- A reduction in the quarterly cash dividend rate on the
company's common stock to 15 cents per share.
-- A major expense reduction initiative projected to reduce 2008
noninterest expense by $500 million to $8.0 billion or less.
-- A significant acceleration in the strategic focus of our Home
Loans business that emphasizes mortgage lending through our
retail banking stores and other retail distribution channels.
The substantial infusion of new capital, dividend reduction,
significant expense reductions, and the major change in our home loans
business all combine to further fortify WaMu's strong capital and
liquidity position."
Killinger added that the Retail Banking, Card Services and
Commercial businesses delivered steady performance in 2007. In
particular, the Retail Bank, which is the cornerstone of the
franchise, continued its strong growth opening more than 1.1 million
net new checking accounts for the year. The company plans to continue
to leverage the Retail Bank's distribution network by opening
additional stores and adding more than 1 million net new checking
accounts in 2008.
FOURTH QUARTER AND FULL YEAR FINANCIAL SUMMARY AND HIGHLIGHTS
----------------------------------------------------------------------
Selected Financial
Summary Three Months Ended Year Ended
------------------------------ --------------------
($ in millions,
except per share Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
data) 2007 2007 2006 2007 2006
---------- --------- --------- ---------- ---------
Income Statement
Net interest
income $ 2,047 $ 2,014 $ 1,998 $ 8,177 $ 8,121
Provision for loan
losses 1,534 967 344 3,107 816
Noninterest income 1,365 1,379 1,592 6,042 6,377
Noninterest
expense 4,166 2,191 2,257 10,600 8,807
Minority interest
expense 65 53 34 203 105
---------- --------- --------- ---------- ---------
Income (loss) from
continuing
operations before
income taxes (2,353) 182 955 309 4,770
Income taxes (486) (4) 315 376 1,656
---------- --------- --------- ---------- ---------
Income (loss) from
continuing
operations (1,867) 186 640 (67) 3,114
Discontinued
operations - - 418 - 444
---------- --------- --------- ---------- ---------
Net income (loss) $ (1,867) $ 186 $ 1,058 $ (67) $ 3,558
Diluted earnings
(loss) per common
share $ (2.19) $ 0.20 $ 1.10 $ (0.12) $ 3.64
Balance Sheet
Total assets, end
of period $327,913 $330,110 $346,288 $327,913 $346,288
Average total
assets 325,276 320,475 353,056 323,389 348,758
Average interest-
earning assets 287,988 283,263 314,784 286,666 312,178
Average total
deposits 185,636 198,649 214,801 200,380 203,829
Profitability
Ratios
Return on average
common equity (32.64)% 3.03% 16.03% (0.42)% 13.52%
Net interest
margin 2.85 2.86 2.58 2.85 2.60
Efficiency ratio 122.13 64.55 62.87 74.55 60.75
Nonperforming
assets/total
assets 2.17 1.65 0.80 2.17 0.80
Tangible
equity/total
tangible assets 6.67 5.60 6.04 6.67 6.04
----------------------------------------------------------------------
-- Solid revenues and continued focus on expense control. Total
revenue (net interest income plus noninterest income) of $3.41
billion in the fourth quarter was solid, reflecting the
strength of the franchise as evidenced by the company's strong
net interest income and growth in fee income. Total revenue
for the quarter was negatively impacted by continued
illiquidity in the capital markets, resulting in reductions to
noninterest income from net market valuation losses of $528
million on the company's trading and available-for-sale
securities portfolios. Fourth quarter noninterest expense,
excluding the $1.78 billion pretax charge to writedown Home
Loans goodwill, was $2.39 billion, up $200 million from the
prior quarter due primarily to $143 million associated with
the expense reduction steps announced in December. The company
is projecting a $500 million reduction in 2008 noninterest
expense to $8.0 billion or less.
-- Net interest income remains strong. Net interest income has
remained strong at approximately $2.0 billion per quarter over
the past five quarters. During this period, the net interest
margin has grown to 2.85 percent in the fourth quarter from
2.58 percent in the fourth quarter of 2006. The growth in net
interest margin more than offset an 8 percent decline in
average interest-earning assets during a year in which the
company sought to deemphasize balance sheet growth.
-- Depositor and other retail banking fees up 13 percent
year-over-year. During 2007, WaMu attracted over 1.1 million
net new checking accounts, surpassing its goal for a second
year of adding more than 1 million net new accounts per year.
This growth, along with the company's success in building
profitable customer relationships through superior service and
cross sales, led to a 13 percent year-over-year increase in
depositor and other retail banking fees.
-- Noninterest income reflects continued disruption in the
capital markets. Noninterest income of $1.37 billion in the
fourth quarter continued to reflect the illiquidity in the
capital markets. During the quarter, the company reported net
losses of $267 million in the company's trading securities
portfolio, which included a market valuation loss of $159
million on credit card retained interests. The company also
recognized a net loss of $261 million on its portfolio of
securities designated as available for sale due to $271
million of impairment losses on mortgage-backed securities.
Noninterest income of $6.04 billion for 2007 was down 5
percent from the prior year as disruption in the capital
markets during the second half of 2007 more than offset the
growth in fee income.
-- Increase in loan loss provision reflects further weakening in
housing market. The company's provision of $1.53 billion was
within the most recently communicated guidance range of $1.5
to $1.6 billion. This higher level of provisioning reflects
the nationwide housing market weakness that has increased
delinquencies and the level of charge-offs. During the
quarter, net charge-offs of $747 million were also in line
with guidance. The quarter's provision was approximately
double the level of net charge-offs, bringing the allowance
for loan losses to $2.57 billion at year end.
-- Proactive expense management. During the fourth quarter, the
company took steps to substantially adjust its Home Loans
business due to its expectation that national mortgage
originations will shrink to $1.5 trillion, down about 40% from
2007. The resizing of the Home Loans business along with other
reductions in corporate support functions resulted in $143
million of additional fourth quarter noninterest expense. The
company also incurred a fourth quarter pretax charge of $1.78
billion for the writedown of all goodwill associated with the
Home Loans Group. For 2007, noninterest expense of $8.83
billion (which excludes the goodwill charge) was in line with
the previous year, despite more stores and growth within the
company.FOURTH QUARTER AND FULL YEAR SEGMENT RESULTS
----------------------------------------------------------------------
Retail Banking Group
Selected Segment
Information Three Months Ended Year Ended
--------------------------- ---------------------
(in millions, except
accounts and Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
households) 2007 2007 2006 2007 2006
-------- --------- -------- ---------- ----------
Net interest income $ 1,261 $ 1,306 $ 1,247 $ 5,142 $ 5,201
Provision for loan
losses 663 318 47 1,134 167
Noninterest income 850 833 774 3,254 2,914
Noninterest expense 1,215 1,150 1,098 4,567 4,364
Net income 278 456 563 1,874 2,288
Average loans $145,486 $147,357 $172,013 $ 149,409 $ 177,401
Average retail
deposits 142,733 144,921 143,513 144,233 140,344
Net change in number
of retail
checking accounts 74,493 310,360 179,784 1,118,872 1,231,564
Net change in retail
households 41,000 161,000 123,000 625,000 848,000
----------------------------------------------------------------------
-- Solid performance offset by increase in provision. The Retail
Bank has continued to perform well with a year over year 12
percent increase in noninterest income that far exceeded the 5
percent increase in noninterest expense. The increase in
noninterest income was driven by the 13 percent growth in
depositor and other retail banking fees. The modest year over
year increase in noninterest expense reflected the company's
investment in its retail banking network. The quarter's
decline in net income reflected the increase in the provision
for loan losses as the performance of the company's home loan
and home equity loan portfolios remained under pressure from
further deterioration in the housing market.
-- Growth in net new checking accounts exceeds annual goal for
second year. During 2007, the Retail Bank again exceeded its
goal of adding more than 1 million net new checking accounts,
growing the average balance of noninterest checking accounts
by 7 percent year over year. WaMu's highly successful free
checking account is the primary product for many consumers and
provides the basis for cross sells and deepening customer
relationships. This product has helped grow the number of
households 7 percent year over year to just under 10 million.
During the fourth quarter, the pace of checking account growth
slowed due to normal seasonality and the closure of inactive
accounts.Card Services Group (managed basis)
Selected Segment
Information Three Months Ended Year Ended
--------------------------- -----------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(in millions) 2007 2007 2006 2007 2006
-------- --------- -------- -------- --------
Net interest income $ 694 $ 674 $ 652 $ 2,659 $ 2,496
Provision for loan
losses 591 611 555 2,113 1,647
Noninterest income 315 400 451 1,581 1,528
Noninterest expense 338 364 318 1,337 1,205
Net income 92 66 142 540 724
Average managed
receivables $26,665 $25,718 $22,875 $25,066 $21,294
Period end managed
receivables 27,239 26,227 23,501 27,239 23,501
30+ day managed
delinquency rate 6.47% 5.73% 5.25% 6.47% 5.25%
Managed net credit
losses 6.90 6.37 5.84 6.53 5.83
----------------------------------------------------------------------
-- Solid performance impacted by capital markets disruption. Net
income of $92 million was up from the third quarter, but still
reflects the difficulty in the capital markets. Net interest
income continued to grow with the increase in managed
receivable balances, the benefit of which was partially offset
by a decline in yields that reflects the lower Prime rate and
higher proportion of better credit quality, but lower-yielding
retail accounts. Included in fourth quarter noninterest income
were market valuation losses of $159 million on the company's
credit card retained interests. Included in third and fourth
quarter noninterest expense were charges of $38 million and
$50 million for VISA related litigation liabilities, which in
the fourth quarter was partially offset by lower marketing
expenses.
-- Retail channel drives new account growth. Card Services
continues to focus on WaMu's Retail Bank customers for new
account growth and they accounted for 37 percent of the
quarter's credit card account production, compared with 32
percent in the third quarter and 28 percent a year ago. During
the quarter, Card Services opened 653,000 new credit card
accounts, or 292,000 less than in the third quarter,
reflecting the selective reduction in marketing activities as
the company places more emphasis on its retail channel. Strong
customer acquisition contributed to the increase in year-end
managed receivables to $27.24 billion, up 16 percent compared
with the end of 2006.
-- Credit losses in line with expectations. Net credit losses of
6.90 percent of managed receivables were higher than in the
third quarter and a year ago as the economy softened and
unemployment levels increased. At 6.47 percent of period-end
managed receivables, the 30+ day managed delinquency rate was
also up from prior periods as delinquencies continue to rise
from historically low levels. The year-over-year increase in
the loan loss provision reflected the company's strong managed
receivable growth and worsening credit trends.Commercial Group
Selected Segment
Information Three Months Ended Year Ended
--------------------------- -----------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(in millions) 2007 2007 2006 2007 2006
-------- --------- -------- -------- --------
Net interest income $ 200 $ 200 $ 201 $ 820 $ 719
Provision for loan
losses 19 12 (70) 24 (82)
Noninterest income (10) (34) 41 35 99
Noninterest expense 66 67 73 282 259
Net income 94 58 148 375 396
Loan volume $ 4,800 $ 4,054 $ 4,019 $16,873 $12,854
Average loans 40,129 38,333 37,552 38,975 33,230
------------------------ ---------------------------------------------
-- Solid quarterly results. Net income of $94 million was up from
$58 million in the third quarter with the improvement in
noninterest income. Gain on sale, net of hedging, improved
from the third quarter, but is still far below 2006 levels.
For the full year, noninterest income was down due to lower
gain on sale, as well as losses on the valuation of assets.
The increase in noninterest expense for the full year was
primarily due to a 31 percent increase in loan volumes. The
increase in the provision from the prior quarter reflected the
strong loan growth. The provision in the fourth quarter of
2006 included a $60 million reduction in the allowance related
to refinements in the company's estimate of the allowance
attributable to multi-family loans.
-- Loan volume continues to be strong. During the fourth quarter,
loan volume of $4.8 billion was up 18 percent from the prior
quarter and up 19 percent from a year ago. Full year loan
volume of $16.87 billion was up 31 percent with growth in both
multi-family and nonresidential lending. The growth in
multi-family lending was driven by the acquisition of
Commercial Capital Bancorp in 2006 and the growth in existing
markets, as well as entry into new markets. Other commercial
real estate lending continued to benefit from leveraging the
existing multi-family footprint.Home Loans Group
Selected Segment
Information Three Months Ended Year Ended
--------------------------- -------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(in millions) 2007 2007 2006 2007 2006
-------- --------- -------- --------- ---------
Net interest income $ 230 $ 191 $ 270 $ 878 $ 1,165
Provision for loan
losses 511 323 47 985 189
Noninterest income 329 183 125 1,061 1,296
Noninterest expense 2,319 553 533 3,939 2,295
Net (loss) (1,964) (342) (124) (2,460) (50)
Loan volume $19,089 $26,434 $37,532 $115,241 $171,569
Average loans 52,278 43,737 51,048 48,131 47,586
----------------------------------------------------------------------
-- Results impacted by goodwill charge and increased credit
costs. Home Loans reported a fourth quarter loss of $1.96
billion, up from a loss of $342 million in the third quarter
as mortgage market conditions continued to deteriorate. The
Home Loans segment wrote off all goodwill on its balance
sheet, which resulted in a pretax charge to noninterest
expense of $1.78 billion. Additionally, increasing levels of
subprime delinquencies and charge-offs drove the loan loss
provision $188 million higher than in the prior quarter. Net
interest income was up from the third quarter as loan balances
increased due to retention of nonconforming loan production in
the segment's portfolio. Noninterest income was up due to
favorable gain on sale compared with the third quarter as that
quarter included mark to market valuation losses on loans
transferred to portfolio. Expenses (excluding the goodwill
charge) were down slightly reflecting third quarter staffing
reductions and lower production related costs with the reduced
amount of lending. Actions taken in the fourth quarter to
resize the Home Loans' business included elimination of
approximately 2,600 positions, closure of approximately 190
home loan centers and sales offices and closure of 9 loan
processing and call centers.
-- Home loan volume reflects distressed housing market. Fourth
quarter loan volume of $19.09 billion was down 28 percent from
the third quarter. During the fourth quarter, the company
discontinued all remaining lending through its subprime
mortgage channel.
COMPANY UPDATES
-- On Dec. 12, WaMu priced a public offering of 3,000,000 shares
of 7.75% Series R Non-Cumulative Perpetual Convertible
Preferred Stock with a liquidation preference of $1,000 per
share, resulting in an aggregate liquidation preference of
$3.0 billion. Each share of series R Preferred Stock will pay,
when and if declared by the company's board of directors,
dividends in cash at a rate of 7.75% per annum, payable
quarterly. The first dividend payment date will be Mar. 17,
2008.
-- On Jan. 15, WaMu's Board of Directors declared a cash dividend
of 15 cents per share on the company's common stock. Dividends
on the common stock are payable on Feb. 15, 2008 to
shareholders of record as of Jan. 31, 2008. In addition to
declaring a dividend on the company's common stock, the
company will pay a dividend of $0.3596 per depository share of
Series K Preferred Stock to be payable on Mar. 17, 2008 to
holders of record on Mar. 3, 2008 and a dividend of $19.1597
per share of Series R Preferred Stock to be payable on Mar.
17, 2008 to holders of record on Mar. 3, 2008.
ABOUT WAMU
WaMu, through its subsidiaries, is one of the nation's leading
consumer and small business banks. At Dec. 31, 2007, WaMu and its
subsidiaries had assets of $327.91 billion. The company has a history
dating back to 1889 and its subsidiary banks currently operate
approximately 2,500 consumer and small business banking stores
throughout the nation. WaMu's financial reports and news releases are
available at www.wamu.com/ir.
WEBCAST INFORMATION
A conference call to discuss the company's financial results will
be held on Thursday, Jan. 17, 2008, at 5:00 p.m. ET and will be hosted
by Kerry Killinger, chairman and chief executive officer and Tom
Casey, executive vice president and chief financial officer. The
conference call is available by telephone or on the Internet. The
dial-in number for the live conference call is 888-391-7808.
Participants calling from outside the United States may dial
210-234-0002. The passcode "WaMu" is required to access the call. Via
the Internet, the conference call is available on the Investor
Relations portion of the company's web site at www.wamu.com/ir. A
transcript of the prepared remarks will be available on the company's
web site prior to the call and archived for at least 30 days. A
recording of the conference call will be available from 7:00 p.m. ET
on Thursday, Jan. 17, 2008, through 11:59 p.m. ET on Wednesday, Jan.
30, 2008. The recorded message will be available at 800-395-7443.
Callers from outside the United States may dial 203-369-3271.
CAUTIONARY STATEMENTS
This presentation contains forward-looking statements, which are
not historical facts and pertain to future operating results. These
forward-looking statements are within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about our
plans, objectives, expectations and intentions and other statements
contained in this document that are not historical facts. When used in
this presentation, the words "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," or words of similar
meaning, or future or conditional verbs, such as "will," "would,"
"should," "could," or "may" are generally intended to identify
forward-looking statements. These forward-looking statements are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control.
In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions
that are subject to change. Actual results may differ materially from
the results discussed in these forward-looking statements for the
reasons, among others, discussed under the heading "Factors That May
Affect Future Results" in Washington Mutual's 2006 Annual Report on
Form 10-K and "Cautionary Statements" in our Forms 10-Q for the
quarters ended March 31, 2007, June 30, 2007 and September 30, 2007
which include:
-- Volatile interest rates and their impact on the mortgage
banking business;
-- Credit risk;
-- Operational risk;
-- Risks related to credit card operations;
-- Changes in the regulation of financial services companies,
housing government-sponsored enterprises and credit card
lenders;
-- Competition from banking and nonbanking companies;
-- General business, economic and market conditions;
-- Reputational risk;
-- Liquidity risk; and
-- Valuation risk.
There are other factors not described in our 2006 Form 10-K and
Forms 10-Q for the quarters ended March 31, 2007, June 30, 2007 and
September 30, 2007 which are beyond the Company's ability to
anticipate or control that could cause results to differ.
WM-1
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions, except per share data)
(unaudited)
Quarter Ended
---------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
---------------------------------------------------------------------
PROFITABILITY
Net income
(loss) $ (1,867) $ 186 $ 830 $ 784 $ 1,058
Net interest
income 2,047 2,014 2,034 2,081 1,998
Noninterest
income 1,365 1,379 1,758 1,541 1,592
Noninterest
expense 4,166 2,191 2,138 2,105 2,257
Diluted earnings
per common
share:
Income (loss)
from
continuing
operations $ (2.19) $ 0.20 $ 0.92 $ 0.86 $ 0.66
Income from
discontinued
operations - - - - 0.44
Net income
(loss) (2.19) 0.20 0.92 0.86 1.10
Diluted weighted
average number
of common
shares
outstanding
(in thousands) 855,532 876,002 893,090 899,706 955,817
Net interest
margin 2.85 % 2.86 % 2.90 % 2.79 % 2.58 %
Dividends
declared per
common share $ 0.56 $ 0.56 $ 0.55 $ 0.54 $ 0.53
Book value per
common share
(period end)(1) 24.55 27.18 27.27 27.30 28.21
Return on
average assets (2.30)% 0.23 % 1.05 % 0.95 % 1.20 %
Return on
average common
equity (32.64) 3.03 13.74 12.99 16.03
Efficiency
ratio(2)(3) 122.13 64.55 56.38 58.13 62.87
ASSET QUALITY
Nonperforming
assets(4) to
total assets 2.17 % 1.65 % 1.29 % 1.02 % 0.80 %
Allowance as a
percentage of
loans held in
portfolio 1.05 0.80 0.73 0.71 0.72
CREDIT PERFORMANCE
Provision for
loan losses $ 1,534 $ 967 $ 372 $ 234 $ 344
Net charge-offs 747 421 271 183 136
CAPITAL ADEQUACY
Capital Ratios
for WMI:
Tangible
equity to
total
tangible
assets(5) 6.67 % 5.60 % 6.07 % 5.78 % 6.04 %
Tier 1 capital
to average
total
assets(6) 6.84 5.86 6.09 5.87 6.35
Total risk-
based capital
to total
risk-weighted
assets(6) 12.35 10.67 11.04 11.17 11.77
Capital Ratios
for WMB (well-
capitalized
minimum)(7):
Tier 1 capital
to adjusted
total assets
(5.00%) 7.02 6.41 7.52 7.04 7.10
Adjusted Tier
1 capital to
total risk-
weighted
assets
(6.00%) 8.25 7.62 8.77 8.32 8.69
Total risk-
based capital
to total
risk-weighted
assets
(10.00%) 12.12 11.26 12.80 12.37 12.56
SUPPLEMENTAL DATA
Average balance
sheet:
Total loans
held in
portfolio $241,690 $227,348 $216,004 $222,617 $239,265
Total
interest-
earning
assets(2) 287,988 283,263 279,836 295,700 314,784
Total assets 325,276 320,475 316,004 331,905 353,056
Total deposits 185,636 198,649 206,765 210,764 214,801
Total
stockholders'
equity 23,947 23,994 24,436 24,407 26,700
Period-end
balance sheet:
Total loans
held in
portfolio,
net 241,815 235,243 213,434 215,481 223,330
Total assets 327,913 330,110 312,219 319,985 346,288
Total deposits 181,926 194,280 201,380 210,209 213,956
Total
stockholders'
equity 24,584 23,941 24,210 24,578 26,969
Common shares
outstanding
at the end of
period (in
thousands)(8) 869,036 868,802 875,722 888,111 944,479
Employees at
end of period 49,403 49,748 49,989 49,693 49,824
Year Ended
--------------------------------------
Dec. 31, Dec. 31,
2007 2006
--------------------------------------
PROFITABILITY
Net income
(loss) $ (67) $ 3,558
Net interest
income 8,177 8,121
Noninterest
income 6,042 6,377
Noninterest
expense 10,600 8,807
Diluted earnings
per common
share:
Income (loss)
from
continuing
operations $ (0.12) $ 3.18
Income from
discontinued
operations - 0.46
Net income
(loss) (0.12) 3.64
Diluted weighted
average number
of common
shares
outstanding
(in thousands) 866,183 975,406
Net interest
margin 2.85 % 2.60 %
Dividends
declared per
common share $ 2.21 $ 2.06
Book value per
common share
(period end)(1) 24.55 28.21
Return on
average assets (0.02)% 1.02 %
Return on
average common
equity (0.42) 13.52
Efficiency
ratio(2)(3) 74.55 60.75
ASSET QUALITY
Nonperforming
assets(4) to
total assets 2.17 % 0.80 %
Allowance as a
percentage of
loans held in
portfolio 1.05 0.72
CREDIT PERFORMANCE
Provision for
loan losses $ 3,107 $ 816
Net charge-offs 1,623 510
CAPITAL ADEQUACY
Capital Ratios
for WMI:
Tangible
equity to
total
tangible
assets(5) 6.67 % 6.04 %
Tier 1 capital
to average
total
assets(6) 6.84 6.35
Total risk-
based capital
to total
risk-weighted
assets(6) 12.35 11.77
Capital Ratios
for WMB (well-
capitalized
minimum)(7):
Tier 1 capital
to adjusted
total assets
(5.00%) 7.02 7.10
Adjusted Tier
1 capital to
total risk-
weighted
assets
(6.00%) 8.25 8.69
Total risk-
based capital
to total
risk-weighted
assets
(10.00%) 12.12 12.56
SUPPLEMENTAL DATA
Average balance
sheet:
Total loans
held in
portfolio $226,968 $239,094
Total
interest-
earning
assets(2) 286,666 312,178
Total assets 323,389 348,758
Total deposits 200,380 203,829
Total
stockholders'
equity 24,194 26,406
Period-end
balance sheet:
Total loans
held in
portfolio,
net 241,815 223,330
Total assets 327,913 346,288
Total deposits 181,926 213,956
Total
stockholders'
equity 24,584 26,969
Common shares
outstanding
at the end of
period (in
thousands)(8) 869,036 944,479
Employees at
end of period 49,403 49,824
_______________________
(1) Excludes six million shares held in escrow.
(2) Based on continuing operations.
(3) The efficiency ratio is defined as noninterest expense divided by
total revenue (net interest income and noninterest income).
(4) Excludes nonaccrual loans held for sale.
(5) Excludes unrealized net gain/loss on available-for-sale securities
and cash flow hedging instruments, goodwill and intangible assets
(except MSR) and the impact from the adoption and application of
FASB Statement No. 158, Employers' Accounting for Defined Benefit
Pension and Other Postretirement Plans. Minority interests of
$3.92 billion for December 31, 2007, $2.94 billion for September
30, 2007 and June 30, 2007, and $2.45 billion for March 31, 2007
and December 31, 2006 are included in the numerator.
(6) The capital ratios are estimated as if Washington Mutual, Inc.
were a bank holding company subject to Federal Reserve Board
capital requirements.
(7) Capital ratios for Washington Mutual Bank ("WMB") at December 31,
2007 are preliminary.
(8) Includes six million shares held in escrow.
WM-2
Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
Interest Income
Loans held for
sale $ 160 $ 248 $ 421 $ 562 $ 515
Loans held in
portfolio 4,156 3,992 3,786 3,900 4,053
Available-for-sale
securities 380 392 351 332 392
Trading assets 101 108 108 113 102
Other interest and
dividend income 79 116 82 101 148
----------------------------------------------------------------------
Total interest
income 4,876 4,856 4,748 5,008 5,210
Interest Expense
Deposits 1,464 1,650 1,723 1,772 1,843
Borrowings 1,365 1,192 991 1,155 1,369
----------------------------------------------------------------------
Total interest
expense 2,829 2,842 2,714 2,927 3,212
----------------------------------------------------------------------
Net interest
income 2,047 2,014 2,034 2,081 1,998
Provision for loan
losses 1,534 967 372 234 344
----------------------------------------------------------------------
Net interest
income after
provision for
loan losses 513 1,047 1,662 1,847 1,654
Noninterest Income
Revenue from sales
and servicing of
home mortgage
loans 358 161 300 125 164
Revenue from sales
and servicing of
consumer loans 375 418 403 443 372
Depositor and
other retail
banking fees 769 740 720 665 692
Credit card fees 214 209 183 172 182
Securities fees
and commissions 63 67 70 60 54
Insurance income 29 29 29 29 30
Loss on trading
assets (267) (153) (145) (108) (81)
Gain (loss) on
other available-
for-sale
securities (261) (99) 7 35 (1)
Other income 85 7 191 120 180
----------------------------------------------------------------------
Total
noninterest
income 1,365 1,379 1,758 1,541 1,592
Noninterest Expense
Compensation and
benefits 877 910 977 1,002 945
Occupancy and
equipment 488 371 354 376 476
Telecommunications
and outsourced
information
services 134 135 132 129 133
Depositor and
other retail
banking losses 72 71 58 61 64
Advertising and
promotion 108 125 113 98 107
Professional fees 89 52 55 38 89
Foreclosed asset
expense 133 82 56 39 34
Goodwill
impairment charge 1,775 - - - -
Other expense 490 445 393 362 409
----------------------------------------------------------------------
Total
noninterest
expense 4,166 2,191 2,138 2,105 2,257
Minority interest
expense 65 53 42 43 34
----------------------------------------------------------------------
Income (loss)
from
continuing
operations
before income
taxes (2,353) 182 1,240 1,240 955
Income taxes (486) (4) 410 456 315
----------------------------------------------------------------------
Income (loss)
from
continuing
operations (1,867) 186 830 784 640
----------------------------------------------------------------------
Discontinued
Operations(1)
Income from
discontinued
operations
before income
taxes - - - - 2
Gain on
disposition of
discontinued
operations - - - - 667
Income taxes - - - - 251
----------------------------------------------------------------------
Income from
discontinued
operations - - - - 418
----------------------------------------------------------------------
Net Income (Loss) $ (1,867) $ 186 $ 830 $ 784 $ 1,058
======================================================================
Net Income (Loss)
Applicable to
Common Stockholders $ (1,875) $ 178 $ 822 $ 777 $ 1,050
======================================================================
Basic Earnings Per
Common Share:
Income (loss) from
continuing
operations $ (2.19) $ 0.21 $ 0.95 $ 0.89 $ 0.68
Income from
discontinued
operations - - - - 0.45
--------- --------- --------- --------- ---------
Net Income
(Loss) (2.19) 0.21 0.95 0.89 1.13
Diluted Earnings Per
Common Share:
Income (loss) from
continuing
operations $ (2.19) $ 0.20 $ 0.92 $ 0.86 $ 0.66
Income from
discontinued
operations - - - - 0.44
--------- --------- --------- --------- ---------
Net Income
(Loss) (2.19) 0.20 0.92 0.86 1.10
Dividends declared
per common share 0.56 0.56 0.55 0.54 0.53
Basic weighted
average number of
common shares
outstanding (in
thousands) 855,518 857,005 868,968 874,816 931,484
Diluted weighted
average number of
common shares
outstanding (in
thousands) 855,532 876,002 893,090 899,706 955,817
____________________
(1) Represents WM Advisors, Inc., the Company's retail mutual fund
management business, which was sold in the fourth quarter of
2006.
WM-3
Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)
Year Ended
----------------------------------------------------------------------
Dec. 31, Dec. 31,
2007 2006
----------------------------------------------------------------------
Interest Income
Loans held for sale $ 1,391 $ 1,807
Loans held in portfolio 15,835 15,533
Available-for-sale securities 1,455 1,460
Trading assets 430 606
Other interest and dividend income 378 501
----------------------------------------------------------------------
Total interest income 19,489 19,907
Interest Expense
Deposits 6,610 6,263
Borrowings 4,702 5,523
----------------------------------------------------------------------
Total interest expense 11,312 11,786
----------------------------------------------------------------------
Net interest income 8,177 8,121
Provision for loan losses 3,107 816
----------------------------------------------------------------------
Net interest income after provision for loan
losses 5,070 7,305
Noninterest Income
Revenue from sales and servicing of home
mortgage loans 944 768
Revenue from sales and servicing of consumer
loans 1,639 1,527
Depositor and other retail banking fees 2,893 2,567
Credit card fees 778 637
Securities fees and commissions 260 215
Insurance income 116 127
Loss on trading assets (673) (154)
Loss on other available-for-sale securities (319) (9)
Other income 404 699
----------------------------------------------------------------------
Total noninterest income 6,042 6,377
Noninterest Expense
Compensation and benefits 3,766 3,937
Occupancy and equipment 1,589 1,711
Telecommunications and outsourced information
services 530 554
Depositor and other retail banking losses 262 229
Advertising and promotion 445 443
Professional fees 233 227
Foreclosed asset expense 309 117
Goodwill impairment charge 1,775 -
Other expense 1,691 1,589
----------------------------------------------------------------------
Total noninterest expense 10,600 8,807
Minority interest expense 203 105
----------------------------------------------------------------------
Income from continuing operations before
income taxes 309 4,770
Income taxes 376 1,656
----------------------------------------------------------------------
Income (loss) from continuing operations (67) 3,114
----------------------------------------------------------------------
Discontinued Operations(1)
Income from discontinued operations before
income taxes - 42
Gain on disposition of discontinued
operations - 667
Income taxes - 265
----------------------------------------------------------------------
Income from discontinued operations - 444
----------------------------------------------------------------------
Net Income (Loss) $ (67) $ 3,558
======================================================================
Net Income (Loss) Applicable to Common
Stockholders $ (98) $ 3,550
======================================================================
Basic Earnings Per Common Share:
Income (loss) from continuing operations $ (0.11) $ 3.27
Income from discontinued operations - 0.47
--------- ---------
Net Income (Loss) (0.11) 3.74
Diluted Earnings Per Common Share:
Income (loss) from continuing operations $ (0.12) $ 3.18
Income from discontinued operations - 0.46
--------- ---------
Net Income (Loss) (0.12) 3.64
Dividends declared per common share 2.21 2.06
Basic weighted average number of common shares
outstanding (in thousands) 864,004 948,371
Diluted weighted average number of common shares
outstanding (in thousands) 866,183 975,406
___________________
(1) Represents WM Advisors, Inc., the Company's retail mutual fund
management business, which was sold in the fourth quarter of
2006.
WM-4
Washington Mutual, Inc.
Consolidated Statements of Financial Condition
(dollars in millions)
(unaudited)
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
Assets
Cash and cash
equivalents $ 9,560 $ 11,370 $ 4,167 $ 4,047 $ 6,948
Federal funds sold
and securities
purchased under
agreements to
resell 1,877 4,042 3,267 8,279 3,743
Trading assets 2,768 3,797 5,534 5,290 4,434
Available-for-sale
securities, total
amortized cost of
$27,789, $28,725,
$28,934, $22,921,
and $25,073:
Mortgage-backed
securities 19,249 20,562 20,393 16,543 18,601
Investment
securities 8,291 7,844 7,947 6,296 6,377
----------------------------------------------------------------------
Total
available-
for-sale
securities 27,540 28,406 28,340 22,839 24,978
Loans held for
sale 5,403 7,586 19,327 26,874 44,970
Loans held in
portfolio 244,386 237,132 214,994 217,021 224,960
Allowance for loan
losses (2,571) (1,889) (1,560) (1,540) (1,630)
----------------------------------------------------------------------
Loans held in
portfolio,
net 241,815 235,243 213,434 215,481 223,330
Investment in
Federal Home Loan
Banks 3,351 2,808 1,596 2,230 2,705
Mortgage servicing
rights 6,278 6,794 7,231 6,507 6,193
Goodwill 7,287 9,062 9,056 9,052 9,050
Other assets 22,034 21,002 20,267 19,386 19,937
----------------------------------------------------------------------
Total assets $327,913 $330,110 $312,219 $319,985 $346,288
======================================================================
Liabilities
Deposits:
Noninterest-
bearing
deposits $ 30,389 $ 31,341 $ 33,557 $ 34,367 $ 33,386
Interest-bearing
deposits 151,537 162,939 167,823 175,842 180,570
----------------------------------------------------------------------
Total deposits 181,926 194,280 201,380 210,209 213,956
Federal funds
purchased and
commercial paper 2,003 2,482 3,390 563 4,778
Securities sold
under agreements
to repurchase 4,148 4,732 9,357 8,323 11,953
Advances from
Federal Home Loan
Banks 63,852 52,530 21,412 24,735 44,297
Other borrowings 38,958 40,887 40,313 39,430 32,852
Other liabilities 8,523 8,313 9,212 9,694 9,035
Minority interests 3,919 2,945 2,945 2,453 2,448
----------------------------------------------------------------------
Total
liabilities 303,329 306,169 288,009 295,407 319,319
Stockholders' equity
Preferred stock 3,392 492 492 492 492
Capital surplus -
common stock 2,630 2,575 2,715 3,121 5,825
Accumulated other
comprehensive
loss (359) (390) (568) (268) (287)
Retained earnings 18,921 21,264 21,571 21,233 20,939
----------------------------------------------------------------------
Total
stockholders'
equity 24,584 23,941 24,210 24,578 26,969
----------------------------------------------------------------------
Total
liabilities
and
stockholders'
equity $327,913 $330,110 $312,219 $319,985 $346,288
======================================================================
WM-5
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
-------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------------------------------------------------------
Stockholders'
Equity Rollforward
Balance, beginning
of period $23,941 $24,210 $24,578 $26,969 $26,458
Net income (loss) (1,867) 186 830 784 1,058
Cumulative effect
from the adoption
of new accounting
pronouncements - - - (6)(1) (157)(2)
Other comprehensive
income (loss), net
of income taxes 31 177 (300) 19 50
Cash dividends
declared on common
stock (482) (485) (484) (476) (496)
Cash dividends
declared on
preferred stock (8) (8) (8) (7) (8)
Cash dividends
returned(3) 15 - - - -
Common stock
repurchased and
retired(4) - (199) (500) (2,797) -
Common stock issued 54 60 94 92 64
Preferred stock
issued 2,900 - - - -
-------------------------------------------------------------------
Balance, end of
period $24,584 $23,941 $24,210 $24,578 $26,969
===================================================================
(1) As of January 1, 2007, the Company adopted FASB Interpretation
No. 48, Accounting for Uncertainty in Income Taxes.
(2) On December 31, 2006, the Company adopted Statement of Financial
Accounting Standards ("Statement") No. 158, Employers' Accounting
for Defined Benefit Pension and Other Postretirement Plans.
Statement No. 158 requires an entity to recognize the overfunded
or underfunded status of its defined benefit postretirement plans
as an asset or liability in its statement of financial condition
and to recognize changes, through comprehensive income, in that
funded status in the year in which the changes occur. The
cumulative effects, net of income taxes, resulted in a $274
million decrease to December 31, 2006 other assets and a $117
million decrease to December 31, 2006 other liabilities.
(3) Represents accumulated dividends on shares returned from escrow.
(4) The Company repurchased zero, 7.2 million, 13.5 million, 61.4
million and 1.7 million shares of its common stock during the
three months ended December 31, 2007, September 30, 2007, June
30, 2007, March 31, 2007 and December 31, 2006. At December 31,
2007, the total remaining common stock repurchase authority was
47.5 million shares.
WM-6
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
RETAIL BANKING
GROUP
Condensed income
statement:
Net interest
income $ 1,261 $ 1,306 $ 1,291 $ 1,284 $ 1,247
Provision for
loan losses 663 318 91 62 47
Noninterest
income 850 833 820 751 774
Inter-segment
revenue 5 9 16 18 15
Noninterest
expense 1,215 1,150 1,132 1,070 1,098
----------------------------------------------------------------------
Income from
continuing
operations
before income
taxes 238 680 904 921 891
Income taxes (40) 224 339 346 340
----------------------------------------------------------------------
Income from
continuing
operations 278 456 565 575 551
Income from
discontinued
operations - - - - 12
----------------------------------------------------------------------
Net income $ 278 $ 456 $ 565 $ 575 $ 563
======================================================================
Performance and
other data:
Efficiency
ratio 57.40% 53.53% 53.24% 52.13% 53.95%
Average loans $145,486 $147,357 $149,716 $155,206 $172,013
Average assets 155,103 157,196 159,518 165,047 182,240
Average
deposits:
Checking
deposits:
Noninterest
bearing 22,748 22,860 23,107 22,331 21,873
Interest
bearing 26,328 28,406 30,282 31,739 33,010
----------------------------------------------------------------------
Total
checking
deposits 49,076 51,266 53,389 54,070 54,883
Savings and
money market
deposits 44,623 43,524 43,814 43,103 41,442
Time deposits 49,034 50,131 48,049 46,857 47,188
----------------------------------------------------------------------
Average
deposits 142,733 144,921 145,252 144,030 143,513
Loan volume 3,417 5,172 5,760 4,576 4,154
Employees at
end of period 28,784 28,263 28,131 27,837 27,629
CARD SERVICES GROUP
Managed basis(1)
Condensed income
statement:
Net interest
income $ 694 $ 674 $ 649 $ 641 $ 652
Provision for
loan losses 591 611 523 388 555
Noninterest
income 315 400 393 474 451
Noninterest
expense 338 364 306 329 318
----------------------------------------------------------------------
Income before
income taxes 80 99 213 398 230
Income taxes (12) 33 80 149 88
----------------------------------------------------------------------
Net income $ 92 $ 66 $ 133 $ 249 $ 142
======================================================================
Performance and
other data:
Efficiency
ratio 33.51% 33.91% 29.33% 29.51% 28.83%
Average loans $ 26,665 $ 25,718 $ 24,234 $ 23,604 $ 22,875
Average assets 28,961 28,206 26,762 26,039 25,472
Employees at
end of period 2,860 2,878 2,827 2,579 2,611
Securitization
adjustments
Condensed income
statement:
Net interest
income $ (454) $ (456) $ (459) $ (414) $ (437)
Provision for
loan losses (335) (288) (294) (282) (280)
Noninterest
income 119 168 165 132 157
Performance and
other data:
Average loans (16,007) (14,488) (13,888) (12,507) (12,811)
Average assets (14,180) (12,841) (12,287) (10,961) (11,035)
Adjusted basis
Condensed income
statement:
Net interest
income $ 240 $ 218 $ 190 $ 227 $ 215
Provision for
loan losses 256 323 229 106 275
Noninterest
income 434 568 558 606 608
Noninterest
expense 338 364 306 329 318
----------------------------------------------------------------------
Income before
income taxes 80 99 213 398 230
Income taxes (12) 33 80 149 88
----------------------------------------------------------------------
Net income $ 92 $ 66 $ 133 $ 249 $ 142
======================================================================
Performance and
other data:
Average loans $ 10,658 $ 11,230 $ 10,346 $ 11,097 $ 10,064
Average assets 14,781 15,365 14,475 15,078 14,437
Year Ended
----------------------------------------------
Dec. 31, Dec. 31,
2007 2006
----------------------------------------------
RETAIL BANKING
GROUP
Condensed income
statement:
Net interest
income $ 5,142 $ 5,201
Provision for
loan losses 1,134 167
Noninterest
income 3,254 2,914
Inter-segment
revenue 48 58
Noninterest
expense 4,567 4,364
----------------------------------------------
Income from
continuing
operations
before income
taxes 2,743 3,642
Income taxes 869 1,392
----------------------------------------------
Income from
continuing
operations 1,874 2,250
Income from
discontinued
operations - 38
----------------------------------------------
Net income $ 1,874 $ 2,288
==============================================
Performance and
other data:
Efficiency
ratio 54.09% 53.39%
Average loans $149,409 $177,401
Average assets 159,184 187,735
Average
deposits:
Checking
deposits:
Noninterest
bearing 22,763 21,274
Interest
bearing 29,169 36,391
----------------------------------------------
Total
checking
deposits 51,932 57,665
Savings and
money market
deposits 43,769 38,843
Time deposits 48,532 43,836
----------------------------------------------
Average
deposits 144,233 140,344
Loan volume 18,926 20,354
Employees at
end of period 28,784 27,629
CARD SERVICES GROUP
Managed basis(1)
Condensed income
statement:
Net interest
income $ 2,659 $ 2,496
Provision for
loan losses 2,113 1,647
Noninterest
income 1,581 1,528
Noninterest
expense 1,337 1,205
----------------------------------------------
Income before
income taxes 790 1,172
Income taxes 250 448
----------------------------------------------
Net income $ 540 $ 724
==============================================
Performance and
other data:
Efficiency
ratio 31.53% 29.96%
Average loans $ 25,066 $ 21,294
Average assets 27,502 23,888
Employees at
end of period 2,860 2,611
Securitization
adjustments
Condensed income
statement:
Net interest
income $ (1,783) $ (1,686)
Provision for
loan losses (1,200) (943)
Noninterest
income 583 743
Performance and
other data:
Average loans (14,233) (12,165)
Average assets (12,577) (10,337)
Adjusted basis
Condensed income
statement:
Net interest
income $ 876 $ 810
Provision for
loan losses 913 704
Noninterest
income 2,164 2,271
Noninterest
expense 1,337 1,205
----------------------------------------------
Income before
income taxes 790 1,172
Income taxes 250 448
----------------------------------------------
Net income $ 540 $ 724
==============================================
Performance and
other data:
Average loans $ 10,833 $ 9,129
Average assets 14,925 13,551
(This table is continued on "WM-7.")
__________________________
(1) The managed basis presentation treats securitized and sold credit
card receivables as if they were still on the balance sheet. The
Company uses this basis in assessing the overall performance of
this operating segment. The managed basis presentation of the
Card Services Group is derived by adjusting the GAAP financial
information to add back securitized loan balances and the related
interest, fee income and provision for credit losses. Such
adjustments are eliminated as securitization adjustments when
reporting GAAP results.
WM-7
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
(This table is
continued from
"WM-6.") Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
COMMERCIAL GROUP
Condensed income
statement:
Net interest
income $ 200 $ 200 $ 208 $ 211 $ 201
Provision for
loan losses 19 12 2 (10) (70)
Noninterest
income (10) (34) 63 15 41
Noninterest
expense 66 67 74 74 73
----------------------------------------------------------------------
Income before
income taxes 105 87 195 162 239
Income taxes 11 29 73 61 91
----------------------------------------------------------------------
Net income $ 94 $ 58 $ 122 $ 101 $ 148
======================================================================
Performance and
other data:
Efficiency
ratio 34.49% 40.26% 27.42% 32.85% 30.18%
Average loans $40,129 $38,333 $38,789 $38,641 $37,552
Average assets 42,333 40,661 41,181 41,001 40,216
Average
deposits 9,762 13,816 15,294 12,028 12,189
Loan volume 4,800 4,054 4,348 3,671 4,019
Employees at
end of period 1,406 1,426 1,409 1,356 1,416
HOME LOANS GROUP
Condensed income
statement:
Net interest
income $ 230 $ 191 $ 211 $ 244 $ 270
Provision for
loan losses 511 323 101 49 47
Noninterest
income 329 183 389 161 125
Inter-segment
expense 5 9 16 18 15
Noninterest
expense 2,319 553 547 521 533
----------------------------------------------------------------------
Loss before
income taxes (2,276) (511) (64) (183) (200)
Income taxes (312) (169) (24) (69) (76)
----------------------------------------------------------------------
Net loss $(1,964) $ (342) $ (40) $ (114) $ (124)
======================================================================
Performance and
other data:
Efficiency
ratio 418.90% 151.23% 93.54% 134.57% 140.22%
Average loans $52,278 $43,737 $43,312 $53,254 $51,048
Average assets 66,130 61,068 60,314 71,367 71,503
Average
deposits 6,714 7,780 8,372 8,501 11,208
Loan volume 19,089 26,434 35,938 33,780 37,532
Employees at
end of period 11,323 12,162 12,661 12,947 12,934
CORPORATE
SUPPORT/TREASURY
AND OTHER
Condensed income
statement:
Net interest
income
(expense) $ (18) $ (39) $ (4) $ (22) $ (69)
Provision for
loan losses 85 (9) (51) 27 45
Noninterest
income (201) (91) 60 94 152
Noninterest
expense 228 57 79 111 235
Minority
interest
expense 65 53 42 43 34
----------------------------------------------------------------------
Loss from
continuing
operations
before income
taxes (597) (231) (14) (109) (231)
Income taxes (156) (46) (36) (69) (102)
----------------------------------------------------------------------
Income (loss)
from
continuing
operations (441) (185) 22 (40) (129)
Income from
discontinued
operations - - - - 406
----------------------------------------------------------------------
Net income
(loss) $ (441) $ (185) $ 22 $ (40) $ 277
======================================================================
Performance and
other data:
Average loans $ 1,482 $ 1,420 $ 1,367 $ 1,345 $ 1,310
Average assets 48,215 47,570 41,817 40,891 46,233
Average
deposits 26,427 32,132 37,847 46,205 47,891
Loan volume 171 113 72 107 144
Employees at
end of period 5,030 5,019 4,961 4,974 5,234
Year Ended
---------------------------------------------
(This table is
continued from
"WM-6.") Dec. 31, Dec. 31,
2007 2006
---------------------------------------------
COMMERCIAL GROUP
Condensed income
statement:
Net interest
income $ 820 $ 719
Provision for
loan losses 24 (82)
Noninterest
income 35 99
Noninterest
expense 282 259
---------------------------------------------
Income before
income taxes 549 641
Income taxes 174 245
---------------------------------------------
Net income $ 375 $ 396
=============================================
Performance and
other data:
Efficiency
ratio 32.93% 31.68%
Average loans $ 38,975 $ 33,230
Average assets 41,296 35,565
Average
deposits 12,722 10,364
Loan volume 16,873 12,854
Employees at
end of period 1,406 1,416
HOME LOANS GROUP
Condensed income
statement:
Net interest
income $ 878 $ 1,165
Provision for
loan losses 985 189
Noninterest
income 1,061 1,296
Inter-segment
expense 48 58
Noninterest
expense 3,939 2,295
---------------------------------------------
Loss before
income taxes (3,033) (81)
Income taxes (573) (31)
---------------------------------------------
Net loss $ (2,460) $ (50)
=============================================
Performance and
other data:
Efficiency
ratio 208.33% 95.48%
Average loans $ 48,131 $ 47,586
Average assets 64,695 72,772
Average
deposits 7,836 11,535
Loan volume 115,241 171,569
Employees at
end of period 11,323 12,934
CORPORATE
SUPPORT/TREASURY
AND OTHER
Condensed income
statement:
Net interest
income
(expense) $ (86) $ (304)
Provision for
loan losses 51 (162)
Noninterest
income (137) 303
Noninterest
expense 475 684
Minority
interest
expense 203 105
---------------------------------------------
Loss from
continuing
operations
before income
taxes (952) (628)
Income taxes (308) (296)
---------------------------------------------
Income (loss)
from
continuing
operations (644) (332)
Income from
discontinued
operations - 406
---------------------------------------------
Net income
(loss) $ (644) $ 74
=============================================
Performance and
other data:
Average loans $ 1,403 $ 1,126
Average assets 44,651 40,722
Average
deposits 35,589 41,586
Loan volume 462 308
Employees at
end of period 5,030 5,234
(This table is continued on "WM-8.")
WM-8
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
(This table is
continued from
"WM-7.") Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
RECONCILING
ADJUSTMENTS
Condensed income
statement:
Net interest
income(1) $ 134 $ 138 $ 138 $ 137 $ 134
Noninterest
income
(expense)(2) (37) (80) (132) (86) (108)
----------------------------------------------------------------------
Income before
income taxes 97 58 6 51 26
Income taxes
(3) 23 (75) (22) 38 (26)
----------------------------------------------------------------------
Net income $ 74 $ 133 $ 28 $ 13 $ 52
======================================================================
Performance and
other data:
Average
loans(4) $ (1,286) $ (1,385) $ (1,301) $ (1,479) $ (1,573)
Average
assets(4) (1,286) (1,385) (1,301) (1,479) (1,573)
TOTAL CONSOLIDATED
Condensed income
statement:
Net interest
income $ 2,047 $ 2,014 $ 2,034 $ 2,081 $ 1,998
Provision for
loan losses 1,534 967 372 234 344
Noninterest
income 1,365 1,379 1,758 1,541 1,592
Noninterest
expense 4,166 2,191 2,138 2,105 2,257
Minority
interest
expense 65 53 42 43 34
----------------------------------------------------------------------
Income (loss)
from
continuing
operations
before income
taxes (2,353) 182 1,240 1,240 955
Income taxes (486) (4) 410 456 315
----------------------------------------------------------------------
Income (loss)
from
continuing
operations (1,867) 186 830 784 640
Income from
discontinued
operations - - - - 418
----------------------------------------------------------------------
Net income
(loss) $ (1,867) $ 186 $ 830 $ 784 $ 1,058
======================================================================
Performance and
other data:
Efficiency
ratio 122.13% 64.55% 56.38% 58.13% 62.87%
Average loans $248,747 $240,692 $242,229 $258,064 $270,414
Average assets 325,276 320,475 316,004 331,905 353,056
Average
deposits 185,636 198,649 206,765 210,764 214,801
Loan volume 27,477 35,773 46,118 42,134 45,849
Employees at
end of period 49,403 49,748 49,989 49,693 49,824
Year Ended
------------------------- -------------------
(This table is
continued from
"WM-7.") Dec. 31, Dec. 31,
2007 2006
------------------------- -------------------
RECONCILING
ADJUSTMENTS
Condensed income
statement:
Net interest
income(1) $ 547 $ 530
Noninterest
income
(expense)(2) (335) (506)
---------------------------------------------
Income before
income taxes 212 24
Income taxes
(3) (36) (102)
---------------------------------------------
Net income $ 248 $ 126
=============================================
Performance and
other data:
Average
loans(4) $ (1,362) $ (1,587)
Average
assets(4) (1,362) (1,587)
TOTAL CONSOLIDATED
Condensed income
statement:
Net interest
income $ 8,177 $ 8,121
Provision for
loan losses 3,107 816
Noninterest
income 6,042 6,377
Noninterest
expense 10,600 8,807
Minority
interest
expense 203 105
---------------------------------------------
Income (loss)
from
continuing
operations
before income
taxes 309 4,770
Income taxes 376 1,656
---------------------------------------------
Income (loss)
from
continuing
operations (67) 3,114
Income from
discontinued
operations - 444
---------------------------------------------
Net income
(loss) $ (67) $ 3,558
=============================================
Performance and
other data:
Efficiency
ratio 74.55% 60.75%
Average loans $247,389 $266,885
Average assets 323,389 348,758
Average
deposits 200,380 203,829
Loan volume 151,502 205,085
Employees at
end of period 49,403 49,824
__________________________
(1) Represents the difference between mortgage loan premium
amortization recorded by the Retail Banking Group and the amount
recognized in the Company's Consolidated Statements of Income.
For management reporting purposes, certain mortgage loans that
are held in portfolio by the Retail Banking Group are treated as
if they are purchased from the Home Loans Group. Since the cost
basis of these loans includes an assumed profit factor paid to
the Home Loans Group, the amortization of loan premiums recorded
by the Retail Banking Group reflects this assumed profit factor
and must therefore be eliminated as a reconciling adjustment.
(2) Represents the difference between gain from mortgage loans
recorded by the Home Loans Group and gain from mortgage loans
recognized in the Company's Consolidated Statements of Income.
(3) Represents the tax effect of reconciling adjustments.
(4) Represents the inter-segment offset for inter-segment loan
premiums that the Retail Banking Group recognized upon transfer
of portfolio loans from the Home Loans Group.
WM-9
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
--------------------------------------------------
Dec. 31, 2007
-------------------------
Interest
Income/
Balance Rate Expense
--------------------------------------------------
Average Balances and
Weighted Average
Interest Rates
Assets
Interest-earning
assets(1):
Federal funds sold
and securities
purchased under
agreements to
resell $ 1,673 4.65% $ 20
Trading assets 3,114 12.89 101
Available-for-sale
securities(2):
Mortgage-backed
securities 20,104 5.47 275
Investment
securities 8,029 5.22 105
Loans held for sale 7,057 8.99 160
Loans held in
portfolio:
Loans secured by
real estate:
Home loans(3)(4) 108,496 6.58 1,785
Home equity
loans and lines
of credit(4) 60,135 7.15 1,083
Subprime
mortgage
channel(5) 19,341 6.38 309
Home
construction(6) 2,136 6.99 37
Multi-family 31,331 6.54 513
Other real
estate 8,969 6.89 155
--------------------------------- ---------
Total loans
secured by
real estate 230,408 6.72 3,882
Consumer:
Credit card 9,134 9.76 225
Other 213 15.77 8
Commercial 1,935 8.47 41
--------------------------------- ---------
Total loans
held in
portfolio 241,690 6.86 4,156
Other 6,321 3.74 59
--------------------------------- ---------
Total
interest-
earning
assets 287,988 6.76 4,876
Noninterest-earning
assets:
Mortgage servicing
rights 6,472
Goodwill 8,907
Other assets 21,909
---------------------------------
Total assets $325,276
=================================
Liabilities
Interest-bearing
liabilities:
Deposits:
Interest-bearing
checking deposits $ 26,425 2.15 143
Savings and money
market deposits 54,622 3.14 432
Time deposits 73,741 4.78 889
--------------------------------- ---------
Total
interest-
bearing
deposits 154,788 3.75 1,464
Federal funds
purchased and
commercial paper 3,385 4.96 42
Securities sold
under agreements to
repurchase 4,273 4.80 52
Advances from
Federal Home Loan
Banks 56,146 5.13 726
Other 39,268 5.52 545
--------------------------------- ---------
Total
interest-
bearing
liabilities 257,860 4.36 2,829
---------
Noninterest-bearing
sources:
Noninterest-bearing
deposits 30,848
Other liabilities 8,956
Minority interests 3,665
Stockholders' equity 23,947
---------------------------------
Total
liabilities
and
stockholders'
equity $325,276
=================================
Net interest spread
and net interest
income 2.40 $ 2,047
=========
Impact of
noninterest-bearing
sources 0.45
Net interest margin 2.85
Quarter Ended
---------------------------------------------------
Sept. 30, 2007
-------------------------
Interest
Income/
Balance Rate Expense
---------------------------------------------------
Average Balances and
Weighted Average
Interest Rates
Assets
Interest-earning
assets(1):
Federal funds sold
and securities
purchased under
agreements to
resell $ 4,349 5.43% $ 60
Trading assets 4,509 9.54 108
Available-for-sale
securities(2):
Mortgage-backed
securities 20,815 5.60 291
Investment
securities 7,721 5.21 101
Loans held for sale 13,344 7.41 248
Loans held in
portfolio:
Loans secured by
real estate:
Home loans(3)(4) 97,398 6.48 1,579
Home equity
loans and lines
of credit(4) 57,469 7.56 1,094
Subprime
mortgage
channel(5) 20,405 6.63 338
Home
construction(6) 2,056 6.90 35
Multi-family 30,058 6.63 498
Other real
estate 7,418 6.99 131
---------------------- -------- ---------
Total loans
secured by
real estate 214,804 6.83 3,675
Consumer:
Credit card 10,332 10.28 268
Other 233 14.83 8
Commercial 1,979 8.25 41
---------------------- -------- ---------
Total loans
held in
portfolio 227,348 7.01 3,992
Other 5,177 4.33 56
---------------------- -------- ---------
Total
interest-
earning
assets 283,263 6.84 4,856
Noninterest-earning
assets:
Mortgage servicing
rights 6,901
Goodwill 9,056
Other assets 21,255
---------------------- --------
Total assets $320,475
====================== ========
Liabilities
Interest-bearing
liabilities:
Deposits:
Interest-bearing
checking deposits $ 28,492 2.36 169
Savings and money
market deposits 57,377 3.32 480
Time deposits 80,719 4.92 1,001
---------------------- -------- ---------
Total
interest-
bearing
deposits 166,588 3.93 1,650
Federal funds
purchased and
commercial paper 2,991 5.40 41
Securities sold
under agreements to
repurchase 8,617 5.34 116
Advances from
Federal Home Loan
Banks 34,128 5.39 464
Other 40,567 5.60 571
---------------------- -------- ---------
Total
interest-
bearing
liabilities 252,891 4.46 2,842
---------
Noninterest-bearing
sources:
Noninterest-bearing
deposits 32,061
Other liabilities 8,584
Minority interests 2,945
Stockholders' equity 23,994
---------------------- --------
Total
liabilities
and
stockholders'
equity $320,475
====================== ========
Net interest spread
and net interest
income 2.38 $ 2,014
=========
Impact of
noninterest-bearing
sources 0.48
Net interest margin 2.86
Quarter Ended
--------------------------------------------------
Dec. 31, 2006
------------------------
Interest
Income/
Balance Rate Expense
--------------------------------------------------
Average Balances and
Weighted Average
Interest Rates
Assets
Interest-earning
assets(1):
Federal funds sold
and securities
purchased under
agreements to
resell $ 5,597 5.33% $ 76
Trading assets 4,855 8.39 102
Available-for-sale
securities(2):
Mortgage-backed
securities 22,176 5.60 311
Investment
securities 6,437 5.04 81
Loans held for sale 31,149 6.59 515
Loans held in
portfolio:
Loans secured by
real estate:
Home loans(3)(4) 114,645 6.04 1,729
Home equity
loans and lines
of credit(4) 52,850 7.54 1,004
Subprime
mortgage
channel(5) 20,982 6.81 357
Home
construction(6) 2,060 6.62 34
Multi-family 30,348 6.52 494
Other real
estate 6,732 6.88 118
---------------------- -------- --------
Total loans
secured by
real estate 227,617 6.55 3,736
Consumer:
Credit card 9,597 11.28 273
Other 280 12.54 9
Commercial 1,771 7.72 35
---------------------- -------- --------
Total loans
held in
portfolio 239,265 6.76 4,053
Other 5,305 5.35 72
---------------------- -------- --------
Total
interest-
earning
assets 314,784 6.60 5,210
Noninterest-earning
assets:
Mortgage servicing
rights 6,230
Goodwill 9,011
Other assets 23,031
---------------------- --------
Total assets $353,056
====================== ========
Liabilities
Interest-bearing
liabilities:
Deposits:
Interest-bearing
checking deposits $ 33,098 2.78 232
Savings and money
market deposits 53,314 3.34 449
Time deposits 93,415 4.90 1,162
---------------------- -------- --------
Total
interest-
bearing
deposits 179,827 4.05 1,843
Federal funds
purchased and
commercial paper 6,781 5.40 93
Securities sold
under agreements to
repurchase 12,177 5.43 169
Advances from
Federal Home Loan
Banks 46,005 5.31 625
Other 34,420 5.54 482
---------------------- -------- --------
Total
interest-
bearing
liabilities 279,210 4.53 3,212
--------
Noninterest-bearing
sources:
Noninterest-bearing
deposits 34,974
Other liabilities 10,111
Minority interests 2,061
Stockholders' equity 26,700
---------------------- --------
Total
liabilities
and
stockholders'
equity $353,056
====================== ========
Net interest spread
and net interest
income 2.07 $ 1,998
========
Impact of
noninterest-bearing
sources 0.51
Net interest margin 2.58
_______________________________
(1) Nonaccrual assets and related income, if any, are included in
their respective categories.
(2) The average balance and yield are based on average amortized cost
balances.
(3) Capitalized interest recognized in earnings that resulted from
negative amortization within the Option ARM portfolio totaled
$364 million, $345 million and $333 million for the three months
ended December 31, 2007, September 30, 2007 and December 31,
2006.
(4) Excludes home loans and home equity loans and lines of credit in
the subprime mortgage channel.
(5) Represents mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name and held in the investment portfolio.
(6) Represents loans to builders for the purpose of financing the
acquisition, development and construction of single-family
residences for sale and construction loans made directly to the
intended occupant of a single-family residence.
WM-10
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Year Ended
----------------------------------------------------------------------
Dec. 31, 2007
-------------------------
Interest
Income/
Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average
Interest Rates
Assets
Interest-earning assets(1):
Federal funds sold and securities
purchased under agreements to resell $ 3,475 5.31% $ 184
Trading assets 4,546 9.45 430
Available-for-sale securities(2):
Mortgage-backed securities 19,647 5.49 1,078
Investment securities 7,334 5.13 377
Loans held for sale 20,421 6.81 1,391
Loans held in portfolio:
Loans secured by real estate:
Home loans(3)(4) 98,547 6.49 6,396
Home equity loans and lines of
credit(4) 56,285 7.46 4,197
Subprime mortgage channel(5) 20,125 6.62 1,333
Home construction(6) 2,074 6.79 141
Multi-family 30,162 6.59 1,988
Other real estate 7,504 6.98 524
----------------------------------------------------- ---------
Total loans secured by real estate 214,697 6.79 14,579
Consumer:
Credit card 10,113 10.55 1,067
Other 242 13.90 34
Commercial 1,916 8.10 155
----------------------------------------------------- ---------
Total loans held in portfolio 226,968 6.98 15,835
Other 4,275 4.53 194
----------------------------------------------------- ---------
Total interest-earning assets 286,666 6.80 19,489
Noninterest-earning assets:
Mortgage servicing rights 6,616
Goodwill 9,018
Other assets 21,089
-----------------------------------------------------
Total assets $323,389
=====================================================
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits $ 29,261 2.42 709
Savings and money market deposits 56,459 3.27 1,846
Time deposits 82,551 4.91 4,055
----------------------------------------------------- ---------
Total interest-bearing deposits 168,271 3.93 6,610
Federal funds purchased and commercial
paper 3,096 5.30 164
Securities sold under agreements to
repurchase 8,330 5.32 443
Advances from Federal Home Loan Banks 37,144 5.28 1,963
Other 38,157 5.59 2,132
----------------------------------------------------- ---------
Total interest-bearing liabilities 254,998 4.44 11,312
---------
Noninterest-bearing sources:
Noninterest-bearing deposits 32,109
Other liabilities 9,155
Minority interests 2,933
Stockholders' equity 24,194
-----------------------------------------------------
Total liabilities and stockholders'
equity $323,389
=====================================================
Net interest spread and net interest
income 2.36 $ 8,177
=========
Impact of noninterest-bearing sources 0.49
Net interest margin 2.85
Year Ended
---------------------------------------------------------------------
Dec. 31, 2006
------------------------
Interest
Income/
Balance Rate Expense
---------------------------------------------------------------------
Average Balances and Weighted Average
Interest Rates
Assets
Interest-earning assets(1):
Federal funds sold and securities
purchased under agreements to resell $ 4,718 5.20% $ 245
Trading assets 7,829 7.74 606
Available-for-sale securities(2):
Mortgage-backed securities 21,534 5.41 1,165
Investment securities 5,992 4.92 295
Loans held for sale 27,791 6.50 1,807
Loans held in portfolio:
Loans secured by real estate:
Home loans(3)(4) 120,320 5.83 7,011
Home equity loans and lines of
credit(4) 52,265 7.33 3,833
Subprime mortgage channel(5) 20,202 6.31 1,275
Home construction(6) 2,061 6.46 133
Multi-family 27,386 6.28 1,721
Other real estate 5,797 6.93 402
----------------------------------------------------- --------
Total loans secured by real estate 228,031 6.30 14,375
Consumer:
Credit card 8,733 11.19 977
Other 444 11.12 50
Commercial 1,886 6.94 131
----------------------------------------------------- --------
Total loans held in portfolio 239,094 6.50 15,533
Other 5,220 4.90 256
----------------------------------------------------- --------
Total interest-earning assets 312,178 6.38 19,907
Noninterest-earning assets:
Mortgage servicing rights 7,667
Goodwill 8,489
Other assets 20,424
-----------------------------------------------------
Total assets $348,758
=====================================================
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits $ 36,477 2.63 960
Savings and money market deposits 48,866 2.96 1,446
Time deposits 84,106 4.59 3,857
----------------------------------------------------- --------
Total interest-bearing deposits 169,449 3.70 6,263
Federal funds purchased and commercial
paper 7,347 5.06 371
Securities sold under agreements to
repurchase 15,257 5.12 781
Advances from Federal Home Loan Banks 56,619 4.99 2,828
Other 28,796 5.36 1,543
----------------------------------------------------- --------
Total interest-bearing liabilities 277,468 4.25 11,786
--------
Noninterest-bearing sources:
Noninterest-bearing deposits 34,380
Other liabilities 8,865
Minority interests 1,639
Stockholders' equity 26,406
-----------------------------------------------------
Total liabilities and stockholders'
equity $348,758
=====================================================
Net interest spread and net interest
income 2.13 $ 8,121
========
Impact of noninterest-bearing sources 0.47
Net interest margin 2.60
_______________________________
(1) Nonaccrual assets and related income, if any, are included in
their respective categories.
(2) The average balance and yield are based on average amortized cost
balances.
(3) Capitalized interest recognized in earnings that resulted from
negative amortization within the Option ARM portfolio totaled
$1.41 billion and $1.07 billion for the years ended December 31,
2007 and December 31, 2006.
(4) Excludes home loans and home equity loans and lines of credit in
the subprime mortgage channel.
(5) Represents mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name and held in the investment portfolio.
(6) Represents loans to builders for the purpose of financing the
acquisition, development and construction of single-family
residences for sale and construction loans made directly to the
intended occupant of a single-family residence.
WM-11
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Change
from
Sept. 30,
2007 to
Dec. 31, Dec. 31, Sept. 30,
2007 2007 2007
-----------------------------------------------------
Deposits
Retail deposits:
Checking
deposits:
Noninterest
bearing $ (245) $ 23,476 $ 23,721
Interest
bearing (1,564) 25,713 27,277
-----------------------------------------------------
Total
checking
deposits (1,809) 49,189 50,998
Savings and
money market
deposits 1,627 44,987 43,360
Time
deposits(1) (1,330) 49,410 50,740
-----------------------------------------------------
Total
retail
deposits (1,512) 143,586 145,098
Commercial
business and
other deposits (5,269) 11,267 16,536
Brokered
deposits:
Consumer 605 18,089 17,484
Institutional (5,592) 2,515 8,107
Custodial and
escrow
deposits(2) (586) 6,469 7,055
-----------------------------------------------------
Total
deposits $(12,354) $181,926 $194,280
=====================================================
June 30, Mar. 31, Dec. 31,
2007 2007 2006
-------------------------------------------------
Deposits
Retail deposits:
Checking
deposits:
Noninterest
bearing $ 24,142 $ 24,400 $ 22,838
Interest
bearing 29,592 31,523 32,723
-------------------------------------------------
Total
checking
deposits 53,734 55,923 55,561
Savings and
money market
deposits 43,617 44,058 41,943
Time
deposits(1) 48,140 47,262 46,821
-------------------------------------------------
Total
retail
deposits 145,491 147,243 144,325
Commercial
business and
other deposits 19,186 17,741 15,175
Brokered
deposits:
Consumer 17,153 18,995 22,299
Institutional 11,025 17,256 22,339
Custodial and
escrow
deposits(2) 8,525 8,974 9,818
-------------------------------------------------
Total
deposits $201,380 $210,209 $213,956
=================================================
(1) Weighted average remaining maturity of time deposits was 7 months
at December 31, 2007 and at September 30, 2007, 8 months at June
30, 2007 and 9 months at March 31, 2007 and December 31, 2006.
(2) Substantially all custodial and escrow deposits reside in
noninterest-bearing checking accounts.
Dec. 31, Sept. 30, June 30,
2007 2007 2007
-------------------------------------------------------------
Retail Deposit
Accounts (number of
accounts)
Noninterest-
bearing
checking 10,960,270 10,824,548 10,449,887
Interest-bearing
checking 1,273,673 1,334,902 1,399,203
Savings and
money market 7,118,349 7,087,311 6,936,870
-------------------------------------------------------------
Total
transaction
accounts,
end of
period(1) 19,352,292 19,246,761 18,785,960
=============================================================
Net change in
noninterest-
bearing
checking
accounts 135,722 374,661 466,574
Net change in
checking
accounts 74,493 310,360 406,243
Mar. 31, Dec. 31,
2007 2006
-----------------------------------------------
Retail Deposit
Accounts (number of
accounts)
Noninterest-
bearing
checking 9,983,313 9,611,706
Interest-bearing
checking 1,459,534 1,503,365
Savings and
money market 6,708,784 6,525,772
-----------------------------------------------
Total
transaction
accounts,
end of
period(1) 18,151,631 17,640,843
===============================================
Net change in
noninterest-
bearing
checking
accounts 371,607 208,634
Net change in
checking
accounts 327,776 179,784
_______________________________
(1) Transaction accounts include retail checking, small business
checking, retail savings and small business savings.
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
-------------------------------------------------------------------
Retail Banking
Stores
Stores, beginning
of period 2,212 2,235 2,228 2,225 2,225
Stores opened
during the
quarter 50 10 11 6 81 (1)
Stores closed
during the
quarter (5) (33) (4) (3) (81)
-------------------------------------------------------------------
Stores, end of
period 2,257 2,212 2,235 2,228 2,225
===================================================================
(1) Includes 26 retail banking stores acquired through the merger with
Commercial Capital Bancorp.
WM-12
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
2007 2007 2007 2007 2006
----------------------------------------------------------------------
Loan Volume
Home loans:
Short-term
adjustable-rate
loans(1):
Option ARMs $ 2,372 $ 5,865 $ 7,888 $ 7,777 $ 9,487
Other ARMs 10 111 22 36 13
----------------------------------------------------------------------
Total short-term
adjustable-rate
loans 2,382 5,976 7,910 7,813 9,500
Medium-term
adjustable-rate
loans(2) 7,545 10,177 14,953 13,567 17,323
Fixed-rate loans 7,382 6,176 8,172 8,824 7,351
----------------------------------------------------------------------
Total home loan
volume 17,309 22,329 31,035 30,204 34,174
Home equity loans and
lines of credit 4,619 8,544 9,988 7,600 6,944
Home construction(3) 378 483 426 298 298
Multi-family 3,412 2,856 3,067 2,663 2,977
Other real estate 1,487 1,285 1,246 1,080 1,182
----------------------------------------------------------------------
Total loans
secured by real
estate(4) 27,205 35,497 45,762 41,845 45,575
Commercial 272 276 356 289 274
----------------------------------------------------------------------
Total loan
volume $27,477 $35,773 $46,118 $42,134 $45,849
======================================================================
Loan Volume by Channel
Retail $17,341 $21,223 $24,707 $21,171 $22,417
Wholesale 9,536 13,387 17,020 14,746 16,834
Purchased 600 1,163 4,391 6,217 6,398
Correspondent - - - - 200
----------------------------------------------------------------------
Total loan
volume by
channel $27,477 $35,773 $46,118 $42,134 $45,849
======================================================================
Refinancing Activity(5)
Home loan refinancing $12,297 $14,722 $22,637 $22,552 $25,060
Home equity loans and
lines of credit 46 143 157 550 599
Home construction
loans 30 30 20 12 2
Multi-family and other
real estate 1,436 1,225 1,378 1,131 1,254
----------------------------------------------------------------------
Total
refinancing $13,809 $16,120 $24,192 $24,245 $26,915
======================================================================
(1) Short-term adjustable-rate loans reprice within one year.
(2) Medium-term adjustable-rate loans reprice after one year.
(3) Represents loans to builders for the purpose of financing the
acquisition, development and construction of single-family
residences for sale and construction loans made directly to the
intended occupant of a single-family residence.
(4) Includes mortgage loans purchased from recognized subprime lenders
and mortgage loans originated under the Long Beach Mortgage name
of $22 million, $483 million, $2.45 billion, $3.48 billion and
$6.07 billion for the three months ended December 31, 2007,
September 30, 2007, June 30, 2007, March 31, 2007 and December
31, 2006.
(5) Includes loan refinancing entered into by both new and pre-
existing loan customers.
WM-13
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Year Ended
----------------------------------------------------------------------
Dec. 31, Dec. 31,
2007 2006
----------------------------------------------------------------------
Loan Volume
Home loans:
Short-term adjustable-rate loans(1):
Option ARMs $ 23,902 $ 42,594
Other ARMs 180 3,384
----------------------------------------------------------------------
Total short-term adjustable-rate loans 24,082 45,978
Medium-term adjustable-rate loans(2) 46,242 64,936
Fixed-rate loans 30,554 47,469
----------------------------------------------------------------------
Total home loan volume 100,878 158,383
Home equity loans and lines of credit 30,752 31,037
Home construction(3) 1,584 1,481
Multi-family 11,997 9,428
Other real estate 5,097 3,668
----------------------------------------------------------------------
Total loans secured by real estate(4) 150,308 203,997
Commercial 1,194 1,088
----------------------------------------------------------------------
Total loan volume $151,502 $205,085
======================================================================
Loan Volume by Channel
Retail $ 84,442 $ 89,688
Wholesale 54,690 64,501
Purchased 12,370 37,310
Correspondent - 13,586
----------------------------------------------------------------------
Total loan volume by channel $151,502 $205,085
======================================================================
Refinancing Activity(5)
Home loan refinancing $ 72,209 $102,589
Home equity loans and lines of credit 897 1,665
Home construction loans 91 39
Multi-family and other real estate 5,169 3,590
----------------------------------------------------------------------
Total refinancing $ 78,366 $107,883
======================================================================
(1) Short-term adjustable-rate loans reprice within one year.
(2) Medium-term adjustable-rate loans reprice after one year.
(3) Represents loans to builders for the purpose of financing the
acquisition, development and construction of single-family
residences for sale and construction loans made directly to the
intended occupant of a single-family residence.
(4) Includes mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name of $6.44 billion and $30.76 billion for the years
ended December 31, 2007 and December 31, 2006.
(5) Includes loan refinancing entered into by both new and pre-
existing loan customers.
WM-14
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Change
from
Sept. 30,
2007 to
Dec. 31, Dec. 31, Sept. 30, June 30,
2007 2007 2007 2007
------------------------------------------------------------ ---------
Loans Held in Portfolio
Loans secured by real
estate:
Home:
Short-term adjustable-
rate loans(1):
Option ARMs(2) $ (877) $ 56,969 $ 57,846 $ 53,455
Other ARMs 753 16,231 15,478 13,538
------------------------------------------------------------ ---------
Total short-term
adjustable-rate
loans (124) 73,200 73,324 66,993
Medium-term adjustable-
rate loans(3) 3,266 41,274 38,008 29,647
Fixed-rate loans 192 12,005 11,813 9,505
------------------------------------------------------------ ---------
Total home loans 3,334 126,479 123,145 106,145
Home equity loans and
lines of credit 1,657 63,488 61,831 58,631
Home construction(4) 116 2,226 2,110 2,058
Multi-family 923 31,754 30,831 29,290
Other real estate 1,189 9,524 8,335 6,879
------------------------------------------------------------ ---------
Total loans secured
by real estate(5) 7,219 233,471 226,252 203,003
Consumer:
Credit card 40 8,831 8,791 9,913
Other (19) 205 224 243
Commercial 14 1,879 1,865 1,835
------------------------------------------------------------ ---------
Total loans held in
portfolio(6) 7,254 244,386 237,132 214,994
Less: allowance for loan
losses (682) (2,571) (1,889) (1,560)
------------------------------------------------------------ ---------
Total loans held in
portfolio, net $6,572 $241,815 $235,243 $213,434
============================================================ =========
Mar. 31, Dec. 31,
2007 2006
---------------------------------------------------
Loans Held in Portfolio
Loans secured by real estate:
Home:
Short-term adjustable-rate
loans(1):
Option ARMs(2) $ 58,130 $ 63,557
Other ARMs 13,501 15,091
---------------------------------------------------
Total short-term
adjustable-rate loans 71,631 78,648
Medium-term adjustable-
rate loans(3) 29,924 29,774
Fixed-rate loans 9,506 9,782
---------------------------------------------------
Total home loans 111,061 118,204
Home equity loans and lines
of credit 56,123 54,924
Home construction(4) 2,071 2,082
Multi-family 29,515 30,161
Other real estate 6,728 6,745
---------------------------------------------------
Total loans secured by
real estate(5) 205,498 212,116
Consumer:
Credit card 9,490 10,861
Other 261 276
Commercial 1,772 1,707
---------------------------------------------------
Total loans held in
portfolio(6) 217,021 224,960
Less: allowance for loan
losses (1,540) (1,630)
---------------------------------------------------
Total loans held in
portfolio, net $215,481 $223,330
===================================================
(1) Short-term adjustable-rate loans reprice within one year.
(2) The total amount by which the unpaid principal balance of Option
ARM loans exceeded their original principal amount was $1.73
billion, $1.50 billion, $1.30 billion, $1.12 billion and $888
million at December 31, 2007, September 30, 2007, June 30, 2007,
March 31, 2007 and December 31, 2006.
(3) Medium-term adjustable-rate loans reprice after one year.
(4) Represents loans to builders for the purpose of financing the
acquisition, development and construction of single-family
residences for sale and construction loans made directly to the
intended occupant of a single-family residence.
(5) Includes subprime mortgage channel loans, comprising mortgage
loans purchased from recognized subprime lenders and mortgage
loans originated under the Long Beach Mortgage name and held in
the investment portfolio as follows:
-------------------------------------------------------------------
Subprime Mortgage
Channel Dec. 31, Sept. 30, June 30, Mar. 31,Dec. 31,
2007 2007 2007 2007 2006
-------------------------------------------------------------------
Home loans $16,092 $17,285 $17,602 $17,610 $18,725
Home equity loans
and lines of
credit 2,525 2,711 2,855 2,749 2,042
-------------------------------------------------------------------
Total $18,617 $19,996 $20,457 $20,359 $20,767
===================================================================
(6) Includes net unamortized deferred loan costs of $1.45 billion,
$1.44 billion, $1.58 billion, $1.71 billion and $1.88 billion at
December 31, 2007, September 30, 2007, June 30, 2007, March 31,
2007 and December 31, 2006.
WM-15
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Change from
Sept. 30, Weighted Weighted
2007 to Average Average
Dec. 31, Dec. 31, Coupon Sept. 30, Coupon
2007 2007 Rate 2007 Rate
----------------------------------------------------------------------
Selected Loans
Secured by Real
Estate
Home loans held in
portfolio:
Short-term
adjustable-rate
loans(1):
Option ARMs $ (877) $ 56,969 7.69% $ 57,846 7.61%
Other ARMs 753 16,231 6.99 15,478 7.19
----------------------------------------- ----------
Total short-
term
adjustable-
rate loans (124) 73,200 7.54 73,324 7.52
Medium-term
adjustable-rate
loans(2) 3,266 41,274 6.45 38,008 6.33
Fixed-rate loans 192 12,005 6.75 11,813 6.74
----------------------------------------- ----------
Total home
loans held
in
portfo
