SEATTLE--(BUSINESS WIRE)--
On Apr. 14, WaMu (NYSE:WM) closed the previously announced $7
billion capital issuance to TPG Capital and to other investors,
including many of WaMu's top institutional shareholders. With the
proceeds of the offering, the company's capital ratios are expected to
remain well above its targeted levels while it absorbs elevated credit
costs in its loan portfolios in 2008 and 2009. At the same time, the
company will continue to grow its leading, national banking franchise.
"The completion of this offering demonstrates the confidence these
major investors have expressed in WaMu's underlying value and its
growth potential," said WaMu Chairman and Chief Executive Officer
Kerry Killinger. "This substantial new capital will position us for a
return to profitability as elevated credit costs subside. With the
support of these investors, we have every confidence in our ability to
deal with today's market conditions and restore shareholder value."
WaMu today announced a first quarter 2008 net loss of $1.14
billion, or $1.40 per diluted share, compared with the fourth quarter
net loss of $1.87 billion, or $2.19 per diluted share, and net income
of $784 million, or $0.86 per diluted share, during the first quarter
of 2007. The quarter's financial results reflect a higher level of
provisioning as steep declines in home values led to further
deterioration in mortgage credit markets.
"By issuing $7 billion of additional capital, we have taken
decisive actions to withstand this period of unprecedented credit
losses, while maintaining strong liquidity," said Killinger. "We also
recently announced plans to further advance our retail-focused
strategy by:
-- Investing in and growing our retail banking stores and call
center production;
-- Closing all of our remaining freestanding home loan offices;
and
-- Exiting wholesale lending - our broker channel."
Killinger added that the Retail Bank, Card Services and Commercial
businesses again delivered steady performance. During the quarter,
retail deposits grew $8.1 billion to $151.7 billion and 256,069 net
new checking accounts were opened - a good start to reaching our goal
of adding more than a million net new checking accounts this year.
FIRST QUARTER FINANCIAL SUMMARY AND HIGHLIGHTS
----------------------------------------------------------------------
Selected Financial
Summary Three Months Ended
---------------------------------------------------
($ in millions,
except per share Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
data) 2008 2007 2007 2007 2007
---------- ---------- --------- --------- ---------
Income Statement
Net interest
income $ 2,175 $ 2,047 $ 2,014 $ 2,034 $ 2,081
Provision for loan
losses 3,511 1,534 967 372 234
Noninterest income 1,569 1,365 1,379 1,758 1,541
Noninterest
expense 2,152 4,166 2,191 2,138 2,105
Minority interest
expense 75 65 53 42 43
---------- ---------- --------- --------- ---------
Income (loss)
before income
taxes (1,994) (2,353) 182 1,240 1,240
Income taxes (856) (486) (4) 410 456
---------- ---------- --------- --------- ---------
Net income (loss) $ (1,138) $ (1,867) $ 186 $ 830 $ 784
Diluted earnings
(loss) per common
share $ (1.40) $ (2.19) $ 0.20 $ 0.92 $ 0.86
Balance Sheet
Total assets, end
of period $319,668 $327,913 $330,110 $312,219 $319,985
Average total
assets 319,928 325,276 320,475 316,004 331,905
Average interest-
earning assets 285,265 287,988 283,263 279,836 295,700
Average total
deposits 184,304 185,636 198,649 206,765 210,764
Profitability Ratios
Return on average
common equity (23.27)% (32.64)% 3.03% 13.74% 12.99%
Net interest
margin 3.05 2.86 2.86 2.91 2.80
Efficiency ratio 57.49 122.13 64.55 56.38 58.13
Nonperforming
assets/total
assets 2.87 2.17 1.65 1.29 1.02
Tangible
equity/total
tangible assets 6.40 6.67 5.60 6.07 5.78
----------------------------------------------------------------------
-- Net interest margin expands by 19 basis points to 3.05
percent. Net interest income of $2.18 billion was up from the
previous quarter as the growth in the net interest margin more
than offset the effects of the 1 percent drop in average
interest-earning assets. The 19 basis point increase in the
net interest margin reflected significantly lower wholesale
borrowing costs following the 200 basis point reduction in the
Federal Funds rate since the beginning of the year.
-- Depositor and other retail banking fees up 6 percent
year-over-year. During the first quarter, WaMu attracted
256,069 net new checking accounts, a good start towards
reaching its goal of adding more than 1 million net new
accounts this year. This growth, along with the company's
success in building profitable customer relationships through
superior service and cross sales, led to a 6 percent
year-over-year increase in depositor and other retail banking
fees. The decline in depositor fees from the fourth quarter
reflected normal seasonality and slowing consumer spending.
-- Market valuation losses decline. Reflecting continued
illiquidity of the capital markets, the company reported net
losses of $216 million in its trading securities, down from a
loss of $267 million in the fourth quarter. Market conditions
also resulted in the recording of $67 million in impairment
losses on mortgage securities designated as available for
sale, which was more than offset by $85 million of net gains
on the sale of securities, a significant improvement from
fourth quarter net losses of $261 million.
-- Provision increases as economy weakens and home values
continue to slide. The company's first quarter provision for
loan losses of $3.51 billion more than doubled from the $1.53
billion provision in the fourth quarter of last year. The
larger provision reflects an increase in delinquencies as the
economy weakens, as well as a higher level of losses as home
prices declined sharply from the start of the year. During the
quarter, net charge-offs increased 83 percent over the prior
quarter to $1.37 billion. At the end of the quarter,
nonperforming assets as a percentage of total assets grew to
2.87 percent from 2.17 percent at the end of 2007. The
quarter's provision was well in excess of net charge-offs and
brought the allowance for loan losses to $4.71 billion at the
end of the quarter from $2.57 billion at the end of 2007.
-- Noninterest expense down 4 percent. Noninterest expense was
$2.15 billion in the quarter. This represents a 4 percent
decline when compared with adjusted noninterest expense of
$2.25 billion in the fourth quarter. The adjustments exclude
the $1.78 billion charge for the writedown of all goodwill
within the Home Loans Group and $143 million associated with
the resizing of the Home Loans business along with other
reductions in corporate support functions. During the quarter,
the company reduced the number of employees 7 percent while
continuing to grow the retail banking franchise. With the rise
in the number of foreclosures and drop in home prices,
foreclosure costs increased to $155 million from $133 million
in the fourth quarter.FIRST QUARTER SEGMENT RESULTS
----------------------------------------------------------------------
Retail Banking Group
Selected Segment
Information Three Months Ended
-----------------------------------------------
($ in millions, except
accounts and Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
households) 2008 2007 2007 2007 2007
--------- --------- --------- -------- --------
Net interest income $ 1,203 $ 1,262 $ 1,306 $ 1,291 $ 1,284
Provision for loan
losses 2,300 663 318 91 62
Noninterest income 775 850 833 820 751
Inter-segment revenue 9 5 9 16 18
Noninterest expense 1,221 1,212 1,149 1,131 1,069
--------- --------- --------- -------- --------
Income (loss) before
income taxes (1,534) 242 681 905 922
Income taxes (491) (39) 225 340 346
--------- --------- --------- -------- --------
Net income (loss) $ (1,043) $ 281 $ 456 $ 565 $ 576
Average loans $142,720 $145,486 $147,357 $149,716 $155,206
Average retail
deposits 146,734 142,733 144,921 145,252 144,030
Net change in number
of retail checking
accounts 256,069 74,493 310,360 406,243 327,776
Net change in retail
households 154,000 37,000 161,000 228,000 195,000
----------------------------------------------------------------------
-- Results reflect weaker economy. Net interest income was down
slightly from the fourth quarter due to the lag in the
downward repricing of deposits as short-term interest rates
fell. The major component of noninterest income is depositor
fees, which totaled $704 million during the first quarter,
down from the fourth quarter reflecting normal seasonality,
but were up 6 percent year-over-year. Noninterest expense was
up slightly as the company continued to invest in its retail
banking network.
-- Further declines in home prices leads to increase in
provision. The quarter's net loss reflected the significant
increase in the provision as deterioration in the company's
home loan and home equity portfolios accelerated during the
quarter.
-- Growth in net new checking accounts on pace to reach annual
goal. During the first quarter, the Retail Bank added 256,069
net new checking accounts, up from 74,493 in the fourth
quarter as that quarter contained end of year inactive account
clean up. Average retail deposits increased by $4.0 billion
during the quarter reflecting both money market and CD growth.
Retail deposit balances at the end of the quarter were up
$8.07 billion to $151.65 billion while the company reduced
average consolidated deposit costs by nearly 30 basis points
from the prior quarter.Card Services Group (managed basis)
Selected Segment
Information Three Months Ended
---------------------------------------------
Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
($ in millions) 2008 2007 2007 2007 2007
-------- -------- --------- -------- --------
Net interest income $ 765 $ 694 $ 674 $ 649 $ 641
Provision for loan
losses 626 591 611 523 388
Noninterest income 418 315 400 393 474
Inter-segment expense 5 - - - -
Noninterest expense 260 338 364 306 329
-------- -------- --------- -------- --------
Income before income
taxes 292 80 99 213 398
Income taxes 93 (12) 33 80 149
-------- -------- --------- -------- --------
Net income $ 199 $ 92 $ 66 $ 133 $ 249
Average managed
receivables $26,889 $26,665 $25,718 $24,234 $23,604
Period end managed
receivables 26,379 27,239 26,227 24,987 23,597
30+ day managed
delinquency rate 6.89% 6.47% 5.73% 5.11% 5.15%
Managed net credit
losses 9.32 6.90 6.37 6.49 6.31
----------------------------------------------------------------------
-- Solid quarter includes VISA settlement. The growth in net
interest income was due to lower funding costs driven by a
significant drop in short-term interest rates. Noninterest
income was up from the prior quarter due to an $85 million
benefit received from the company's share of VISA's IPO, while
noninterest expense was down from the fourth quarter due to
slower hiring and delays in marketing spend. Also, noninterest
expense during the first quarter included a $38 million
partial recovery of the VISA litigation expense recorded in
the prior year.
-- Retail channel focus of new account growth. During the
quarter, Card Services opened 666,407 new credit card
accounts, 13,696 more than in the prior quarter as the company
directed its card growth efforts to its core retail banking
customer base and scaled back promotions on a national level
to enhance the risk profile of the portfolio. WaMu's Retail
Bank customers accounted for 38 percent of total account
production during the first quarter. Total managed receivables
decreased 3 percent during the quarter to $26.38 billion as a
result of lower purchase volumes with the softening economy
and the seasonal increase in payments.
-- Credit losses up with slowing economy. Managed net credit
losses and the 30+ day managed delinquency rate increased from
prior periods reflecting the weakening economy and higher
unemployment. The increase in the provision was also driven by
the higher delinquency levels, partially offset by the decline
in ending managed receivables.Commercial Group
Selected Segment
Information Three Months Ended
---------------------------------------------
Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
($ in millions) 2008 2007 2007 2007 2007
-------- -------- --------- -------- --------
Net interest income $ 196 $ 200 $ 200 $ 208 $ 211
Provision for loan
losses 29 19 12 2 (10)
Noninterest income (8) (10) (34) 63 15
Noninterest expense 68 66 67 74 74
-------- -------- --------- -------- --------
Income before income
taxes 91 105 87 195 162
Income taxes 29 11 28 73 61
-------- -------- --------- -------- --------
Net income $ 62 $ 94 $ 59 $ 122 $ 101
Loan volume $ 2,835 $ 4,800 $ 4,054 $ 4,348 $ 3,671
Average loans 40,934 40,129 38,333 38,789 38,641
----------------------------------------------------------------------
-- Solid quarterly results. Net interest income of $196 million
was down modestly from the prior quarter due to lower
noninterest bearing deposits. Noninterest income slightly
improved from the prior quarter as a result of lower trading
and hedging losses, partially offset by lower loan sales
volume.
-- Provision up slightly. The provision for loan losses of $29
million reflected increased delinquencies and portfolio
growth, as the company holds more of its loan production in
portfolio.
-- Reduced loan volume. Loan volume of $2.84 billion was down 41
percent from the prior quarter reflecting secondary market
illiquidity and prudent management of loan portfolio growth.Home Loans Group
Selected Segment
Information Three Months Ended
---------------------------------------------
Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
($ in millions) 2008 2007 2007 2007 2007
-------- -------- --------- -------- --------
Net interest income $ 250 $ 229 $ 191 $ 211 $ 244
Provision for loan
losses 907 511 323 101 49
Noninterest income 319 329 183 389 161
Inter-segment expense 4 5 9 16 18
Noninterest expense(a) 499 2,319 554 547 522
-------- -------- --------- -------- --------
Income (loss) before
income taxes (841) (2,277) (512) (64) (184)
Income taxes (269) (312) (169) (24) (69)
-------- -------- --------- -------- --------
Net (loss) $ (572) $(1,965) $ (343) $ (40) $ (115)
Loan volume $13,774 $19,089 $26,434 $35,938 $33,780
Average loans 55,672 52,278 43,737 43,312 53,254
(a) Includes $1.78 billion goodwill charge in fourth quarter 2007.
----------------------------------------------------------------------
-- Improved quarter for Home Loans. Net interest income was up
slightly from the fourth quarter reflecting lower funding
costs that were largely offset by lower loan yields.
Noninterest income was down slightly from the prior quarter
due to additional writedowns on trading securities resulting
from the continued market dislocation and higher MSR hedging
costs. The impact of these two items was partially offset by
improved gain on sale of $122 million during the quarter,
which included $79 million in gains from the adoption of a new
accounting pronouncement. Despite the increase in foreclosure
costs, expenses were down 8 percent from the fourth quarter
(excluding the $1.78 billion goodwill charge) due to actions
taken in the fourth quarter to resize the Home Loans business
in response to the smaller mortgage market. The number of
employees decreased to 9,159 at the end of the first quarter
from 11,812 at the end of 2007, and 13,449 as of Mar. 31,
2007.
-- Provision continues to reflect housing stress. Increasing
subprime delinquencies along with higher loss severity rates
drove the loan loss provision to $907 million from $511
million in the prior quarter.
-- Home loan volume reflects change in mix. Home loan segment
volume of $13.77 billion in the first quarter was down from
the prior quarter due to the decline in Option ARM, hybrid and
home equity lending. Fixed-rate loans comprised the majority
of first quarter volume as the company placed more emphasis on
originating GSE conforming loans and borrowers took advantage
of lower interest rates.
-- Further consolidation of Home Loans business. The company
recently announced plans to further consolidate its Home Loans
business, including: -- Exiting its wholesale channel and closing its home loan
centers;
-- Focusing its mortgage operations in its core retail
banking network and direct to consumer channel;
-- Consolidating certain loan fulfillment centers, resulting
in 3 loan fulfillment center locations.
COMPANY UPDATES
-- On Apr. 15, WaMu's Board of Directors declared a cash dividend
of $0.01 per share on the company's common stock. Dividends on
the common stock are payable on May 15, 2008 to shareholders
of record as of Apr. 30, 2008. In addition to declaring a
dividend on the company's common stock, the company will pay a
dividend of $0.2528 per depository share of Series K Preferred
Stock to be payable on Jun. 16, 2008 to holders of record on
Jun. 2, 2008, a dividend of $19.8056 per share of Series R
Preferred Stock to be payable on Jun. 16, 2008 to holders of
record on Jun. 2, 2008, and a dividend of $0.01 per share, on
an as converted basis, on the company's Series S and Series T
Preferred Stock to be payable on May 15, 2008 to shareholders
of record as of Apr. 30, 2008.
-- On Apr. 15, WaMu director, Mary E. Pugh, who served on the
WaMu Board of Directors for nine years and as Chair of its
Finance Committee for three years, resigned from the Board.
-- On Apr. 15, the term of WaMu director, Anne V. Farrell,
expired. Ms. Farrell, who served on the Board for thirteen
years, did not stand for reelection because she reached the
Board's mandatory retirement age.
-- On Apr. 8, WaMu's Board of Directors announced its intention
to appoint TPG Partner David Bonderman (65) to the company's
Board. In addition, Larry Kellner (49), chairman and chief
executive officer of Continental Airlines and former executive
vice president and chief financial officer of American Savings
Bank, will become a board observer at TPG's request.
-- On Mar. 14, the United States Court of Federal Claims
published its written decision in the case of Anchor Savings
Bank, FSB vs. The United States of America, awarding
Washington Mutual Bank$382 million for damages, and an
additional amount for taxes that will be determined by the
court. A significant portion of the award will benefit
outstanding warrants. The government is expected to appeal the
decision, a lengthy process that could delay, reduce or negate
the award.
-- On Mar. 3, WaMu's Board of Directors announced the election of
Stephen Chazen (61) to the company's Board. Under Washington
law, Chazen will stand for re-election with other directors at
the company's annual shareholders' meeting. Chazen has been
designated a member of the Board's Audit and Finance
Committees. Chazen serves as president and chief financial
officer of Occidental Petroleum Corporation, an international
company based in Los Angeles.
ABOUT WAMU
WaMu, through its subsidiaries, is one of the nation's leading
consumer and small business banks. At Mar. 31, 2008, WaMu and its
subsidiaries had assets of $319.67 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 Tuesday, Apr. 15, 2008, at 6:30 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
630-395-0029. 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
recording of the conference call will be available from approximately
8:30 p.m. ET on Tuesday, Apr. 15, 2008 through 11:59 p.m. on Friday,
Apr. 25, 2008. The recorded message will be available at 866-360-3314.
Callers from outside the United States may dial 203-369-0168.
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 2007 Annual Report on
Form 10-K which include:
-- Economic conditions that negatively affect housing prices and
the job market that have resulted, and may continue to result,
in a deterioration in credit quality of the Company's loan
portfolio.
-- Access to market-based liquidity sources that may be
negatively impacted if market conditions persist or if further
ratings downgrades occur and could lead to increased funding
costs and reduced gain on sale.
-- The need to raise additional capital due to significant
additional losses which could have a dilutive effect on
existing shareholders and could affect the ability to pay
dividends.
-- Changes in interest rates.
-- Features of certain of the Company's loan products that may
result in increased credit risk.
-- Estimates used by the Company to determine the fair value of
certain of our assets that may prove to be imprecise and
result in significant changes in valuation.
-- Risks related to the Company's credit card operations that
could adversely affect the credit card portfolio and our
ability to continue growing the credit card business.
-- Operational risk which may result in incurring financial and
reputational losses.
-- Failure to comply with laws and regulations.
-- Changes in the regulation of financial services companies,
housing government-sponsored enterprises and credit card
lenders.
-- General business, economic and market conditions and continued
deterioration in these conditions.
-- Damage to the Company's professional reputation and business
as a result of allegations and negative public opinion as well
as pending and threatened litigation.
-- Significant competition from banking and nonbanking companies.
There are other factors not described in our 2007 Form 10-K 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
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
PROFITABILITY
Net income (loss) $ (1,138) $ (1,867) $ 186 $ 830 $ 784
Net interest
income 2,175 2,047 2,014 2,034 2,081
Noninterest
income 1,569 1,365 1,379 1,758 1,541
Noninterest
expense 2,152 4,166 2,191 2,138 2,105
Diluted earnings
per common share $ (1.40) $ (2.19) $ 0.20 $ 0.92 $ 0.86
Diluted weighted
average number
of common shares
outstanding (in
thousands) 856,923 855,532 876,002 893,090 899,706
Net interest
margin on a
taxable-
equivalent
basis(1) 3.05 % 2.86 % 2.86 % 2.91 % 2.80 %
Dividends
declared per
common share $ 0.15 $ 0.56 $ 0.56 $ 0.55 $ 0.54
Book value per
common share
(period end)(2) 21.74 24.55 27.18 27.27 27.30
Return on average
assets (1.42)% (2.30)% 0.23 % 1.05 % 0.95 %
Return on average
common equity (23.27) (32.64) 3.03 13.74 12.99
Efficiency
ratio(3) 57.49 122.13 64.55 56.38 58.13
ASSET QUALITY
Nonperforming
assets(4) to
total assets 2.87 % 2.17 % 1.65 % 1.29 % 1.02 %
Allowance as a
percentage of
loans held in
portfolio 1.94 1.05 0.80 0.73 0.71
CREDIT PERFORMANCE
Provision for
loan losses $ 3,511 $ 1,534 $ 967 $ 372 $ 234
Net charge-offs 1,368 747 421 271 183
CAPITAL ADEQUACY
Capital Ratios
for WMI:
Tangible equity
to total
tangible
assets(5) 6.40 % 6.67 % 5.60 % 6.07 % 5.78 %
Tier 1 capital
to average
total assets
(leverage)(6) 6.56 6.84 5.86 6.09 5.87
Total risk-
based capital
to total risk-
weighted
assets(6) 12.24 12.34 10.67 11.04 11.17
Capital Ratios
for WMB (well-
capitalized
minimum)(7):
Tier 1 capital
to adjusted
total assets
(leverage)
(5.00%) 6.94 7.05 6.41 7.52 7.04
Adjusted Tier 1
capital to
total risk-
weighted
assets (6.00%) 8.11 8.33 7.62 8.77 8.32
Total risk-
based capital
to total risk-
weighted
assets
(10.00%) 12.20 12.22 11.26 12.80 12.37
SUPPLEMENTAL DATA
Average balance
sheet:
Total loans
held in
portfolio $244,186 $241,690 $227,348 $216,004 $222,617
Total interest-
earning assets 285,265 287,988 283,263 279,836 295,700
Total assets 319,928 325,276 320,475 316,004 331,905
Total deposits 184,304 185,636 198,649 206,765 210,764
Total
stockholders'
equity 24,066 23,947 23,994 24,436 24,407
Period-end
balance sheet:
Total loans
held in
portfolio, net 238,100 241,815 235,243 213,434 215,481
Total assets 319,668 327,913 330,110 312,219 319,985
Total deposits 188,049 181,926 194,280 201,380 210,209
Total
stockholders'
equity 22,449 24,584 23,941 24,210 24,578
Common shares
outstanding at
the end of
period (in
thousands)(8) 882,610 869,036 868,802 875,722 888,111
Employees at
end of period 45,883 49,403 49,748 49,989 49,693
_______________________
(1) Includes taxable-equivalent adjustments primarily related to tax-
exempt income on U.S. states and political subdivisions
securities and loans related to the Company's community lending
and investment activities. The federal statutory tax rate was 35%
for the periods presented.
(2) Excludes six million shares held in escrow.
(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
$3.91 billion, $3.92 billion, $2.94 billion, $2.94 billion and
$2.45 billion at March 31, 2008, December 31, 2007, September 30,
2007, June 30, 2007 and March 31, 2007 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 March 31,
2008 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
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Interest Income
Loans held for
sale $ 87 $ 160 $ 248 $ 421 $ 562
Loans held in
portfolio 3,954 4,156 3,992 3,786 3,900
Available-for-sale
securities 357 380 392 351 332
Trading assets 116 101 108 108 113
Other interest and
dividend income 77 79 116 82 101
----------------------------------------------------------------------
Total interest
income 4,591 4,876 4,856 4,748 5,008
Interest Expense
Deposits 1,329 1,464 1,650 1,723 1,772
Borrowings 1,087 1,365 1,192 991 1,155
----------------------------------------------------------------------
Total interest
expense 2,416 2,829 2,842 2,714 2,927
----------------------------------------------------------------------
Net interest
income 2,175 2,047 2,014 2,034 2,081
Provision for loan
losses 3,511 1,534 967 372 234
----------------------------------------------------------------------
Net interest
income
(expense)
after
provision for
loan losses (1,336) 513 1,047 1,662 1,847
Noninterest Income
Revenue from sales
and servicing of
home mortgage
loans 411 358 161 300 125
Revenue from sales
and servicing of
consumer loans 248 375 418 403 443
Depositor and
other retail
banking fees 704 769 740 720 665
Credit card fees 181 214 209 183 172
Securities fees
and commissions 58 63 67 70 60
Insurance income 30 29 29 29 29
Loss on trading
assets (216) (267) (153) (145) (108)
Gain (loss) on
other available-
for-sale
securities 18 (261) (99) 7 35
Other income 135 85 7 191 120
----------------------------------------------------------------------
Total
noninterest
income 1,569 1,365 1,379 1,758 1,541
Noninterest Expense
Compensation and
benefits 914 877 910 977 1,002
Occupancy and
equipment 358 488 371 354 376
Telecommunications
and outsourced
information
services 130 134 135 132 129
Depositor and
other retail
banking losses 63 72 71 58 61
Advertising and
promotion 105 108 125 113 98
Professional fees 39 89 52 55 38
Foreclosed asset
expense 155 133 82 56 39
Goodwill
impairment charge - 1,775 - - -
Other expense 388 490 445 393 362
----------------------------------------------------------------------
Total
noninterest
expense 2,152 4,166 2,191 2,138 2,105
Minority interest
expense 75 65 53 42 43
----------------------------------------------------------------------
Income (loss)
before income
taxes (1,994) (2,353) 182 1,240 1,240
Income taxes (856) (486) (4) 410 456
----------------------------------------------------------------------
Net Income (Loss) $ (1,138) $ (1,867) $ 186 $ 830 $ 784
----------------------------------------------------------------------
Net Income (Loss)
Applicable to
Common Stockholders $ (1,203) $ (1,875) $ 178 $ 822 $ 777
======================================================================
Earnings Per Common
Share:
Basic $ (1.40) $ (2.19) $ 0.21 $ 0.95 $ 0.89
Diluted (1.40) (2.19) 0.20 0.92 0.86
Dividends declared
per common share 0.15 0.56 0.56 0.55 0.54
Basic weighted
average number of
common shares
outstanding (in
thousands) 856,923 855,518 857,005 868,968 874,816
Diluted weighted
average number of
common shares
outstanding (in
thousands) 856,923 855,532 876,002 893,090 899,706
WM-3
Washington Mutual, Inc.
Consolidated Statements of Financial Condition
(dollars in millions)
(unaudited)
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Assets
Cash and cash
equivalents $ 10,089 $ 9,560 $ 11,370 $ 4,167 $ 4,047
Federal funds sold
and securities
purchased under
agreements to
resell 2,527 1,877 4,042 3,267 8,279
Trading assets 2,483 2,768 3,797 5,534 5,290
Available-for-sale
securities, total
amortized cost of
$24,907, $27,789,
$28,725, $28,934
and $22,921:
Mortgage-backed
securities 18,140 19,249 20,562 20,393 16,543
Investment
securities 5,466 8,291 7,844 7,947 6,296
----------------------------------------------------------------------
Total
available-
for-sale
securities 23,606 27,540 28,406 28,340 22,839
Loans held for
sale 4,941 5,403 7,586 19,327 26,874
Loans held in
portfolio 242,814 244,386 237,132 214,994 217,021
Allowance for loan
losses (4,714) (2,571) (1,889) (1,560) (1,540)
----------------------------------------------------------------------
Loans held in
portfolio,
net 238,100 241,815 235,243 213,434 215,481
Investment in
Federal Home Loan
Banks 3,514 3,351 2,808 1,596 2,230
Mortgage servicing
rights 5,726 6,278 6,794 7,231 6,507
Goodwill 7,283 7,287 9,062 9,056 9,052
Other assets 21,399 22,034 21,002 20,267 19,386
----------------------------------------------------------------------
Total assets $319,668 $327,913 $330,110 $312,219 $319,985
======================================================================
Liabilities
Deposits:
Noninterest-
bearing
deposits $ 31,911 $ 30,389 $ 31,341 $ 33,557 $ 34,367
Interest-bearing
deposits 156,138 151,537 162,939 167,823 175,842
----------------------------------------------------------------------
Total deposits 188,049 181,926 194,280 201,380 210,209
Federal funds
purchased and
commercial paper 250 2,003 2,482 3,390 563
Securities sold
under agreements
to repurchase 215 4,148 4,732 9,357 8,323
Advances from
Federal Home Loan
Banks 64,009 63,852 52,530 21,412 24,735
Other borrowings 32,710 38,958 40,887 40,313 39,430
Other liabilities 8,072 8,523 8,313 9,212 9,694
Minority interests 3,914 3,919 2,945 2,945 2,453
----------------------------------------------------------------------
Total
liabilities 297,219 303,329 306,169 288,009 295,407
Stockholders' Equity
Preferred stock 3,392 3,392 492 492 492
Capital surplus -
common stock 2,646 2,630 2,575 2,715 3,121
Accumulated other
comprehensive
loss (1,141) (359) (390) (568) (268)
Retained earnings 17,552 18,921 21,264 21,571 21,233
----------------------------------------------------------------------
Total
stockholders'
equity 22,449 24,584 23,941 24,210 24,578
----------------------------------------------------------------------
Total
liabilities and
stockholders'
equity $319,668 $327,913 $330,110 $312,219 $319,985
======================================================================
WM-4
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
-------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
-------------------------------------------------------------------
Stockholders'
Equity
Rollforward
Balance, beginning
of period $24,584 $23,941 $24,210 $24,578 $26,969
Net income (loss) (1,138) (1,867) 186 830 784
Cumulative effect
from the adoption
of new accounting
pronouncements (36)(1) - - - (6)(2)
Other
comprehensive
income (loss),
net of income
taxes (782) 31 177 (300) 19
Cash dividends
declared on
common stock (130) (482) (485) (484) (477)
Cash dividends
declared on
preferred stock (65) (8) (8) (8) (7)
Cash dividends
returned(3) - 15 - - -
Common stock
repurchased and
retired(4) - - (199) (500) (2,797)
Common stock
issued 16 54 60 94 93
Preferred stock
issued - 2,900 - - -
-------------------------------------------------------------------
Balance, end of
period $22,449 $24,584 $23,941 $24,210 $24,578
===================================================================
(1) As of January 1, 2008, the Company adopted FASB Statement No. 157,
Fair Value Measurements ("Statement No. 157"), EITF Issue No. 06-
4, Accounting for Deferred Compensation and Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements ("Issue 06-4") and EITF Issue No. 06-10, Accounting
for Collateral Assignment Split-Dollar Life Insurance
Arrangements ("Issue 06-10"). The cumulative effect from the
adoption of Statement No. 157, Issue 06-4 and Issue 06-10 was $1
million, $(35) million and $(2) million.
(2) As of January 1, 2007, the Company adopted FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxes.
(3) Represents accumulated dividends on shares returned from escrow.
(4) The Company repurchased zero shares of its common stock during the
three months ended March 31, 2008 and December 31, 2007, and 7.2
million, 13.5 million and 61.4 million shares of its common stock
during the three months ended September 30, 2007, June 30, 2007
and March 31, 2007. At March 31, 2008, the total remaining common
stock repurchase authority was 47.5 million shares.
WM-5
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
RETAIL BANKING GROUP
Condensed income
statement:
Net interest
income $ 1,203 $ 1,262 $ 1,306 $ 1,291 $ 1,284
Provision for
loan losses 2,300 663 318 91 62
Noninterest
income 775 850 833 820 751
Inter-segment
revenue 9 5 9 16 18
Noninterest
expense 1,221 1,212 1,149 1,131 1,069
----------------------------------------------------------------------
Income before
income taxes (1,534) 242 681 905 922
Income taxes (491) (39) 225 340 346
----------------------------------------------------------------------
Net income $ (1,043) $ 281 $ 456 $ 565 $ 576
======================================================================
Performance and
other data:
Efficiency ratio 61.48% 57.25% 53.48% 53.19% 52.08%
Average loans $142,720 $145,486 $147,357 $149,716 $155,206
Average assets 151,609 155,100 157,194 159,515 165,044
Average
deposits:
Checking
deposits:
Noninterest
bearing 23,425 22,748 22,860 23,107 22,331
Interest
bearing 24,306 26,328 28,406 30,282 31,739
----------------------------------------------------------------------
Total checking
deposits 47,731 49,076 51,266 53,389 54,070
Savings and
money market
deposits 47,904 44,623 43,524 43,814 43,103
Time deposits 51,099 49,034 50,131 48,049 46,857
----------------------------------------------------------------------
Average
deposits 146,734 142,733 144,921 145,252 144,030
Loan volume 1,238 3,417 5,172 5,760 4,576
Employees at end
of period 28,736 29,147 28,636 28,523 28,229
CARD SERVICES GROUP
Managed basis(1)
Condensed income
statement:
Net interest
income $ 765 $ 694 $ 674 $ 649 $ 641
Provision for
loan losses 626 591 611 523 388
Noninterest
income 418 315 400 393 474
Inter-segment
expense 5 - - - -
Noninterest
expense 260 338 364 306 329
----------------------------------------------------------------------
Income before
income taxes 292 80 99 213 398
Income taxes 93 (12) 33 80 149
----------------------------------------------------------------------
Net income $ 199 $ 92 $ 66 $ 133 $ 249
======================================================================
Performance and
other data:
Efficiency ratio 22.04% 33.51% 33.91% 29.33% 29.51%
Average loans $ 26,889 $ 26,665 $ 25,718 $ 24,234 $ 23,604
Average assets 29,244 28,961 28,206 26,762 26,039
Employees at end
of period 2,881 2,860 2,878 2,827 2,579
Securitization
adjustments
Condensed income
statement:
Net interest
income $ (503) $ (454) $ (456) $ (459) $ (414)
Provision for
loan losses (470) (335) (288) (294) (282)
Noninterest
income 33 119 168 165 132
Performance and
other data:
Average loans (17,391) (16,007) (14,488) (13,888) (12,507)
Average assets (15,075) (14,180) (12,841) (12,287) (10,961)
Adjusted basis
Condensed income
statement:
Net interest
income $ 262 $ 240 $ 218 $ 190 $ 227
Provision for
loan losses 156 256 323 229 106
Noninterest
income 451 434 568 558 606
Inter-segment
expense 5 - - - -
Noninterest
expense 260 338 364 306 329
----------------------------------------------------------------------
Income before
income taxes 292 80 99 213 398
Income taxes 93 (12) 33 80 149
----------------------------------------------------------------------
Net income $ 199 $ 92 $ 66 $ 133 $ 249
======================================================================
Performance and
other data:
Average loans $ 9,498 $ 10,658 $ 11,230 $ 10,346 $ 11,097
Average assets 14,169 14,781 15,365 14,475 15,078
(This table is continued on "WM-6.")
__________________________
(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-6
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
(This table is continued
from "WM-5.") Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
COMMERCIAL GROUP
Condensed income
statement:
Net interest income $ 196 $ 200 $ 200 $ 208 $ 211
Provision for loan
losses 29 19 12 2 (10)
Noninterest income (8) (10) (34) 63 15
Noninterest expense 68 66 67 74 74
----------------------------------------------------------------------
Income before income
taxes 91 105 87 195 162
Income taxes 29 11 28 73 61
----------------------------------------------------------------------
Net income $ 62 $ 94 $ 59 $ 122 $ 101
======================================================================
Performance and other
data:
Efficiency ratio 36.09% 34.49% 40.26% 27.42% 32.85%
Average loans $40,934 $40,129 $38,333 $38,789 $38,641
Average assets 43,004 42,336 40,663 41,184 41,005
Average deposits 7,474 9,762 13,816 15,294 12,028
Loan volume 2,835 4,800 4,054 4,348 3,671
Employees at end of
period 1,358 1,502 1,524 1,508 1,459
HOME LOANS GROUP
Condensed income
statement:
Net interest income $ 250 $ 229 $ 191 $ 211 $ 244
Provision for loan
losses 907 511 323 101 49
Noninterest income 319 329 183 389 161
Inter-segment
expense 4 5 9 16 18
Noninterest expense 499 2,319 554 547 522
----------------------------------------------------------------------
Loss before income
taxes (841) (2,277) (512) (64) (184)
Income taxes (269) (312) (169) (24) (69)
----------------------------------------------------------------------
Net loss $ (572) $(1,965) $ (343) $ (40) $ (115)
======================================================================
Performance and other
data:
Efficiency ratio 88.26% 419.52% 151.63% 93.71% 134.82%
Average loans $55,672 $52,278 $43,737 $43,312 $53,254
Average assets 66,841 66,172 61,106 60,342 71,382
Average deposits 5,469 6,714 7,780 8,372 8,501
Loan volume 13,774 19,089 26,434 35,938 33,780
Employees at end of
period 9,159 11,812 12,668 13,150 13,449
CORPORATE
SUPPORT/TREASURY AND
OTHER
Condensed income
statement:
Net interest income
(expense) $ 132 $ (18) $ (39) $ (4) $ (22)
Provision for loan
losses 119 85 (9) (51) 27
Noninterest income 86 (201) (91) 60 94
Noninterest expense 104 231 57 80 111
Minority interest
expense 75 65 53 42 43
----------------------------------------------------------------------
Loss before income
taxes (80) (600) (231) (15) (109)
Income taxes (68) (157) (46) (37) (69)
----------------------------------------------------------------------
Net income (loss) $ (12) $ (443) $ (185) $ 22 $ (40)
======================================================================
Performance and other
data:
Average loans $ 1,556 $ 1,482 $ 1,420 $ 1,367 $ 1,345
Average assets 45,525 48,173 47,532 41,789 40,875
Average deposits 24,627 26,427 32,132 37,847 46,205
Loan volume 143 171 113 72 107
Employees at end of
period 3,749 4,082 4,042 3,981 3,977
(This table is continued on "WM-7.")
WM-7
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
(This table is
continued from "WM-
6.") Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
RECONCILING
ADJUSTMENTS
Condensed income
statement:
Net interest
income(1) $ 132 $ 134 $ 138 $ 138 $ 137
Noninterest
income
(expense)(2) (54) (37) (80) (132) (86)
----------------------------------------------------------------------
Income before
income taxes 78 97 58 6 51
Income taxes(3) (150) 23 (75) (22) 38
----------------------------------------------------------------------
Net income $ 228 $ 74 $ 133 $ 28 $ 13
======================================================================
Performance and
other data:
Average loans(4) $ (1,220)$ (1,286)$ (1,385)$ (1,301)$ (1,479)
Average
assets(4) (1,220) (1,286) (1,385) (1,301) (1,479)
TOTAL CONSOLIDATED
Condensed income
statement:
Net interest
income $ 2,175 $ 2,047 $ 2,014 $ 2,034 $ 2,081
Provision for
loan losses 3,511 1,534 967 372 234
Noninterest
income 1,569 1,365 1,379 1,758 1,541
Noninterest
expense 2,152 4,166 2,191 2,138 2,105
Minority
interest
expense 75 65 53 42 43
----------------------------------------------------------------------
Income (loss)
before income
taxes (1,994) (2,353) 182 1,240 1,240
Income taxes (856) (486) (4) 410 456
----------------------------------------------------------------------
Net income
(loss) $ (1,138) $ (1,867) $ 186 $ 830 $ 784
======================================================================
Performance and
other data:
Efficiency ratio 57.49% 122.13% 64.55% 56.38% 58.13%
Average loans $249,160 $248,747 $240,692 $242,229 $258,064
Average assets 319,928 325,276 320,475 316,004 331,905
Average deposits 184,304 185,636 198,649 206,765 210,764
Loan volume 17,990 27,477 35,773 46,118 42,134
Employees at end
of period 45,883 49,403 49,748 49,989 49,693
__________________________
(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-8
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 31, 2008
------------------------
Interest
Income/
Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average
Interest Rates
Assets (Taxable-Equivalent Basis(1))
Interest-earning assets(2):
Federal funds sold and securities
purchased under agreements to resell $ 2,118 3.48% $ 18
Trading assets 2,726 17.10 116
Available-for-sale securities(3):
Mortgage-backed securities 18,945 5.80 275
Investment securities 6,316 5.39 85
Loans held for sale 4,974 6.98 87
Loans held in portfolio:
Loans secured by real estate:
Home loans(4)(5) 109,773 6.27 1,720
Home equity loans and lines of
credit(5) 61,196 6.28 956
Subprime mortgage channel(6) 18,106 6.33 287
Home construction(7) 2,142 7.65 41
Multi-family 31,962 6.35 507
Other real estate 9,797 6.49 158
---------------------------------------------------- --------
Total loans secured by real estate 232,976 6.31 3,669
Consumer:
Credit card 9,024 10.75 241
Other 195 17.47 8
Commercial 1,991 7.36 37
---------------------------------------------------- --------
Total loans held in portfolio 244,186 6.49 3,955
Other 6,000 3.94 59
---------------------------------------------------- --------
Total interest-earning assets 285,265 6.45 4,595
Noninterest-earning assets:
Mortgage servicing rights 5,882
Goodwill 7,286
Other assets 21,495
----------------------------------------------------
Total assets $319,928
====================================================
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits $ 24,384 1.75 107
Savings and money market deposits 55,951 2.73 379
Time deposits 74,225 4.57 843
---------------------------------------------------- --------
Total interest-bearing deposits 154,560 3.46 1,329
Federal funds purchased and commercial
paper 1,009 3.62 9
Securities sold under agreements to
repurchase 885 3.78 8
Advances from Federal Home Loan Banks 62,799 4.29 670
Other 34,048 4.71 400
---------------------------------------------------- --------
Total interest-bearing liabilities 253,301 3.83 2,416
--------
Noninterest-bearing sources:
Noninterest-bearing deposits 29,744
Other liabilities 8,902
Minority interests 3,915
Stockholders' equity 24,066
----------------------------------------------------
Total liabilities and stockholders'
equity $319,928
====================================================
Net interest spread and net interest
income on a taxable-equivalent basis 2.62 $2,179
========
Impact of noninterest-bearing sources 0.43
Net interest margin on a taxable-
equivalent basis 3.05
Quarter Ended
----------------------------------------------------------------------
Dec. 31, 2007
--------------------------
Interest
Income/
Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average
Interest Rates
Assets (Taxable-Equivalent Basis(1))
Interest-earning assets(2):
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(3):
Mortgage-backed securities 20,104 5.47 275
Investment securities 8,029 5.35 107
Loans held for sale 7,057 8.99 160
Loans held in portfolio:
Loans secured by real estate:
Home loans(4)(5) 108,496 6.58 1,785
Home equity loans and lines of
credit(5) 60,135 7.15 1,083
Subprime mortgage channel(6) 19,341 6.38 309
Home construction(7) 2,136 6.99 37
Multi-family 31,331 6.56 514
Other real estate 8,969 6.89 155
---------------------------------------------------- ---------
Total loans secured by real estate 230,408 6.73 3,883
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 4,157
Other 6,321 3.74 59
---------------------------------------------------- ---------
Total interest-earning assets 287,988 6.76 4,879
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 on a taxable-equivalent basis 2.40 $ 2,050
=========
Impact of noninterest-bearing sources 0.46
Net interest margin on a taxable-
equivalent basis 2.86
Quarter Ended
----------------------------------------------------------------------
Mar. 31, 2007
---------------------------
Interest
Income/
Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average
Interest Rates
Assets (Taxable-Equivalent Basis(1))
Interest-earning assets(2):
Federal funds sold and securities
purchased under agreements to resell $ 3,930 5.39% $ 52
Trading assets 5,594 8.10 113
Available-for-sale securities(3):
Mortgage-backed securities 18,460 5.48 253
Investment securities 6,180 5.23 81
Loans held for sale 35,447 6.37 562
Loans held in portfolio:
Loans secured by real estate:
Home loans(4)(5) 97,365 6.45 1,570
Home equity loans and lines of
credit(5) 53,014 7.56 989
Subprime mortgage channel(6) 20,612 6.67 344
Home construction(7) 2,061 6.55 34
Multi-family 29,826 6.58 491
Other real estate 6,763 7.03 117
------------------------------------------------------ --------
Total loans secured by real estate 209,641 6.79 3,545
Consumer:
Credit card 10,904 11.57 311
Other 267 12.96 9
Commercial 1,805 7.96 36
------------------------------------------------------ --------
Total loans held in portfolio 222,617 7.04 3,901
Other 3,472 5.77 49
------------------------------------------------------ --------
Total interest-earning assets 295,700 6.81 5,011
Noninterest-earning assets:
Mortgage servicing rights 6,304
Goodwill 9,054
Other assets 20,847
------------------------------------------------------
Total assets $ 331,905
======================================================
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits $ 31,821 2.63 206
Savings and money market deposits 54,862 3.27 443
Time deposits 91,631 4.97 1,123
------------------------------------------------------ --------
Total interest-bearing deposits 178,314 4.03 1,772
Federal funds purchased and commercial
paper 3,846 5.48 52
Securities sold under agreements to
repurchase 12,098 5.48 164
Advances from Federal Home Loan Banks 36,051 5.38 478
Other 32,808 5.67 461
------------------------------------------------------ --------
Total interest-bearing liabilities 263,117 4.51 2,927
--------
Noninterest-bearing sources:
Noninterest-bearing deposits 32,450
Other liabilities 9,482
Minority interests 2,449
Stockholders' equity 24,407
------------------------------------------------------
Total liabilities and
stockholders' equity $ 331,905
======================================================
Net interest spread and net interest
income on a taxable-equivalent basis 2.30 $2,084
========
Impact of noninterest-bearing sources 0.50
Net interest margin on a taxable-
equivalent basis 2.80
_______________________________
(1) Includes taxable-equivalent adjustments primarily related to tax-
exempt income on U.S. states and political subdivisions
securities and loans related to the Company's community lending
and investment activities. The federal statutory tax rate was 35%
for the periods presented.
(2) Nonaccrual assets and related income, if any, are included in
their respective categories.
(3) The average balance and yield are based on average amortized cost
balances.
(4) Capitalized interest recognized in earnings that resulted from
negative amortization within the Option ARM portfolio totaled
$336 million, $367 million and $361 million for the three months
ended March 31, 2008, December 31, 2007 and March 31, 2007.
(5) Excludes home loans and home equity loans and lines of credit in
the subprime mortgage channel.
(6) Represents mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name and held in the investment portfolio.
(7) 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-9
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Change from
Dec. 31,
2007 to
Mar. 31, Mar. 31, Dec. 31,
2008 2008 2007
----------------------------------------------------------------------
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing $ 1,655 $ 25,131 $ 23,476
Interest bearing (2,082) 23,631 25,713
----------------------------------------------------------------------
Total checking
deposits (427) 48,762 49,189
Savings and money market
deposits 6,330 51,317 44,987
Time deposits(1) 2,164 51,574 49,410
----------------------------------------------------------------------
Total retail deposits 8,067 151,653 143,586
Commercial business and
other deposits (862) 10,405 11,267
Brokered deposits:
Consumer (350) 17,739 18,089
Institutional (804) 1,711 2,515
Custodial and escrow
deposits(2) 72 6,541 6,469
----------------------------------------------------------------------
Total deposits $ 6,123 $ 188,049 $ 181,926
======================================================================
(1) Weighted average remaining maturity of time deposits was 6 months
at March 31, 2008, 7 months at December 31, 2007 and September
30, 2007, 8 months at June 30, 2007 and 9 months at March 31,
2007.
(2) Substantially all custodial and escrow deposits reside in
noninterest-bearing checking accounts.
Mar. 31, Dec. 31,
2008 2007
----------------------------------------------------------------------
Retail Deposit Accounts
(number of accounts)
Noninterest-bearing checking 11,271,406 10,960,270
Interest-bearing checking 1,218,606 1,273,673
Savings and money market 7,293,256 7,118,349
----------------------------------------------------------------------
Total transaction
accounts, end of
period(1) 19,783,268 19,352,292
======================================================================
Net change in noninterest-
bearing checking accounts 311,136 135,722
Net change in checking
accounts 256,069 74,493
_______________________________
(1) Transaction accounts include retail checking, small business
checking, retail savings and small business savings.
Mar. 31, Dec. 31,
2008 2007
----------------------------------------------------------------------
Retail Banking Stores
Stores, beginning of period 2,257 2,212
Stores opened during the
quarter 9 50
Stores closed during the
quarter (5) (5)
----------------------------------------------------------------------
Stores, end of period 2,261 2,257
======================================================================
Sept. 30, June 30, Mar. 31,
2007 2007 2007
----------------------------------------------------------------------
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing $ 23,721 $ 24,142 $ 24,400
Interest bearing 27,277 29,592 31,523
----------------------------------------------------------------------
Total checking
deposits 50,998 53,734 55,923
Savings and money market
deposits 43,360 43,617 44,058
Time deposits(1) 50,740 48,140 47,262
----------------------------------------------------------------------
Total retail deposits 145,098 145,491 147,243
Commercial business and
other deposits 16,536 19,186 17,741
Brokered deposits:
Consumer 17,484 17,153 18,995
Institutional 8,107 11,025 17,256
Custodial and escrow
deposits(2) 7,055 8,525 8,974
----------------------------------------------------------------------
Total deposits $ 194,280 $ 201,380 $ 210,209
======================================================================
(1) Weighted average remaining maturity of time deposits was 6 months
at March 31, 2008, 7 months at December 31, 2007 and September
30, 2007, 8 months at June 30, 2007 and 9 months at March 31,
2007.
(2) Substantially all custodial and escrow deposits reside in
noninterest-bearing checking accounts.
Sept. 30, June 30, Mar. 31,
2007 2007 2007
----------------------------------------------------------------------
Retail Deposit Accounts
(number of accounts)
Noninterest-bearing checking 10,824,548 10,449,887 9,983,313
Interest-bearing checking 1,334,902 1,399,203 1,459,534
Savings and money market 7,087,311 6,936,870 6,708,784
----------------------------------------------------------------------
Total transaction
accounts, end of
period(1) 19,246,761 18,785,960 18,151,631
======================================================================
Net change in noninterest-
bearing checking accounts 374,661 466,574 371,607
Net change in checking
accounts 310,360 406,243 327,776
_______________________________
(1) Transaction accounts include retail checking, small business
checking, retail savings and small business savings.
Sept. 30, June 30, Mar. 31,
2007 2007 2007
----------------------------------------------------------------------
Retail Banking Stores
Stores, beginning of period 2,235 2,228 2,225
Stores opened during the
quarter 10 11 6
Stores closed during the
quarter (33) (4) (3)
----------------------------------------------------------------------
Stores, end of period 2,212 2,235 2,228
======================================================================
WM-10
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Loan Volume
Home loans:
Short-term
adjustable-rate
loans(1):
Option ARMs $ 231 $ 3,945 $ 6,174 $ 7,888 $ 7,777
Other ARMs 19 10 111 22 36
----------------------------------------------------------------------
Total short-term
adjustable-rate
loans 250 3,955 6,285 7,910 7,813
Medium-term
adjustable-rate
loans(2) 3,810 5,972 9,868 14,953 13,567
Fixed-rate loans 9,427 7,382 6,176 8,172 8,824
----------------------------------------------------------------------
Total home loan
volume 13,487 17,309 22,329 31,035 30,204
Home equity loans and
lines of credit 1,297 4,619 8,544 9,988 7,600
Home construction(3) 128 378 483 426 298
Multi-family 2,250 3,412 2,856 3,067 2,663
Other real estate 728 1,487 1,285 1,246 1,080
----------------------------------------------------------------------
Total loans
secured by real
estate 17,890 27,205 35,497 45,762 41,845
Commercial 100 272 276 356 289
----------------------------------------------------------------------
Total loan volume $17,990 $27,477 $ 35,773 $46,118 $42,134
======================================================================
Loan Volume by Channel
Retail $10,585 $17,341 $ 21,223 $24,707 $21,171
Wholesale 7,091 9,536 13,387 17,020 14,746
Purchased 314 600 1,163 4,391 6,217
----------------------------------------------------------------------
Total loan volume
by channel $17,990 $27,477 $ 35,773 $46,118 $42,134
======================================================================
Refinancing Activity(4)
Home loan refinancing $10,779 $12,297 $ 14,722 $22,637 $22,552
Home equity loans and
lines of credit 22 46 143 157 550
Home construction
loans 1 30 30 20 12
Multi-family and other
real estate 1,033 1,436 1,225 1,378 1,131
----------------------------------------------------------------------
Total refinancing $11,835 $13,809 $ 16,120 $24,192 $24,245
======================================================================
(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 loan refinancing entered into by both new and pre-
existing loan customers.
WM-11
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Change from
Dec. 31,
2007 to
Mar. 31, Mar. 31, Dec. 31,
2008 2008 2007
----------------------------------------------------------------------
Loans Held in Portfolio
Loans secured by real estate:
Home:
Short-term adjustable-rate
loans(1):
Option ARMs(2) $ (3,024) $ 55,846 $ 58,870
Other ARMs (699) 15,532 16,231
----------------------------------------------------------------------
Total short-term adjustable-
rate loans (3,723) 71,378 75,101
Medium-term adjustable-rate
loans(3) 844 40,217 39,373
Fixed-rate loans (148) 11,857 12,005
----------------------------------------------------------------------
Total home loans (3,027) 123,452 126,479
Home equity loans and lines of
credit 58 63,546 63,488
Home construction(4) (138) 2,088 2,226
Multi-family 774 32,528 31,754
Other real estate 498 10,022 9,524
----------------------------------------------------------------------
Total loans secured by real
estate(5) (1,835) 231,636 233,471
Consumer:
Credit card 158 8,989 8,831
Other (19) 186 205
Commercial 124 2,003 1,879
----------------------------------------------------------------------
Total loans held in
portfolio(6) (1,572) 242,814 244,386
Less: allowance for loan losses (2,143) (4,714) (2,571)
----------------------------------------------------------------------
Total loans held in portfolio,
net $ (3,715) $238,100 $241,815
======================================================================
Sept. 30, June 30, Mar. 31,
2007 2007 2007
----------------------------------------------------------------------
Loans Held in Portfolio
Loans secured by real estate:
Home:
Short-term adjustable-rate
loans(1):
Option ARMs(2) $ 58,137 $ 53,455 $ 58,130
Other ARMs 15,478 13,538 13,501
----------------------------------------------------------------------
Total short-term adjustable-
rate loans 73,615 66,993 71,631
Medium-term adjustable-rate
loans(3) 37,717 29,647 29,924
Fixed-rate loans 11,813 9,505 9,506
----------------------------------------------------------------------
Total home loans 123,145 106,145 111,061
Home equity loans and lines of
credit 61,831 58,631 56,123
Home construction(4) 2,110 2,058 2,071
Multi-family 30,831 29,290 29,515
Other real estate 8,335 6,879 6,728
----------------------------------------------------------------------
Total loans secured by real
estate(5) 226,252 203,003 205,498
Consumer:
Credit card 8,791 9,913 9,490
Other 224 243 261
Commercial 1,865 1,835 1,772
----------------------------------------------------------------------
Total loans held in
portfolio(6) 237,132 214,994 217,021
Less: allowance for loan losses (1,889) (1,560) (1,540)
----------------------------------------------------------------------
Total loans held in portfolio,
net $235,243 $213,434 $215,481
======================================================================
(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 $1.93
billion, $1.73 billion, $1.50 billion, $1.30 billion and $1.12
billion at March 31, 2008, December 31, 2007, September 30, 2007,
June 30, 2007 and March 31, 2007.
(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 Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
-------------------------------------------------------------------
Home loans $15,032 $16,092 $17,285 $17,602 $17,610
Home equity loans
and lines of
credit 2,312 2,525 2,711 2,855 2,749
-------------------------------------------------------------------
Total $17,344 $18,617 $19,996 $20,457 $20,359
===================================================================
(6) Includes net unamortized deferred loan costs of $1.42 billion,
$1.45 billion, $1.44 billion, $1.58 billion and $1.71 billion at
March 31, 2008, December 31, 2007, September 30, 2007, June 30,
2007 and March 31, 2007.
WM-12
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Weighted
Change from Average
Dec. 31, 2007 Mar. 31, Coupon
to Mar. 31, 2008 2008 Rate
----------------------------------------------------------------------
Selected Loans Secured by Real
Estate
Home loans held in
portfolio:
Short-term adjustable-rate
loans(1):
Option ARMs $ (3,024) $ 55,846 7.30%
Other ARMs (699) 15,532 6.94
------------------------------------------------------------
Total short-term
adjustable-rate loans (3,723) 71,378 7.22
Medium-term adjustable-
rate loans(2) 844 40,217 6.35
Fixed-rate loans (148) 11,857 6.75
------------------------------------------------------------
Total home loans held
in portfolio (3,027) 123,452 6.89
Home equity loans and lines
of credit:
Adjustable-rate 751 53,850 6.02
Fixed-rate (693) 9,696 7.67
------------------------------------------------------------
Total home equity
loans and lines of
credit 58 63,546 6.27
Multi-family loans held in
portfolio:
Short-term adjustable-rate
loans(1):
Option ARMs (136) 6,158 6.70
Other ARMs (641) 7,469 6.03
------------------------------------------------------------
Total short-term
adjustable-rate loans (777) 13,627 6.33
Medium-term adjustable-
rate loans(2) 1,366 16,817 6.12
Fixed-rate loans 185 2,084 6.22
------------------------------------------------------------
Total multi-family
loans held in
portfolio 774 32,528 6.22
------------------------------------------------------------
Total selected loans
held in portfolio
secured by real
estate(3) (2,195) 219,526 6.61
Loans held for sale(4) 568 4,941 5.73
------------------------------------------------------------
Total selected loans
secured by real
estate $ (1,627) $224,467 6.59
============================================================
Weighted Weighted
Average Average
Dec. 31, Coupon Mar. 31, Coupon
2007 Rate 2007 Rate
---------------------------------------- -----------------------------
Selected Loans Secured by Real
Estate
Home loans held in
portfolio:
Short-term adjustable-rate
loans(1):
Option ARMs $ 58,870 7.68% $ 58,130 7.74%
Other ARMs 16,231 6.99 13,501 7.25
--------------------------------------- ----------
Total short-term
adjustable-rate loans 75,101 7.53 71,631 7.65
Medium-term adjustable-
rate loans(2) 39,373 6.41 29,924 5.86
Fixed-rate loans 12,005 6.75 9,506 6.68
--------------------------------------- ----------
Total home loans held
in portfolio 126,479 7.11 111,061 7.08
Home equity loans and lines
of credit:
Adjustable-rate 53,099 7.52 45,288 8.25
Fixed-rate 10,389 7.72 10,835 7.57
--------------------------------------- ----------
Total home equity
loans and lines of
credit 63,488 7.55 56,123 8.12
Multi-family loans held in
portfolio:
Short-term adjustable-rate
loans(1):
Option ARMs 6,294 7.12 8,373 7.29
Other ARMs 8,110 6.40 7,779 7.01
--------------------------------------- ----------
Total short-term
adjustable-rate loans 14,404 6.71 16,152 7.15
Medium-term adjustable-
rate loans(2) 15,451 6.14 11,545 5.78
Fixed-rate loans 1,899 6.28 1,818 6.39
--------------------------------------- ----------
Total multi-family
loans held in
portfolio 31,754 6.41 29,515 6.57
--------------------------------------- ----------
Total selected loans
held in portfolio
secured by real
estate(3) 221,721 7.13 196,699 7.30
Loans held for sale(4) 4,373 6.12 26,394 6.44
--------------------------------------- ----------
Total selected loans
secured by real
estate $226,094 7.12 $223,093 7.20
======================================= ==========
(1) Short-term adjustable-rate loans reprice within one year.
(2) Medium-term adjustable-rate loans reprice after one year.
(3) At March 31, 2008, December 31, 2007 and March 31, 2007,
adjustable-rate loans with lifetime caps were $182.93 billion,
$182.12 billion and $162.24 billion with a lifetime weighted
average cap rate of 12.60%, 12.49% and 12.31%.
(4) Excludes credit card and student loans.
Dec. 31,
2007
to Mar. 31,
2008
-------------------------------------------------------------------
Rollforward of Loans Held for Sale
Balance, beginning of period $ 5,403
Mortgage loans originated, purchased and transferred
from held in portfolio 11,630
Mortgage loans transferred to held in portfolio (346)
Mortgage loans sold and other(1) (10,716)
Net change in consumer loans held for sale (1,030)
-------------------------------------------------------------------
Balance, end of period $ 4,941
===================================================================
Rollforward of Home Loans Held in Portfolio
Balance, beginning of period $126,479
Loans originated, purchased and transferred from
held for sale 2,265
Loan payments, transferred to held for sale and
other (5,292)
-------------------------------------------------------------------
Balance, end of period $123,452
===================================================================
(1) The unpaid principal balance ("UPB") of home loans sold was $10.0
billion for the three months ended March 31, 2008.
WM-13
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Detail of Revenue from
Sales and Servicing of
Home Mortgage Loans Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Gain (loss) from home
mortgage loans and
originated mortgage-
backed securities,
net of hedging and risk
management instruments:
Gain (loss) from home
mortgage loans and
originated mortgage-
backed securities(1) $ 143 $ 7 $ (169) $ 66 $ 149
Revaluation gain
(loss) from
derivatives
economically hedging
loans held for sale (21) (12) (53) 126 (54)
----------------------------------------------------------------------
Gain (loss) from
home mortgage loans
and originated
mortgage-backed
securities, net of
hedging and risk
management
instruments 122 (5) (222) 192 95
----------------------------------------------------------------------
Home mortgage loan
servicing revenue:
Home mortgage loan
servicing revenue(2) 470 490 516 526 514
Change in MSR fair
value due to payments
on loans and other (230) (255) (351) (401) (356)
----------------------------------------------------------------------
Net mortgage loan
servicing revenue 240 235 165 125 158
Change in MSR fair
value due to
valuation inputs or
assumptions (499) (390) (201) 530 (96)
Revaluation gain
(loss) from
derivatives
economically hedging
MSR 548 518 419 (547) (32)
----------------------------------------------------------------------
Home mortgage loan
servicing revenue,
net of MSR
valuation changes
and derivative risk
management
instruments 289 363 383 108 30
----------------------------------------------------------------------
Total revenue from
sales and servicing
of home mortgage
loans $ 411 $ 358 $ 161 $ 300 $ 125
======================================================================
(1) Originated mortgage-backed securities represent available-for-sale
securities retained on the balance sheet subsequent to the
securitization of mortgage loans that were originated by the
Company.
(2) Includes contractually specified servicing fees (net of guarantee
fees paid to housing government-sponsored enterprises, where
applicable), late charges and loan pool expenses (the shortfall
of the scheduled interest required to be remitted to investors
and that which is collected from borrrowers upon payoff).
Quarter Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
MSR Valuation and Risk
Management:
Change in MSR fair
value due to
valuation inputs or
assumptions $ (499) $ (390) $ (201) $ 530 $ (96)
Gain (loss) on MSR risk
management instruments:
Revaluation gain
(loss) from
derivatives 548 518 419 (547) (32)
Revaluation gain
(loss) from certain
trading securities - - 4 (4) 4
----------------------------------------------------------------------
Total gain (loss) on
MSR risk management
instruments 548 518 423 (551) (28)
----------------------------------------------------------------------
Total changes in
MSR valuation and
risk management $ 49 $ 128 $ 222 $ (21) $ (124)
======================================================================
WM-14
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Rollforward of
Mortgage
Servicing
Rights(1)
Balance,
beginning of
period $ 6,278 $ 6,794 $ 7,231 $ 6,507 $ 6,193
Home loans:
Additions 181 127 116 592 760
Change in
MSR fair
value due
to payments
on loans
and other (230) (255) (351) (401) (356)
Change in
MSR fair
value
due to
valuation
inputs or
assumptions (499) (390) (201) 530 (96)
Sale of MSR (1) - - - -
Net change in
commercial
real estate
MSR (3) 2 (1) 3 6
----------------------------------------------------------------------
Balance, end of
period $ 5,726 $ 6,278 $ 6,794 $ 7,231 $ 6,507
======================================================================
Rollforward of
Mortgage Loans
Serviced for
Others
Balance,
beginning of
period $456,484 $463,436 $474,867 $467,782 $ 444,696
Home loans:
Additions 9,862 7,814 8,700 29,949 44,550
Sale of
servicing (109) - - - -
Loan
payments
and other (17,177) (15,739) (20,716) (24,213) (22,469)
Net change in
commercial
real estate
loans 66 973 585 1,349 1,005
----------------------------------------------------------------------
Balance, end of
period $449,126 $456,484 $463,436 $474,867 $ 467,782
======================================================================
(1) MSR as a percentage of mortgage loans serviced for others was
1.27%, 1.38%, 1.47%, 1.52% and 1.39% at March 31, 2008, December
31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Total Servicing
Portfolio
Mortgage loans
serviced for
others $449,126 $456,484 $463,436 $474,867 $ 467,782
Consumer loans
serviced for
others 17,390 17,379 16,078 14,745 13,645
Servicing on
retained MBS
without MSR 904 942 980 1,023 1,082
Servicing on
owned loans 236,877 238,344 232,392 218,122 226,217
Subservicing
portfolio 285 399 418 439 465
----------------------------------------------------------------------
Total servicing
portfolio $704,582 $713,548 $713,304 $709,196 $ 709,191
======================================================================
March 31, 2008
----------------------------------------------------------------------
Weighted
Unpaid Average
Principal Servicing
Balance Fee
----------------------------------------------------------------------
(in basis
points,
Mortgage Loans Serviced for Others by Loan Type annualized)
Agency $249,621 32
Private 171,078 57
Subprime mortgage channel-home 28,427 51
----------------------------------------------------------
Total mortgage loans serviced for others(1) $449,126 43
==========================================================
(1) Weighted average coupon rate was 6.24% at March 31, 2008.
WM-15
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Allowance for Loan
Losses
Balance, beginning of
quarter $ 2,571 $1,889 $1,560 $1,540 $1,630
Allowance transferred
to loans held for
sale - (105) (217) (81) (148)
Other - - - - 7
Provision for loan
losses 3,511 1,534 967 372 234
----------------------------------------------------------------------
6,082 3,318 2,310 1,831 1,723
Loans charged off:
Loans secured by
real estate:
Home loans(1) (331) (105) (52) (21) (35)
Home equity loans
and lines of
credit(1) (486) (249) (104) (55) (29)
Subprime mortgage
channel(2) (388) (277) (146) (103) (40)
Home
construction(3) (8) - - (1) -
Multi-family (4) (4) - - -
Other real estate (2) (1) (1) (1) -
----------------------------------------------------------------------
Total loans
secured by
real estate (1,219) (636) (303) (181) (104)
Consumer:
Credit card (135) (126) (120) (106) (96)
Other (2) (2) (2) (2) (3)
Commercial (39) (32) (20) (15) (9)
----------------------------------------------------------------------
Total loans
charged off (1,395) (796) (445) (304) (212)
Recoveries of loans
previously charged
off:
Loans secured by
real estate:
Home loans(1) 1 4 1 1 1
Home equity loans
and lines of
credit(1) 9 4 3 3 3
Subprime mortgage
channel(2) 1 4 1 11 1
Home
construction(3) - 2 - - -
Other real estate 1 2 2 - -
----------------------------------------------------------------------
Total loans
secured by
real estate 12 16 7 15 5
Consumer:
Credit card 12 31 14 15 16
Other - - - - 6
Commercial 3 2 3 3 2
----------------------------------------------------------------------
Total
recoveries of
loans
previously
charged off 27 49 24 33 29
----------------------------------------------------------------------
Net charge-
offs (1,368) (747) (421) (271) (183)
----------------------------------------------------------------------
Balance, end of
quarter $ 4,714 $2,571 $1,889 $1,560 $1,540
======================================================================
Net charge-offs
(annualized) as a
percentage of
average loans held
in portfolio 2.24 % 1.24 % 0.74 % 0.50 % 0.33 %
Allowance as a
percentage of loans
held in portfolio 1.94 1.05 0.80 0.73 0.71
__________________
(1) Excludes home loans and home equity loans and lines of credit in
the subprime mortgage channel.
(2) Represents mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name and held in the investment portfolio. Charge-offs
in the second quarter of 2007 include $26 million of amounts
primarily related to uncollected borrower expenses incurred in
prior periods by and owed to a third party loan servicer.
(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.
WM-16
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2008 2007 2007 2007 2007
----------------------------------------------------------------------
Nonperforming Assets
Nonaccrual
loans(1)(2):
Loans secured by
real estate:
Home loans(3) $3,504 $2,302 $1,452 $ 991 $ 690
Home equity loans
and lines of
credit(3) 1,102 835 533 378 297
Subprime mortgage
channel(4) 2,882 2,721 2,356 1,707 1,503
Home
construction(5) 77 56 44 47 41
Multi-family 142 131 120 69 60
Other real estate 87 53 49 52 52
----------------------------------------------------------------------
Total nonaccrual
loans secured
by real estate 7,794 6,098 4,554 3,244 2,643
Consumer 2 1 1 1 1
Commercial 28 24 22 30 28
----------------------------------------------------------------------
Total nonaccrual
loans held in
portfolio 7,824 6,123 4,577 3,275 2,672
Foreclosed assets(6) 1,357 979 874 750 587
----------------------------------------------------------------------
Total
nonperforming
assets(7) $9,181 $7,102 $5,451 $4,025 $3,259
======================================================================
Total nonperforming
assets as a
percentage of total
assets 2.87% 2.17% 1.65% 1.29% 1.02%
______________________________
(1) Nonaccrual loans held for sale, which are excluded from the
nonaccrual balances presented above, were zero, $4 million, $7
million, $171 million and $195 million at March 31, 2008,
December 31, 2007, September 30, 2007, June 30, 2007 and March
31, 2007. Loans held for sale are accounted for at the lower of
cost or fair value, with valuation changes included as
adjustments to noninterest income.
(2) Credit card loans are exempt under regulatory rules from being
classified as nonaccrual because they are charged off when they
are determined to be uncollectible, or by the end of the month in
which the account becomes 180 days past due.
(3) Excludes home loans and home equity loans and lines of credit in
the subprime mortgage channel.
(4) Represents mortgage loans purchased from recognized subprime
lenders and mortgage loans originated under the Long Beach
Mortgage name and held in the investment portfolio.
(5) 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.
(6) Foreclosed real estate securing Government National Mortgage
Association ("GNMA") loans of $25 million, $37 million, $46
million, $49 million and $72 million at March 31, 2008, December
31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007
have been excluded. These assets are fully collectible as the
corresponding GNMA loans are insured by the Federal Housing
Administration ("FHA") or guaranteed by the Department of
Veterans Affairs ("VA").
(7) Excludes accruing restructured loans of $372 million, $251
million, $269 million, $277 million and $340 million at March 31,
2008, December 31, 2007, September 30, 2007, June 30, 2007 and
March 31, 2007.
Source: Washington Mutual, Inc.
