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Washington Mutual Announces Second Quarter 2004 Earnings; Board of Directors Increases Cash Dividend

SEATTLE--(BUSINESS WIRE)--July 21, 2004--Washington Mutual, Inc. (NYSE:WM) today announced second quarter 2004 earnings of $489 million, or $0.55 per diluted share, down 49 percent on a per share basis from $995 million, or $1.07 per diluted share from continuing operations for the same period a year ago.

The reduction in second quarter net income resulted primarily from a reduction in net home loan mortgage banking income, which declined to zero from $611 million in the second quarter of 2003 and $531 million in the first quarter of this year. The second quarter decrease reflected the large change in the hedging performance of the company's mortgage servicing rights since the end of the first quarter.

Washington Mutual's Board of Directors declared a cash dividend of 44 cents per share on the company's common stock, up from 43 cents per share previously. Dividends on the common stock are payable on August 13, 2004 to shareholders of record as of July 30, 2004.

On June 28, the company provided revised guidance that earnings for the full 2004 year are estimated to range from $3.00 to $3.60 per diluted share. The most important development that led us to change guidance was the company's view that the increase in long term interest rates would be sustained. The impact of rising rates on its mortgage banking unit, which is compounded by the unit's high cost structure, will result in lower than expected gain on sale and increased overall hedging costs, especially in the second half of this year. Also, net income for the year will be reduced by sales of investment securities in the first quarter.

    Key second quarter highlights:

    --  Net income in the company's Retail Banking & Financial
        Services segment increased by 25 percent year over year and 8
        percent from last quarter;

    --  Total loan volume decreased to $79.52 billion compared with
        $121.63 billion in the second quarter of 2003 but was up from
        $62.17 billion in the first quarter of 2004.

    --  Total home equity loan and line of credit volume of $11.57
        billion increased 38 percent from last quarter and was up 62
        percent, or $4.42 billion, year over year;

    --  Loans held in portfolio grew from the prior quarter by $8.47
        billion primarily due to strong growth in the company's home
        equity loans and lines of credit and Option ARM portfolios;

    --  Depositor and other retail banking fees increased 12 percent
        to $507 million from the comparable period a year ago, with
        the addition of nearly 157,000 net new retail checking
        accounts in the second quarter and 792,000 accounts in the
        preceding 12 months. In addition nearly 34,000 net new small
        business checking accounts were added in the quarter;

    --  66 new retail banking stores were opened during the quarter,
        including 20 in the company's newest market, Tampa-St.
        Petersburg, Florida, and 20 in Chicago;

    --  A HarrisInteractive poll recently named Washington Mutual one
        of the nation's top 10 financial services brands.

"Most of Washington Mutual is strong and growing profitably, but this was a disappointing quarter," said Kerry Killinger, chairman, president and chief executive officer. "While second quarter results were affected by the volatility of our mortgage servicing rights, the root of our problem is the unacceptably high cost structure in our Mortgage Banking business. We know what we need to do, our efforts are well underway, and we will not be satisfied until we have fixed it."

Killinger added: "Our middle-market retail strategy is sound and remains unchanged. We have a great franchise of talented, hard-working employees. I'm proud of our people, but we have to improve execution in our mortgage business to deliver on the potential of this franchise. This is my highest priority."

    SECOND QUARTER FINANCIAL SUMMARY

    Net Interest Income

Net interest income was $1.79 billion compared with $1.99 billion in the second quarter of 2003 and $1.73 billion in the first quarter of 2004. The net interest margin was 2.86 percent, compared with 3.22 percent in the second quarter of 2003 and 2.89 percent in the first quarter of 2004. Although the margin continued to be affected by the downward repricing of loans and the sale of debt securities, its performance on a linked quarter basis was enhanced by the company's early retirement of certain high-cost Federal Home Loan Bank borrowings in the first quarter of 2004 and growth in average noninterest bearing deposits in the second quarter of 2004.

Noninterest Income

Noninterest income was $894 million compared with $1.53 billion a year ago and $1.24 billion in the first quarter of 2004. The principal reason for the change was a reduction in net home loan mortgage banking income, which declined to zero from $611 million in the second quarter of 2003 and $531 million in the first quarter of this year. The second quarter decrease reflected the large quarter to quarter change in the performance of the company's hedging of its mortgage servicing rights.

As would be expected in a rising interest rate environment, the company's mortgage servicing rights, excluding additions and amortization, increased in value but were more than offset by losses in corresponding hedges. This difference in performance of the mortgage servicing rights and the associated hedges reflects both tightening basis spreads (the difference between the mortgage and interest rate swap indicies) during the quarter and higher interest rates, thus reducing Mortgage Banking income. The company's loan pipeline and warehouse hedging were not adversely affected by these factors.

Continued strong consumer demand for Washington Mutual's products and personal service contributed to the 12 percent year to year growth in depositor and other retail banking fees and a 10 percent increase from the previous quarter.

Cost Leadership Initiative - Noninterest Expense Update

The company reduced noninterest expense by $32 million from the first quarter of 2004. The majority of the decrease occurred in compensation and benefits, which resulted primarily from headcount reductions in the mortgage banking business. When adjusted for technology-related charges and restructuring costs that were incurred primarily from headcount reductions and facilities closures, noninterest expense increased by $10 million from the prior quarter, primarily due to growth in the company's retail banking business.

The company expects to keep 2004 noninterest expense essentially flat with the 2003 level while executing its targeted growth and expansion plans this year. The company's efficiency ratio, which was negatively impacted by the performance of the mortgage servicing rights, was 68.77 percent, as compared with 63.34 percent for the first quarter of 2004.

The company recently completed the conversion of all of its home loan servicing records onto a common platform. This migration enables the company to fully realize its strategy to consolidate its 5 million customer records onto one servicing platform and to announce today the closure of the company's San Antonio Service Delivery facility.

Lending

Total loan volume was $79.52 billion, compared with $121.63 billion in the second quarter of 2003 and $62.17 billion in the first quarter of 2004. Home loan volume of $63.15 billion was down $46.46 billion from the second quarter of 2003 due to the significant industry-wide reduction in mortgage originations year over year, but up $12.65 billion from the first quarter of 2004, partially due to lower interest rates near the end of the first quarter, which resulted in a strong pipeline of loans that were funded in the second quarter after the dip in interest rates.

During the second quarter of 2004, ARMs represented 55 percent of the company's home loan origination volume, compared with 53 percent in the first quarter of 2004 and 26 percent in the second quarter of 2003.

The company's focus on cross-selling its broad range of products and services and expanding customer relationships contributed to record home equity loans and lines of credit volume of $11.57 billion, up 62 percent from the second quarter of 2003 and up 38 percent from the first quarter of 2004.

Credit Quality

The positive credit trends of recent quarters continued in the second quarter. Nonperforming assets as a percentage of total assets were 0.60 percent, an improvement from 0.66 percent as of March 31, 2004 and 0.78 percent as of June 30, 2003. Net charge offs were $24 million versus $46 million in the first quarter of 2004 and $81 million in the second quarter of 2003. The company's provision for loan and lease losses was $60 million, while the allowance for loan and lease losses was $1.29 billion at June 30, 2004.

Balance Sheet and Capital Management

Total assets declined $2.22 billion from the end of the first quarter to $278.54 billion, reflecting a decrease in loans held for sale and sales of investment securities. Loans held in portfolio grew to $195.93 billion, an increase of $8.47 billion from the first quarter 2004, reflecting the company's emphasis on Option ARM loans as well as growth in its home equity loans and lines of credit and commercial business lending portfolios. Loans held for sale declined to $26.41 billion, a decrease of $6.72 billion from March 31, 2004 levels.

Total deposits increased $1.49 billion from the prior quarter to $162.47 billion at June 30, 2004.

The company's ratio of tangible common equity to tangible assets was 5.32 percent. In addition, the capital ratios of the company's banking subsidiaries continued to exceed the federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard.

    SECOND QUARTER OPERATING SEGMENT RESULTS

    Retail Banking and Financial Services

The award-winning Retail Banking and Financial Services segment offers innovative retail banking and financial products and services to consumers and small businesses, including deposits, loans, securities brokerage, mutual funds and annuities, through its network of more than 1,800 internationally recognized retail banking stores. The company's home loan and consumer loan portfolios, as well as its mutual fund management business are also part of the Retail Banking and Financial Services segment.

Retail Banking and Financial Services Second Quarter Financial

Performance

Net income for the company's Retail Banking and Financial Services business increased by 25 percent to $508 million, compared with $405 million in the second quarter of 2003. In addition to the strong growth in depositor and other retail banking fees, net interest income of the segment increased 30 percent from the second quarter of 2003, driven by growth in Option ARM loans and home equity loans and lines of credit held in portfolio.

The strong growth in net interest income and noninterest income was partially offset by an increase in noninterest expense, which reflected the continued expansion of the company's retail banking network.

    Highlights of the Retail Banking and Financial Services Business
    for the second quarter included:

    --  Total retail deposits increased $5.33 billion year over year.
        Retail deposits were up $1.16 billion from the prior quarter
        with the introduction of new deposit account products in the
        quarter;

    --  Retail banking stores that have been open since January 1,
        2003 produced strong same-store sales from the second quarter
        of 2003, posting a 57 percent increase in consumer lending, a
        10 percent increase in depositor and other banking fees and 8
        percent growth in net new checking accounts;

    --  Average loans grew 39 percent from the second quarter of 2003
        to $158.95 billion, reflecting the emphasis on originating ARM
        loans for the balance sheet as well as growth in its home
        equity loans and lines of credit, which increased 76 percent
        to $36.08 billion year over year;

    --  The company's retail banking network grew 13 percent year over
        year as it opened 214 new stores over that period, including
        61 new store openings during the second quarter;

    --  The cross-sell ratio for the average mature retail banking
        household increased to 5.79 products and services, up from
        5.65 at the end of the first quarter of 2004;

    --  Over the past year, WM Group of Funds grew assets under
        management by $4.79 billion, or 31 percent, to $20.11 billion
        at June 30, 2004;

    Mortgage Banking

The Mortgage Banking business is a leading national originator and servicer of home loans. Loans originated by Mortgage Banking are either sold to secondary market participants or retained by the company. Mortgage Banking also makes insurance products and services available to its customers and manages the company's captive reinsurance activities.

Mortgage Banking Second Quarter Financial Performance

The Mortgage Banking segment experienced a net loss of $63 million, compared with net income of $489 million in the second quarter of 2003. The principal drivers of the year to year difference were the results of the company's mortgage servicing rights hedging program, a high cost structure in the Mortgage Banking segment and declining loan volumes.

    Highlights of the Mortgage Banking Business for the second quarter
    included:

    --  Total home loan volume from the Mortgage Banking Business was
        $59.49 billion, compared to $106.68 billion in the second
        quarter of 2003 but up $11.59 billion from $47.90 billion in
        the first quarter of 2004;

    --  ARM loan volume was 54 percent of total Mortgage Banking home
        loan volume up from 24 percent in the second quarter of 2003.
        This trend reflects the company's ability to quickly adjust
        the mix of fixed- and adjustable-rate products in response to
        interest rates, market conditions and customer preference.

    --  The company recently completed the conversion of the remaining
        1 million of 5 million Washington Mutual home loan customer
        records to a single servicing platform.

    --  With all loans on one system, the company can now take
        additional steps to drive efficiency in this area.

    Commercial Group

The Commercial Group is the leading national originator of multi-family loans and provides loans to developers of and investors in multi-family and other commercial real estate properties, which it retains in its portfolio or sells in the secondary market. The Commercial Group also provides financing for mortgage bankers, home builders, and mid-sized businesses, and offers deposits and cash management services to its customers. Through Long Beach Mortgage, a wholly owned subsidiary of the company, the Commercial Group originates and services home loans that are made to higher-risk borrowers and sold to secondary market participants. The discontinued operations of Washington Mutual Finance were also previously included in the segment.

Commercial Group Second Quarter Financial Performance

Net income from continuing operations for the Commercial Group increased 11 percent to $187 million, compared with $169 million on a linked quarter basis, and increased 6 percent from $176 million from second quarter of 2003. The main drivers for the increases from the previous quarter were an 18 percent increase in noninterest income, resulting from gains from the sale of originated mortgage-backed securities and the securitization and sale of multi-family and commercial real estate loans, and a 5 percent decrease in noninterest expense related to lower compensation and benefits expense.

    Highlights of the Commercial Group for the second quarter
    included:

    --  Multi-family loan volume of $2.35 billion increased 54 percent
        from the prior quarter's $1.53 billion and 16 percent from the
        second quarter of last year's $2.02 billion;

    --  The average balance for multi-family loans in the second
        quarter of 2004 grew 9 percent from second quarter of 2003 and
        contributed to the 12 percent growth in the total average
        loans for the Commercial Group overall;

    --  Average deposits of $6.90 billion increased 42 percent from
        second quarter of 2003 and 14 percent from the first quarter
        of 2004.

    About Washington Mutual

With a history dating back to 1889, Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients. At June 30, 2004, Washington Mutual and its subsidiaries had assets of $278.54 billion. Washington Mutual currently operates more than 2,400 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamunewsroom.com.

Webcast information: A conference call to discuss the company's financial results will be held on Thursday, July 22, 2004, at 10:30 a.m. EDT and will be hosted by Kerry Killinger, chairman, president, 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 773-756-4602. 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 on the company's web site following the call. A recording of the conference call will be available after 1 p.m. EDT on Thursday, July 22, 2004, through 11:59 pm EDT on Friday, July 30. The recorded message will be available at 800-937-1821. Callers from outside the United States may dial 402-220-4880.

Forward Looking Statement

Our Form 10-K/A and other documents that we file with the Securities and Exchange Commission have forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "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." Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. These statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward looking statements were made. There are a number of factors, many of which are beyond our control that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Some of these factors are:

    --  General business and economic conditions may significantly
        affect our earnings;

    --  If we are unable to effectively manage the volatility of our
        mortgage banking business, our earnings could be adversely
        affected;

    --  If we are unable to fully realize the operational and systems
        efficiencies sought to be achieved from our business segment
        realignment, our earnings could be adversely affected;

    --  We face competition for loans and deposits from banking and
        nonbanking companies and national mortgage companies; and

    --  Changes in the regulation of financial services companies and
        housing government-sponsored enterprises could adversely
        affect our business.

WM-1

                        Washington Mutual, Inc.
                   Consolidated Statements of Income
             (dollars in millions, except per share data)
                              (unaudited)



                                      Quarter Ended
----------------------------------------------------------------------
                       June 30,  Mar. 31,  Dec. 31, Sept. 30, June 30,
                          2004      2004      2003      2003     2003
----------------------------------------------------------------------
Interest Income
 Loans held for sale  $    396  $    328  $    439  $    684  $   693
 Loans held in
  portfolio              2,121     2,071     1,969     1,848    1,905
 Available-for-sale
  securities               180       265       353       401      468
 Other interest and
  dividend income           55        57        38        65       72
----------------------------------------------------------------------
     Total interest
      income             2,752     2,721     2,799     2,998    3,138
Interest Expense
 Deposits                  458       443       491       538      548
 Borrowings                500       546       565       551      604
----------------------------------------------------------------------
     Total interest
      expense              958       989     1,056     1,089    1,152
----------------------------------------------------------------------
       Net interest
        income           1,794     1,732     1,743     1,909    1,986
 Provision (reversal
  of reserve) for loan
  and lease losses          60        56      (202)       76       81
----------------------------------------------------------------------
     Net interest
      income after
      provision
      (reversal of
      reserve) for
      loan and lease
      losses             1,734     1,676     1,945     1,833    1,905
Noninterest Income
 Home loan mortgage
  banking income, net        -       531       592       145      611
 Depositor and other
  retail banking fees      507       463       472       471      454
 Securities fees and
  commissions              105       107       103       103      100
 Insurance income           57        61        49        45       48
 Portfolio loan
  related income           103        87        96       116      111
 Gain (loss) from
  other available-for-
  sale securities           41        21       (13)      557      137
 Gain (loss) on
  extinguishment of
  borrowings                (1)      (89)        -         7      (49)
 Other income               82        56       166       120      114
----------------------------------------------------------------------
     Total noninterest
      income               894     1,237     1,465     1,564    1,526
Noninterest Expense
 Compensation and
  benefits                 849       899       877       837      843
 Occupancy and
  equipment                393       400       569       352      371
 Telecommunications
  and outsourced
  information services     123       123       125       150      140
 Depositor and other
  retail banking
  losses                    40        40        40        35       37
 Amortization of other
  intangible assets         14        15        15        15       15
 Advertising and
  promotion                 84        58        88        51       80
 Professional fees          32        39        78        69       66
 Other expense             313       306       309       301      298
----------------------------------------------------------------------
     Total noninterest
      expense            1,848     1,880     2,101     1,810    1,850
----------------------------------------------------------------------
       Income from
        continuing
        operations
        before income
        taxes              780     1,033     1,309     1,587    1,581
       Income taxes        291       385       488       588      586
----------------------------------------------------------------------
       Income from
        continuing
        operations,
        net of taxes       489       648       821       999      995
----------------------------------------------------------------------
Discontinued Operations
       Income (loss)
        from
        discontinued
        operations
        before income
        taxes                -       (32)       34        38       34
       Gain on
        disposition of
        discontinued
        operations           -       676         -         -        -
       Income taxes          -       245        13        14       12
----------------------------------------------------------------------
         Income from
          discontinued
          operations,
          net of taxes       -       399        21        24       22
----------------------------------------------------------------------
Net Income            $    489  $  1,047  $    842  $  1,023  $ 1,017
======================================================================

Basic Earnings Per
 Common Share:
  Income from
   continuing
   operations         $   0.57  $   0.75  $   0.93  $   1.11  $  1.09
  Income from
   discontinued
   operations, net           -      0.46      0.02      0.03     0.03
                       --------  --------  --------  --------  -------
  Net income              0.57      1.21      0.95      1.14     1.12

Diluted Earnings Per
 Common Share:
  Income from
   continuing
   operations         $   0.55  $   0.73  $   0.91  $   1.09  $  1.07
  Income from
   discontinued
   operations, net           -      0.45      0.02      0.02     0.02
                       --------  --------  --------  --------  -------
  Net income              0.55      1.18      0.93      1.11     1.09

Dividends declared per
 common share             0.43      0.42      0.41      0.40     0.30
Basic weighted average
 number of common
 shares outstanding
 (in thousands)        860,496   863,299   883,539   899,579  910,921
Diluted weighted
 average number of
 common shares
 outstanding (in
 thousands)            883,414   886,467   904,840   918,372  929,386

WM-2

                           Washington Mutual, Inc.
                      Consolidated Statements of Income
                (dollars in millions, except per share data)
                                 (unaudited)



                                                    Six Months Ended
---------------------------------------------------------------------
                                                    June 30,  June 30,
                                                       2004      2003
----------------------------------------------------------------------
Interest Income
   Loans held for sale                             $    724  $  1,361
   Loans held in portfolio                            4,193     3,869
   Available-for-sale securities                        444       984
   Other interest and dividend income                   112       152
----------------------------------------------------------------------
       Total interest income                          5,473     6,366
Interest Expense
   Deposits                                             901     1,135
   Borrowings                                         1,046     1,253
----------------------------------------------------------------------
       Total interest expense                         1,947     2,388
----------------------------------------------------------------------
         Net interest income                          3,526     3,978
   Provision for loan and lease losses                  116       169
----------------------------------------------------------------------
       Net interest income after provision for loan
        and lease losses                              3,410     3,809
Noninterest Income
   Home loan mortgage banking income, net               531     1,237
   Depositor and other retail banking fees              969       875
   Securities fees and commissions                      212       189
   Insurance income                                     118        94
   Portfolio loan related income                        190       227
   Gain from other available-for-sale securities         62       131
   Loss on extinguishment of borrowings                 (90)     (136)
   Other income                                         139       204
----------------------------------------------------------------------
       Total noninterest income                       2,131     2,821
Noninterest Expense
   Compensation and benefits                          1,748     1,590
   Occupancy and equipment                              794       672
   Telecommunications and outsourced information
    services                                            246       280
   Depositor and other retail banking losses             80        78
   Amortization of other intangible assets               29        31
   Advertising and promotion                            143       139
   Professional fees                                     71       120
   Other expense                                        617       586
----------------------------------------------------------------------
       Total noninterest expense                      3,728     3,496
----------------------------------------------------------------------
         Income from continuing operations before
          income taxes                                1,813     3,134
         Income taxes                                   676     1,161
----------------------------------------------------------------------
            Income from continuing operations, net
             of taxes                                 1,137     1,973
----------------------------------------------------------------------
Discontinued Operations
         Income (loss) from discontinued operations
          before income taxes                           (32)       65
         Gain on disposition of discontinued
          operations                                    676         -
         Income taxes                                   245        24
----------------------------------------------------------------------
            Income from discontinued operations,
             net of taxes                               399        41
----------------------------------------------------------------------
Net Income                                         $  1,536  $  2,014
======================================================================

Basic Earnings Per Common Share:
    Income from continuing operations              $   1.32  $   2.15
    Income from discontinued operations, net           0.46      0.05
                                                    --------  --------
    Net income                                         1.78      2.20

Diluted Earnings Per Common Share:
    Income from continuing operations              $   1.29  $   2.12
    Income from discontinued operations, net           0.45      0.04
                                                    --------  --------
    Net income                                         1.74      2.16

Dividends declared per common share                    0.85      0.59
Basic weighted average number of common shares
 outstanding (in thousands)                         861,898   915,974
Diluted weighted average number of common shares
 outstanding (in thousands)                         884,940   932,109

WM-3

                        Washington Mutual, Inc.
            Consolidated Statements of Financial Condition
             (dollars in millions, except per share data)
                              (unaudited)

                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
Assets
 Cash and cash
  equivalents        $  5,133  $  6,045  $  7,018  $  5,744  $  7,333
 Federal funds sold
  and securities
  purchased under
  agreements to
  resell                   70     1,783        19        12     2,085
 Available-for-sale
  securities, total
  amortized cost of
  $19,392, $22,843,
  $36,858, $36,792
  and $43,170:
    Mortgage-backed
     securities        10,042    10,766    10,695    14,352    24,875
    Investment
     securities         9,337    12,565    26,012    22,705    20,152
 Loans held for sale   26,409    33,125    20,343    35,493    44,870
 Loans held in
  portfolio           195,929   187,462   175,644   160,556   150,050
 Allowance for loan
  and lease losses     (1,293)   (1,260)   (1,250)   (1,549)   (1,530)
----------------------------------------------------------------------
     Total loans held
      in portfolio,
      net of
      allowance for
      loan and lease
      losses          194,636   186,202   174,394   159,007   148,520
 Investment in
  Federal Home Loan
  Banks                 3,965     3,916     3,462     3,429     3,596
 Mortgage servicing
  rights                7,501     5,239     6,354     5,870     4,598
 Goodwill               6,196     6,196     6,196     6,196     6,196
 Assets of
  discontinued
  operations                -         -     4,184     4,138     4,020
 Other assets          15,255    14,931    16,501    29,685    16,875
----------------------------------------------------------------------
     Total assets    $278,544  $280,768  $275,178  $286,631  $283,120
======================================================================
Liabilities
 Deposits:
   Noninterest-
    bearing deposits $ 33,343  $ 35,714  $ 29,968  $ 39,197  $ 46,505
   Interest-bearing
    deposits          129,123   125,267   123,213   124,944   119,952
----------------------------------------------------------------------
      Total deposits  162,466   160,981   153,181   164,141   166,457
 Federal funds
  purchased and
  commercial paper      2,293     4,501     2,011     3,113     2,632
 Securities sold
  under agreements
  to repurchase        15,764    18,306    28,333    20,468    22,964
 Advances from
  Federal Home Loan
  Banks                61,379    58,494    48,330    43,743    46,127
 Other borrowings      12,113    13,692    15,483    12,584    12,986
 Liabilities of
  discontinued
  operations                -         -     3,578     3,554     3,448
 Other liabilities      4,160     4,411     4,520    18,587     7,528
----------------------------------------------------------------------
      Total
       liabilities    258,175   260,385   255,436   266,190   262,142
Stockholders' equity   20,369    20,383    19,742    20,441    20,978
----------------------------------------------------------------------
      Total
       liabilities
       and
       stockholders'
       equity        $278,544  $280,768  $275,178  $286,631  $283,120
======================================================================
Common shares
 outstanding at end
 of period (in
 thousands)(1)        872,246   868,953   880,986   913,854   924,238
Book value per
 common share(2)     $  23.51  $  23.62  $  22.56  $  22.77  $  23.13
Tangible book value
 per common share(2)    16.47     16.53     15.58     15.94     16.35
Employees at end of
 period(3)             57,274    59,173    63,720    62,901    60,166

--------------------------
(1) Includes 6,000,000 shares at June 30, 2004, March 31, 2004 and
    December 31, 2003, 16,200,000 shares at September 30, 2003, and
    17,100,000 shares at June 30, 2003, held in escrow.
(2) Excludes 6,000,000 shares at June 30, 2004, March 31, 2004 and
    December 31, 2003, 16,200,000 shares at September 30, 2003, and
    17,100,000 shares at June 30, 2003, held in escrow.
(3) Includes 2,346, 2,352, and 2,397 employees reported as part of
    discontinued operations at December 31, 2003, September 30, 2003,
    and June 30, 2003.

WM-4

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                         Quarter Ended
----------------------------------------------------------------------
                         June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
                            2004     2004     2003      2003     2003
----------------------------------------------------------------------
Stockholders' Equity Rollforward
Balance, beginning of
 period                   $20,383  $19,742  $20,441  $20,978  $20,608
Net income                    489    1,047      842    1,023    1,017
Other comprehensive income
 (loss), net of tax          (210)     512     (105)    (805)      91
Cash dividends declared on
 common stock                (372)    (367)    (368)    (362)    (275)
Cash dividends returned(1)      -        -       45        4        2
Common stock repurchased
 and retired                    -     (712)  (1,269)    (457)    (621)
Common stock issued            79      161      156       60      156
----------------------------------------------------------------------
Balance, end of period    $20,369  $20,383  $19,742  $20,441  $20,978
======================================================================
(1) Represents accumulated dividends on shares returned from escrow.

WM-5

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                        Quarter Ended
----------------------------------------------------------------------
                         June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
                            2004     2004     2003      2003     2003
----------------------------------------------------------------------
CONSUMER GROUP
 RETAIL BANKING AND FINANCIAL SERVICES
  Condensed income statement:
   Net interest income   $  1,271 $  1,236 $  1,116 $    994 $    975
   Provision for loan
    and lease losses           42       38       35       40       37
   Noninterest income         702      622      646      653      625
   Inter-segment revenue        7        6       20       63       45
   Noninterest expense      1,120    1,071    1,075      982      958
----------------------------------------------------------------------
   Income before income
    taxes                     818      755      672      688      650
   Income taxes               310      286      257      273      245
----------------------------------------------------------------------
     Net income          $    508 $    469 $    415 $    415 $    405
======================================================================
  Performance and other data:
   Efficiency ratio(1)      50.07%   50.58%   53.01%   49.80%   50.40%
   Average loans         $158,945 $149,356 $135,323 $118,295 $114,390
   Average assets         171,306  161,298  147,203  130,048  125,666
   Average deposits       128,680  128,000  128,651  126,040  123,767

 MORTGAGE BANKING
  Condensed income statement:
   Net interest income   $    358 $    277 $    401 $    683 $    668
   Provision for loan
    and lease losses            3        2        -        1        1
   Noninterest income         199      760      870      288      953
   Inter-segment expense        7        6       20       63       45
   Noninterest expense        649      671      867      729      786
----------------------------------------------------------------------
   Income (expense) before
    income taxes             (102)     358      384      178      789
   Income taxes (benefit)     (39)     135      163       61      300
----------------------------------------------------------------------
      Net income (loss)  $    (63)$    223 $    221 $    117 $    489
======================================================================
  Performance and other data:
   Efficiency ratio(1)     108.71%   59.97%   65.16%   74.58%   46.58%
   Average loans         $ 26,999 $ 19,871 $ 24,677 $ 51,648 $ 51,558
   Average assets          39,936   35,478   44,279   78,809   73,411
   Average deposits        19,837   14,877   18,347   35,120   30,039

COMMERCIAL GROUP
  Condensed income statement:
   Net interest income   $    340 $    340 $    364 $    324 $    316
   Provision for loan
    and lease losses           10       15       22       24       26
   Noninterest income         103       87       54      204      122
   Noninterest expense        145      152      154      142      139
----------------------------------------------------------------------
   Income from continuing
    operations before income
    taxes                     288      260      242      362      273
   Income taxes               101       91       90      130       97
----------------------------------------------------------------------
     Income from continuing
      operations              187      169      152      232      176
   Income from discontinued
    operations, net of taxes    -        -       21       24       22
----------------------------------------------------------------------
      Net income         $    187 $    169 $    173 $    256 $    198
======================================================================
  Performance and other data:
   Efficiency ratio(1)      26.10%   28.73%   29.77%   21.42%   24.95%
   Average loans         $ 38,517 $ 37,005 $ 37,816 $ 35,318 $ 34,480
   Average assets          43,761   42,871   46,368   44,017   43,133
   Average deposits         6,898    6,049    6,130    6,131    4,868

(This table is continued on "WM-6".)
--------------------------
(1) The efficiency ratio is defined as noninterest expense, excluding
    a cost of capital charge on goodwill, divided by total revenue
    (net interest income and noninterest income).

WM-6

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                         Quarter Ended
----------------------------------------------------------------------
(This table is           June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
 continued from "WM-5".)    2004     2004     2003      2003     2003
----------------------------------------------------------------------
CORPORATE SUPPORT/TREASURY AND OTHER
  Condensed income statement:
   Net interest expense  $   (281) $  (224) $  (235) $  (183) $   (59)
   Noninterest income
    (expense)                  33      (68)     135      611        -
   Noninterest expense        144      196      217      169      177
----------------------------------------------------------------------
   Income (expense) from
    continuing operations    (392)    (488)    (317)     259     (236)
   Income taxes (benefit)    (146)    (182)    (118)      96      (87)
----------------------------------------------------------------------
     Income (expense) from
      continuing operations  (246)    (306)    (199)     163     (149)
   Income from discontinued
    operations, net of taxes    -      399        -        -        -
----------------------------------------------------------------------
      Net income (loss)  $   (246) $    93  $  (199) $   163  $  (149)
======================================================================
  Performance and other data:
   Average assets        $ 30,687  $33,416  $41,472  $39,103  $43,492
   Average deposits         9,391    5,028    5,558    6,654    5,006

RECONCILING ADJUSTMENTS
  Condensed income statement:
   Net interest
    income(2)            $    106  $   103  $    97  $    91  $    86
   Provision (reversal of
    reserve) for loan and
    lease losses(3)             5        1     (259)      11       17
   Noninterest income
    (expense)(4)             (143)    (164)    (240)    (192)    (174)
   Noninterest (income)
    expense(5)               (210)    (210)    (212)    (212)    (210)
----------------------------------------------------------------------
   Income before income
    taxes                     168      148      328      100      105
   Income taxes(6)             65       55       96       28       31
----------------------------------------------------------------------
      Net income         $    103  $    93  $   232  $    72  $    74
======================================================================
  Performance and other data:
   Average loans(7)      $ (1,553) $(1,505) $(1,421) $(1,293) $(1,201)
   Average assets(7)(8)    (1,750)  (1,657)  (1,882)  (1,762)  (1,665)

TOTAL CONSOLIDATED
  Condensed income statement:
   Net interest income   $  1,794  $ 1,732  $ 1,743  $ 1,909  $ 1,986
   Provision (reversal
    of reserve) for
    loan and lease losses      60       56     (202)      76       81
   Noninterest income         894    1,237    1,465    1,564    1,526
   Noninterest expense      1,848    1,880    2,101    1,810    1,850
----------------------------------------------------------------------
   Income from continuing
    operations before
    income taxes              780    1,033    1,309    1,587    1,581
   Income taxes               291      385      488      588      586
----------------------------------------------------------------------
     Income from continuing
      operations              489      648      821      999      995
   Income from discontinued
    operations, net of taxes    -      399       21       24       22
----------------------------------------------------------------------
      Net income         $    489  $ 1,047  $   842  $ 1,023  $ 1,017
======================================================================
  Performance and other data:
   Efficiency ratio(9)      68.77%   63.34%   65.51%   52.13%   52.66%
   Average loans         $222,908 $204,727 $196,395 $203,968 $199,227
   Average assets         283,940  271,406  277,440  290,215  284,037
   Average deposits       164,806  153,954  158,686  173,945  163,680

--------------------------
(2) Represents the difference between home loan premium amortization
    recorded by the Retail Banking and Financial Services segment and
    the amount recognized in the Company's Consolidated Statements of
    Income. For management reporting purposes, loans that are held in
    portfolio by the Retail Banking and Financial Services segment are
    treated as if they are purchased from the Mortgage Banking
    segment. Since the cost basis of these loans includes an assumed
    profit factor paid to the Mortgage Banking segment, the
    amortization of loan premiums recorded by the Retail Banking and
    Financial Services segment includes this assumed profit factor and
    must therefore be eliminated as a reconciling adjustment.
(3) Represents the difference between the long-term, normalized net
    charge-off ratio used to assess expected loan and lease losses for
    the operating segments and the "losses inherent in the loan
    portfolio" methodology used by the Company.
(4) Represents the difference between gain from mortgage loans
    recorded by the Mortgage Banking segment and the gain from
    mortgage loans recognized in the Company's Consolidated Statements
    of Income. (As the Mortgage Banking segment holds no loans in
    portfolio, all loans originated or purchased by this segment are
    considered to be salable for management reporting purposes.)
(5) Represents the corporate offset for the cost of capital related to
    goodwill that has been allocated to the segments.
(6) Represents the tax effect of reconciling adjustments.
(7) Includes the inter-segment offset for inter-segment loan premiums
    that the Retail Banking and Financial Services segment recognized
    from the transfer of portfolio loans from the Mortgage Banking
    segment.
(8) Includes the impact to the allowance for loan and lease losses per
    the following table that results from the difference between the
    long-term, normalized net charge-off ratio used to assess expected
    loan and lease losses for the operating segments and the "losses
    inherent in the loan portfolio" methodology used by the Company.

                 Quarter Ended
  ---------------------------------------------------
    June 30,  Mar. 31,  Dec. 31,  Sept. 30,  June 30,
       2004      2004      2003       2003      2003
  ---------------------------------------------------
    $(197)    $(152)     $(461)    $(469)     $(464)
  ---------------------------------------------------
(9) The efficiency ratio is defined as noninterest expense divided by
    total revenue (net interest income and noninterest income).

WM-7

                        Washington Mutual, Inc.
                    Selected Financial Information
             (dollars in millions, except per share data)
                              (unaudited)

                                     Quarter Ended
----------------------------------------------------------------------
                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
PROFITABILITY
 Net interest income $ 1,794  $  1,732  $  1,743  $  1,909  $  1,986
 Net interest margin    2.86 %    2.89 %    2.90 %    3.07 %    3.22 %
 Noninterest income  $   894  $  1,237  $  1,465  $  1,564  $  1,526
 Noninterest expense   1,848     1,880     2,101     1,810     1,850
 Basic earnings per
  common share:
  Income from
   continuing
   operations        $  0.57  $   0.75  $   0.93  $   1.11  $   1.09
  Income from
   discontinued
   operations, net         -      0.46      0.02      0.03      0.03
  Net income            0.57      1.21      0.95      1.14      1.12
 Diluted earnings
  per common share:
  Income from
   continuing
   operations        $  0.55  $   0.73  $   0.91  $   1.09  $   1.07
  Income from
   discontinued
   operations, net         -      0.45      0.02      0.02      0.02
  Net income            0.55      1.18      0.93      1.11      1.09
 Dividends declared
  per common share   $  0.43  $   0.42  $   0.41  $   0.40  $   0.30
 Return on average
  assets(1)             0.69 %    1.54 %    1.21 %    1.41 %    1.43 %
 Return on average
  common equity(1)      9.63     20.85     16.83     19.82     19.26
 Efficiency
  ratio(2)(3)          68.77     63.34     65.51     52.13     52.66
ASSET QUALITY
 Nonaccrual
  loans(4)(5)        $ 1,396  $  1,542  $  1,626  $  1,813  $  1,893
 Foreclosed
  assets(5)              286       307       311       293       307
 Total nonperforming
  assets(5)            1,682     1,849     1,937     2,106     2,200
 Nonperforming
  assets/total
  assets(5)             0.60 %    0.66 %    0.70 %    0.73 %    0.78 %
 Restructured
  loans(5)           $    79  $    107  $    111  $    118  $     89
 Total nonperforming
  assets and
  restructured
  loans(5)             1,761     1,956     2,048     2,224     2,289
 Allowance for loan
  and lease
  losses(5)            1,293     1,260     1,250     1,549     1,530
 Allowance as a
  percentage of
  total loans held
  in portfolio(5)       0.66 %    0.67 %    0.71 %    0.96 %    1.02 %
 Provision (reversal
  of reserve) for
  loan and lease
  losses             $    60  $     56  $   (202) $     76  $     81
 Net charge-offs(5)       24        46        97        74        81
CAPITAL ADEQUACY(5)
 Stockholders'
  equity/total
  assets                7.31 %    7.26 %    7.17 %    7.13 %    7.41 %
 Tangible common
  equity(6)/total
  tangible assets(6)    5.32      5.21      5.26      5.26      5.26
 Estimated total
  risk-based
  capital/risk-
  weighted assets(7)   10.34     10.53     10.94     11.54     11.68
SUPPLEMENTAL DATA
 Average balance sheet:
  Total loans held
   for sale          $31,694  $ 23,859  $ 29,362  $ 51,272  $ 51,519
  Total loans held
   in portfolio      191,214   180,868   167,033   152,696   147,708
  Total interest-
   earning assets    251,264   239,979   241,718   249,892   246,851
  Total assets       283,940   271,406   277,440   290,215   284,037
  Total interest-
   bearing deposits  127,670   123,336   125,318   124,488   120,144
  Total noninterest-
   bearing deposits   37,136    30,618    33,368    49,457    43,536
  Total stockholders'
   equity             20,288    20,088    20,027    20,657    21,112
 Period-end balance
  sheet:
  Loans held for
   sale               26,409    33,125    20,343    35,493    44,870
  Loans held in
   portfolio, net of
   allowance for
   loan and lease
   losses            194,636   186,202   174,394   159,007   148,520
  Interest-earning
   assets(2)         245,752   249,617   236,175   236,547   245,628
  Total assets       278,544   280,768   275,178   286,631   283,120
  Interest-bearing
   deposits          129,123   125,267   123,213   124,944   119,952
  Noninterest-
   bearing deposits   33,343    35,714    29,968    39,197    46,505
  Total stockholders'
   equity             20,369    20,383    19,742    20,441    20,978

--------------------------
(1) Includes income from continuing and discontinued operations
    through the period ending March 31, 2004.
(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) As of quarter end.
(6) Excludes unrealized net gain/loss on available-for-sale securities
    and derivatives, goodwill and intangible assets, but includes MSR.
(7) Estimate of what the total risk-based capital ratio would be if
    Washington Mutual, Inc. were a bank holding company that is
    subject to Federal Reserve Board capital requirements.

WM-8

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                       Quarter Ended
----------------------------------------------------------------------
                          June 30, 2004           Mar. 31, 2004
                                     Interest                 Interest
                                     Income/                  Income/
                      Balance  Rate  Expense  Balance   Rate  Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
  Federal funds sold and
   securities purchased
   under agreements to
   resell             $  1,030  1.14% $    3  $  1,026   1.34% $    3
  Available-for-sale
   securities(1):
    Mortgage-backed
     securities          9,887  3.92      97     9,999   4.35     109
    Investment
     securities         11,975  2.76      83    19,073   3.29     156
  Loans held for
   sale(2)              31,694  5.00     396    23,859   5.50     328
  Loans held in
   portfolio(2):
    Loans secured by real
     estate:
     Home              105,360  4.12   1,086   102,691   4.24   1,089
     Purchased specialty
      mortgage finance  15,361  4.77     183    14,016   5.21     182
------------------------------        ------  --------         ------
         Total home
          loans        120,721  4.20   1,269   116,707   4.36   1,271
     Home equity loans
      and lines of
      credit            33,716  4.53     381    29,262   4.72     344
     Home construction:
      Builder(3)         1,211  4.35      13     1,117   4.42      12
      Custom(4)          1,299  6.16      20     1,200   6.17      19
     Multi-family       20,809  4.97     259    20,376   5.06     258
     Other real estate   6,502  6.05      98     6,589   5.77      95
------------------------------        ------  --------         ------
         Total loans
          secured by
          real estate  184,258  4.43   2,040   175,251   4.57   1,999
  Consumer                 927  9.92      23       997  10.15      25
  Commercial business    6,029  3.83      58     4,620   4.01      47
------------------------------        ------  --------         ------
         Total loans held
          in portfolio 191,214  4.44   2,121   180,868   4.58   2,071
  Other                  5,464  3.84      52     5,154   4.17      54
------------------------------        ------  --------         ------
         Total interest-
          earning
          assets       251,264  4.38   2,752   239,979   4.54   2,721
Noninterest-earning
 assets:
  Mortgage servicing
   rights                7,128                   5,872
  Goodwill               6,196                   6,196
  Other(5)              19,352                  19,359
------------------------------                --------
     Total assets     $283,940                $271,406
==============================                ========
Liabilities
Interest-bearing liabilities:
  Deposits:
    Interest-bearing
     checking
     deposits         $ 65,468  1.28     208  $ 67,431   1.28     214
    Savings and money
     market deposits    29,328  0.82      60    26,915   0.75      50
    Time deposits       32,874  2.31     190    28,990   2.48     179
------------------------------        ------  --------         ------
         Total interest-
          bearing
          deposits     127,670  1.44     458   123,336   1.45     443
  Federal funds
   purchased and
   commercial paper      3,029  1.07       8     3,493   1.08      10
  Securities sold
   under agreements
   to repurchase        17,004  2.28      98    21,954   1.93     107
  Advances from Federal
   Home Loan Banks      59,233  1.88     281    52,921   2.28     305
  Other                 12,774  3.56     113    14,032   3.56     124
------------------------------        ------  --------         ------
         Total interest-
          bearing
          liabilities  219,710  1.74     958   215,736   1.83     989
                                      ------                   ------
Noninterest-bearing sources:
  Noninterest-bearing
   deposits             37,136                  30,618
  Other liabilities(6)   6,806                   4,964
  Stockholders' equity  20,288                  20,088
------------------------------                --------
     Total liabilities and
      stockholders'
      equity          $283,940                $271,406
==============================                ========
  Net interest spread and net
   interest income              2.64  $1,794             2.71  $1,732
                                      ======                   ======
  Impact of noninterest-
   bearing sources              0.22                     0.18
  Net interest margin           2.86                     2.89



                            Quarter Ended
----------------------------------------------------------------------
                          June 30, 2003
                                     Interest
                                     Income/
                      Balance  Rate  Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
  Federal funds sold and
   securities purchased
   under agreements to
   resell             $  3,448  1.29% $   11
  Available-for-sale
   securities(1):
    Mortgage-backed
     securities         24,087  5.22     314
    Investment
     securities         14,880  4.14     154
  Loans held for
   sale(2)              51,519  5.38     693
  Loans held in
   portfolio(2):
    Loans secured by
     real estate:
     Home               83,426  4.95   1,033
     Purchased specialty
      mortgage finance  10,475  5.50     144
------------------------------         ------
         Total home
          loans         93,901  5.01   1,177
     Home equity loans
      and lines of
      credit            19,238  5.13     246
     Home construction:
      Builder(3)         1,103  4.77      13
      Custom(4)            927  7.48      17
     Multi-family       19,036  5.34     255
     Other real estate   7,306  6.25     114
------------------------------         ------
         Total loans
          secured by
          real estate  141,511  5.15   1,822
  Consumer               1,253  8.93      28
  Commercial business    4,944  4.38      55
------------------------------         ------
         Total loans
          held in
          portfolio    147,708  5.16   1,905
  Other                  5,209  4.69      61
------------------------------         ------
         Total
          interest-
          earning
          assets       246,851  5.08   3,138
Noninterest-earning
 assets:
  Mortgage servicing
   rights                4,754
  Goodwill               6,196
  Other(5)              26,236
------------------------------
     Total assets     $284,037
==============================
Liabilities
Interest-bearing liabilities:
  Deposits:
    Interest-bearing
     checking
     deposits         $ 60,597  1.74     262
    Savings and money
     market deposits    28,229  0.98      69
    Time deposits       31,318  2.77     217
------------------------------         ------
         Total
          interest-
          bearing
          deposits     120,144  1.83     548
  Federal funds
   purchased and
   commercial paper      2,972  1.27      10
  Securities sold
   under agreements
   to repurchase        20,040  2.66     134
  Advances from Federal
   Home Loan Banks      51,916  2.56     334
  Other                 13,297  3.80     126
------------------------------         ------
         Total
          interest-
          bearing
          liabilities  208,369  2.21   1,152
                                       ------
Noninterest-bearing sources:
  Noninterest-bearing
   deposits             43,536
  Other liabilities(6)  11,020
  Stockholders' equity  21,112
------------------------------
     Total liabilities
      and stockholders'
      equity          $284,037
==============================
  Net interest spread and net
   interest income              2.87  $1,986
                                       ======
  Impact of noninterest-
   bearing sources              0.35
  Net interest margin           3.22

-----------------------
(1) The average balance and yield are based on average amortized cost
    balances.
(2) Nonaccrual loans were included in the average loan amounts
    outstanding.
(3) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.
(4) Represents construction loans made directly to the intended
    occupant of a single-family residence.
(5) Includes assets of continuing and discontinued operations for the
    quarter ended June 30, 2003.
(6) Includes liabilities of continuing and discontinued operations for
    the quarter ended June 30, 2003.

WM-9

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                      Six Months Ended
----------------------------------------------------------------------
                           June 30, 2004            June 30, 2003
                      ------------------------  ----------------------
                                       Interest               Interest
                                       Income/                Income/
                       Balance   Rate  Expense  Balance  Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
  Federal funds sold
   and securities
   purchased under
   agreements to
   resell             $  1,028  1.24%  $    6  $  4,286  1.27% $    27
  Available-for-sale
   securities(1):
    Mortgage-backed
     securities          9,943  4.14      205    25,142  5.26      661
    Investment
     securities         15,524  3.08      239    14,903  4.34      323
  Loans held for
   sale(2)              27,776  5.21      724    49,422  5.51    1,361
  Loans held in
   portfolio(2):
    Loans secured by
     real estate:
      Home             104,025  4.18    2,174    83,255  5.08    2,116
      Purchased
       specialty mortgage
       finance          14,689  4.98      366    10,286  5.72      294
------------------------------         ------- ---------       -------
          Total home
           loans       118,714  4.28    2,540    93,541  5.15    2,410
      Home equity
       loans and lines
       of credit        31,489  4.62      725    18,248  5.28      480
      Home construction:
          Builder(3)     1,164  4.38       26     1,080  4.90       27
          Custom(4)      1,249  6.16       38       923  7.61       35
      Multi-family      20,592  5.02      517    18,758  5.50      516
      Other real estate  6,546  5.91      194     7,525  6.30      237
------------------------------         ------- ---------       -------
          Total loans
           secured by
           real
           estate      179,754  4.50    4,040   140,075  5.29    3,705
    Consumer               962 10.04       48     1,293  8.94       57
    Commercial business  5,325  3.91      105     4,837  4.42      107
------------------------------         ------- ---------       -------
          Total loans
           held in
           portfolio   186,041  4.51    4,193   146,205  5.30    3,869
  Other                  5,309  4.00      106     4,873  5.16      125
------------------------------         ------- ---------       -------
          Total
           interest-
           earning
           assets      245,621  4.46    5,473   244,831  5.20    6,366
Noninterest-earning
 assets:
  Mortgage servicing
   rights                6,500                    5,103
  Goodwill               6,196                    6,202
  Other(5)              19,356                   26,262
------------------------------                 ---------
      Total assets    $277,673                 $282,398
==============================                 =========
Liabilities
Interest-bearing liabilities:
  Deposits:
    Interest-bearing
     checking
     deposits         $ 66,449  1.28      422  $ 59,416  1.83      538
    Savings and money
     market deposits    28,122  0.79      110    28,056  1.03      143
    Time deposits       30,932  2.39      369    32,088  2.85      454
------------------------------         ------- ---------       -------
          Total
           interest-
           bearing
           deposits    125,503  1.44      901   119,560  1.91    1,135
  Federal funds
   purchased and
   commercial paper      3,261  1.07       18     2,339  1.29       15
  Securities sold
   under agreements to
   repurchase           19,479  2.08      205    20,205  2.71      274
  Advances from
   Federal Home Loan
   Banks                56,077  2.07      586    53,869  2.64      712
  Other                 13,403  3.56      237    13,694  3.66      252
------------------------------         ------- ---------       -------
         Total
          interest-
          bearing
          liabilities  217,723  1.79    1,947   209,667  2.29    2,388
                                      -------                 --------
Noninterest-bearing sources:
  Noninterest-bearing
   deposits             33,877                   41,249
  Other liabilities(6)   5,885                   10,663
  Stockholders' equity  20,188                   20,819
------------------------------                 ---------
      Total
       liabilities and
       stockholders'
       equity         $277,673                 $282,398
==============================                 =========
  Net interest spread
   and net interest
   income                       2.67   $3,526            2.91   $3,978
                                       =======                 =======
  Impact of
   noninterest-bearing
   sources                      0.21                     0.34
  Net interest margin           2.88                     3.25

-----------------------
(1) The average balance and yield are based on average amortized cost
    balances.
(2) Nonaccrual loans were included in the average loan amounts
    outstanding.
(3) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.
(4) Represents construction loans made directly to the intended
    occupant of a single-family residence.
(5) Includes assets of continuing and discontinued operations for the
    six months ended June 30, 2003.
(6) Includes liabilities of continuing and discontinued operations for
    the six months ended June 30, 2003.

WM-10

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)


                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
Deposits
 Retail Deposits:
  Checking:
   Noninterest
    bearing           $ 15,666  $ 15,107  $ 13,724  $ 14,033  $ 13,244
   Interest bearing     59,395    66,618    67,990    66,009    61,131
----------------------------------------------------------------------
     Total checking     75,061    81,725    81,714    80,042    74,375
  Savings and money
   market deposits      30,413    22,452    22,131    22,657    23,171
  Time deposits(1)      23,990    24,128    24,605    25,356    26,591
----------------------------------------------------------------------
     Total retail
      deposits         129,464   128,305   128,450   128,055   124,137
  Commercial business    7,925     7,038     7,159     6,451     6,083
  Wholesale              8,874     6,219     2,579     4,711     3,287
  Custodial and
   escrow(2)            16,203    19,419    14,993    24,924    32,950
----------------------------------------------------------------------
     Total deposits   $162,466  $160,981  $153,181  $164,141  $166,457
======================================================================
(1) Weighted average remaining maturity of time deposits was 16 months
    at June 30, 2004, 16 months at March 31, 2004, 14 months at
    December 31, 2003, 15 months at September 30, 2003 and 16 months
    at June 30, 2003.
(2) Substantially all custodial and escrow deposits reside in
    noninterest-bearing checking accounts.

                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
Retail Checking Accounts(1)
Accounts, beginning of
 period              8,273,235 8,066,332 7,882,946 7,637,914 7,461,320
  Net accounts
   opened during
   the quarter         156,687   206,903   183,386   245,032   176,594
----------------------------------------------------------------------
Accounts, end
 of period           8,429,922 8,273,235 8,066,332 7,882,946 7,637,914
======================================================================
(1) Retail checking accounts exclude commercial business accounts. The
    information provided refers to the number of accounts, not dollar
    amounts.


                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
Retail Banking Stores
Stores, beginning
 of period               1,755     1,776     1,677     1,602     1,556
  Net stores opened
   during the quarter       61       (21)(1)    99        75        46
----------------------------------------------------------------------
Stores, end of period    1,816     1,755     1,776     1,677     1,602
======================================================================
(1) The Company consolidated 79 grocery store locations into larger,
    existing, retail banking stores.


                      June 30,  Mar. 31,  Dec. 31, Sept. 30,  June 30,
                         2004      2004      2003      2003      2003
----------------------------------------------------------------------
Assets Under
 Management           $ 20,106  $ 19,438  $ 17,868  $ 16,017  $ 15,315
======================================================================

WM-11

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                        Quarter Ended
----------------------------------------------------------------------
                        June 30, Mar. 31, Dec. 31, Sept. 30,  June 30,
                           2004     2004     2003      2003      2003
----------------------------------------------------------------------
Loan Volume
 Home loans:
  Adjustable rate       $29,753  $21,822  $23,397  $ 28,225  $ 24,847
  Fixed rate             26,076   21,564   28,105    83,360    80,107
  Specialty mortgage
   finance(1)             7,323    7,113    6,031     5,460     4,658
----------------------------------------------------------------------
   Total home loan
    volume               63,152   50,499   57,533   117,045   109,612
 Home equity loans and
  lines of credit        11,572    8,416    7,922     9,369     7,152
 Home construction loans:
  Builder(2)                447      273      636       787       606
  Custom(3)                 392      336      377       363       273
 Multi-family             2,346    1,525    1,647     2,598     2,022
 Other real estate          760      370      655       439       595
----------------------------------------------------------------------
   Total loans secured
    by real estate       78,669   61,419   68,770   130,601   120,260
 Consumer                    63       58       72       146        61
 Commercial business        789      688    1,061     1,191     1,304
----------------------------------------------------------------------
   Total loan volume    $79,521  $62,165  $69,903  $131,938  $121,625
======================================================================
Loan Volume by Channel
 Retail                 $37,720  $28,126  $31,630  $ 55,104  $ 46,620
 Wholesale               19,534   15,419   16,334    27,410    27,067
 Purchased/correspondent 22,267   18,620   21,939    49,424    47,938
----------------------------------------------------------------------
   Total loan volume by
    channel             $79,521  $62,165  $69,903  $131,938  $121,625
======================================================================
Refinancing Activity(4)
 Home loan refinancing  $40,201  $33,233  $36,817  $ 90,762  $ 87,772
 Home equity loans and
  lines of credit and
  consumer                1,147    1,107      848     2,030     1,203
 Home construction loans     13       12        6        16        13
 Multi-family and other
  real estate               883      575      690     1,164       893
----------------------------------------------------------------------
   Total refinancing    $42,244  $34,927  $38,361  $ 93,972  $ 89,881
======================================================================
Home Loan Volume by Index
 Short-term adjustable-
  rate loans(5):
  Treasury indices      $16,467  $13,440  $13,021  $  7,076  $  5,510
  COFI                      167      110      151       124       198
  Other                     812      218      628       336       223
----------------------------------------------------------------------
   Total short-term
    adjustable-rate
    loans                17,446   13,768   13,800     7,536     5,931
 Medium-term adjustable-
  rate loans(6)          17,536   12,814   13,667    24,138    22,070
 Fixed-rate loans        28,170   23,917   30,066    85,371    81,611
----------------------------------------------------------------------
   Total home loan
    volume              $63,152  $50,499  $57,533  $117,045  $109,612
======================================================================
Note: Pursuant to regulatory guidance issued in December 2003, buyouts
of delinquent mortgages contained within Government National Mortgage
Association (GNMA) loan servicing pools must be classified as loans on
the balance sheet. Accordingly, total home loan volume includes GNMA
pool buy-out volume of $689 million, $1.05 billion, $1.30 billion,
$1.67 billion and $1.46 billion for the quarters ended June 30, 2004,
March 31, 2004, December 31, 2003, September 30, 2003 and
June 30, 2003.

------------------------------
(1) Represents purchased Specialty Mortgage Finance loan portfolios
    and mortgages originated by Long Beach Mortgage.
(2) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.
(3) Represents 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.
(5) Short term is defined as adjustable-rate loans that reprice within
    one year or less.
(6) Medium term is defined as adjustable-rate loans that reprice after
    one year.

WM-12

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                                Six Months Ended
----------------------------------------------------------------------
                                             June 30,      June 30,
                                                2004          2003
----------------------------------------------------------------------
Loan Volume
 Home loans:
  Adjustable rate                          $    51,575    $    48,278
  Fixed rate                                    47,640        152,139
  Specialty mortgage finance(1)                 14,436          9,187
----------------------------------------------------------------------
    Total home loan volume                     113,651        209,604
 Home equity loans and lines of credit          19,988         12,348
 Home construction loans:
  Builder(2)                                       720          1,083
  Custom(3)                                        728            436
 Multi-family                                    3,871          3,819
 Other real estate                               1,130            876
----------------------------------------------------------------------
    Total loans secured by real estate         140,088        228,166
 Consumer                                          121            120
 Commercial business                             1,477          2,118
----------------------------------------------------------------------
    Total loan volume                      $   141,686    $   230,404
======================================================================
Loan Volume by Channel
 Retail                                    $    65,846    $    82,813
 Wholesale                                      34,953         51,927
 Purchased/correspondent                        40,887         95,664
----------------------------------------------------------------------
    Total loan volume by channel           $   141,686    $   230,404
======================================================================
Refinancing Activity(4)
 Home loan refinancing                     $    73,434    $   170,404
 Home equity loans and lines of credit and
  consumer                                       2,254          1,896
 Home construction loans                            25             25
 Multi-family and other real estate              1,458          1,600
----------------------------------------------------------------------
    Total refinancing                      $    77,171    $   173,925
======================================================================
Home Loan Volume by Index
 Short-term adjustable-rate loans(5):
  Treasury indices                         $    29,907    $    10,049
  COFI                                             277            447
  Other                                          1,030            441
----------------------------------------------------------------------
    Total short-term adjustable-rate loans      31,214         10,937
 Medium-term adjustable-rate loans(6)           30,350         43,600
 Fixed-rate loans                               52,087        155,067
----------------------------------------------------------------------
    Total home loan volume                 $   113,651    $   209,604
======================================================================

Note: Pursuant to regulatory guidance issued in December 2003, buyouts
of delinquent mortgages contained within Government National Mortgage
Association (GNMA) loan servicing pools must be classified as loans on
the balance sheet. Accordingly, total home loan volume includes GNMA
pool buy-out volume of $1.74 billion and $3.98 billion for the six
months ended June 30, 2004 and June 30, 2003.

------------------------------
(1) Represents purchased Specialty Mortgage Finance loan portfolios
    and mortgages originated by Long Beach Mortgage.
(2) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.
(3) Represents 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.
(5) Short term is defined as adjustable-rate loans that reprice within
    one year or less.
(6) Medium term is defined as adjustable-rate loans that reprice after
    one year.

WM-13

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                        Change from
                                      Mar. 31, 2004  June 30, Mar. 31,
                                   to June 30, 2004     2004     2004
----------------------------------------------------------------------
Loans by Property Type
 Loans held in portfolio:
  Loans secured by real estate:
   Home                               $ 1,366      $106,312  $104,946
   Purchased specialty mortgage
    finance                               780        16,217    15,437
----------------------------------------------------------------------
     Total home loans                   2,146       122,529   120,383
   Home equity loans and lines of
    credit                              4,813        36,077    31,264
   Home construction:
    Builder(1)                            136         1,241     1,105
    Custom(2)                              99         1,364     1,265
   Multi-family                           577        21,156    20,579
   Other real estate                        5         6,513     6,508
----------------------------------------------------------------------
      Total loans secured by real
       estate                           7,776       188,880   181,104
  Consumer                                (62)          892       954
  Commercial business                     753         6,157     5,404
----------------------------------------------------------------------
      Total loans held in
       portfolio                        8,467       195,929   187,462
 Less: allowance for loan and
  lease losses                            (33)       (1,293)   (1,260)
----------------------------------------------------------------------
      Total net loans held in
       portfolio                        8,434       194,636   186,202
 Loans held for sale(3)                (6,716)       26,409    33,125
----------------------------------------------------------------------
      Total net loans                 $ 1,718      $221,045  $219,327
======================================================================

                                       Dec. 31,   Sept. 30,   June 30,
                                          2003        2003       2003
----------------------------------------------------------------------
Loans by Property Type
 Loans held in portfolio:
  Loans secured by real estate:
   Home                             $  100,043    $ 90,243   $ 83,839
   Purchased specialty mortgage
    finance                             12,973      11,366     10,836
----------------------------------------------------------------------
     Total home loans                  113,016     101,609     94,675
   Home equity loans and lines of
    credit                              27,647      24,060     20,505
   Home construction:
    Builder(1)                           1,052       1,061      1,121
    Custom(2)                            1,168       1,032        963
   Multi-family                         20,324      20,191     19,482
   Other real estate                     6,649       6,932      7,122
----------------------------------------------------------------------
      Total loans secured by real
       estate                          169,856     154,885    143,868
  Consumer                               1,028       1,121      1,207
  Commercial business                    4,760       4,550      4,975
----------------------------------------------------------------------
      Total loans held in
       portfolio                       175,644     160,556    150,050
 Less: allowance for loan and
  lease losses                          (1,250)     (1,549)    (1,530)
----------------------------------------------------------------------
      Total net loans held in
       portfolio                       174,394     159,007    148,520
 Loans held for sale(3)                 20,343      35,493     44,870
----------------------------------------------------------------------
      Total net loans               $  194,737    $194,500   $193,390
======================================================================
(1) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.
(2) Represents construction loans made directly to the intended
    occupant of a single-family residence.
(3) Fair value of loans held for sale was $26.53 billion, $33.28
    billion, $20.34 billion, $35.53 billion and $44.87 billion as of
    June 30, 2004, March 31, 2004, December 31, 2003, September 30,
    2003 and June 30, 2003.

WM-14

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)


                                                             Weighted
                                     Change from              Average
                                    Mar. 31, 2004   June 30,  Coupon
                                 to June 30, 2004      2004    Rate
----------------------------------------------------------------------
Loans Secured by Real Estate and MBS
 Selected loans held in portfolio
  secured by real estate(1):
   Short-term adjustable-rate loans(2):
     COFI                             $     (840) $  9,038       4.83%
     Treasury indices                      5,711    64,692       3.77
     Other                                 3,831    34,590       4.70
----------------------------------------------------------------------
        Total short-term
         adjustable-rate loans             8,702   108,320       4.15
   Medium-term adjustable-rate loans(3)   (1,518)   51,691       5.41
   Fixed-rate loans                          352    19,751       6.65
----------------------------------------------------------------------
        Total loans held in portfolio
         secured by real estate(4)         7,536   179,762       4.79
 Loans held for sale(5)                   (6,667)   26,274       5.26
----------------------------------------------------------------------
        Total loans secured by real estate   869   206,036       4.85
 MBS(6):
   Short-term adjustable-rate MBS(2):
     COFI                                   (431)    4,533       3.78
     Treasury indices                        356     4,581       2.68
     Other                                     -         9       3.09
----------------------------------------------------------------------
        Total short-term adjustable-rate MBS (75)    9,123       3.23
   Fixed-rate MBS                           (604)      668       6.99
----------------------------------------------------------------------
        Total MBS(7)                        (679)    9,791       3.49
----------------------------------------------------------------------
        Total loans secured by real estate
         and MBS                      $      190  $215,827       4.79
======================================================================

                                            Weighted          Weighted
                                            Average           Average
                                  Mar. 31,   Coupon  June 30,  Coupon
                                     2004    Rate       2003    Rate
----------------------------------------------------------------------
Loans Secured by Real Estate and MBS
 Selected loans held in portfolio
  secured by real estate(1):
   Short-term adjustable-rate loans(2):
     COFI                        $  9,878      4.86% $ 13,210    5.20%
     Treasury indices              58,981      3.76    36,410    4.26
     Other                         30,759      4.78    22,244    5.31
----------------------------------------------------------------------
        Total short-term
         adjustable-rate loans     99,618      4.19    71,864    4.76
   Medium-term adjustable-rate
    loans(3)                       53,209      5.51    44,427    6.01
   Fixed-rate loans                19,399      6.80    18,371    7.55
----------------------------------------------------------------------
        Total loans held in
         portfolio secured by
         real estate(4)           172,226      4.89   134,662    5.55
 Loans held for sale(5)            32,941      5.51    44,765    5.74
----------------------------------------------------------------------
        Total loans secured by
         real estate              205,167      4.99   179,427    5.60
 MBS(6):
   Short-term adjustable-rate MBS(2):
     COFI                           4,964      3.82     9,555    4.09
     Treasury indices               4,225      2.50     7,790    3.34
     Other                              9      3.08     3,300    5.31
----------------------------------------------------------------------
        Total short-term
         adjustable-rate MBS        9,198      3.21    20,645    4.00
   Fixed-rate MBS                   1,272      6.38     3,938    6.04
----------------------------------------------------------------------
        Total MBS(7)               10,470      3.60    24,583    4.33
----------------------------------------------------------------------
        Total loans secured by
         real estate and MBS     $215,637      4.92  $204,010    5.45
======================================================================
(1) Includes total home loans, home equity loans and lines of credit
    and multi-family loans.
(2) Short term is defined as adjustable-rate loans and MBS that
    reprice within one year or less.
(3) Medium term is defined as adjustable-rate loans that reprice after
    one year.
(4) At June 30, 2004, March 31, 2004 and June 30, 2003, the
    adjustable-rate loans with lifetime caps were $156.12 billion,
    $149.33 billion and $113.01 billion with a lifetime weighted
    average cap rate of 12.24%, 12.20% and 12.54%.
(5) Excludes student loans.
(6) Excludes principal-only strips and interest-only strips.
(7) At June 30, 2004, March 31, 2004 and June 30, 2003, the
    adjustable-rate MBS with lifetime caps were $6.60 billion, $7.48
    billion and $20.57 billion with a lifetime weighted average cap
    rate of 11.33%, 11.33% and 11.35%.


                                       Mar. 31, 2004     Dec. 31, 2003
                                    to June 30, 2004  to June 30, 2004
----------------------------------------------------------------------
Rollforward of Loans Held for Sale
  Balance, beginning of period         $ 33,125           $ 20,343
    Loans originated and purchased       47,285             80,603
    Loans sold and other                (54,001)           (74,537)
----------------------------------------------------------------------
  Balance, end of period               $ 26,409           $ 26,409
======================================================================

Rollforward of Loans Held in Portfolio
  Balance, beginning of period         $187,462           $175,644
    Loans originated and purchased       32,236             61,083
    Loan payments and other             (23,769)           (40,798)
----------------------------------------------------------------------
  Balance, end of period               $195,929           $195,929
======================================================================

WM-15

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                     Quarter Ended
----------------------------------------------------------------------
                    June 30,  Mar. 31,  Dec. 31,    Sept. 30, June 30,
                       2004      2004      2003         2003     2003
----------------------------------------------------------------------
Home Loan Mortgage Banking Income (Expense)
 Loan servicing
  fees              $   485   $   502    $ 524      $   542   $   593
 Amortization of
  mortgage servicing
  rights               (546)     (750)    (604)        (665)   (1,032)
 Mortgage servicing
  rights valuation
  adjustments(1)        (51)     (606)     615          368      (309)
 Other, net             (89)      (66)     (75)        (220)     (161)
----------------------------------------------------------------------
   Net home loan
    servicing income
    (expense)          (201)     (920)     460           25      (909)
 Revaluation gain (loss)
  from derivatives:
   Mortgage servicing
    rights risk
    management(2)      (322)    1,108     (314)        (317)      745
   Loans held for sale
    risk management(3)  142       (66)       8          145      (147)
----------------------------------------------------------------------
      Total revaluation
       gain (loss) from
       derivatives     (180)     1,042    (306)        (172)      598
 Net settlement income
  from certain
  interest-rate swaps   192        167     190          130        84
 Gain (loss) from
  mortgage loans(3)     113        171      63         (204)      747
 Loan related income     76         71     124          108        91
 Gain from sale of
  originated mortgage-
  backed securities       -          -      61          258         -
----------------------------------------------------------------------
      Total home loan
       mortgage banking
       income             -        531     592          145       611
----------------------------------------------------------------------
 Impact of other mortgage servicing
  rights risk management
  instruments(4):
      Gain (loss) from
       certain available-
       for-sale
       securities         -          5     (11)         176       140
----------------------------------------------------------------------
         Total home loan
          mortgage banking
          income, net of
          other mortgage
          servicing rights risk
          management
          instruments $   -    $   536   $ 581      $   321   $   751
======================================================================

                                                     Six Months Ended
----------------------------------------------------------------------
                                                     June 30, June 30,
                                                        2004     2003
----------------------------------------------------------------------
Home Loan Mortgage Banking Income (Expense)
 Loan servicing fees                                $   987   $ 1,206
 Amortization of mortgage servicing rights           (1,296)   (2,000)
 Mortgage servicing rights valuation adjustments(1)    (657)     (272)
 Other, net                                            (155)     (294)
----------------------------------------------------------------------
   Net home loan servicing expense                   (1,121)   (1,360)
 Revaluation gain (loss) from derivatives:
   Mortgage servicing rights risk management(2)         786     1,157
   Loans held for sale risk management(3)                76      (342)
----------------------------------------------------------------------
      Total revaluation gain from derivatives           862       815
 Net settlement income from certain interest-rate
  swaps                                                 359       224
 Gain from mortgage loans(3)                            284     1,391
 Loan related income                                    147       166
 Gain from sale of originated mortgage-backed
  securities                                              -         1
----------------------------------------------------------------------
      Total home loan mortgage banking income           531     1,237
----------------------------------------------------------------------
 Impact of other mortgage servicing rights risk management
  instruments(4):
      Gain from certain available-for-sale securities     5       140
----------------------------------------------------------------------
         Total home loan mortgage banking income,
          net of other mortgage servicing rights
          risk management instruments               $   536   $ 1,377
======================================================================
(1) Represents fair value hedge ineffectiveness as well as any
    impairment/reversal recognized on MSR accounted for under the
    lower of cost or market value methodology. The Company
    prospectively applied fair value hedge accounting treatment, as
    prescribed by Statement of Financial Accounting Standards
    (Statement) No. 133, to most of its MSR on April 1, 2004.
(2) Represents the change in fair value from certain derivatives that
    economically hedge the MSR.
(3) Gain (loss) from mortgage loans net of revaluation gain (loss)
    from derivatives used for loans held for sale risk management was
    a net gain of $255 million for the quarter ended June 30, 2004,
    compared with a net gain of $105 million for the quarter ended
    March 31, 2004, a net gain of $71 million for the quarter ended
    December 31, 2003, a net loss of $59 million for the quarter ended
    September 30, 2003, and a net gain of $600 million for the quarter
    ended June 30, 2003. Gain from mortgage loans net of revaluation
    gain (loss) from derivatives used for loans held for sale risk
    management was a net gain of $360 million for the six months ended
    June 30, 2004, compared with a net gain of $1.05 billion for the
    six months ended June 30, 2003.
(4) Includes only instruments designated for mortgage servicing rights
    risk management and does not include the effects of instruments
    held for asset/liability risk management.

WM-16

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)
                                                            Six Months
                                            Quarter Ended      Ended
----------------------------------------------------------------------
                                          June 30,  Mar. 31,  June 30,
                                            2004      2004      2004
----------------------------------------------------------------------
Mortgage Servicing Rights ("MSR") Performance
 Statement No. 133 MSR accounting
  valuation adjustments                   $ 1,707   $    -    $ 1,707
 Statement No. 133 fair value hedge
  valuation adjustment                     (1,985)       -     (1,985)
----------------------------------------------------------------------
    Statement No. 133 ineffectiveness        (278)       -       (278)
 Change in value of MSR accounted for under
  lower of cost or market value methodology
  (reversal of impairment reserve)            227     (606)      (379)
----------------------------------------------------------------------
    Mortgage servicing rights valuation
     adjustments(1)                           (51)    (606)      (657)
 Revaluation gain (loss) from derivatives:
  MSR risk management                        (322)   1,108        786
 Amortization of mortgage servicing rights   (546)    (750)    (1,296)
 Net settlement income from certain
  interest-rate swaps                         195      160        355
 Gain from certain available-for-sale
  securities                                    -        5          5
----------------------------------------------------------------------
      Net MSR valuation less hedging
       expense                            $  (724)  $  (83)   $  (807)
======================================================================

(1) Represents fair value hedge ineffectiveness as well as any
    impairment/reversal recognized on MSR accounted for under the
    lower of cost or market value methodology. The Company began
    applying fair value hedge accounting treatment, as prescribed by
    Statement No. 133, to most of its MSR on a prospective basis as of
    April 1, 2004.

WM-17

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                      Quarter Ended
----------------------------------------------------------------------
                     June 30,  Mar. 31,  Dec. 31, Sept. 30,   June 30,
                        2004      2004      2003      2003       2003
----------------------------------------------------------------------
Rollforward of Mortgage
 Servicing Rights
 ("MSR")(1)
   Balance,
    beginning of
    period            $5,239    $6,354    $5,870    $4,598     $5,210
      Home loans:
       Additions         874       241       701     1,587        976
       Amortization     (546)     (750)     (604)     (665)    (1,032)
       (Impairment)
        reversal         227      (606)      615       368       (309)
       Statement No.
        133 MSR
        accounting
        valuation
        adjustments    1,707         -         -         -          -
       Sales               -         -      (231)      (18)      (247)
      Net change in
       commercial
       real estate MSR     -         -         3         -          -
----------------------------------------------------------------------
   Balance, end of
    period(2)         $7,501    $5,239    $6,354    $5,870     $4,598
======================================================================
Rollforward of
 Valuation Allowance
 for MSR Impairment
   Balance,
    beginning of
    period            $3,035    $2,435    $3,075    $3,444     $3,864
      Impairment
       (reversal)       (227)      606      (615)     (368)       309
      Other than
       temporary
       impairment       (388)        -         -         -       (579)
      Sales                -         -       (25)       (1)      (150)
      Other               (3)       (6)        -         -          -
----------------------------------------------------------------------
   Balance, end of
    period            $2,417    $3,035    $2,435    $3,075     $3,444
======================================================================
Rollforward of
 Loans Serviced
 for Others
   Balance,
    beginning of
    period          $559,807  $582,669  $577,822  $583,823   $591,917
      Home loans:
       Additions      54,201    22,009    51,480   105,883    105,992
       Sales               -         -      (195)        -     (2,960)
       Loan payments
        and other    (56,388)  (46,058)  (47,062) (111,834)  (110,867)
      Net change in
       commercial
       real estate
       loans serviced
       for others        768     1,187       624       (50)      (259)
----------------------------------------------------------------------
   Balance, end of
    period          $558,388  $559,807  $582,669  $577,822   $583,823
======================================================================

                    June 30,  Mar. 31,  Dec. 31,  Sept. 30,  June 30,
                       2004      2004      2003       2003      2003
----------------------------------------------------------------------
Total Servicing
 Portfolio
      Loans serviced
       for others   $558,388  $559,807  $582,669  $577,822   $583,823
      Servicing on
       retained MBS
       without MSR     2,938     3,208     3,455     3,810      4,293
      Servicing on
       owned loans   205,714   204,449   182,604   182,570    180,377
      Subservicing
       portfolio         563     1,528     1,852       249      2,453
----------------------------------------------------------------------
   Total servicing
    portfolio       $767,603  $768,992  $770,580  $764,451   $770,946
======================================================================

                                                     June 30, 2004
----------------------------------------------------------------------
                                                             Weighted
                                                   Unpaid    Average
                                                  Principal Servicing
                                                   Balance     Fee
----------------------------------------------------------------------
                                                            (in basis
Loans Serviced for                                           points,
 Others by Loan Type                                       annualized)

      Government                                   $59,662         49
      Agency                                       367,178         30
      Private                                      113,720         36
      Specialty home loans                          17,828         50
----------------------------------------------------------------------
   Total loans serviced for others(3)             $558,388         34
======================================================================
(1) Net of valuation allowance.
(2) At June 30, 2004, aggregate mortgage servicing rights fair value
    was $7.52 billion.
(3) Weighted average coupon rate (annualized) was 5.93% at June 30,
    2004.

WM-18

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                          Quarter Ended
---------------------------------------------------------------------
                                June    Mar.    Dec.    Sept.   June
                                 30,     31,     31,     30,     30,
                                2004    2004    2003    2003    2003
---------------------------------------------------------------------
Allowance for Loan and Lease
 Losses
   Balance, beginning of
    quarter                   $1,260  $1,250  $1,549  $1,530  $1,530
   Allowance for certain
    loan commitments/other        (3)      -       -      17       -
   Provision (reversal of
    reserve) for loan and
    lease losses                  60      56    (202)     76      81
----------------------------- ------- ------- ------- ------- -------
                               1,317   1,306   1,347   1,623   1,611
   Loans charged off:
      Loans secured by real
       estate:
         Home                     (8)    (16)    (18)    (22)     (9)
         Purchased specialty
          mortgage finance        (9)     (9)    (11)     (9)     (9)
----------------------------- ------- ------- ------- ------- -------
              Total home
               loan charge-
               offs              (17)    (25)    (29)    (31)    (18)
         Home equity loans
          and lines of
          credit                  (5)     (7)     (2)     (4)     (4)
         Home construction -
          builder (1)              -      (1)     (1)     (1)      -
         Multi-family              -       -      (1)     (4)      -
         Other real estate        (1)     (8)    (52)    (16)    (21)
----------------------------- ------- ------- ------- ------- -------
              Total loans
               secured by
               real estate       (23)    (41)    (85)    (56)    (43)
      Consumer                   (11)    (14)    (14)    (20)    (18)
      Commercial business         (4)     (6)    (15)    (19)    (31)
----------------------------- ------- ------- ------- ------- -------
              Total loans
               charged off       (38)    (61)   (114)    (95)    (92)
   Recoveries of loans
    previously charged off:
      Loans secured by real
       estate:
         Home                      -       -       1       7       2
         Purchased specialty
          mortgage finance         1       1       1       1       1
----------------------------- ------- ------- ------- ------- -------
              Total home
               loan
               recoveries          1       1       2       8       3
         Home equity loans
          and lines of
          credit                   1       1       -       -       -
         Multi-family              -       2       -       -       -
         Other real estate         4       2       5       6       2
----------------------------- ------- ------- ------- ------- -------
              Total loans
               secured by
               real estate         6       6       7      14       5
      Consumer                     5       5       5       5       3
      Commercial business          3       4       5       2       3
----------------------------- ------- ------- ------- ------- -------
              Total
               recoveries of
               loans
               previously
               charged off        14      15      17      21      11
----------------------------- ------- ------- ------- ------- -------
      Net charge-offs            (24)    (46)    (97)    (74)    (81)
----------------------------- ------- ------- ------- ------- -------
   Balance, end of quarter    $1,293  $1,260  $1,250  $1,549  $1,530
============================= ======= ======= ======= ======= =======

   Net charge-offs
   (annualized) as a
   percentage of average
   loans held in portfolio    0.05 %  0.10 %  0.23 %   0.19 % 0.22 %

   Allowance as a
   percentage of total
   loans held in portfolio    0.66    0.67    0.71     0.96   1.02

(1) Represents loans to builders for the purpose of financing the
    acquisition, development and construction of single-family
    residences for sale.

WM-19

                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)


                                June    Mar.    Dec.    Sept.   June
                                 30,     31,     31,     30,     30,
                                2004    2004    2003    2003    2003
---------------------------------------------------------------------
Nonperforming Assets and
 Restructured Loans
  Nonaccrual loans(1):
     Loans secured by real
      estate:
        Home                    $535    $622    $736    $760    $804
        Purchased specialty
         mortgage finance        585     615     597     553     483
----------------------------- ------- ------- ------- ------- -------
              Total home
               nonaccrual
               loans           1,120   1,237   1,333   1,313   1,287
        Home equity loans and
         lines of credit          48      45      47      46      49
        Home construction:
           Builder(2)             18      23      25      31      31
           Custom(3)               6       8      10       9       9
        Multi-family              20      23      19      39      54
        Other real estate        133     153     153     309     369
----------------------------- ------- ------- ------- ------- -------
              Total
               nonaccrual
               loans secured
               by real estate  1,345   1,489   1,587   1,747   1,799
     Consumer                      9       7       8      10      15
     Commercial business          42      46      31      56      79
----------------------------- ------- ------- ------- ------- -------
              Total
               nonaccrual
               loans held in
               portfolio       1,396   1,542   1,626   1,813   1,893
  Foreclosed assets              286     307     311     293     307
----------------------------- ------- ------- ------- ------- -------
              Total
               nonperforming
               assets         $1,682  $1,849  $1,937  $2,106  $2,200
              As a percentage
               of total
               assets           0.60%   0.66%   0.70%   0.73%   0.78%
  Restructured loans             $79    $107    $111    $118     $89
----------------------------- ------- ------- ------- ------- -------
               Total
                nonperforming
                assets and
                restructured
                loans         $1,761  $1,956  $2,048  $2,224  $2,289
============================= ======= ======= ======= ======= =======
 (1) Excludes nonaccrual loans held for sale of $99 million at June
     30, 2004. Prior periods also reflect the exclusion of
     nonaccrual loans held for sale of $135 million, $66 million,
     $67 million and $73 million at March 31, 2004, December 31,
     2003, September 30, 2003 and June 30, 2003. Loans held for
     sale are accounted for at lower of aggregate cost or market
     value, with valuation changes included as adjustments to gain
     from mortgage loans.
 (2) Represents loans to builders for the purpose of financing the
     acquisition, development and construction of single-family
     residences for sale.
 (3) Represents construction loans made directly to the intended
     occupant of a single-family residence.


    CONTACT: Washington Mutual
             Media Contact:
             Alan Gulick, 206-377-3637
             alan.gulick@wamu.net
             or
             Investor Relations Contacts:
             Doug Wisdorf, 206-461-3805
             doug.wisdorf@wamu.net
             Ruthanne King, 206-461-6421
             ruthanne.king@wamu.net

    SOURCE: Washington Mutual, Inc.