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Washington Mutual Announces Record Earnings; Company Delivers $1 Billion Quarter; Board of Directors Increases Cash Dividend
To view a printable version of the Q1 2003 financial tables, click here.

To view a downloadable version of the Q1 2003 financial tables, click here.

SEATTLE--(BUSINESS WIRE)--April 15, 2003--Washington Mutual, Inc. (NYSE:WM) today announced record earnings of $1 billion, or $1.07 per diluted share, for the quarter ended March 31, 2003, up 8 percent on a per share basis from $956 million, or 99 cents per diluted share for the same period a year ago.

    Highlights of the recently completed quarter included:

    --  Loan volume of $106.62 billion, up 62 percent from the first
        quarter of 2002;

    --  Depositor and other retail banking fees of $420 million, up 16
        percent from the same period a year ago;

    --  Continued growth in checking accounts, one of the company's
        key relationship-building products, which increased by more
        than 200,000 during the quarter;

    --  The opening of 33 new financial center stores and three new
        home loan stores throughout the country. The company is on
        schedule to open approximately 250 financial center stores and
        70 home loans stores in 2003 as the company continues to
        expand its national franchise;

    --  The company recorded a strong 19.44 percent return on average
        common equity;

    --  The repurchase of 10.2 million shares of the company's common
        stock in the quarter at an average price of $34.41, reflecting
        the company's strategy to effectively manage its capital; and

    --  The 31st consecutive quarter of an increased cash dividend.

"Washington Mutual entered 2003 in an excellent position and we're poised to continue the momentum as the year progresses," said Kerry Killinger, the company's chairman, president and CEO. "Our record-breaking first quarter results reflect the strength of our underlying strategy of serving the broad middle market by providing the combination of great value and efficient, friendly service. We are extremely proud of the first quarter results that our talented employees produced."

Board of Directors Increases Dividend for 31st Consecutive Quarter

Based on the company's continued strong operating fundamentals and financial performance, Washington Mutual's Board of Directors declared a cash dividend of 30 cents per share on the company's common stock, up from 29 cents per share in the previous quarter. Dividends on the common stock are payable May 15, 2003, to shareholders of record as of April 30, 2003.

    First Quarter Results

    Net Interest Income

For the first quarter of 2003, net interest income was $2.02 billion, an increase of $91 million, or 5 percent, from the fourth quarter of 2002. Most of this increase was due to the expansion of the net interest margin, which increased by 7 basis points to 3.32 percent during the first quarter, largely because of lower rates paid on interest-bearing deposits.

As compared with the first quarter of 2002, net interest income for the first quarter of 2003 declined by $379 million, or 16 percent. Most of this decrease resulted from contraction of the margin, which declined by 42 basis points as yields on loans and debt securities continued to reprice downward from the higher interest rate levels in effect during the early part of 2002.

The net interest spread for the quarter was 3.04 percent, compared with 3.58 percent for the same period last year.

Noninterest Income

As the company experienced exceptional quarterly loan volumes, the gain from mortgage loans was $587 million, an increase of $195 million versus the fourth quarter of 2002 and $336 million from the first quarter of 2002.

In addition, consumers continued to choose Washington Mutual to serve their financial needs, leading to an increase of more than 200,000 net retail checking accounts during the first quarter. Strong growth in net retail checking accounts, which increased by more than 900,000 since the end of first quarter 2002, contributed to the increase of $59 million in depositor and other retail banking fees to $420 million, up 16 percent from $361 million a year earlier.

The company's expansion into the New York/New Jersey retail banking market continues to produce strong results. From May 2002, when the company's retail banking unit began doing business under the Washington Mutual name in New York, through the end of the first quarter of 2003, the number of checking accounts increased 37 percent at an annualized rate in the branches acquired from Dime Bancorp.

Lending

Boosted by the continued low interest rate environment and the demand for refinancing of home loan mortgages, Washington Mutual produced loan volume of $106.62 billion for the quarter, up 62 percent from $65.69 billion in the first quarter of 2002. Of the total loan volume in the first quarter, home loan volume totaled $97.47 billion, versus $58.97 billion in the same period a year ago. Home equity loans and lines of credit and multi-family loans increased by $6.73 billion from the first quarter of 2002 to $38.72 billion at March 31, 2003, up 21 percent.

Efficiency Ratio

For the quarter, noninterest expense totaled $1.71 billion, which was up from $1.52 billion during the first quarter of 2002. The increase was primarily due to investment in the expansion of the company's store network and increased loan expenses resulting from significantly higher lending volumes. The efficiency ratio was 49.91 percent during the quarter compared with 49.94 percent in the fourth quarter of 2002 and 47.48 percent in the first quarter of 2002.

Risk Management

Credit performance, a key focus for Washington Mutual, remained well in line with the company's expectations. Consistent with the fourth quarter of 2002, the company continued to actively manage its portfolio of nonperforming assets (NPAs) during the quarter.

Total NPAs decreased $93 million during the quarter to $2.50 billion at March 31, 2003. At the end of the quarter, NPAs as a percentage of total assets were 0.90 percent versus 0.97 percent at the end of the fourth quarter.

The provision for loan and lease losses was $125 million, as compared with $125 million in the fourth quarter of 2002 and $175 million for the same period of the previous year. Net loan charge-offs for the first quarter were $95 million, compared with $108 million for the fourth quarter of 2002. The allowance for loan and lease losses was $1.68 billion at March 31, 2003. The net MSR asset was $5.21 billion at March 31, 2003, as compared with $5.34 billion at December 31, 2002.

Balance Sheet and Capital Management

Consolidated assets at March 31, 2003, were $276.97 billion, compared with $268.30 billion at December 31, 2002. The growth in assets during the quarter was the result of an increase in loans held for sale and loans held in portfolio. The company continues to expect asset growth of 5% to 10% in 2003.

At March 31, 2003, balances of transaction deposits, including checking, savings and money market deposits, represented 80 percent of total deposits, compared with 78 percent at the end of 2002. Total deposits were $159.87 billion at the end of the first quarter, up from $155.52 billion at December 31, 2002, reflecting the company's organic growth in retail deposits and in custodial/escrow deposits related to loan servicing activities.

Washington Mutual continues to manage its capital position by repurchasing its common stock. During the first quarter, the company repurchased 10.2 million shares of its common stock at an average price of $34.41. The company's tangible common equity was 5.29 percent of total tangible assets at March 31, 2003.

In addition, the capital ratios of the company's banking subsidiaries continued to exceed federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard.

Outlook

"Despite the current challenges both domestically and internationally, our management team fully expects 2003 will be another record year for Washington Mutual," Killinger said. "Our business fundamentals remain strong and credit quality continues to perform in line with management's expectations."

"Our primary focus for the foreseeable future will be successfully executing our key business strategies, which are focused on internal growth and increased productivity, and continuing to make progress toward our long-term goal of building the nation's leading retailer of financial services to the broad middle market."

    Company Updates

    --  Business Week magazine rated Washington Mutual No. 13 among
        all S&P 500 companies based on its one- and three-year
        shareholder returns, sales growth and profit growth, and the
        company's net margin and return on equity, including a
        weighting for sales volume and long-term debt-to-capital
        ratio. The company was the No. 1-rated performer in the
        banking category.

    --  Washington Mutual was also named "One of the Best Companies to
        Work For" by Fortune magazine, making it part of an exclusive
        group to be recognized by the magazine in three areas: "Best
        to Work For," "Best for Minorities" and "Most Admired."

    --  WaMu Capital Corp., a fixed-income institutional broker-dealer
        and subsidiary of Washington Mutual, Inc., announced plans to
        expand its existing sales office in New York to include
        trading, compliance and support functions. WaMu Capital Corp.,
        headquartered in Seattle, is focused on building additional
        relationships with asset managers, banks and other
        institutional investors nationwide.

    --  The company and Fannie Mae announced an affordable lending
        alliance designed to increase lending by $85 billion over five
        years to low- and moderate-income borrowers, minorities,
        immigrant families, residents of low- to moderate-income
        underserved areas and first-time homebuyers.

    --  WM Group of Funds, the company's mutual fund complex, was
        ranked by Barron's magazine as the No. 1 fund family for
        five-year performance.

    --  The company's ongoing effort to further broaden its corporate
        finance team resulted in the hiring of two new members. Steve
        Lobo, a former American Express and U.S. Bancorp executive,
        joined the company as Senior Vice President and Treasurer. On
        April 4, the company announced 20-year General Electric
        veteran David Beck as its Chief Investment Officer, a newly
        created position that will play an important role in
        continuing to broaden the company's asset portfolio
        management.

With a history dating back to 1889, Washington Mutual is a retailer of consumer financial services that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At March 31, 2003, Washington Mutual and its subsidiaries had assets of $276.97 billion. Washington Mutual currently operates more than 2,500 consumer banking, mortgage lending, commercial banking, consumer finance and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamu.com.

A live webcast of the company's quarterly earnings conference call will be held on Wednesday, April 16, 2003, at 7:30 a.m. Pacific Daylight Time at www.wamu.com or via telephone at 1-888-282-0170. Participants calling from outside the United States may dial 1-712-257-2272. 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 for 30 days following the call.

A recording of the conference call will be available after 10 a.m. PDT on Wednesday, April 16, 2003 through 8:59 p.m. PDT on Friday, April 25, 2003. The recorded message will be available at 1-800-406-7495. Callers from outside the United States may dial 1-402-220-1206.

Forward Looking Statement

"This press release contains forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this document that are not historical facts. When used in this presentation, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed under the heading "Factors That May Affect Future Results" in Washington Mutual's 2002 Annual Report on Form 10-K which include: 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; a failure to effectively implement our business operations technology solutions could adversely affect our earnings and financial condition; the financial services industry is highly competitive; changes in the regulation of financial services companies could adversely affect our business."


WM-1

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


                                                 Quarter Ended
---------------------------------------------------------------------
                                           Mar. 31, Dec. 31, Mar. 31,
                                            2003     2002     2002
---------------------------------------------------------------------
Interest Income
   Loans held for sale                        $589 $532 $443
   Loans held in portfolio                   2,106    2,219    2,411
   Available-for-sale securities               517      547      947
   Other interest and dividend income           80       68       82
---------------------------------------------------------------------
      Total interest income                  3,292    3,366    3,883
Interest Expense
   Deposits                                    587      672      651
   Borrowings                                  688      768      836
---------------------------------------------------------------------
      Total interest expense                 1,275    1,440    1,487
---------------------------------------------------------------------
          Net interest income                2,017    1,926    2,396
   Provision for loan and lease losses         125      125      175
---------------------------------------------------------------------
          Net interest income after
           provision for loan and lease
           losses                            1,892    1,801    2,221
Noninterest Income
   Home loan mortgage banking income
    (expense):
      Loan servicing fees                      613      628      540
      Amortization of mortgage servicing
       rights                                 (969)    (920)    (479)
      Mortgage servicing rights recovery
       (impairment)                             37     (308)      45
      Revaluation gain (loss) from
       derivatives                             217      (19)     (15)
      Net settlement income from certain
       interest-rate swaps                     140      158        6
      Gain from mortgage loans                 587      392      251
      Other home loan mortgage banking
       income, net                              98       90       39
---------------------------------------------------------------------
           Total home loan mortgage banking
            income                             723       21      387
   Depositor and other retail banking fees     420      449      361
   Securities fees and commissions              89       90       82
   Insurance income                             52       45       47
   Portfolio loan related income               117      123       65
   Gain (loss) from other available-for-
    sale securities                             (5)     574     (298)
   Gain (loss) on extinguishment of
    securities sold under agreements to
    repurchase                                 (87)     (11)      74
   Other income                                 97      103       90
---------------------------------------------------------------------
       Total noninterest income              1,406    1,394      808
Noninterest Expense
   Compensation and benefits                   771      757      690
   Occupancy and equipment                     304      294      288
   Telecommunications and outsourced
    information services                       144      115      139
   Depositor and other retail banking
    losses                                      52       51       50
   Amortization of other intangible assets      16       16       17
   Professional fees                            56       47       55
   Advertising and promotion                    63       58       44
   Other expense                               303      320      238
---------------------------------------------------------------------
       Total noninterest expense             1,709    1,658    1,521
---------------------------------------------------------------------
       Income before income taxes            1,589    1,537    1,508
           Income taxes                        586      568      552
---------------------------------------------------------------------
Net Income                                  $1,003 $969 $956
=====================================================================
Net Income Attributable to Common Stock     $1,003 $969 $954
=====================================================================

Net income per common share:
   Basic                                     $1.09 $1.05 $1.01
   Diluted                                    1.07     1.03     0.99
Dividends declared per common share           0.29     0.28     0.25
Basic weighted average number of common
 shares outstanding (in thousands)         921,084  926,210  947,653
Diluted weighted average number of common
 shares outstanding (in thousands)         934,889  939,991  963,242

WM-2

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


                                         Mar. 31,  Dec. 31,  Mar. 31,
                                            2003      2002      2002
----------------------------------------------------------------------
Assets
   Cash and cash equivalents               $6,295 $7,208 $5,740
   Federal funds sold and securities
    purchased under resale agreements       1,606     2,015     2,312
   Available-for-sale securities:
      Mortgage-backed securities           26,768    28,375    24,347
      Investment securities                15,635    15,597    42,951
   Loans held for sale                     44,014    33,996    24,751
   Loans held in portfolio                150,557   147,528   144,930
   Allowance for loan and lease losses     (1,680)   (1,653)   (1,621)
----------------------------------------------------------------------
         Total loans held in portfolio,
          net of allowance for loan and
          lease losses                    148,877   145,875   143,309
   Investment in Federal Home Loan Banks    3,871     3,703     4,317
   Mortgage servicing rights                5,210     5,341     7,955
   Goodwill                                 6,253     6,270     6,163
   Other assets                            18,441    19,918    13,386
----------------------------------------------------------------------
         Total assets                    $276,970 $268,298 $275,231
======================================================================

Liabilities
   Deposits:
      Noninterest-bearing deposits        $40,478 $37,515 $22,553
      Interest-bearing deposits           119,394   118,001   106,457
----------------------------------------------------------------------
         Total deposits                   159,872   155,516   129,010
   Federal funds purchased and
    commercial paper                        2,214     1,247     4,018
   Securities sold under agreements to
    repurchase                             20,502    16,717    44,789
   Advances from Federal Home Loan Banks   52,221    51,265    61,734
   Other borrowings                        15,725    15,264    14,238
   Other liabilities                        5,749     8,155     3,207
----------------------------------------------------------------------
         Total liabilities                256,283   248,164   256,996
   Redeemable preferred stock                   -         -       102
Stockholders' equity                       20,687    20,134    18,133
----------------------------------------------------------------------
         Total liabilities, redeemable
          preferred stock, and
          stockholders' equity           $276,970 $268,298 $275,231
======================================================================

Common shares outstanding at end of
 period (in thousands) (1)                934,983   944,047   973,590

Book value per common share(2)             $22.55 $21.74 $18.98
Tangible book value per common share(2)     15.84     15.06     12.55

Full-time equivalent employees at end of
 period                                    53,918    52,459    49,039


(1)  Includes 17,550,000 shares at March 31, 2003, and 18,000,000
     shares at December 31, 2002 and March 31, 2002, held in escrow
     pending resolution of the Company's asserted right to the return
     of such shares.
(2)  Excludes 17,550,000 shares at March 31, 2003, and 18,000,000
     shares at December 31, 2002 and March 31, 2002, held in escrow
     pending resolution of the Company's asserted right to the return
     of such shares.

WM-3

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


                                                       Quarter Ended
----------------------------------------------------------------------
                                                     Mar. 31, Mar. 31,
                                                      2003     2002
----------------------------------------------------------------------
Stockholders' Equity Rollforward
Balance, beginning of period                         $20,134 $14,063
Net income                                             1,003      956
Other comprehensive income (loss), net of tax            119     (412)
Cash dividends declared on common stock                 (267)    (243)
Cash dividends declared on redeemable preferred
 stock                                                     -       (2)
Common stock repurchased and retired                    (351)       -
Common stock issued for acquisitions                       -    3,685
Common stock issued                                       49       86
----------------------------------------------------------------------
Balance, end of period                               $20,687 $18,133
======================================================================

WM-4

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



                                      Quarter Ended
----------------------------------------------------------------------
                         Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,

                            2003     2002     2002     2002     2002
----------------------------------------------------------------------
PROFITABILITY
    Net interest income   $2,017 $1,926 $1,919 $2,100 $2,396
    Net interest margin     3.32 %   3.25 %   3.36 %   3.54 %   3.74 %
    Noninterest income    $1,406 $1,394 $1,380 $1,208 $808
    Noninterest expense    1,709    1,658    1,616    1,586    1,521
    Net income             1,003      969      981      990      956
    Net income per common
     share:
        Basic              $1.09 $1.05 $1.04 $1.04 $1.01
        Diluted             1.07     1.03     1.02     1.01     0.99
    Dividends declared
     per common share      $0.29 $0.28 $0.27 $0.26 $0.25
    Return on average
     assets                 1.43 %   1.42 %   1.50 %   1.48 %   1.34 %
    Return on average
     common equity         19.44    18.34    18.79    20.37    20.64
    Efficiency ratio(1)    49.91    49.94    48.99    47.95    47.48

ASSET QUALITY
      Nonaccrual loans(2) $2,166 $2,257 $2,188 $2,232 $2,391
      Foreclosed assets      334      336      309      274      267
      Total nonperforming
       assets              2,500    2,593    2,497    2,506    2,658
      Nonperforming
       assets/total
       assets               0.90 %   0.97 %   0.95 %   0.96 %   0.97 %
      Restructured loans     $99 $98 $112 $119 $130
        Total
         nonperforming
         assets and
         restructured
         loans             2,599    2,691    2,609    2,625    2,788
      Allowance for loan
       and lease losses    1,680    1,653    1,705    1,665    1,621
        Allowance as a
         percentage of
         total loans held
         in portfolio       1.12 %   1.12 %   1.15 %   1.14 %   1.12 %
      Provision for loan
       and lease losses     $125 $125 $135 $160 $175
      Net charge-offs         95      108       88      116       99

CAPITAL ADEQUACY
    Stockholders'
     equity/total assets    7.47 %   7.50 %   7.68 %   7.50 %   6.59 %
    Tangible common
     equity(3)/total
     tangible assets(3)     5.29     5.29     5.27     5.28     4.69
    Estimated total risk-
     based capital/risk-
     weighted assets(4)    11.41    11.57    11.16    12.32    11.69

SUPPLEMENTAL DATA
    Average balance
     sheet:
       Loans held for
        sale             $42,327 $37,322 $25,740 $22,211 $27,241
       Loans held in
        portfolio        148,382  149,173  146,160  146,667  147,531
       Interest-earning
        assets           241,690  237,842  229,364  236,504  255,177
       Total assets      280,850  273,729  261,170  266,849  284,350
       Interest-bearing
        deposits         119,056  116,177  111,408  108,231  101,217
       Noninterest-
        bearing deposits  38,851   32,375   24,065   22,417   22,635
       Stockholders'
        equity            20,633   21,121   20,872   19,401   18,487
    Period-end balance
     sheet:
       Loans held for
        sale              44,014   33,996   29,508   21,940   24,751
       Loans held in
        portfolio, net of
        allowance for
        loan and lease
        losses           148,877  145,875  146,157  144,208  143,309
       Interest-earning
        assets           242,451  231,214  230,167  230,852  243,608
       Assets            276,970  268,298  262,631  261,298  275,231
       Interest-bearing
        deposits         119,394  118,001  112,969  108,441  106,457
       Noninterest-
        bearing deposits  40,478   37,515   27,639   20,628   22,553
       Stockholders'
        equity            20,687   20,134   20,178   19,598   18,133



(1)   The efficiency ratio is defined as noninterest expense, divided
      by total revenue (net interest income and noninterest income).
(2)   Excludes nonaccrual loans held for sale.
(3)   Excludes unrealized net gain/loss on available-for-sale
      securities and derivatives, goodwill and intangible assets but
      includes MSR.
(4)   Estimate of what the total risk-based capital ratio would be if
      Washington Mutual, Inc. was a bank holding company that complies
      with Federal Reserve Board capital requirements.


WM-5

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

                                     Quarter Ended
----------------------------------------------------------------------
                          Mar. 31, 2003 Dec. 31, 2002
                                     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
   resale agreements   $5,132   1.25%    $16 $2,536   1.43%     $9
  Available-for-sale
   securities(1):
    Mortgage-backed
     securities        26,209   5.30     347    26,010   5.01     325
    Investment
     securities        14,989   4.55     170    18,286   4.84     222
  Loans held for
   sale(2)             42,327   5.57     589    37,322   5.70     532
  Loans held in
   portfolio(2):
    Loans secured by
     real estate:
      Home loans       83,105   5.21   1,083    85,317   5.55   1,184
      Purchased
       specialty
       mortgage
       finance         10,075   5.95     150     9,405   5.54     130
-------------------------------        ------- ---------        ------
        Total home
         loans         93,180   5.29   1,233    94,722   5.55   1,314
      Home construction
       loans:
        Builder (3)     1,056   5.03      13     1,109   5.68      16
        Custom (4)        920   7.75      18       914   8.34      19
      Home equity loans
       and lines of
       credit:
        Banking
         subsidiaries  17,247   5.43     234    15,380   5.69     219
        Washington
         Mutual
         Finance        1,958  11.94      58     2,010  11.88      60
      Multi-family     18,476   5.66     262    18,815   5.82     274
      Other real
       estate           7,747   6.34     122     8,230   6.67     138
-------------------------------        ------- ---------        ------
          Total loans
           secured by
           real
           estate     140,584   5.52   1,940   141,180   5.77   2,040
    Consumer:
      Banking
       subsidiaries     1,343   8.90      30     1,691   9.30      40
      Washington
       Mutual
       Finance          1,720  19.30      83     1,710  19.25      83
    Commercial
      business          4,735   4.47      53     4,592   4.83      56
-------------------------------        ------- ---------        ------
      Total loans
       held in
       portfolio      148,382   5.68   2,106   149,173   5.94   2,219
 Other                  4,651   5.56      64     4,515   5.16      59
-------------------------------        ------- ---------        ------
          Total
           interest-
           earning
           assets     241,690   5.45   3,292   237,842   5.65   3,366
Noninterest-earning
 assets:
 Mortgage servicing
  rights                5,456                    5,855
 Goodwill               6,267                    6,229
 Other                 27,437                   23,803
-------------------------------                ---------
       Total assets  $280,850 $273,729
===============================                =========

Liabilities
Interest-bearing
 liabilities:
 Deposits:
    Interest-bearing
     checking         $58,222   1.92     276   $53,588   2.35     317
    Savings accounts and
     money market deposit
     accounts          27,968   1.07      74    28,745   1.30      94
    Time deposit
     accounts          32,866   2.93     237    33,844   3.06     261
-------------------------------        ------- ---------        ------
      Total interest-
       bearing
       deposits       119,056   2.00     587   116,177   2.30     672
 Federal funds
  purchased and
  commercial paper      2,385   1.42       9     2,848   1.71      12
 Securities sold under
  agreements to
  repurchase           20,371   2.76     140    23,659   2.77     165
 Advances from Federal
  Home Loan Banks      55,844   2.72     378    56,047   2.94     416
 Other                 15,487   4.16     161    14,376   4.83     175
-------------------------------        ------- ---------        ------
      Total interest-
       bearing
       liabilities    213,143   2.41   1,275   213,107   2.68   1,440
                                      -------                  -------
Noninterest-bearing
 sources:
 Noninterest-bearing
  deposits             38,851                   32,375
 Other liabilities      8,223                    7,126
 Stockholders' equity  20,633                   21,121
-------------------------------                ---------
           Total
            liabilities
            and
            stockholders'
            equity   $280,850 $273,729
===============================                =========

 Net interest spread and net
  interest income               3.04  $2,017             2.97  $1,926
                                      =======                  =======
 Impact of noninterest-
  bearing sources               0.28                     0.28
 Net interest margin            3.32                     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.



                       -------------------------------
                              Mar. 31, 2002
                                         Interest
                                          Income/
                         Balance   Rate   Expense
                       -------------------------------
Average Balances
 and Weighted Average
 Interest Rates
Assets
Interest-earning
 assets:
  Federal funds sold
   and securities
   purchased under
   resale agreements      $1,139   1.63%      $5
  Available-for-sale
   securities(1):
    Mortgage-backed
     securities           25,248   5.39      340
    Investment
     securities           49,267   4.96      607
  Loans held for
   sale(2)                27,241   6.51      443
  Loans held in
   portfolio(2):
    Loans secured by
     real estate:
      Home loans          88,206   6.18    1,362
      Purchased
       specialty
       mortgage
       finance             8,538   6.91      148
------------------------ ---------        --------
        Total home
         loans            96,744   6.24    1,510
      Home construction
       loans:
        Builder (3)        1,568   6.04       24
        Custom (4)           929   7.72       18
      Home equity loans
       and lines of
       credit:
        Banking
         subsidiaries     11,103   6.02      167
        Washington
         Mutual
         Finance           2,097  11.94       62
      Multi-family        17,541   6.34      278
      Other real
       estate              8,424   7.03      148
------------------------ ---------        --------
          Total loans
           secured by
           real
           estate        138,406   6.38    2,207
    Consumer:
      Banking
       subsidiaries        2,851   9.71       66
      Washington
       Mutual
       Finance             1,729  18.50       80
    Commercial
      business             4,545   5.14       58
------------------------ ---------        --------
      Total loans
       held in
       portfolio         147,531   6.55    2,411
 Other                     4,751   6.69       77
------------------------ ---------        --------
          Total
           interest-
           earning
           assets        255,177   6.10    3,883
Noninterest-earning
 assets:
 Mortgage servicing
  rights                   7,006
 Goodwill                  5,595
 Other                    16,572
-----------------------  ---------
       Total assets     $284,350
=======================  =========

Liabilities
Interest-bearing
 liabilities:
 Deposits:
    Interest-bearing
     checking            $23,873   2.76      163
    Savings accounts and
     money market deposit
     accounts             35,311   1.61      140
    Time deposit
     accounts             42,033   3.36      348
------------------------ ---------        --------
      Total interest-
       bearing
       deposits          101,217   2.61      651
 Federal funds
  purchased and
  commercial paper         5,565   1.96       27
 Securities sold under
  agreements to
  repurchase              53,450   1.62      213
 Advances from Federal
  Home Loan Banks         65,302   2.63      424
 Other                    14,156   4.94      172
------------------------ ---------        --------
      Total interest-
       bearing
       liabilities       239,690   2.52    1,487
                                         --------
Noninterest-bearing
 sources:
 Noninterest-bearing
  deposits                22,635
 Other liabilities         3,538
 Stockholders' equity     18,487
-----------------------  ---------
           Total
            liabilities
            and
            stockholders'
            equity      $284,350
=======================  =========

 Net interest spread and net
  interest income                  3.58   $2,396
                                         ========
 Impact of noninterest-
  bearing sources                  0.16
 Net interest margin               3.74

---------------------------
(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.


WM-6

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


                                                Quarter Ended
---------------------------------------------------------------------
                                          Mar. 31,  Dec. 31, Mar. 31,
                                             2003      2002     2002
---------------------------------------------------------------------
Loan Volume
   Home loans:
      Adjustable rate                     $23,431 $25,998 $16,608
      Fixed rate                           69,510    67,487   39,231
      Specialty mortgage finance (1)        4,529     4,689    3,127
---------------------------------------------------------------------
         Total home loan volume            97,470    98,174   58,966
   Home construction loans:
      Builder (2)                             477       389      366
      Custom (3)                              163       194      148
   Home equity loans and lines of
    credit:
      Banking subsidiaries                  5,196     4,721    3,480
      Washington Mutual Finance               287       216      242
   Multi-family                             1,797     1,864      864
   Other real estate                          281       513      344
---------------------------------------------------------------------
         Total loans secured by real
          estate                          105,671   106,071   64,410
   Consumer:
      Banking subsidiaries                     59       114      238
      Washington Mutual Finance               424       481      402
   Commercial business                        466       438      637
---------------------------------------------------------------------
         Total loan volume               $106,620 $107,104 $65,687
=====================================================================

Loan Volume by Channel
   Originated                             $61,288 $64,881 $43,538
   Purchased/Correspondent                 45,332    42,223   22,149
---------------------------------------------------------------------
         Total loan volume by
          channel                        $106,620 $107,104 $65,687
=====================================================================

Refinancing Activity (4)
   Home loan refinancing                  $72,448 $71,203 $40,090
   Home construction loans                     12        11       13
   Home equity loans and lines of
    credit and consumer                       693       904      641
   Multi-family and other real
    estate                                    707       903      322
---------------------------------------------------------------------
        Total refinancing                 $73,860 $73,021 $41,066
=====================================================================

Home Loan Volume by Index:
   Short-term adjustable-rate
    mortgages:
      Treasury indices                     $4,539 $3,972 $6,480
      COFI                                    249       316      728
      Other                                   218       244       90
---------------------------------------------------------------------
         Total short-term
          adjustable-rate mortgages         5,006     4,532    7,298
   Medium-term adjustable-rate
    mortgages                              21,530    24,896   11,832
   Fixed-rate mortgages                    70,934    68,746   39,836
---------------------------------------------------------------------
         Total home loan volume           $97,470 $98,174 $58,966
=====================================================================



(1)  Represents purchased subprime 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.


WM-7

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


                                Change
                                  from
                                Dec. 31,
                                  2002
                                to Mar.   Mar. 31,  Dec. 31,  Mar. 31,
                                 31, 2003    2003      2002      2002
----------------------------------------------------------------------
Loans by Property Type and MBS
   Loans held in portfolio:
      Home loans:
         Adjustable rate and
          fixed rate               $903 $83,745 $82,842 $85,401
         Purchased specialty
          mortgage finance          476    10,604    10,128     8,974
----------------------------------------------------------------------
            Total home loans      1,379    94,349    92,970    94,375
      Home construction loans:
         Builder(1)                  30     1,047     1,017     1,476
         Custom(2)                   (6)      926       932       915
      Home equity loans and
       lines of credit:
         Banking subsidiaries     1,921    18,089    16,168    12,676
         Washington Mutual
          Finance                    87     2,017     1,930     2,093
      Multi-family                  618    18,618    18,000    17,228
      Other real estate             (24)    7,962     7,986     8,422
----------------------------------------------------------------------
         Total loans secured by
          real estate             4,005   143,008   139,003   137,185
      Consumer:
         Banking subsidiaries      (383)    1,280     1,663     1,908
         Washington Mutual
          Finance                   (11)    1,718     1,729     1,707
      Commercial business          (582)    4,551     5,133     4,130
----------------------------------------------------------------------
         Total loans held in
          portfolio               3,029   150,557   147,528   144,930
   Less: allowance for loan and
    lease losses                    (27)   (1,680)   (1,653)   (1,621)
   Loans securitized and
    retained as
     mortgage-backed securities  (1,385)   23,669    25,054    21,145
       Total net loans held in
        portfolio and loans
        securitized
        and retained as
        mortgage-backed
        securities                1,617   172,546   170,929   164,454
   Loans held for sale           10,018    44,014    33,996    24,751
----------------------------------------------------------------------
       Total net loans and
        loans securitized
        and retained as
        mortgage-backed
        securities               11,635   216,560   204,925   189,205
   Purchased mortgage-backed
    securities                     (222)    3,099     3,321     3,202
----------------------------------------------------------------------
       Total net loans and
        mortgage-backed
        securities              $11,413 $219,659 $208,246 $192,407
======================================================================



(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.


WM-8

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

                                                           Dec. 31,
                                                              2002
                                                          to Mar. 31,
                                                              2003
----------------------------------------------------------------------
Rollforward of Mortgage Servicing Rights(1)
   Balance, beginning of period                                $5,341
      Home loans:
         Additions                                                940
         Amortization                                            (969)
         Recovery                                                  37
         Sale of servicing rights                                (141)
      Net change in commercial real estate mortgage
       servicing rights                                             2
----------------------------------------------------------------------
   Balance, end of period(2)                                   $5,210
======================================================================

Rollforward of Valuation Allowance for Mortgage Servicing
 Rights Impairment
   Balance, beginning of period                                $4,521
      Recovery                                                    (37)
      Other than temporary impairment                            (536)
      Sale of servicing rights                                    (84)
----------------------------------------------------------------------
   Balance, end of period                                      $3,864
======================================================================

Rollforward of Loans Serviced for Others
   Balance, beginning of period                              $604,504
      Home loans:
         Additions                                             79,516
         Loan payments and other                              (92,556)
      Net change in commercial real estate loans serviced
       for others                                                 453
----------------------------------------------------------------------
   Balance, end of period                                    $591,917
======================================================================

                                                             Mar. 31,
                                                                2003
                                                               Balance
----------------------------------------------------------------------
Total Servicing Portfolio
      Loans serviced for others                              $591,917
      Servicing on retained mortgage-backed securities
       without mortgage servicing rights                        4,843
      Servicing on owned loans                                180,160
      Subservicing portfolio                                      191
----------------------------------------------------------------------
   Total servicing portfolio                                 $777,111
======================================================================



                                                    Mar. 31, 2003
                                               -----------------------
                                                Unpaid     Weighted
                                                Principal    Average
                                                Balance    Servicing
                                                               Fee
----------------------------------------------------------------------
Loans Serviced for Others by Loan Type                      (in basis
                                                              points,
                                                           annualized)
      Government                                 $82,552           54
      Agency                                     383,232           33
      Private                                    113,125           41
      Specialty home loans                        13,008           50
----------------------------------------------------------------------
   Total loans serviced for others(3)           $591,917           38
======================================================================



(1)  Net of valuation allowance.
(2)  At March 31, 2003, aggregate mortgage servicing rights fair
     value was $5.25 billion.
(3)  Weighted average coupon (annualized) was 6.66% at March 31,
     2003.


WM-9

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


            Change
             from
            Dec. 31,
             2002
            to Mar.   Mar. 31,  % of  Dec. 31,   % of  Mar. 31,  % of
           31, 2003    2003     total   2002     total   2002    total
----------------------------------------------------------------------
Loans Secured
 by Real Estate
 and
 Mortgage-Backed
 Securities
 ("MBS")
  Short-term adjustable- rate loans
   and MBS:
   COFI    $(1,964)  $26,288     12%  $28,252     14%   $32,523    18%
   Treasury
    indices  2,317    44,362     21    42,045     21     35,903    19
   Other     2,686    30,106(1)  14    27,420(1)  13     22,716(1) 12
----------------------------------------------------------------------
    Total short-
     term
     adjustable-
     rate loans
     and MBS 3,039   100,756     47    97,717     48     91,142    49
   Medium-term
    adjustable-rate
    loans and
    MBS        (40)   54,124     25    54,164     27     51,546    28
   Fixed-rate
    loans    9,547    55,238     26    45,691     23     40,019    21
   Fixed-rate
    MBS       (172)    3,535      2     3,707      2      3,473     2
----------------------------------------------------------------------
    Total loans
     secured by
     real estate
     and
     MBS   $12,374 $213,653    100% $201,279    100%  $186,180   100%
======================================================================

(1)  The balance included the following amount of securities retained
     which bear COFI to LIBOR basis risk (dollars in billions):
                                    Mar. 31, 2003:$2.8
                                    Dec. 31, 2002: 2.8
                                    Mar. 31, 2002: 2.8



                                                  Quarter Ended
------------------------------------------ ---------------------------
                                            Mar. 31, Dec. 31, Mar. 31,
                                               2003     2002     2002
------------------------------------------ --------- -------- --------
Home Loan Mortgage Banking Income
 (Expense)
   Loan servicing fees                         $613 $628 $540
   Loan subservicing fees                         5       14       15
   Amortization of mortgage servicing
    rights                                     (969)    (920)    (479)
   Mortgage servicing rights recovery
    (impairment)                                 37     (308)      45
   Other, net                                  (137)    (134)     (62)
------------------------------------------ --------- -------- --------
      Net home loan servicing income
       (expense)                               (451)    (720)      59
   Revaluation gain (loss) from
    derivatives:
      Mortgage servicing rights risk
       management                               412      109      (15)
      Other mortgage banking risk
       management                              (195)    (128)       -
------------------------------------------ --------- -------- --------
          Total revaluation gain (loss)
           from derivatives                     217      (19)     (15)
   Net settlement income from certain
    interest-rate swaps                         140      158        6
   Gain from mortgage loans                     587      392      251
   GNMA pool buy-out income                     154      119       13
   Loan related income                           75       76       71
   Gain from sale of originated mortgage-
    backed securities                             1       15        2
------------------------------------------ --------- -------- --------
        Total home loan mortgage banking
         income                                 723       21      387
------------------------------------------ --------- -------- --------
   Impact of other mortgage servicing
    rights risk management instruments(1):
       Gain from certain available-for-
        sale securities                           -      407        -
------------------------------------------ --------- -------- --------
              Total home loan mortgage
               banking income, net
               of other mortgage servicing
               rights risk
               management instruments          $723 $428 $387



(1)   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-10

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


                                    Mar. 31,   Dec. 31,   Mar. 31,
                                      2003       2002       2002
----------------------------------------------------------------------
                                    Balance    Balance    Balance
----------------------------------------------------------------------
Deposits
   Deposits:
      Checking accounts:
       Interest-bearing             $60,105 $56,132 $31,658
       Noninterest-bearing           38,263     35,730     21,718
----------------------------------------------------------------------
        Total checking accounts      98,368     91,862     53,376
      Savings and money market
       deposit accounts              29,910     29,886     34,378
      Time deposit accounts(1)       31,594     33,768     41,256
----------------------------------------------------------------------
           Total deposits(2)       $159,872 $155,516 $129,010
======================================================================

(1)  Weighted average remaining maturity of time deposits was 15
     months at March 31, 2003, 15 months at December 31, 2002 and
     11 months at March 31, 2002.
(2)  Includes custodial and escrow deposits of $27.04 billion at
     March 31, 2003, $25.90 billion at December 31, 2002 and $11.76
     billion at March 31, 2002.


                                   Mar. 31,   Dec. 31,   Mar. 31,
                                     2003       2002       2002
----------------------------------------------------------------------
Retail Checking Accounts(1)
  Washington Mutual Bank and
   Washington Mutual Bank fsb     1,300,561  1,289,705  1,218,440
  Washington Mutual Bank, FA      6,160,759  5,968,850  5,318,195
----------------------------------------------------------------------
    Total retail checking
     accounts                     7,461,320  7,258,555  6,536,635
======================================================================

Retail Checking Account Activity(1)
  Net accounts opened during the
   quarter:
   Washington Mutual Bank and
    Washington Mutual Bank fsb       10,856     11,900     36,055
   Washington Mutual Bank, FA       191,909    155,087    650,389(2)
----------------------------------------------------------------------
   Net new retail checking
    accounts                        202,765    166,987    686,444
======================================================================

(1)  Retail checking accounts exclude commercial business accounts.
     The information provided refers to the number of accounts, not
     dollar amounts.
(2)  Includes 358,846 checking accounts acquired from Dime.



WM-11

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



                                           Quarter Ended
----------------------------------------------------------------------
                                 Mar.    Dec.    Sept.   June    Mar.
                                  31,     31,     30,     30,     31,
                                 2003    2002    2002    2002    2002
----------------------------------------------------------------------
Allowance for Loan and Lease
 Losses
   Balance, beginning of
    quarter                    $1,653 $1,705 $1,665 $1,621 $1,404
   Allowance acquired through
    business combinations           -       -       -       -     148
   Allowance for transfer to
    loans held for sale            (3)    (17)     (7)      -      (7)
   Allowance for certain loan
    commitments                     -     (52)      -       -       -
   Provision for loan and
    lease losses                  125     125     135     160     175
----------------------------------------------------------------------
                                1,775   1,761   1,793   1,781   1,720
   Loans charged off:
    Loans secured by real
     estate:
      Home loans                  (15)    (23)     (9)    (11)    (11)
      Purchased specialty
       mortgage finance           (10)     (7)     (9)     (8)     (9)
----------------------------------------------------------------------
             Total home loan
              charge-offs         (25)    (30)    (18)    (19)    (20)
         Home equity loans
          and lines of credit:
           Banking subsidiaries    (4)     (9)     (3)     (1)     (1)
           Washington Mutual
            Finance                (3)     (4)     (2)     (3)     (2)
         Multi-family               -       -      (1)      -       -
         Other real estate        (10)     (5)    (11)    (32)    (10)
----------------------------------------------------------------------
             Total loans secured
              by real estate      (42)    (48)    (35)    (55)    (33)
      Consumer:
         Banking subsidiaries     (17)    (16)    (15)    (20)    (20)
         Washington Mutual
          Finance                 (40)    (43)    (42)    (44)    (40)
      Commercial business         (14)    (20)    (17)    (19)    (19)
----------------------------------------------------------------------
             Total loans
              charged off        (113)   (127)   (109)   (138)   (112)
   Recoveries of loans
    previously charged off:
      Loans secured by real
       estate:
         Home loans                 -       -       2       -       -
         Purchased specialty
          mortgage finance          1       -       -       -       -
         Multi-family               -       -       1       -       -
         Other real estate          4       5       6       1       1
----------------------------------------------------------------------
               Total loans
                secured by
                real estate         5       5       9       1       1
      Consumer:
         Banking subsidiaries       3       5       3       3       2
         Washington Mutual
          Finance                   6       4       5       5       5
      Commercial business           4       5       4      13       5
----------------------------------------------------------------------
               Total recoveries
                of loans
                previously
                charged off        18      19      21      22      13
----------------------------------------------------------------------
               Net charge-offs    (95)   (108)    (88)   (116)    (99)
----------------------------------------------------------------------
Balance, end of quarter        $1,680 $1,653 $1,705 $1,665 $1,621
======================================================================

Net charge offs (annualized) as
 a percentage of average loans
 held in portfolio              0.26%   0.29%   0.24%   0.32%   0.27%
Allowance as a percentage of
 total loans held in portfolio  1.12%   1.12%   1.15%   1.14%   1.12%




WM-12

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


                         Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
                           2003     2002      2002     2002     2002
----------------------------------------------------------------------
Nonperforming Assets and
 Restructured Loans
  Nonaccrual loans(1):
    Home loans              $910 $1,017 $1,068 $1,092 $1,177
    Purchased specialty
     mortgage finance        523      488       407      403      401
----------------------------------------------------------------------
        Total home loan
         nonaccrual loans  1,433    1,505     1,475    1,495    1,578
    Home construction
     loans:
        Builder(2)            38       42        48       44       57
        Custom(3)              9        7         6        8       15
    Home equity loans and
     lines of credit:
        Banking
         subsidiaries         44       36        35       35       35
        Washington Mutual
         Finance              41       37        35       31       29
    Multi-family              49       50        58       64       51
    Other real estate        402      414       356      371      413
----------------------------------------------------------------------
        Total nonaccrual
         loans secured by
         real estate       2,016    2,091     2,013    2,048    2,178
    Consumer:
        Banking
         subsidiaries         10       18        13       13       18
        Washington Mutual
         Finance              67       69        76       75       79
    Commercial business       73       79        86       96      116
----------------------------------------------------------------------
       Total nonaccrual
        loans held in
        portfolio          2,166    2,257     2,188    2,232    2,391
  Foreclosed assets          334      336       309      274      267
----------------------------------------------------------------------
       Total
        nonperforming
        assets            $2,500 $2,593 $2,497 $2,506 $2,658
       As a percentage
        of total assets     0.90%    0.97%     0.95%    0.96%    0.97%

  Restructured loans         $99 $98 $112 $119 $130
----------------------------------------------------------------------
        Total
         nonperforming
         assets and
         restructured
         loans            $2,599 $2,691 $2,609 $2,625 $2,788
======================================================================

(1)  Excludes nonaccrual loans held for sale of $134 million at
     March 31, 2003. Prior periods also reflect the exclusion of
     nonaccrual loans held for sale of $119 million, $105 million,
     $114 million and $122 million at December 31, 2002, September
     30, 2002, June 30, 2002 and March 31, 2002. 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, Inc. Alan Gulick, 206/377-3637 (Media)
             alan.gulick@wamu.net
             or
             JoAnn DeGrande, 206/461-3186 (Investors)
             joann.degrande@wamu.net
             or
             Ruthanne King, 206/461-6421 (Investors)
             ruthanne.king@wamu.net

    SOURCE: Washington Mutual, Inc.