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Washington Mutual Announces Record Fourth-Quarter and Annual Earnings; Increased Cash Dividend

    SEATTLE--(BUSINESS WIRE)--Jan. 16, 2001--Washington Mutual, Inc. (NYSE:WM) today announced record fourth-quarter earnings of $496.9 million, or 94 cents per diluted share, for the period ended Dec. 31, 2000, up from $450.3 million, or 80 cents per diluted share for the same period a year ago.

    Annual earnings were also a record at $1.90 billion, or $3.54 per diluted share, versus $1.82 billion, or $3.16 per diluted share in 1999.

    Other financial highlights for the fourth quarter and year 2000 included:

    • return on average common equity of 20.56 percent for the fourth quarter and 21.15 percent for the year;

    • strong net checking account growth of over 106,000 checking accounts in the fourth quarter and more than 514,000 checking accounts for the year;

    • increases in noninterest income of 30 percent and 31 percent for the fourth quarter and year, respectively;

    • record total loan volume of $66.01 billion, which includes record volume in both single-family and other than single-family categories for the year; and

    • continued solid asset quality.

    • Based on continued strong operating fundamentals, the company's board of directors declared an increase in the cash dividend on common stock to 31 cents per share, up from 30 cents the previous quarter. Dividends on the common stock are payable on Feb. 15, 2001 to shareholders of record as of Jan. 31, 2001.

      "The fourth quarter capped off an extraordinary year for Washington Mutual highlighted by record profitability in a challenging interest rate environment, significant internal growth and the continuation of the strong underlying fundamentals driving our company," said Kerry Killinger, Washington Mutual's chairman, president and chief executive officer. "We also took steps to further solidify our national franchises in consumer banking and mortgage banking with the proposed acquisitions of Bank United and PNC's mortgage operation. The Bank United acquisition will strengthen our position in Texas and PNC Mortgage will add scale to our mortgage operation, particularly in the Midwest and Eastern Seaboard."

      FOURTH-QUARTER RESULTS

      Net Interest Income and Noninterest Income

      Net interest income in the fourth quarter of 2000 was $1.10 billion, up 4 percent from $1.06 billion in the prior year's fourth quarter. For the year, net interest income totaled $4.31 billion, compared with $4.45 billion in 1999.

      The net interest spread was 2.29 percent in the most recent quarter, compared with 2.28 percent for the same period a year earlier. The margin was 2.42 percent in the most recent quarter versus

    • 2.41 percent in fourth quarter 1999. Given the current interest rate environment, the company expects the spread and margin expansion that began in the fourth quarter to continue in 2001.

    • Strong momentum in noninterest income continued in the fourth quarter, fueled primarily by the expansion in the checking account base and expanded mortgage activity. Total noninterest income in the fourth quarter was $549.4 million, up 30 percent from $423.2 million in last year's fourth quarter. Total noninterest income was $1.98 billion in 2000, up 31 percent from $1.51 billion for 1999.

      The net increase of 514,042 checking accounts, year over year, contributed to depositor and other retail banking fees of $269.1 million for the quarter, up 22 percent from $219.7 million for the same period one year ago. For the year, depositor and other retail banking fees totaled $976.3 million, up from $763.6 million for 1999.

      Reflecting the volatility in the stock market, securities fees and commissions totaled $73.8 million in the most recent quarter, up slightly from $71.6 million in the fourth quarter of last year. For the year, these fees and commissions totaled $318.3 million, up 17 percent from 1999's $271.3 million.

      During the fourth quarter, the sale of current loan production resulted in $64.2 million in gain on sale of loans. The sale of securities backed by seasoned loans originated by Washington Mutual generated additional gains of $2.4 million (reported as gain from securities). Collectively, the gains from these sales of the company's loans totaled $66.6 million.

      Lending

      For the year, Washington Mutual produced record loan volume, despite a significant reduction in residential mortgage refinancing activity during the first half of 2000. During the most recent quarter, total loan volume was $17.31 billion, versus $14.17 billion for the fourth quarter of 1999. For the year, total loan volume was a record $66.01 billion, compared with $58.95 billion in 1999.

      In the fourth quarter, single-family residential (SFR) volume totaled $11.63 billion, versus $10.05 billion a year ago. SFR volume totaled $43.92 billion in 2000, as compared with $43.79 billion in 1999.

      In the year 2000, new loan originations for home purchases were 65 percent of the total originations, versus 50 percent for 1999. Of the SFR loan volume, 85 percent was adjustable-rate loans in 2000, versus just 76 percent the previous year.

      The volume of loans other than SFRs totaled $5.68 billion for the most recent quarter, up 38 percent over $4.12 billion in the fourth quarter of 1999. For the year, that volume was $22.10 billion, up 46 percent from $15.15 billion for 1999.

      Efficiency Ratio

      The company's efficiency ratio (defined as total noninterest expense, excluding amortization of intangible assets, as a percentage of net interest income and noninterest income) was 48.22 percent during the fourth quarter of 2000, compared with 47.67 percent for the fourth quarter of 1999. For the year, the efficiency ratio was 47.97, versus 47.16 for the same period one year ago.

      Noninterest expense for the fourth quarter of 2000 totaled $821.5 million, compared with $731.6 million in the fourth quarter of 1999. For the year, noninterest expense totaled $3.13 billion, as compared with $2.91 billion for 1999. The growth in expenses was more than offset by double-digit percentage increases in noninterest income for both the fourth quarter and the year.

      Balance Sheet and Capital Management

      Washington Mutual's consolidated assets were $194.72 billion at Dec. 31, 2000, up from $186.51 billion at year-end 1999.

      At Dec. 31, 2000, transaction account balances, including checking, savings and money market deposits, represented 57 percent of total deposits, up from 55 percent at the end of the third quarter of 2000. The average deposit balance during the fourth quarter was $79.86 billion, versus $81.69 billion during the fourth quarter of 1999.

      Stockholders' equity stood at $10.17 billion, or 5.22 percent of consolidated assets at Dec. 31, 2000. In addition, capital ratios of the company's banking subsidiaries continued to exceed the federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard.

      Credit Quality

      In light of what appears to be a slowing national economy, Killinger said the company continues to keep a watchful eye on credit quality. Nonperforming assets were $1.04 billion at Dec. 31, 2000, as compared with $993.3 million at Sept. 30, 2000, and $1.03 billion at year-end 1999. The ratio of nonperforming assets to total assets was

    • 0.53 percent at Dec. 31, 2000, versus 0.52 percent at the end of the third quarter, and down from 0.55 percent at year-end 1999. In the fourth quarter, the company made a $52.5 million provision for loan and lease losses.

    • "The strength of our existing loan portfolio, still largely made up of lower-risk residential mortgages, places our company in a good position to weather a downturn in the economy," Killinger said.

      Company Updates

    • The previously announced acquisition of Bank United Corp. is expected to be completed in the first quarter of 2001, pending regulatory and shareholder approval. Bank United shareholders will vote on the transaction at a meeting scheduled for Feb. 8, 2001.

    • On Oct. 2, the company announced its plans to acquire the mortgage operations of PNC Financial Services Group. The transaction is expected to close during the first quarter of 2001. The Bank United and PNC acquisitions will make Washington Mutual the nation's second-largest mortgage originator and fourth-largest servicer of residential mortgages, based on data for the first nine months of 2000.

    • During the fourth quarter, the company began the first deployment of its proprietary OptisTM mortgage origination system. When fully implemented, the Optis system will dramatically enhance the loan process by handling greater loan volume in a more efficient system, and providing improved service, flexibility and access for borrowers, brokers, realtors and correspondents.

    • In the next phase of its successful Occasio retail financial store concept, the company will open the first of its 40 Phoenix-area financial stores (branches) in the first quarter of 2001. Occasio, which debuted in Las Vegas last April, has far outperformed the company's initial forecasts. While real estate and construction costs are 20 percent lower than average for the company's free-standing locations, deposits are growing at nearly three times the rate and checking accounts are being opened at nearly twice the pace as the average at new branches for the company.

    • Outlook

      "Washington Mutual enters 2001 with excellent momentum and a goal to further extend its leading national franchises," said Killinger. "We'll look for opportunities to grow these franchises through a combination of internal growth and potential acquisitions that meet our criteria. While the economy appears to be slowing, we begin the year from a position of strength in our asset quality with the ratio of nonperforming assets to total assets well below our stated five-year target.

      "In addition, the company should benefit from expansion in the net interest margin, a result of recent declines in short-term interest rates. Consequently, we expect 2001 will be a very strong year for Washington Mutual."

      With a history dating back to 1889, Washington Mutual is a national financial services company that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At Dec. 31, 2000, Washington Mutual and its subsidiaries had assets of $194.72 billion. The company currently operates more than 2,000 consumer banking, mortgage lending, commercial banking, consumer finance and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamu.com.

      Webcast information: Investors may listen to Washington Mutual's investor conference call on January 17, 2001, at 7:30 a.m. PST at www.wamu.com. A replay will be available shortly after the completion of the call.

      To view a downloadable version of the fourth quarter earnings financial supplement click here

       

    
                            Washington Mutual, Inc.
                       Consolidated Statements of Income
                 (dollars in millions, except per share data)
                                  (unaudited)
    
                                 Quarter Ended             Year Ended
    ----------------------------------------------------------------------
                        Dec. 31,  Sept. 30,  Dec. 31,   Dec. 31,  Dec. 31,
                           2000       2000      1999       2000      1999
    ----------------------------------------------------------------------
    Interest Income
     Loans             $2,533.3   $2,396.4  $2,179.5   $9,388.4  $8,348.1
     Available-for-sale 
      ("AFS") securities  712.1      703.4     651.9    2,810.4   2,481.5
     Held-to-maturity 
      ("HTM") securities  320.8      325.8     305.0    1,318.9   1,050.0
     Other interest and 
      dividend income      66.2       59.3      52.5      265.3     182.6
    ----------------------------------------------------------------------
       Total interest 
        income          3,632.4    3,484.9   3,188.9   13,783.0  12,062.2
    Interest Expense
     Deposits             854.0      844.3     788.1    3,289.2   3,170.3
     Borrowings         1,677.4    1,606.6   1,344.6    6,182.2   4,440.1
    ----------------------------------------------------------------------
       Total interest 
        expense         2,531.4    2,450.9   2,132.7    9,471.4   7,610.4
    ----------------------------------------------------------------------
        Net interest 
         income         1,101.0    1,034.0   1,056.2    4,311.6   4,451.8
    Provision for loan 
     and lease losses      52.5       47.6      41.7      185.3     167.1
    ----------------------------------------------------------------------
        Net interest income after 
         provision for loan and 
           lease losses 1,048.5      986.4   1,014.5    4,126.3   4,284.7
    Noninterest Income
     Depositor and other retail 
      banking fees        269.1      256.4     219.7      976.3     763.6
     Securities fees 
      and commissions      73.8       78.4      71.6      318.3     271.3
     Insurance fees 
      and commissions      11.0       10.7      11.6       44.0      43.1
     Loan servicing income 36.7       37.7      38.5      146.8     112.3
     Loan related income   33.7       30.1      24.8      116.8     102.8
     Gain on sale of loans 64.2       55.5      28.4      261.6     109.4
     Gain (loss) 
      from securities      13.1        9.3       0.3       (0.9)    (11.6)
     Other income          47.8       32.8      28.3      120.7     118.1
    ----------------------------------------------------------------------
       Total noninterest 
        income            549.4      510.9     423.2    1,983.6   1,509.0
    Noninterest Expense
     Compensation 
      and benefits        342.9      339.0     288.4    1,347.8   1,186.4
     Occupancy 
      and equipment       157.3      145.5     153.3      603.4     564.6
     Telecommunications and 
      outsourced information 
       services            86.8       82.0      67.8      323.1     276.0
     Depositor and other 
      retail banking 
       losses              28.9       27.6      30.0      105.2     107.5
     Transaction-related 
      expense                --         --      22.7         --      95.7
     Amortization of goodwill 
      and other intangible 
       assets              25.7       26.9      26.3      106.5      98.4
     Other expense        179.9      163.7     143.1      640.1     580.9
    ----------------------------------------------------------------------
       Total noninterest 
        expense           821.5      784.7     731.6    3,126.1   2,909.5
    ----------------------------------------------------------------------
        Income before 
         income taxes     776.4      712.6     706.1    2,983.8   2,884.2
    Income taxes          279.5      260.1     255.8    1,085.2   1,067.1
    ----------------------------------------------------------------------
    Net Income           $496.9     $452.5    $450.3   $1,898.6  $1,817.1
    ======================================================================
    Net Income Attributable 
     to Common Stock     $496.9     $452.5    $450.3   $1,898.6  $1,817.1
    ======================================================================
    
    Net income per diluted 
     common share:        $0.94      $0.86     $0.80      $3.54     $3.16
    Average common shares used to calculate 
     diluted earnings per share 
      (in thousands):   530,977    528,888   564,828    536,463   574,553
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                   (dollars in millions, except share data)
                                  (unaudited)
    
    
    
                                          Quarter Ended
    ----------------------------------------------------------------------
                     Dec. 31, 2000       Sept. 30, 2000    Dec. 31, 1999
                   Balance      Rate    Balance     Rate  Balance    Rate
    ----------------------------------------------------------------------
    Average Balances and Weighted Average Interest Rates
     Loans        $122,619.0  8.26%   $118,399.2   8.09% $116,858.7  7.45%
     Mortgage-backed 
      securities 
       ("MBS")      56,230.1  7.20      58,102.3   7.00    56,801.2  6.67
     Investment securities 
      and other      5,196.8  6.67       4,398.4   6.46     4,136.7  5.96
    ----------------------------------------------------------------------
      Total interest-earning 
       assets      184,045.9  7.89     180,899.9   7.70   177,796.6  7.17
    
     Deposits:
      Checking 
       accounts     14,299.3            14,285.7           13,508.8
      Savings accounts and money 
       market deposit accounts  
        ("MMDAs")   30,242.5            29,698.6           30,589.5
      Time deposit 
       accounts     35,315.2            35,965.2           37,596.6
    ----------------------------------------------------------------------
    Total 
     deposits       79,857.0  4.25      79,949.5   4.20    81,694.9  3.83
    Borrowings      99,852.9  6.68      96,904.3   6.60    91,355.0  5.84
    ----------------------------------------------------------------------
      Total interest-bearing 
       liabilities 179,709.9  5.60     176,853.8   5.51   173,049.9  4.89
    
    
      Net interest spread     2.29                 2.19              2.28
      Net interest margin     2.42                 2.31              2.41
    
    
    Total assets   192,127.8           188,014.5          183,722.2
    Stockholders' 
     equity          9,668.3             8,811.9            8,999.9
    
    
    
    
                                                Year Ended
    ----------------------------------------------------------------------
                                    Dec. 31, 2000        Dec. 31, 1999
                                  Balance      Rate     Balance     Rate
    ----------------------------------------------------------------------
    Average Balances and Weighted Average Interest Rates
     Loans                        $117,741.5   7.97%   $112,859.5   7.40%
     MBS                            58,468.9   6.97      52,293.1   6.68
     Investment securities and other 4,598.6   6.89       3,883.7   5.68
    ----------------------------------------------------------------------
      Total interest-earning 
       assets                      180,809.0   7.62     169,036.3   7.14
    
     Deposits:
      Checking accounts             14,120.0             13,644.5
      Savings accounts and MMDAs    29,815.7             30,267.4
      Time deposit accounts         36,340.4             39,182.8
    ----------------------------------------------------------------------
     Total deposits                 80,276.1   4.10      83,094.7   3.82
     Borrowings                     96,109.4   6.43      80,469.1   5.52
    ----------------------------------------------------------------------
      Total interest-bearing 
       liabilities                 176,385.5   5.37     163,563.8   4.66
    
    
      Net interest spread                      2.25                 2.48
      Net interest margin                      2.38                 2.63
    
    
    Total assets                   187,571.6            174,786.3
    Stockholders' equity             8,978.9              9,243.8
    
    
    
                            Washington Mutual, Inc.
                Consolidated Statements of Financial Condition
                 (dollars in millions, except per share data)
                                  (unaudited)
    
    
    
                                         Dec. 31,    Sept. 30,    Dec. 31,
                                            2000         2000        1999
    ----------------------------------------------------------------------
    Assets
      Cash and cash equivalents         $2,621.8     $2,218.4    $3,040.2 
      AFS securities:                                                     
          MBS                           40,348.4     39,754.2    40,972.7 
          Investment securities          1,810.4        468.9       411.7 
     HTM securities:                                                      
          MBS                           16,428.1     17,138.4    19,263.4 
          Investment securities            136.5        136.7       138.0 
      Loans held for sale                3,403.9      6,185.8       793.5 
      Loans:                                                              
          Loans held in portfolio      119,626.1    115,054.3   113,745.6 
          Allowance for loan 
           and lease losses             (1,013.8)    (1,011.8)   (1,041.9)
    ----------------------------------------------------------------------
            Total loans, net of allowance 
             for loan and lease losses 118,612.3    114,042.5   112,703.7 
      Mortgage servicing rights          1,017.3        899.3       643.2 
      Investment in Federal Home 
       Loan Banks ("FHLBs")              3,260.1      3,195.9     2,916.7 
      Goodwill and other 
       intangible assets                 1,083.7      1,108.6     1,199.8 
      Other assets                       5,993.5      5,631.5     4,430.7 
    ----------------------------------------------------------------------
           Total assets               $194,716.0   $190,780.2  $186,513.6 
    ======================================================================
    
    Liabilities                                                           
      Deposits:                                                           
         Checking accounts             $14,499.8    $14,656.6   $13,489.5 
         Savings accounts and MMDAs     30,655.8     29,843.8    30,048.4 
         Time deposit accounts          34,418.2     35,952.9    37,591.9 
    ----------------------------------------------------------------------
           Total deposits               79,573.8     80,453.3    81,129.8 
      Federal funds purchased and 
       commercial paper                  4,114.7      3,913.7       866.5 
      Securities sold under agreements 
       to repurchase 
        ("repurchase agreements")       29,756.1     30,588.9    30,162.8 
      Advances from FHLBs               57,854.9     56,938.4    57,094.0 
      Other borrowings                   9,930.3      6,907.2     6,203.2 
      Other liabilities                  3,320.7      2,649.5     2,004.6 
    ----------------------------------------------------------------------
           Total liabilities           184,550.5    181,451.0   177,460.9 
    Stockholders' equity                10,165.5      9,329.2     9,052.7 
    ----------------------------------------------------------------------
           Total liabilities and 
            stockholders' equity      $194,716.0   $190,780.2  $186,513.6 
    ======================================================================
    
    Common shares outstanding at end 
     of period (in thousands)(1)         539,856      539,082     571,589
    Book value per common share           $19.26       $17.70      $16.18
    Tangible book value per common share   17.49        15.89       14.32
    
    Full-time equivalent employees 
     at end of period                     28,798       28,428      28,509
    
    
    (1) Includes 12 million shares held in escrow that were not
    included in the book value per share calculations.
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                (dollars in millions, except per share amounts)
                                  (unaudited)
    
        Note: The following analysis of reported and operating earnings is
    based upon the Company's opinion and is intended to provide the user
    additional information about the Company's operations. It is not
    intended to replace traditional financial statement disclosures in
    accordance with generally accepted accounting principles and may not
    be comparable to similarly titled measures reported by other
    companies.
    
                           Quarter Ended                    Year Ended
    ----------------------------------------------------------------------
                          Dec. 31,  Sept. 30,  Dec. 31,  Dec. 31, Dec. 31,
                             2000      2000       1999      2000     1999
    ----------------------------------------------------------------------
    Reported Financial
    Results
     Net income             $496.9   $452.5    $450.3   $1,898.6 $1,817.1
     Net income per
      diluted common share   $0.94    $0.86     $0.80      $3.54    $3.16
     Financial ratios on
      reported financial
      results:
      Return on average
       assets                1.03%     0.96%     0.98%      1.01%    1.04%
      Return on average
       common equity        20.56     20.54     20.01      21.15    19.66
      Efficiency ratio,
       excluding
       amortization of
       intangible assets    48.22     49.06     47.67      47.97    47.16
      Efficiency ratio,
       including
       amortization of
       intangible assets    49.78     50.80     49.45      49.66    48.81
    
    Operating Financial
      Results, Excluding
      Transaction-Related
      Expense
      Reported pretax
       income              $776.4    $712.6    $706.1   $2,983.8 $2,884.2
      Transaction-related
       expense                  -        -      22.7           -     95.7
    ----------------------------------------------------------------------
    Adjusted pretax income  776.4     712.6     728.8    2,983.8  2,979.9
    Provision for 
      income taxes          279.5     260.1     264.0    1,085.2  1,102.5
    ----------------------------------------------------------------------
    Earnings from operations,
     excluding
     transaction-related
     expense               $496.9    $452.5    $464.8   $1,898.6 $1,877.4
    ======================================================================
    
    Earnings per diluted
     common share            $0.94     $0.86     $0.82      $3.54   $3.27
    
     Financial ratios on
      operating financial
      results:
     Return on average
      assets                  1.03%     0.96%     1.01%      1.01%   1.07%
     Return on average
      common equity          20.56     20.54     20.66      21.15   20.31
    Efficiency ratio,
     excluding
     amortization
     of intangible assets    48.22     49.06     46.14      47.97   45.56
    Earnings from
     Operations,
     Excluding
     Transaction-Related
     Expense and
     Amortization of
     Intangible Assets
    
    Earnings from
     operations,
     excluding
     transaction-related
     expense               $496.9    $452.5    $464.8   $1,898.6  $1,877.4
    Total amortization of
     intangible assets
     during the period       25.7      26.9      26.3      106.5      98.4
    Tax benefit               6.0       6.3       3.5       24.5      17.9
    ----------------------------------------------------------------------
    Amortization of
     intangible assets,
     net of tax              19.7      20.6      22.8       82.0      80.5
    ----------------------------------------------------------------------
    Earnings from
     operations,
     excluding
     transaction-related
     expense and
     amortization of
     intangible assets     $516.6     $473.1   $487.6   $1,980.6  $1,957.9
    ======================================================================
    
    Earnings per diluted
     common share            $0.97      $0.89    $0.86      $3.69    $3.41
    Financial ratios on
     earnings from
     operations:
    Return on average
     assets                   1.08%      1.01%    1.06%      1.06%   1.12%
    Return on average
     common equity           21.37      21.48    21.67      22.06   21.18
    
    
                  Washington Mutual, Inc.
               Selected Financial Information
                        (unaudited)
    
    
    
                                                 Dec. 31,     Sept. 30,
                                                   2000          2000
    ----------------------------------------------------------------------
    Capital Adequacy
      Stockholders'
       equity/total assets                        5.22%         4.89%
      Stockholders'
       equity (1)/total assets (1)                5.24          5.14
      Estimated total risk-based capital (2)     11.07         11.15
    
    
    (1)  Excludes unrealized net loss on available-for-sale securities.
    (2)  Estimate of what WMI's total risk-based capital ratio would be if
         it were a bank holding company that complies with Federal Reserve
         Board capital requirements.
    
    
    
    
                                    Dec. 31,     Sept. 30,      Dec. 31,
                                     2000          2000          1999
    ----------------------------------------------------------------------
    Retail Checking Accounts (3)
     WMB and WMBfsb                1,064,780     1,057,124     1,006,749
     WMB, FA                       3,744,195     3,645,811     3,288,184
    ----------------------------------------------------------------------
    Total retail
     checking accounts             4,808,975     4,702,935     4,294,933
    ======================================================================
    
    Retail Checking
     Account Activity (3) 
     Net accounts opened
      during the quarter:
        WMB and WMBfsb                 7,656        16,274        11,024
        WMB, FA                       98,384       125,426        73,367
    ----------------------------------------------------------------------
     Net new retail
      checking accounts              106,040       141,700        84,391
    ======================================================================
    
    
    (3)  Retail checking accounts exclude commercial business accounts.
         The information provided refers to the number of accounts, not
         dollar volume.
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                           Quarter Ended                  Year Ended
    ----------------------------------------------------------------------
                     Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,   Dec. 31,
                       2000       2000        1999       2000       1999  
    ----------------------------------------------------------------------
    Loan Volume
     Single-family
      residential
      ("SFR"):
     Adjustable rate
      ("ARMs")       $ 8,766.8  $10,329.8  $ 9,050.9  $37,285.9  $33,114.2
      Fixed rate       2,860.4    1,638.9      994.5    6,631.2   10,677.9
     SFR - 
      construction       413.9      466.8      470.2    1,849.3    2,003.4
     Second mortgage
      and other
      consumer:
       Banking
       subsidiaries    1,426.1    1,381.5      839.4    5,003.7    2,946.4
     Washington 
      Mutual Finance     587.9      580.2      615.1    2,342.1    2,100.8
     Specialty
      mortgage finance 1,913.4    2,351.3    1,349.8    8,249.4    5,008.9
     Commercial
       business          806.3      738.7      364.9    2,695.1    1,186.0
     Commercial
       real estate:
     Apartment
       buildings         410.9      305.7      447.4    1,600.5    1,672.5
     Other commercial
         real estate     124.0       99.9       35.8      357.7      236.0
    ----------------------------------------------------------------------
    Total loan
     volume           $17,309.7 $17,892.8  $14,168.0  $66,014.9  $58,946.1
    ======================================================================
    
    As a percentage
     of total loan
     volume:
    SFR, excluding
     SFR construction     67%       67%        71%       67%         74%
     All other            33        33         29        33          26
    
    SFR Loan Originations (1)(2)
     Short-term ARMs:
    Treasury indices  $ 6,451.5  $ 6,604.0   $5,598.7 $25,596.6  $14,485.2
    COFI                1,434.4    2,624.2      257.0   6,035.8      745.9
    Other                   1.9       12.3        1.1      17.8        9.6
    ----------------------------------------------------------------------
    Total short-term
     ARMs               7,887.8    9,240.5    5,856.8  31,650.2   15,240.7
    Medium-term ARMs      434.9      310.9    2,732.0   3,932.5   14,333.0
     Fixed-rate
     mortgages          2,664.2    1,631.6      994.4   6,414.6   10,677.9
    ----------------------------------------------------------------------
    Total SFR loan
     originations     $10,986.9  $11,183.0   $9,583.2 $41,997.3  $40,251.6
    ======================================================================
    
    (1)  Does not include purchased SFR loans.
    (2)  Does not include Washington Mutual Finance and Long Beach
    Mortgage.
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                             Change from
                          Sept. 30, 2000  Dec. 31,  Sept. 30,  Dec. 31,
                        to Dec. 31, 2000     2000       2000      1999
    ----------------------------------------------------------------------
    Loans and MBS by Property Type 
    Loans held in portfolio:
    
     SFR                    $ 3,174.1   $ 80,180.7  $ 77,006.6 $ 80,234.4
     SFR - construction          16.9      1,430.7     1,413.8    1,242.8
     Second mortgage and other 
      consumer:
      Banking subsidiaries      495.2      7,991.7     7,496.5    6,393.3
      Washington Mutual Finance  72.6      2,486.5     2,413.9    2,081.0
     Specialty mortgage finance 596.2      6,783.2     6,187.0    4,105.1
     Commercial business        197.7      2,273.6     2,075.9    1,451.5
     Commercial real estate:
      Apartment buildings        69.2     15,657.6    15,588.4   15,261.0
      Other commercial 
       real estate              (50.1)     2,822.1     2,872.2    2,976.5
    ----------------------------------------------------------------------
     Total loans held in 
      portfolio               4,571.8    119,626.1   115,054.3  113,745.6
     Less: allowance for loan 
      and lease losses           (2.0)    (1,013.8)   (1,011.8)  (1,041.9)
     Loans securitized and 
      retained as MBS         1,352.7     34,768.8    33,416.1   33,505.4
    ----------------------------------------------------------------------
      Total loans held in 
       portfolio and loans 
       securitized and 
       retained as MBS        5,922.5    153,381.1   147,458.6  146,209.1
      Loans held for sale    (2,781.9)     3,403.9     6,185.8      793.5
    ----------------------------------------------------------------------
      Total loans and loans 
       securitized and
       retained as MBS        3,140.6    156,785.0   153,644.4  147,002.6
     Purchased MBS           (1,468.8)    22,007.7    23,476.5   26,730.7
    ----------------------------------------------------------------------
      Total loans and MBS   $ 1,671.8   $178,792.7  $177,120.9 $173,733.3
    ======================================================================
    
                             Dec. 31, 2000 Sept. 30, 2000  Dec. 31, 1999
    ----------------------------------------------------------------------
    MBS Balances by 
     Originated and Purchased:
       AFS MBS:
          Originated         $ 18,434.6    $ 16,391.0      $  14,381.5
          Purchased            21,913.8      23,363.2         26,591.2
    ----------------------------------------------------------------------
                             $ 40,348.4    $ 39,754.2      $  40,972.7
    ======================================================================
    
     HTM MBS:
          Originated         $ 16,334.2    $ 17,025.1      $  19,123.9
          Purchased                93.9         113.3            139.5
    ----------------------------------------------------------------------
                             $ 16,428.1    $ 17,138.4      $  19,263.4
    ======================================================================
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                                     Sept. 30, 2000          Dec. 31, 1999
                                   to Dec. 31, 2000       to Dec. 31, 2000
    ----------------------------------------------------------------------
    Rollforward of Loans            
    (Held for Sale and 
     Held in Portfolio)
     Balance, beginning of period       $121,240.1             $114,539.1
      Loans originated and purchased      17,309.7               66,014.9
      Loans sold or securitized           (8,174.8)             (31,830.5)
      Loan payments and other             (7,345.0)             (25,693.5)
    ----------------------------------------------------------------------
      Change in loans                      1,789.9                8,490.9
    ----------------------------------------------------------------------
      Balance, end of period            $123,030.0             $123,030.0
    ======================================================================
    
    Rollforward of Mortgage 
     Servicing Rights ("MSR")
     Balance, beginning of period          $ 899.3                 $643.2
      Additions                              168.4                  515.5
      Amortization                           (41.7)                (132.7)
      Impairment adjustment                   (8.7)                  (8.7)
    ----------------------------------------------------------------------
     Balance, end of period               $1,017.3               $1,017.3
    ======================================================================
    
    Rollforward of Loan Servicing 
     Portfolio with MSR (1)
      Balance, beginning of period       $72,788.1              $55,268.2
       Additions                           8,270.2               32,060.5
       Loan payments and other            (1,723.0)              (7,993.4)
    ----------------------------------------------------------------------
     Balance, end of period              $79,335.3              $79,335.3
    ======================================================================
    
       (1) Rollforward does not include approximately $ 6.54 billion of
    loans sold or securitized without capitalized MSR.
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
    
    
                                  Change from
                               Sept. 30, 2000     Dec. 31,                
                             to Dec. 31, 2000        2000     % of total  
    ----------------------------------------------------------------------
    Real Estate Loans and MBS
      Short-term ARMs:
         COFI                        $ (528.2)  $ 42,557.7            27% 
         Treasury indices             1,726.1     44,752.0            28  
         Other                         (180.3)     8,553.5 (1)         5  
    ----------------------------------------------------------------------
         Total short-term ARMs        1,017.6     95,863.2            60  
      Medium-term ARMs                 (762.0)    28,991.5            18  
      Fixed-rate loans                  527.1     12,835.8             8  
      Fixed-rate MBS                   (470.6)    22,581.0            14  
    ----------------------------------------------------------------------
         Total real estate loans
          and MBS                     $ 312.1   $160,271.5           100% 
    ======================================================================
       (1) At December 31, 2000, the balance included $2.75 billion of
    securities retained which bear COFI to LIBOR basis risk. At September
    30, 2000, the balance included $2.68 billion of securities retained
    which bear COFI to LIBOR basis risk.
    
                                 Sept. 30,             Dec. 31,           
                                     2000   % of total    1999  % of total
    ----------------------------------------------------------------------
    Real Estate Loans and MBS       
      Short-term ARMs:           
         COFI                    $ 43,085.9       27% $ 55,838.7       35%
         Treasury indices          43,025.9       27    29,844.7       18
         Other                      8,733.8 (1)    5     6,530.0        4 
    ----------------------------------------------------------------------
         Total short-term ARMs     94,845.6       59    92,213.4       57 
      Medium-term ARMs             29,753.5       19    28,410.9       18 
      Fixed-rate loans             12,308.7        8    14,233.6        9 
      Fixed-rate MBS               23,051.6       14    25,886.4       16
    ----------------------------------------------------------------------                                                                      
         Total real estate loans   
          and MBS                $159,959.4      100% $160,744.3      100%
    ======================================================================                             
    
    
       (1) At December 31, 2000, the balance included $2.75 billion of
    securities retained which bear COFI to LIBOR basis risk. At September
    30, 2000, the balance included $2.68 billion of securities retained
    which bear COFI to LIBOR basis risk.
    
    
                             Quarter Ended                Year Ended
    ----------------------------------------------------------------------
                          Dec. 31, Sept. 30,   Dec. 31,  Dec. 31, Dec. 31,
                             2000      2000       1999      2000     1999
    ----------------------------------------------------------------------
    Income Related to 
     Mortgage Loans
     Loan related income  $ 33.7     $ 30.1    $  24.8   $ 116.8  $ 102.8
     Loan servicing income  36.7       37.7       38.5     146.8    112.3
     Gain on sale of loans  64.2       55.5       28.4     261.6    109.4
    ----------------------------------------------------------------------
     Total income related 
      to mortgage loans   $134.6     $123.3    $  91.7   $ 525.2  $ 324.5
    ======================================================================
    
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                                   Dec. 31, 2000       Sept. 30, 2000
    ----------------------------------------------------------------------
                                 Balance   Term (1)   Balance   Term (1)
    ----------------------------------------------------------------------
    Deposits, Borrowings and             (in months)          (in months)
     Derivatives Outstanding        
    Deposits:
      Noninterest-bearing
       checking accounts        $ 8,575.3       NA   $ 8,844.2      NA
      Interest-bearing checking
       accounts, savings accounts
       and MMDAs                 36,580.3       NA    35,656.2      NA
      Time deposit accounts      34,418.2        7    35,952.9       7
    ----------------------------------------------------------------------
         Total deposits          79,573.8             80,453.3
    Borrowings:
      Adjustable (2)             57,219.1        1    57,284.4       1
      Short-term fixed           30,456.6        2    28,930.0       2
      Long-term fixed            13,980.3       48    12,133.8      52
    ----------------------------------------------------------------------
         Total borrowings       101,656.0             98,348.2
    ----------------------------------------------------------------------
    Total deposits and
     borrowings                $181,229.8           $178,801.5
    ======================================================================
    
    Notional amount of derivatives:
      WM pay rate swaps:
           Fixed rate           $11,008.1        9   $12,658.0      11
           Variable rate          2,890.0        2     2,090.0       1
    ----------------------------------------------------------------------
      Total swaps                13,898.1             14,748.0
      Caps\Collars\Corridors      8,286.2        1     8,984.3       1
    ----------------------------------------------------------------------
         Total derivatives      $22,184.3            $23,732.3
    ======================================================================
    
    
       (1) Terms used are remaining term for deposits and term to reprice
    for borrowings and notional amount of derivatives.
       (2) Adjustable-rate borrowings included notional values of $13.20
    billion and $8.10 billion of embedded purchased interest rate floors
    at December 31, 2000 and September 30, 2000, respectively. Contractual
    start dates for these floors range from December 2000 to July 2003. At
    December 31, 2000, $800.0 million of these contracts were effective.
    Once effective, the floors reprice every three months.
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                                          Quarter Ended
    ----------------------------------------------------------------------
                         Dec. 31,  Sept. 30,  June 30,  Mar. 31,  Dec. 31,
                          2000      2000       2000      2000      1999
    ----------------------------------------------------------------------
    Allowance for Loan
     and Lease Losses
      Balance, beginning
       of quarter        $1,011.8  $1,009.7  $1,025.2  $1,041.9  $1,051.4
      Provision for loan
       and lease losses      52.5      47.6      44.1      41.2      41.7
      Identified allowance
       for loans sold or
       securitized (1)          -      (2.6)    (17.1)    (16.9)     (6.4)
      Loans charged off:
        SFR and SFR
         construction        (5.2)     (3.1)     (5.6)     (6.8)     (8.3)
    Second mortgage and
     other consumer:
      Banking subsidiaries  (10.8)    (11.6)     (9.9)    (10.6)     (9.9)
      Washington Mutual
       Finance              (34.1)    (30.2)    (28.2)    (27.1)    (26.5)
      Specialty mortgage
       finance               (2.5)     (0.8)     (0.8)     (0.6)     (0.3)
      Commercial business    (3.0)     (3.4)     (3.7)     (0.8)     (1.1)
      Commercial real estate:
       Apartment buildings   (0.3)     (0.3)     (0.5)     (1.2)     (2.2)
       Other commercial
        real estate          (0.3)     (0.4)     (0.6)     (0.4)     (4.7)
    ----------------------------------------------------------------------
    Total loans charged off (56.2)    (49.8)    (49.3)    (47.5)    (53.0)
     Recoveries of loans
      previously charged off:
     SFR and SFR construction 0.2       0.3       0.8       0.1       1.4
     Second mortgage and
      other consumer:
      Banking subsidiaries    0.9       0.7       1.0       0.8       0.8
      Washington Mutual
       Finance                3.9       4.4       4.3       4.4       4.0
      Specialty mortgage
       finance                  -         -         -       0.5       0.3
      Commercial business     0.3       0.3       0.4       0.2       0.2
     Commercial real estate:
      Apartment buildings       -       0.8         -       0.5       1.4
      Other commercial
       real estate            0.4       0.4       0.3         -       0.1
    ----------------------------------------------------------------------
    Total recoveries of loans
     previously charged off   5.7       6.9       6.8       6.5       8.2
    ----------------------------------------------------------------------
    Net charge offs         (50.5)    (42.9)    (42.5)    (41.0)    (44.8)
    ----------------------------------------------------------------------
    Balance, end of
     quarter             $1,013.8  $1,011.8  $1,009.7  $1,025.2  $1,041.9
    ======================================================================
    
    Net charge offs (annualized)
     as a percentage of
     average loans          0.16%     0.14%     0.15%     0.14%     0.15%
    
       (1) Allowance is due to loan sales and securitizations during the
    applicable quarters.
    
    
    
                            Washington Mutual, Inc.
                        Selected Financial Information
                             (dollars in millions)
                                  (unaudited)
    
                                  Dec. 31,        Sept. 30,       Dec. 31,
                                   2000            2000            1999
    ----------------------------------------------------------------------
    Allowance for loan and lease
     losses as a percentage of:
      Nonaccrual loans                114%             121%           126%
      Nonperforming assets             98              102            102
    
    Changes in the liability for losses on loans securitized with recourse
     and retained or sold, included in "Other liabilities," were as
     follows:
    
    Allowance for expected recourse
     obligations:
      Balance, beginning
       of quarter                  $106.1           $106.3         $117.0
      Charge offs, net of
       provision for
       recourse losses               (1.8)            (0.2)          (3.9)
    ----------------------------------------------------------------------
      Balance, end of quarter      $104.3           $106.1         $113.1
    ======================================================================
    
    The total loss coverage represents the allowance for loan and lease
     losses and allowance for expected recourse obligations as a
     percentage of nonaccrual loans:
    
    Total loss coverage percentage    126%             134%           140%
    
    
    
                         Washington Mutual, Inc.
                     Selected Financial Information
                          (dollars in millions)
                               (unaudited)
    
                                       Dec. 31,    Sept. 30,    Dec. 31, 
                                        2000         2000        1999 
    ----------------------------------------------------------------------
    Nonperforming Assets ("NPAs")
      Nonaccrual loans:
        SFR and SFR construction       $547.0       $551.7      $619.9
        Second mortgage and other 
         consumer:
            Banking subsidiaries         51.2         41.6        43.3
            Washington Mutual Finance    65.6         62.1        54.8
        Specialty mortgage finance      178.5        131.3        57.2
        Commercial business              12.3         14.1         9.8
        Commercial real estate:
            Apartment buildings          10.1          8.6        22.0
            Other commercial real 
             estate                      21.0         27.3        20.0
    ----------------------------------------------------------------------
           Total nonaccrual loans       885.7        836.7       827.0
      Foreclosed assets:
        SFR and SFR construction         96.8        104.6       143.3
        Second mortgage and other 
         consumer:
            Banking subsidiaries         16.2         17.4        15.4
            Washington Mutual Finance     6.0          6.1         3.6
        Specialty mortgage finance       23.9         16.1         6.6
        Commercial real estate:
           Apartment buildings            0.7          1.3         8.1
           Other commercial real estate   9.6         11.1        22.0
    ----------------------------------------------------------------------
           Net foreclosed assets        153.2        156.6       199.0
    ----------------------------------------------------------------------
           Total NPAs                $1,038.9       $993.3    $1,026.0
    ======================================================================
    
      NPAs by property type:
        SFR and SFR construction       $643.8       $656.3      $763.2
        Second mortgage and other 
         consumer:
            Banking subsidiaries         67.4         59.0        58.7
            Washington Mutual Finance    71.6         68.2        58.4
        Specialty mortgage finance      202.4        147.4        63.8
        Commercial business              12.3         14.1         9.8
        Commercial real estate:
           Apartment buildings           10.8          9.9        30.1
           Other commercial real estate  30.6         38.4        42.0
    ----------------------------------------------------------------------
           Total NPAs                $1,038.9       $993.3    $1,026.0
    ======================================================================
    
      NPAs as a percentage of :
        Total loans, including 
         loans held for sale            0.84%        0.82%       0.90%
        Total loans and recourse loans 
         and recourse MBS               0.73         0.70        0.75
        Total assets                    0.53         0.52        0.55
    
    
    CONTACT: Media
    Washington Mutual
    Libby Hutchinson, 1-800-228-9268 or (206) 461-2484
    or
    Investors
    JoAnn DeGrande, 206/461-3186
    or
    Ruthanne King, 206/461-6421