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

October 20, 2004
FOR IMMEDIATE RELEASE

To view a printable version of the Q3 2004 financial release.

To view a downloadable version of the Q3 2004 financial tables.

To view Q3 2004 Earnings Conference Call Prepared Remarks.

SEATTLE--(BUSINESS WIRE)--Oct. 20, 2004--Washington Mutual, Inc. (NYSE:WM) today announced third quarter 2004 earnings of $674 million, or $0.76 per diluted share, down 30 percent on a per share basis from $999 million, or $1.09 per diluted share from continuing operations for the same period a year ago. This quarter's performance was up 38 percent on a per share basis from $489 million, or $0.55 per diluted share, from the second quarter 2004.

The decrease in year over year net income was primarily due to reduced mortgage refinancing activity this year and higher gains from the sale of securities in the third quarter of 2003. The increase from the second quarter of 2004 was principally a result of improved performance of the company's mortgage servicing rights ("MSR") and related hedges.

Washington Mutual's Board of Directors declared a cash dividend of 45 cents per share on the company's common stock, up from 44 cents per share previously. Dividends on the common stock are payable on November 15, 2004 to shareholders of record as of October 29, 2004.

    Key third quarter highlights:

    --  Net income in the company's Retail Banking & Financial
        Services segment increased by 27 percent year over year and 4
        percent from last quarter;

    --  Depositor and other retail banking fees increased 9 percent to
        $514 million while total retail deposits grew $3.95 billion
        from the comparable period a year ago and $2.54 billion from
        the previous quarter. Contributing to these increases were the
        addition of more than 140,000 net new retail checking accounts
        in the third quarter, which included nearly 32,000 net new
        small business checking accounts. The company has added nearly
        755,000 of these accounts in the preceding 12 months;

    --  56 net new retail banking stores were opened during the
        quarter;

    --  The company's net MSR performance, including amortization and
        the effect of hedges, improved by $601 million from the
        previous quarter's results due to lower medium-term interest
        rates and a widening of the spread between mortgage rates and
        the rates on certain financial instruments the company uses to
        hedge the MSR risk;

    --  Total loan volume decreased to $61.83 billion compared with
        $131.94 billion in the third quarter of 2003 and was down from
        $79.52 billion in the second quarter of 2004;

    --  Total home equity loan and line of credit volume of $10.53
        billion was up 12 percent, or $1.16 billion, year over year;

    --  Loans held in portfolio grew from the previous quarter by
        $11.62 billion primarily due to strong growth in the company's
        home equity loans and lines of credit and short-term
        adjustable rate mortgage (ARM) portfolios. Since December 31,
        2003, outstanding balances of home equity loans and lines of
        credit have increased by 47 percent;

    --  The company continues to make progress toward achieving its
        goal of flat year over year noninterest expense of
        approximately $7.5 billion. Excluding restructuring and
        severance-related charges, noninterest expense decreased by
        $24 million from the second quarter of 2004;

"Our retail bank is producing excellent results and continues to grow successfully," said Kerry Killinger, chairman, president and chief executive officer. "In the quarter, we made solid progress in the overhaul of our mortgage banking business while our multi-family business continues to be an industry leader. In addition, our credit quality remains strong and we are making progress in refining our MSR program."

Killinger added: "Our work is not done but we are pleased with the progress we made in the quarter. We know we have a great franchise, and we are confident our direction will deliver outstanding value for our shareholders."

    THIRD QUARTER FINANCIAL SUMMARY

    Net Interest Income

Net interest income was $1.74 billion in the third quarter of 2004, compared with $1.91 billion in the third quarter of 2003 and $1.79 billion in the second quarter of 2004. The decrease was primarily due to contraction in the net interest margin, which declined from 3.07 percent in the third quarter of 2003 to 2.86 percent in the second quarter of 2004 and to 2.77 percent in the current period. Declining asset yields and lower custodial and escrow balances were the primary factors that led to the 30 basis point decline in the margin from the third quarter of 2003. Recent steps taken by the Federal Reserve to increase the targeted Federal funds rate increased the cost of the company's interest-bearing liabilities during the current quarter, which accounted for the majority of the 9 basis point contraction from the second quarter of 2004.

In September, the company terminated $1.75 billion of higher cost repurchase agreements with embedded interest rate swaps, prior to their maturity, resulting in a loss on their extinguishment of $155 million. The termination of these higher-cost borrowings will help offset future compression of the net interest margin.

Noninterest Income

Noninterest income was $1.26 billion compared with $1.56 billion a year ago and $894 million in the second quarter of 2004. The principal reason for the improvement from the previous quarter was increased mortgage banking income of $504 million compared with zero in the second quarter. The MSR performance improved $601 million from the previous quarter, resulting in a net cost of $123 million including amortization. This compares with a net cost in the second quarter of $724 million, and a net cost of $83 million in the first quarter. The improvement in MSR performance reflected lower medium-term interest rates and a widening of spreads between mortgage rates and the rates on interest-rate swaps that the company uses as part of its MSR risk management program.

Continued strong consumer demand for Washington Mutual's products, an expanding national market and personal service contributed to a 9 percent year over year growth in depositor and other retail banking fees with a 1 percent increase from the previous quarter.

Cost Leadership Initiative - Noninterest Expense Update

The company expects to keep 2004 noninterest expense in line with 2003 levels while executing its targeted growth and retail expansion of 250 new banking stores this year. Excluding $71 million in costs in the third quarter and $26 million in the second quarter that were incurred primarily from severance connected with headcount reductions, and from facilities closures, noninterest expense decreased by $24 million from the previous quarter. The company's efficiency ratio was 62.19 percent, as compared with 68.77 percent for the second quarter of 2004.

    In addition, during the quarter the company:

    --  Successfully completed the conversion of its home loan
        servicing systems to a single technology platform, which sets
        the stage for more efficient operations and enhanced customer
        service;

    --  Consolidated 12 mortgage banking loan fulfillment centers into
        the 34 remaining centers and reduced staffing in these
        remaining locations;

    --  Transitioned its back office loan servicing functions to four
        core sites;

    --  Announced the sale or closure of approximately 100 home loan
        offices in non-strategic markets and announced plans to
        significantly expand in the company's retail footprint
        markets;

    --  Announced the closure of 53 Commercial Banking locations,
        which provided commercial banking services to mid- to
        large-sized companies.

    Lending

Total loan volume was $61.83 billion, compared with $131.94 billion in the third quarter of 2003 and $79.52 billion in the second quarter of 2004. Home loan volume of $47.76 billion was down $69.29 billion from the third quarter of 2003 due to the significant industry-wide reduction in mortgage volume year over year, and down $15.39 billion from the second quarter of 2004.

During the third quarter of 2004, ARMs represented 67 percent of the company's home loan volume, compared with 55 percent in the second quarter of 2004 and 27 percent in the third quarter of 2003. In addition, the company experienced record short-term ARM home loan volume of $19.07 billion this quarter, which represented 40 percent of the company's total home loan volume.

The company's focus on cross-selling its broad range of products and services and expanding customer relationships contributed to home equity loans and lines of credit volume of $10.53 billion, up 12 percent from the third quarter of 2003. A vast majority of these loans were generated through the company's retail banking store network.

Credit Quality

Nonperforming assets as a percentage of total assets were 0.61 percent, slightly up from 0.60 percent as of June 30, 2004 and down from 0.73 percent as of September 30, 2003. Net charge offs were $27 million versus $24 million in the second quarter of 2004 and $74 million in the third quarter of 2003. The company's provision for loan and lease losses was $56 million, while the allowance for loan and lease losses was $1.32 billion as of September 30, 2004.

Balance Sheet and Capital Management

Total assets increased $10.28 billion from the end of the second quarter to $288.83 billion, reflecting continued growth in loans held in portfolio. Loans held in portfolio grew to $206.16 billion, an increase of $11.62 billion from the second quarter of 2004 and an increase of $45.93 billion from the same period a year ago.

Total deposits increased $6.23 billion from the previous quarter to $168.70 billion as of September 30, 2004, reflecting an increase in wholesale deposits of $5.18 billion and retail deposits of $2.54 billion and a decline of custodial and escrow deposits of $1.68 billion.

The company's ratio of tangible common equity to tangible assets was 5.26 percent. In addition, the capital ratios of the company's banking subsidiaries continued to exceed the federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard.

    THIRD QUARTER OPERATING SEGMENT RESULTS

    Retail Banking and Financial Services Third Quarter Financial
    Performance

Net income for the company's Retail Banking and Financial Services business increased by 27 percent to $529 million, compared with $416 million in the third quarter of 2003. In addition to the 9 percent growth in depositor and other retail banking fees year over year, net interest income increased 30 percent from the third quarter of 2003, driven by growth in short-term ARM loans and home equity loans and lines of credit held in portfolio.

The growth in net interest income and noninterest income compared to the third quarter 2003 was partially offset by an increase in noninterest expense, which reflected the expansion of the company's retail banking network by 195 stores since September 30, 2003.

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

    --  Total retail deposits increased $3.95 billion year over year.
        Retail deposits were up $2.54 billion from the previous
        quarter;

    --  The company opened 195 net new stores year over year,
        including 56 net new store openings during the third quarter;

    --  Retail banking stores that have been open since January 1,
        2003 produced strong same-store sales growth from the third
        quarter of 2003, posting a 36 percent increase in consumer
        lending, a 9 percent increase in depositor and other banking
        fees and 6 percent growth in net new checking accounts;

    --  Average loans in the segment's portfolio grew 42 percent from
        the third quarter of 2003 to $167.54 billion, reflecting the
        emphasis on originating ARM loans for retention on the balance
        sheet as well as growth in home equity loan and line of credit
        balances, which increased 68 percent to $39.94 billion year
        over year;

    --  The cross-sell ratio for the average mature retail banking
        household increased to 5.83 products and services, up from
        5.79 at the end of the second quarter of 2004;

    --  Over the past year, WM Advisors grew assets under management
        by $4.60 billion, or 29 percent, to $20.62 billion at
        September 30, 2004;

    Mortgage Banking Third Quarter Financial Performance

Net income for the mortgage banking business was $271 million in the third quarter compared with a $63 million loss in the second quarter of 2004 and net income of $117 million in the third quarter of 2003.

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

    --  Total loan volume from the mortgage banking business was
        $40.49 billion, compared to $111.95 billion in the third
        quarter of 2003 and down $15.73 billion from $56.22 billion in
        the second quarter of 2004;

    --  ARM loan volume was 63 percent of total mortgage banking loan
        volume, up from 25 percent in the third quarter of 2003. This
        trend reflects the company's efforts to quickly adjust the mix
        of fixed- and adjustable-rate products in response to changes
        in interest rates, market conditions and customer preference.

    --  Record short-term ARM home loan volume of $19.06 billion,
        which represented 40 percent of the company's total home loan
        volume.

    --  MSR performance, including amortization and the effect of
        hedges, improved to a net cost of $123 million in the quarter,
        compared to a net cost of $724 million in the second quarter.

    --  The company exited approximately 100 home loan centers in
        non-strategic markets in 18 states and completed the sale of
        94 of those offices.

    --  Noninterest expense declined $47 million from the previous
        quarter, reflecting consolidations of locations and functions,
        headcount reduction, the closure of approximately 100 home
        loan centers and the conversion to a single loan servicing
        platform.

    Commercial Group Third Quarter Financial Performance

Net income from continuing operations for the Commercial Group was $145 million, compared with $187 million in the previous quarter and $232 million in the third quarter of 2003. The difference in net income from a year ago is primarily attributable to certain previously disclosed large transactions occurring in the third quarter of last year totaling $125 million pre-tax.

Multi-family loan production of $5.92 billion year-to-date is nearly at last year's record levels and is on pace to achieve another year of strong loan volume despite an increasing interest rate environment. The average balance for multi-family loans grew 7 percent from third quarter last year and contributed significantly to the total Commercial Group average loan growth of $3.51 billion or 10 percent.

    Highlights of the Commercial Group for the third quarter included:

    --  Specialty mortgage finance loan volume of $3.66 billion
        increased 13 percent from the third quarter last year.

    --  The Commercial Group achieved a significant improvement in
        multi-family loan closing times during the past twelve months,
        reducing the average close time by 21 percent to 45 days.

    --  Average commercial deposits of $7.81 billion increased 27
        percent from third quarter last year and 13 percent from the
        second quarter this year.

    About Washington Mutual

With a history dating back to 1889, Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients. At September 30, 2004, Washington Mutual and its subsidiaries had assets of $288.83 billion. Washington Mutual currently operates more than 2,300 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamunewsroom.com.

Webcast information: A conference call to discuss the company's financial results will be held on Thursday, October 21, 2004, at 10:30 a.m. EDT and will be hosted by Kerry Killinger, chairman, president, and chief executive officer, and Tom Casey, executive vice president and chief financial officer. The conference call is available by telephone or on the Internet. The dial-in number for the live conference call is 888-391-7808. Participants calling from outside the United States may dial 712-421-1601. 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 1 pm EDT on Thursday, October 21, 2004, through 11:59 EDT on Friday, October 29. The recorded message will be available at 800-282-5583. Callers from outside the United States may dial 402-220-9725.

Forward-Looking Statement

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

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

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

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

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

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

WM-1

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



                                       Quarter Ended
----------------------------------------------------------------------
                     Sept. 30,  June 30,  Mar. 31,  Dec. 31, Sept. 30,
                       2004      2004      2004      2003      2003
----------------------------------------------------------------------
Interest Income
   Loans held for
    sale             $    341  $    406  $    332  $    441  $    689
   Loans held in
    portfolio           2,226     2,111     2,067     1,967     1,843
   Available-for-sale
    securities            163       180       265       353       401
   Other interest and
    dividend income        81        55        57        38        65
----------------------------------------------------------------------
       Total interest
        income          2,811     2,752     2,721     2,799     2,998
Interest Expense
   Deposits               539       458       443       491       538
   Borrowings             532       500       546       565       551
----------------------------------------------------------------------
       Total interest
        expense         1,071       958       989     1,056     1,089
----------------------------------------------------------------------
          Net interest
           income       1,740     1,794     1,732     1,743     1,909
   Provision (reversal
    of reserve) for
    loan and lease
    losses                 56        60        56      (202)       76
----------------------------------------------------------------------
       Net interest income
        after provision
        (reversal of
        reserve) for loan
        and lease
        losses          1,684     1,734     1,676     1,945     1,833
Noninterest Income
   Home loan mortgage
    banking income, net   504         -       531       592       145
   Depositor and other
    retail banking fees   514       507       463       472       471
   Securities fees and
    commissions           104       105       107       103       103
   Insurance income        61        57        61        49        45
   Portfolio loan
    related income        109       103        87        96       116
   Gain (loss) from
    other available-
    for-sale securities    11        41        21       (13)      557
   Gain (loss) on
    extinguishment of
    borrowings           (147)       (1)      (89)        -         7
   Other income           108        82        56       166       120
----------------------------------------------------------------------
       Total noninterest
        income          1,264       894     1,237     1,465     1,564
Noninterest Expense
   Compensation and
    benefits              841       849       899       877       837
   Occupancy and
    equipment             404       393       400       569       352
   Telecommunications
    and outsourced
    information
    services              118       123       123       125       150
   Depositor and other
    retail banking
    losses                 54        40        40        40        35
   Amortization of
    other intangible
    assets                 14        14        15        15        15
   Advertising and
    promotion              76        84        58        88        51
   Professional fees       34        32        39        78        69
   Other expense          328       313       306       309       301
----------------------------------------------------------------------
       Total noninterest
        expense         1,869     1,848     1,880     2,101     1,810
----------------------------------------------------------------------
        Income from
         continuing
         operations
         before income
         taxes          1,079       780     1,033     1,309     1,587
        Income taxes      405       291       385       488       588
----------------------------------------------------------------------
          Income from
           continuing
           operations,
           net of taxes   674       489       648       821       999
----------------------------------------------------------------------
Discontinued Operations
        Income (loss)
         from
         discontinued
         operations
         before income
         taxes              -         -       (32)       34        38
        Gain on
         disposition of
         discontinued
         operations         -         -       676         -         -
        Income taxes        -         -       245        13        14
----------------------------------------------------------------------
          Income from
           discontinued
           operations,
           net of taxes     -         -       399        21        24
----------------------------------------------------------------------
Net Income           $    674  $    489  $  1,047  $    842  $  1,023
======================================================================

Basic Earnings Per
 Common Share:
   Income from
    continuing
    operations       $   0.78  $   0.57  $   0.75  $   0.93  $   1.11
   Income from
    discontinued
    operations, net         -         -      0.46      0.02      0.03
                      --------  --------  --------  --------  --------
   Net income            0.78      0.57      1.21      0.95      1.14

Diluted Earnings Per
 Common Share:
   Income from
    continuing
    operations       $   0.76  $   0.55  $   0.73  $   0.91  $   1.09
   Income from
    discontinued
    operations, net         -         -      0.45      0.02      0.02
                      --------  --------  --------  --------  --------
   Net income            0.76      0.55      1.18      0.93      1.11

Dividends declared per
 common share            0.44      0.43      0.42      0.41      0.40
Basic weighted average
 number of common
 shares outstanding (in
 thousands)           862,004   860,496   863,299   883,539   899,579
Diluted weighted
 average number of
 common shares
 outstanding (in
 thousands)           882,323   883,414   886,467   904,840   918,372



WM-2

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

                                                   Nine Months Ended
---------------------------------------------------------------------
                                                   Sept. 30, Sept. 30,
                                                     2004      2003
----------------------------------------------------------------------
Interest Income
   Loans held for sale                             $  1,079  $  2,061
   Loans held in portfolio                            6,404     5,701
   Available-for-sale securities                        607     1,384
   Other interest and dividend income                   194       218
----------------------------------------------------------------------
          Total interest income                       8,284     9,364
Interest Expense
   Deposits                                           1,440     1,674
   Borrowings                                         1,578     1,803
----------------------------------------------------------------------
          Total interest expense                      3,018     3,477
----------------------------------------------------------------------
               Net interest income                    5,266     5,887
   Provision for loan and lease losses                  172       244
----------------------------------------------------------------------
          Net interest income after provision for
           loan and lease losses                      5,094     5,643
Noninterest Income
   Home loan mortgage banking income, net             1,035     1,381
   Depositor and other retail banking fees            1,484     1,346
   Securities fees and commissions                      315       291
   Insurance income                                     179       139
   Portfolio loan related income                        299       344
   Gain from other available-for-sale securities         73       689
   Loss on extinguishment of borrowings                (237)     (129)
   Other income                                         247       323
----------------------------------------------------------------------
          Total noninterest income                    3,395     4,384
Noninterest Expense
   Compensation and benefits                          2,589     2,427
   Occupancy and equipment                            1,197     1,024
   Telecommunications and outsourced information
    services                                            364       429
   Depositor and other retail banking losses            134       113
   Amortization of other intangible assets               42        46
   Advertising and promotion                            219       190
   Professional fees                                    105       189
   Other expense                                        947       888
----------------------------------------------------------------------
          Total noninterest expense                   5,597     5,306
----------------------------------------------------------------------
               Income from continuing operations
                before income taxes                   2,892     4,721
               Income taxes                           1,081     1,749
----------------------------------------------------------------------
                    Income from continuing
                     operations, net of taxes         1,811     2,972
----------------------------------------------------------------------
Discontinued Operations
               Income (loss) from discontinued
                operations before income taxes          (32)      102
               Gain on disposition of discontinued
                operations                              676         -
               Income taxes                             245        37
----------------------------------------------------------------------
                    Income from discontinued
                     operations, net of taxes           399        65
----------------------------------------------------------------------
Net Income                                         $  2,210  $  3,037
======================================================================

Basic Earnings Per Common Share:
    Income from continuing operations              $   2.10  $   3.27
    Income from discontinued operations, net           0.46      0.07
                                                    --------  --------
    Net income                                         2.56      3.34

Diluted Earnings Per Common Share:
    Income from continuing operations              $   2.05  $   3.20
    Income from discontinued operations, net           0.45      0.07
                                                    --------  --------
    Net income                                         2.50      3.27

Dividends declared per common share                    1.29      0.99
Basic weighted average number of common shares
 outstanding (in thousands)                         861,933   910,449
Diluted weighted average number of common shares
 outstanding (in thousands)                         884,068   927,470



WM-3

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

                    Sept. 30,  June 30,  Mar. 31,  Dec. 31,  Sept. 30,
                      2004       2004      2004      2003      2003
----------------------------------------------------------------------
Assets
 Cash and cash
  equivalents       $  4,689  $  5,133  $  6,045  $  7,018  $  5,744
 Federal funds sold
  and securities
  purchased under
  agreements to resell    30        70     1,783        19        12
 Available-for-sale
  securities, total
  amortized cost of
  $16,312, $19,392,
  $22,843, $36,858 and
  $36,792:
   Mortgage-backed
    securities        10,168    10,042    10,766    10,695    14,352
   Investment
    securities         6,319     9,337    12,565    26,012    22,705
 Loans held for sale  29,184    27,795    34,207    20,837    35,820
 Loans held in
  portfolio          206,158   194,543   186,380   175,150   160,229
 Allowance for loan
  and lease losses    (1,322)   (1,293)   (1,260)   (1,250)   (1,549)
----------------------------------------------------------------------
     Total loans held
      in portfolio,
      net of allowance
      for loan and
      lease losses   204,836   193,250   185,120   173,900   158,680
 Investment in
  Federal Home Loan
  Banks                3,883     3,965     3,916     3,462     3,429
 Mortgage servicing
  rights               6,112     7,501     5,239     6,354     5,870
 Goodwill              6,196     6,196     6,196     6,196     6,196
 Assets of
  discontinued
  operations               -         -         -     4,184     4,138
 Other assets         17,411    15,255    14,931    16,501    29,685
----------------------------------------------------------------------
     Total assets   $288,828  $278,544  $280,768  $275,178  $286,631
======================================================================
Liabilities
 Deposits:
   Noninterest-
    bearing
    deposits        $ 32,250  $ 33,343  $ 35,714  $ 29,968  $ 39,197
   Interest-bearing
    deposits         136,445   129,123   125,267   123,213   124,944
----------------------------------------------------------------------
     Total deposits  168,695   162,466   160,981   153,181   164,141
 Federal funds
  purchased and
  commercial paper     7,025     2,293     4,501     2,011     3,113
 Securities sold
  under agreements
  to repurchase       15,611    15,764    18,306    28,333    20,468
 Advances from
  Federal Home Loan
  Banks               59,758    61,379    58,494    48,330    43,743
 Other borrowings     12,747    12,113    13,692    15,483    12,584
 Liabilities of
  discontinued
  operations               -         -         -     3,578     3,554
 Other liabilities     4,172     4,160     4,411     4,520    18,587
----------------------------------------------------------------------
     Total
      liabilities    268,008   258,175   260,385   255,436   266,190
Stockholders' equity  20,820    20,369    20,383    19,742    20,441
----------------------------------------------------------------------
     Total liabilities
      and
      stockholders'
      equity        $288,828  $278,544  $280,768  $275,178  $286,631
======================================================================
Common shares
 outstanding at end
 of period (in
 thousands)(1)       873,085   872,246   868,953   880,986   913,854
Book value per
 common share(2)    $  24.01  $  23.51  $  23.62  $  22.56  $  22.77
Tangible book
 value per common
 share(2)              16.99     16.47     16.53     15.58     15.94
Employees at end of
 period(3)            55,488    57,274    59,173    63,720    62,901


(1) Includes 6,000,000 shares at September 30, 2004, June 30, 2004,
    March 31, 2004 and December 31, 2003 and 16,200,000 shares at
    September 30, 2003, held in escrow.

(2) Excludes 6,000,000 shares at September 30, 2004, June 30, 2004,
    March 31, 2004 and December 31, 2003 and 16,200,000 shares at
    September 30, 2003, held in escrow.

(3) Includes 2,346 and 2,352 employees reported as part of
    discontinued operations at December 31, 2003 and September 30,
    2003.



WM-4

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

                                         Quarter Ended
----------------------------------------------------------------------
                      Sept. 30,  June 30,  Mar. 31, Dec. 31, Sept. 30,
                        2004       2004      2004     2003      2003
----------------------------------------------------------------------
Stockholders' Equity
 Rollforward
Balance, beginning of
 period                $20,369   $20,383   $19,742   $20,441  $20,978
Net income                 674       489     1,047       842    1,023
Other comprehensive income
 (loss), net of tax         98      (210)      512      (105)    (805)
Cash dividends declared on
 common stock             (381)     (372)     (367)     (368)    (362)
Cash dividends
 returned(1)                 -         -         -        45        4
Common stock repurchased
 and retired                 -         -      (712)   (1,269)    (457)
Common stock issued         60        79       161       156       60
----------------------------------------------------------------------
Balance, end of period $20,820   $20,369   $20,383   $19,742  $20,441
======================================================================

(1) Represents accumulated dividends on shares returned from escrow.


WM-5

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

                                        Quarter Ended
----------------------------------------------------------------------
                        Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
                          2004     2004     2004     2003      2003
----------------------------------------------------------------------
CONSUMER GROUP
 RETAIL BANKING AND
  FINANCIAL SERVICES
  Condensed income
   statement:
   Net interest income  $  1,295 $  1,271 $  1,236  $  1,116 $    994
   Provision for loan
    and lease losses          43       42       38        35       40
   Noninterest income        713      702      622       646      653
   Inter-segment revenue       3        7        6        20       63
   Noninterest expense     1,116    1,118    1,069     1,073      980
----------------------------------------------------------------------
   Income before income
    taxes                    852      820      757       674      690
   Income taxes              323      311      286       258      274
----------------------------------------------------------------------
     Net income         $    529 $    509 $    471  $    416 $    416
======================================================================
  Performance and
   other data:
   Efficiency ratio(1)     49.02%   49.97%   50.48%    52.88%   49.65%
   Average loans        $167,539 $158,945 $149,356  $135,323 $118,295
   Average assets        179,950  171,301  161,292   147,200  130,046
   Average deposits      131,850  128,680  128,000   128,651  126,040
   Employees at end of
      period              29,963   29,522   28,859    29,218   28,802

MORTGAGE BANKING
  Condensed income
   statement:
   Net interest income  $    274 $    358 $    277  $    401 $    683
   Provision for loan
    and lease losses           2        3        2         -        1
   Noninterest income        769      199      760       870      288
   Inter-segment expense       3        7        6        20       63
   Noninterest expense       602      649      670       867      729
----------------------------------------------------------------------
   Income (expense) before
    income taxes             436     (102)     359       384      178
   Income taxes (benefit)    165      (39)     136       163       61
----------------------------------------------------------------------
     Net income (loss)  $    271 $    (63)$    223  $    221 $    117
======================================================================
  Performance and
   other data:
   Efficiency ratio(1)     52.89%  108.62%   59.88%    65.22%   74.66%
   Average loans        $ 22,611 $ 26,999 $ 19,871  $ 24,677 $ 51,648
   Average assets         36,343   39,927   35,470    44,274   78,806
   Average deposits       15,385   19,837   14,877    18,347   35,120
   Employees at end
    of period             16,786   18,983   21,509    22,840   22,527

COMMERCIAL GROUP
  Condensed income
   statement:
   Net interest income  $    324 $    340 $    340  $    364 $    324
   Provision for loan
    and lease losses          10       10       15        22       24
   Noninterest income         66      103       87        54      204
   Noninterest expense       160      145      152       154      142
----------------------------------------------------------------------
   Income from continuing
    operations before
    income taxes             220      288      260       242      362
   Income taxes               75      101       91        90      130
----------------------------------------------------------------------
    Income from continuing
     operations              145      187      169       152      232
   Income from discontinued
    operations, net of taxes   -        -        -        21       24
----------------------------------------------------------------------
     Net income         $    145 $    187 $    169  $    173 $    256
======================================================================
  Performance and
   other data:
   Efficiency ratio(1)     33.45%   26.07%   28.70%    29.72%   21.39%
   Average loans        $ 38,829 $ 38,517 $ 37,005  $ 37,816 $ 35,318
   Average assets         43,745   43,761   42,871    46,368   44,017
   Average deposits        7,811    6,898    6,049     6,130    6,131
   Employees at end
    of period(2)           3,270    3,237    3,160     5,653    5,594

(This table is continued on "WM-6".)

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

(2) Includes 2,346 and 2,352 employees reported as part of
    discontinued operations at December 31, 2003 and September 30,
    2003.



WM-6

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

                                         Quarter Ended
----------------------------------------------------------------------
(This table is          Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
 continued from "WM-5".)  2004      2004     2004     2003     2003
----------------------------------------------------------------------
CORPORATE SUPPORT/TREASURY
 AND OTHER
  Condensed income statement:
   Net interest expense $   (263)$   (281)$   (224) $   (235)$   (183)
   Noninterest income
    (expense)               (122)      33      (68)      135      611
   Noninterest expense       203      146      199       219      171
----------------------------------------------------------------------
   Income (expense) from
    continuing operations   (588)    (394)    (491)     (319)     257
   Income taxes (benefit)   (221)    (147)    (183)     (119)      95
----------------------------------------------------------------------
    Income (expense)
     from continuing
     operations             (367)    (247)    (308)     (200)     162
   Income from discontinued
    operations, net
    of taxes                   -        -      399         -        -
----------------------------------------------------------------------
     Net income (loss)  $   (367)$   (247)$     91  $   (200)$    162
======================================================================
  Performance and
   other data:
   Average assets       $ 25,452 $ 30,701 $ 33,430  $ 41,480 $ 39,108
   Average deposits       13,820    9,391    5,028     5,558    6,654
   Employees at end
    of period              5,469    5,532    5,645     6,009    5,978

RECONCILING ADJUSTMENTS
  Condensed income statement:
   Net interest
    income(3)           $    110 $    106 $    103  $     97 $     91
   Provision (reversal
    of reserve) for
    loan and lease
    losses(4)                  1        5        1      (259)      11
   Noninterest income
    (expense)(5)            (162)    (143)    (164)     (240)    (192)
   Noninterest (income)
    expense(6)              (212)    (210)    (210)     (212)    (212)
----------------------------------------------------------------------
   Income before income
    taxes                    159      168      148       328      100
   Income taxes(7)            63       65       55        96       28
----------------------------------------------------------------------
     Net income         $     96 $    103 $     93  $    232 $     72
======================================================================
  Performance and
   other data:
   Average loans(8)     $ (1,600)$ (1,553)$ (1,505) $ (1,421)$ (1,293)
   Average assets(8)(9)   (1,821)  (1,750)  (1,657)   (1,882)  (1,762)

TOTAL CONSOLIDATED
  Condensed income
   statement:
   Net interest income  $  1,740 $  1,794 $  1,732  $  1,743 $  1,909
   Provision (reversal
    of reserve) for
    loan and lease
    losses                    56       60       56      (202)      76
   Noninterest income      1,264      894    1,237     1,465    1,564
   Noninterest expense     1,869    1,848    1,880     2,101    1,810
----------------------------------------------------------------------
   Income from continuing
    operations before
    income taxes           1,079      780    1,033     1,309    1,587
   Income taxes              405      291      385       488      588
----------------------------------------------------------------------
    Income from continuing
     operations              674      489      648       821      999
   Income from discontinued
    operations, net of
    taxes                      -        -      399        21       24
----------------------------------------------------------------------
     Net income         $    674 $    489 $  1,047  $    842 $  1,023
======================================================================
  Performance and other
   data:
   Efficiency ratio(10)    62.19%   68.77%   63.34%    65.51%   52.13%
   Average loans        $227,379 $222,908 $204,727  $196,395 $203,968
   Average assets        283,669  283,940  271,406   277,440  290,215
   Average deposits      168,866  164,806  153,954   158,686  173,945
   Employees at end of
    period(2)             55,488   57,274   59,173    63,720   62,901

(2) Includes 2,346 and 2,352 employees reported as part of
    discontinued operations at December 31, 2003 and September 30,
    2003.

(3) Represents the difference between home loan premium amortization
    recorded by the Retail Banking and Financial Services segment and
    the amount recognized in the Company's Consolidated Statements of
    Income. For management reporting purposes, loans that are held in
    portfolio by the Retail Banking and Financial Services segment are
    treated as if they are purchased from the Mortgage Banking
    segment. Since the cost basis of these loans includes an assumed
    profit factor paid to the Mortgage Banking segment, the
    amortization of loan premiums recorded by the Retail Banking and
    Financial Services segment includes this assumed profit factor and
    must therefore be eliminated as a reconciling adjustment.

(4) Represents the difference between the long-term, normalized net
    charge-off ratio used to assess expected loan and lease losses for
    the operating segments and the "losses inherent in the loan
    portfolio" methodology used by the Company.

(5) Represents the difference between gain from mortgage loans
    recorded by the Mortgage Banking segment and the gain from
    mortgage loans recognized in the Company's Consolidated Statements
    of Income. As the Mortgage Banking segment holds no loans in
    portfolio, all loans originated or purchased by this segment are
    considered to be salable for management reporting purposes.

(6) Represents the corporate offset for the cost of capital related to
    goodwill that has been allocated to the segments.

(7) Represents the tax effect of reconciling adjustments.

(8) Includes the inter-segment offset for inter-segment loan premiums
    that the Retail Banking and Financial Services segment recognized
    from the transfer of portfolio loans from the Mortgage Banking
    segment.

(9) Includes the impact to the allowance for loan and lease losses per
    the following table that results from the difference between the
    long-term, normalized net charge-off ratio used to assess expected
    loan and lease losses for the operating segments and the "losses
    inherent in the loan portfolio" methodology used by the Company.

                        Quarter Ended
  -----------------------------------------------------------
  Sept. 30,    June 30,    Mar. 31,    Dec. 31,    Sept. 30,
  -----------------------------------------------------------
    2004         2004       2004         2003         2003
  -----------------------------------------------------------
   $(221)       $(197)     $(152)       $(461)       $(469)
  -----------------------------------------------------------

(10) The efficiency ratio is defined as noninterest expense divided by
    total revenue (net interest income and noninterest income).


WM-7

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



                                       Quarter Ended
----------------------------------------------------------------------
                    Sept. 30,  June 30,  Mar. 31,  Dec. 31, Sept. 30,
                      2004      2004      2004      2003      2003
----------------------------------------------------------------------
PROFITABILITY
 Net interest
  income            $  1,740  $  1,794  $  1,732  $  1,743  $  1,909
 Net interest
  margin                2.77 %    2.86 %    2.89 %    2.90 %    3.07 %
 Noninterest
  income            $  1,264  $    894  $  1,237  $  1,465  $  1,564
 Noninterest
  expense              1,869     1,848     1,880     2,101     1,810
 Basic earnings per
  common share:
   Income from
    continuing
    operations      $   0.78  $   0.57  $   0.75  $   0.93  $   1.11
   Income from
    discontinued
    operations, net        -         -      0.46      0.02      0.03
   Net income           0.78      0.57      1.21      0.95      1.14
 Diluted earnings
  per common share:
   Income from
    continuing
    operations      $   0.76  $   0.55  $   0.73  $   0.91  $   1.09
   Income from
    discontinued
    operations, net        -         -      0.45      0.02      0.02
   Net income           0.76      0.55      1.18      0.93      1.11
 Dividends declared
  per common share  $   0.44  $   0.43  $   0.42  $   0.41  $   0.40
 Return on average
  assets(1)             0.95 %    0.69 %    1.54 %    1.21 %    1.41 %
 Return on average
  common equity(1)     13.03      9.63     20.85     16.83     19.82
 Efficiency
  ratio(2)(3)          62.19     68.77     63.34     65.51     52.13
ASSET QUALITY
 Nonaccrual
  loans(4)(5)       $  1,471  $  1,396  $  1,542  $  1,626  $  1,813
 Foreclosed
  assets(5)              281       286       307       311       293
 Total
  nonperforming
  assets(5)            1,752     1,682     1,849     1,937     2,106
 Nonperforming
  assets/total
  assets(5)             0.61 %    0.60 %    0.66 %    0.70 %    0.73 %
 Restructured
  loans(5)          $     38  $     79  $    107  $    111  $    118
 Total
  nonperforming
  assets and
  restructured
  loans(5)             1,790     1,761     1,956     2,048     2,224
 Allowance for
  loan and lease
  losses(5)            1,322     1,293     1,260     1,250     1,549
 Allowance as a
  percentage of
  total loans held
  in portfolio(5)       0.64 %    0.66 %    0.68 %    0.71 %    0.97 %
 Provision
  (reversal of
   reserve) for
   loan and lease
   losses           $     56  $     60  $     56  $   (202) $     76
 Net charge-offs(5)       27        24        46        97        74
CAPITAL ADEQUACY(5)
 Stockholders'
  equity/total
  assets                7.21 %    7.31 %    7.26 %    7.17 %    7.13 %
 Tangible common
  equity(6)/total
  tangible assets(6)    5.26      5.32      5.21      5.26      5.26
 Estimated total
  risk-based
  capital/risk-
  weighted assets(7)   10.34     10.39     10.53     10.94     11.54
SUPPLEMENTAL DATA
 Average balance sheet:
   Total loans held
    for sale        $ 28,220  $ 33,096  $ 24,464  $ 29,606  $ 51,950
   Total loans held
    in portfolio     199,159   189,812   180,263   166,789   152,018
   Total interest-
    earning assets   252,235   251,264   239,979   241,718   249,892
   Total assets      283,669   283,940   271,406   277,440   290,215
   Total interest-
    bearing deposits 135,600   127,670   123,336   125,201   124,488
   Total
    noninterest-
    bearing deposits  33,266    37,136    30,618    33,485    49,457
   Total
    stockholders'
    equity            20,703    20,288    20,088    20,027    20,657
 Period-end
  balance sheet:
   Loans held for
    sale              29,184    27,795    34,207    20,837    35,820
   Loans held in
    portfolio, net
    of allowance for
    loan and lease
    losses           204,836   193,250   185,120   173,900   158,680
   Interest-earning
    assets(2)        255,742   245,752   249,617   236,175   236,547
   Total assets      288,828   278,544   280,768   275,178   286,631
   Interest-bearing
    deposits         136,445   129,123   125,267   123,213   124,944
   Noninterest-
    bearing deposits  32,250    33,343    35,714    29,968    39,197
   Total
    stockholders'
    equity            20,820    20,369    20,383    19,742    20,441



(1) Includes income from continuing and discontinued operations
    through the period ending March 31, 2004.

(2) Based on continuing operations.

(3) The efficiency ratio is defined as noninterest expense, divided by
    total revenue (net interest income and noninterest income).

(4) Excludes nonaccrual loans held for sale.

(5) As of quarter end.

(6) Excludes unrealized net gain/loss on available-for-sale securities
    and derivatives, goodwill and intangible assets, but includes MSR.

(7) Estimate of what the total risk-based capital ratio would be if
    Washington Mutual, Inc. were a bank holding company that is
    subject to Federal Reserve Board capital requirements.



WM-8

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

                                        Quarter Ended
----------------------------------------------------------------------
                          Sept. 30, 2004           June 30, 2004
                      ------------------------ -----------------------
                                      Interest                Interest
                                      Income/                 Income/
                      Balance   Rate  Expense  Balance  Rate  Expense
----------------------------------------------------------------------
Average Balances and
 Weighted Average
 Interest Rates
Assets
Interest-earning
 assets:
  Federal funds sold
   and securities
   purchased under
   agreements to
   resell            $    922   1.44% $    3   $  1,030  1.14% $    3
  Available-for-sale
   securities(1):
   Mortgage-backed
    securities          9,726   3.85      94      9,887  3.92      97
   Investment
    securities          7,597   3.62      69     11,975  2.76      83
  Loans held for
   sale(2)             28,220   4.83     341     33,096  4.91     406
  Loans held in
   portfolio(2):
   Loans secured by real
    estate:
    Home              108,594   4.19   1,137    105,360  4.12   1,086
    Purchased
     specialty mortgage
     finance           16,279   4.57     186     15,361  4.77     183
-----------------------------         --------   ------        -------
        Total home
         loans        124,873   4.24   1,323   120,721   4.20   1,269
    Home equity loans
     and lines of
     credit            38,329   4.55     438    33,716   4.53     381
    Home construction:
     Builder(3)         1,288   4.68      15     1,211   4.35      13
     Custom(4)          1,405   6.07      21     1,299   6.16      20
    Multi-family       21,240   4.90     260    20,809   4.97     259
    Other real estate   6,364   5.78      93     6,502   6.05      98
-----------------------------         --------   ------        -------
        Total loans
         secured by
         real estate  193,499   4.44   2,150   184,258   4.43   2,040
   Consumer               860  10.17      22       927   9.92      23
   Commercial business  4,800   4.43      54     4,627   4.11      48
-----------------------------         --------   ------        -------
        Total loans
         held in
         portfolio    199,159   4.46   2,226   189,812   4.45   2,111
  Other                 6,611   4.70      78     5,464   3.84      52
-----------------------------         --------   ------        -------
        Total interest-
         earning
         assets       252,235   4.45   2,811   251,264   4.38   2,752
Noninterest-earning
 assets:
  Mortgage servicing
   rights               6,698                    7,128
  Goodwill              6,196                    6,196
  Other(5)             18,540                   19,352
-----------------------------                  --------
    Total assets     $283,669                 $283,940
=============================                  ========
Liabilities
Interest-bearing
 liabilities:
  Deposits:
   Interest-bearing
    checking
    deposits         $ 54,377   1.25     172  $ 65,468   1.28     208
   Savings and money
    market deposits    43,278   1.27     138    29,328   0.82      60
   Time deposits       37,945   2.40     229    32,874   2.31     190
-----------------------------         -------- --------        -------
        Total
         interest-
         bearing
         deposits     135,600   1.58     539   127,670   1.44     458
  Federal funds
   purchased and
   commercial paper     2,733   1.54      10     3,029   1.07       8
  Securities sold under
   agreements to
   repurchase          14,213   2.75     100    17,004   2.28      98
  Advances from Federal
   Home Loan Banks     59,227   2.02     306    59,233   1.88     281
  Other                12,922   3.62     116    12,774   3.56     113
-----------------------------         -------- --------        -------
        Total
         interest-
         bearing
         liabilities  224,695   1.89   1,071   219,710   1.74     958
                                      --------                 -------
Noninterest-bearing sources:
  Noninterest-bearing
   deposits            33,266                   37,136
  Other liabilities(6)  5,005                    6,806
  Stockholders' equity 20,703                   20,288
-----------------------------                  --------
    Total liabilities
     and stockholders'
     equity          $283,669                 $283,940
=============================                  ========
  Net interest spread and net
   interest income              2.56  $1,740             2.64  $1,794
                                      ======                    ======
  Impact of noninterest-
   bearing sources              0.21                     0.22
  Net interest margin           2.77                     2.86


                                        Quarter Ended
                                -------------------------------
                                         Sept. 30, 2003
                                -------------------------------
                                                      Interest
                                                      Income/
                                     Balance   Rate   Expense
                                -------------------------------
Average Balances and
 Weighted Average
 Interest Rates
Assets
Interest-earning
 assets:
  Federal funds sold
   and securities
   purchased under
   agreements to
   resell                           $  1,350  2.16%  $     7
  Available-for-sale
   securities(1):
   Mortgage-backed
    securities                        21,174  4.51       239
   Investment
    securities                        17,652  3.66       162
  Loans held for
   sale(2)                            51,950  5.31       689
  Loans held in
   portfolio(2):
   Loans secured by real
    estate:
    Home                              84,456  4.56       963
    Purchased
     specialty mortgage
     finance                          10,777  5.30       143
----------------------               -------          -------
        Total home
         loans                        95,233  4.64     1,106
    Home equity loans
     and lines of
     credit                           22,209  4.79       266
    Home construction:
     Builder(3)                        1,105  4.47        13
     Custom(4)                           977  6.90        17
    Multi-family                      19,920  5.16       258
    Other real estate                  6,989  6.31       111
----------------------               -------          -------
        Total loans
         secured by
         real estate                 146,433  4.83     1,771
   Consumer                            1,178  8.55        25
   Commercial business                 4,407  4.18        47
----------------------               -------          -------
        Total loans
         held in
         portfolio                   152,018  4.84     1,843
  Other                                5,748  3.99        58
----------------------               -------          -------
        Total interest
         earning
         assets                      249,892  4.79     2,998
Noninterest-earning
 assets:
  Mortgage servicing
   rights                              6,250
  Goodwill                             6,196
  Other(5)                            27,877
----------------------               -------
    Total assets                    $290,215
======================               =======
Liabilities
Interest-bearing
 liabilities:
  Deposits:
   Interest-bearing
    checking
    deposits                        $ 64,057  1.68       272
   Savings and money
    market deposits                   28,674  0.88        63
   Time deposits                      31,757  2.53       203
----------------------               -------          -------
        Total
         interest-
         bearing
         deposits                    124,488  1.72       538
  Federal funds
   purchased and
   commercial paper                    4,057  1.12        12
  Securities sold under
   agreements to
   repurchase                         21,399  2.19       120
  Advances from Federal
   Home Loan Banks                    45,334  2.59       300
  Other                               12,203  3.94       119
----------------------               -------          -------
        Total
         interest-
         bearing
         liabilities                 207,481  2.07     1,089
                                                      -------
Noninterest-bearing sources:
  Noninterest-bearing
   deposits                           49,457
  Other liabilities(6)                12,620
  Stockholders' equity                20,657
----------------------               -------
    Total liabilities
     and stockholders'
     equity                          $290,215
======================               ========
  Net interest spread and net
   interest income                            2.72   $ 1,909
                                                      =======
  Impact of noninterest
   bearing sources                            0.35
  Net interest margin                         3.07



(1) The average balance and yield are based on average amortized cost
    balances.

(2) Nonaccrual loans are included in the average loan amounts
    outstanding.

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

(4) Represents construction loans made directly to the intended
    occupant of a single-family residence.

(5) Includes assets of continuing and discontinued operations for the
    quarter ended September 30, 2003.

(6) Includes liabilities of continuing and discontinued operations for
    the quarter ended September 30, 2003.



WM-9

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



                                            Nine Months Ended
----------------------------------------------------------------------
                        Sept. 30, 2004                Sept. 30, 2003
                     ------------------------ ------------------------
                                      Interest                Interest
                                      Income/                 Income/
                      Balance   Rate  Expense  Balance  Rate  Expense
----------------------------------------------------------------------
Average Balances and
 Weighted Average Interest
 Rates
Assets
Interest-earning assets:
   Federal funds sold
    and securities
    purchased under
    agreements to
    resell            $    993   1.30% $   10  $  3,297  1.39% $    35
   Available-for-sale
    securities(1):
      Mortgage-backed
       securities        9,870   4.04     299    23,805  5.04      900
      Investment
       securities       12,862   3.19     308    15,829  4.08      484
   Loans held for
    sale(2)             28,592   5.03   1,079    50,773  5.41    2,061
   Loans held in
    portfolio(2):
      Loans secured by
       real estate:
         Home          105,559   4.18   3,311    83,656  4.91    3,079
         Purchased
          specialty
          mortgage
          finance       15,223   4.83     552    10,456  5.57      437
------------------------------         --------  ------        -------
          Total home
           loans       120,782   4.26   3,863    94,112  4.98    3,516
         Home equity
          loans and
          lines of
          credit        33,786   4.59   1,162    19,583  5.09      747
         Home construction:
            Builder(3)   1,205   4.49      41     1,088  4.75       39
            Custom(4)    1,302   6.13      60       942  7.36       52
         Multi-family   20,810   4.98     777    19,149  5.38      773
         Other real
          estate         6,484   5.87     287     7,344  6.30      348
------------------------------         --------   ------       -------
          Total loans
           secured by
           real estate 184,369   4.48   6,190   142,218  5.13    5,475
      Consumer             928  10.08      70     1,255  8.82       83
      Commercial
       business          4,482   4.24     144     4,193  4.49      143
------------------------------         --------   ------       -------
          Total loans
           held in
           portfolio   189,779   4.50   6,404   147,666  5.15    5,701
  Other                  5,746   4.27     184     5,167  4.72      183
------------------------------         --------   ------       -------
          Total
           interest-
           earning
           assets      247,842   4.46   8,284   246,537  5.06    9,364
Noninterest-earning
 assets:
   Mortgage servicing
    rights               6,566                    5,490
   Goodwill              6,196                    6,199
   Other(5)             19,082                   26,806
------------------------------                   ------
          Total
           assets     $279,686                 $285,032
==============================                  =======
Liabilities
Interest-bearing
 liabilities:
   Deposits:
     Interest-bearing
      checking
      deposits        $ 62,396   1.27     593  $ 60,980  1.78      810
      Savings and money
       market deposits  33,211   1.00     249    28,265  0.98      207
      Time deposits     33,286   2.39     598    31,976  2.74      657
------------------------------         --------  ------        -------
          Total
           interest-
           bearing
           deposits    128,893   1.49   1,440   121,221  1.85    1,674
   Federal funds
    purchased and
    commercial paper     3,084   1.21      28     2,917  1.21       26
   Securities sold
    under agreements
    to repurchase       17,711   2.26     304    20,607  2.52      394
   Advances from
    Federal Home Loan
    Banks               57,135   2.05     892    50,993  2.62    1,012
   Other                13,241   3.58     354    13,192  3.76      371
------------------------------         --------  ------        -------
         Total
          interest-
          bearing
          liabilities  220,064   1.82   3,018   208,930  2.21    3,477
                                       --------                -------
Noninterest-bearing sources:
   Noninterest-bearing
    deposits            33,671                   44,015
   Other liabilities(6)  5,590                   11,323
   Stockholders' equity 20,361                   20,764
------------------------------                  --------
         Total liabilities
          and stockholders'
          equity      $279,686                 $285,032
==============================                  ========
   Net interest spread and
    net interest income          2.64  $5,266            2.85  $ 5,887
                                       ======                  =======
   Impact of noninterest-
    bearing sources              0.20                    0.34
   Net interest margin           2.84                    3.19


(1) The average balance and yield are based on average amortized cost
    balances.

(2) Nonaccrual loans are included in the average loan amounts
    outstanding.

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

(4) Represents construction loans made directly to the intended
    occupant of a single-family residence.

(5) Includes assets of continuing and discontinued operations for the
    nine months ended September 30, 2003.

(6) Includes liabilities of continuing and discontinued operations for
    the nine months ended September 30, 2003.

WM-10

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


                     Sept. 30,  June 30,  Mar. 31,  Dec. 31, Sept. 30,
                       2004      2004      2004      2003      2003
----------------------------------------------------------------------
Deposits
   Retail deposits:
      Checking
       deposits:
         Noninterest
          bearing    $ 16,178  $ 15,666  $ 15,107  $ 13,724  $ 14,033
         Interest
          bearing      52,378    59,395    66,618    67,990    66,009
----------------------------------------------------------------------
           Total
            checking
            deposits   68,556    75,061    81,725    81,714    80,042
      Savings and
       money market
       deposits        38,620    30,413    22,452    22,131    22,657
      Time
       deposits(1)     24,825    23,990    24,128    24,605    25,356
----------------------------------------------------------------------
           Total
            retail
            deposits  132,001   129,464   128,305   128,450   128,055
      Commercial
       business
       deposits         8,117     7,925     7,038     7,159     6,451
      Wholesale
       deposits        14,052     8,874     6,219     2,579     4,711
      Custodial and
       escrow
       deposits(2)     14,525    16,203    19,419    14,993    24,924
----------------------------------------------------------------------
           Total
            deposits $168,695  $162,466  $160,981  $153,181  $164,141
======================================================================


(1) Weighted average remaining maturity of time deposits was 16 months
    at September 30, 2004, June 30, 2004 and March 31, 2004, 14 months
    at December 31, 2003, and 15 months at September 30, 2003.

(2) Substantially all custodial and escrow deposits reside in
    noninterest-bearing checking accounts.


                 Sept. 30,   June 30,   Mar. 31,   Dec. 31,  Sept. 30,
                   2004       2004       2004       2003       2003
----------------------------------------------------------------------
Retail Checking
 Accounts(1)
Accounts,
 beginning of
 period             8,734,640 8,544,197 8,315,571 8,122,642 7,867,190
     Net
      accounts
      opened
      during
      the
      quarter         142,802   190,443   228,626   192,929   255,452
----------------------------------------------------------------------
Accounts, end
 of period          8,877,442 8,734,640 8,544,197 8,315,571 8,122,642
======================================================================

(1) Retail checking accounts include small business checking accounts
    generated through financial center but exclude all other
    commercial business accounts. The information provided refers to
    the number of accounts, not dollar amounts.


                     Sept. 30,  June 30,  Mar. 31, Dec. 31,  Sept. 30,
                       2004      2004      2004      2003      2003
----------------------------------------------------------------------
Retail Banking Stores
Stores, beginning
 of period              1,816     1,755     1,776     1,677     1,602
     Net stores opened
      during the
      quarter              56        61       (21)(1)    99        75
----------------------------------------------------------------------
Stores, end of period   1,872     1,816     1,755     1,776     1,677
======================================================================

(1) The Company consolidated 79 grocery store locations into larger,
    existing, retail banking stores.


                    Sept. 30,  June 30,  Mar. 31,  Dec. 31,  Sept. 30,
                      2004      2004       2004      2003      2003
----------------------------------------------------------------------
Assets Under
 Management           $20,617   $20,106   $19,438   $17,868   $16,017
======================================================================


WM-11

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

                                          Quarter Ended
----------------------------------------------------------------------
                        Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
                          2004      2004     2004     2003      2003
----------------------------------------------------------------------
Loan Volume
   Home loans:
      Adjustable rate    $25,589  $29,753  $21,822  $23,397  $ 28,225
      Fixed rate          14,635   26,076   21,564   28,105    83,360
      Specialty mortgage
       finance(1)          7,536    7,323    7,113    6,031     5,460
----------------------------------------------------------------------
         Total home loan
          volume          47,760   63,152   50,499   57,533   117,045
   Home equity loans and
    lines of credit       10,527   11,572    8,416    7,922     9,369
   Home construction
    loans:
      Builder(2)             371      447      273      636       787
      Custom(3)              269      392      336      377       363
   Multi-family            2,050    2,346    1,525    1,647     2,598
   Other real estate         352      760      370      655       439
----------------------------------------------------------------------
         Total loans
          secured by real
          estate          61,329   78,669   61,419   68,770   130,601
   Consumer                  138       63       58       72       146
   Commercial business       358      789      688    1,061     1,191
----------------------------------------------------------------------
         Total loan
          volume         $61,825  $79,521  $62,165  $69,903  $131,938
======================================================================
Loan Volume by Channel
   Retail                $30,285  $37,720  $28,126  $31,630  $ 55,104
   Wholesale              16,079   19,534   15,419   16,334    27,410
   Purchased/
    correspondent         15,461   22,267   18,620   21,939    49,424
----------------------------------------------------------------------
         Total loan volume
          by channel     $61,825  $79,521  $62,165  $69,903  $131,938
======================================================================
Refinancing Activity(4)
   Home loan refinancing $23,834  $40,201  $33,233  $36,817  $ 90,762
   Home equity loans and
    lines of credit and
    consumer                 360    1,147    1,107      848     2,030
   Home construction loans     9       13       12        6        16
   Multi-family and other
    real estate              621      883      575      690     1,164
----------------------------------------------------------------------
         Total
          refinancing    $24,824  $42,244  $34,927  $38,361  $ 93,972
======================================================================
Home Loan Volume by Index
   Short-term adjustable-
    rate loans(5):
      Treasury indices   $18,883  $16,467  $13,440  $13,021  $  7,076
      COFI                   145      167      110      151       124
      Other                   45      812      218      628       336
----------------------------------------------------------------------
         Total short-term
          adjustable-rate
          loans           19,073   17,446   13,768   13,800     7,536
   Medium-term adjustable-
    rate loans(6)         12,866   17,536   12,814   13,667    24,138
   Fixed-rate loans       15,821   28,170   23,917   30,066    85,371
----------------------------------------------------------------------
         Total home loan
          volume         $47,760  $63,152  $50,499  $57,533  $117,045
======================================================================


Note: Pursuant to regulatory guidance issued in December 2003, buyouts
    of delinquent mortgages contained within Government National
    Mortgage Association (GNMA) loan servicing pools must be
    classified as loans on the balance sheet. Accordingly, total home
    loan volume includes GNMA pool buy-out volume of $898 million,
    $689 million, $1.05 billion, $1.30 billion and $1.67 billion for
    the quarters ended September 30, 2004, June 30, 2004, March 31,
    2004, December 31, 2003 and September 30, 2003.

(1) Represents purchased Specialty Mortgage Finance loan portfolios
    and mortgages originated by Long Beach Mortgage.

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

(3) Represents construction loans made directly to the intended
    occupant of a single-family residence.

(4) Includes loan refinancing entered into by both new and pre-
    existing loan customers.

(5) Short term is defined as adjustable-rate loans that reprice within
    one year or less.

(6) Medium term is defined as adjustable-rate loans that reprice after
    one year.



WM-12


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



                                                  Nine Months Ended
----------------------------------------------------------------------
                                                  Sept. 30, Sept. 30,
                                                    2004      2003
----------------------------------------------------------------------
Loan Volume
   Home loans:
      Adjustable rate                              $ 77,164  $ 76,503
      Fixed rate                                     62,275   235,499
      Specialty mortgage finance(1)                  21,972    14,647
----------------------------------------------------------------------
         Total home loan volume                     161,411   326,649
   Home equity loans and lines of credit             30,515    21,717
   Home construction loans:
      Builder(2)                                      1,091     1,870
      Custom(3)                                         997       799
   Multi-family                                       5,921     6,417
   Other real estate                                  1,482     1,315
----------------------------------------------------------------------
         Total loans secured by real estate         201,417   358,767
   Consumer                                             259       266
   Commercial business                                1,835     3,309
----------------------------------------------------------------------
         Total loan volume                         $203,511  $362,342
======================================================================
Loan Volume by Channel
   Retail                                          $ 96,131  $137,917
   Wholesale                                         51,032    79,337
   Purchased/correspondent                           56,348   145,088
----------------------------------------------------------------------
         Total loan volume by channel              $203,511  $362,342
======================================================================
Refinancing Activity(4)
   Home loan refinancing                           $ 97,268  $261,166
   Home equity loans and lines of credit and
    consumer                                          2,614     3,926
   Home construction loans                               34        41
   Multi-family and other real estate                 2,079     2,764
----------------------------------------------------------------------
         Total refinancing                         $101,995  $267,897
======================================================================
Home Loan Volume by Index
   Short-term adjustable-rate loans(5):
      Treasury indices                             $ 48,790  $ 17,125
      COFI                                              422       571
      Other                                           1,075       777
----------------------------------------------------------------------
         Total short-term adjustable-rate loans      50,287    18,473
   Medium-term adjustable-rate loans(6)              43,216    67,738
   Fixed-rate loans                                  67,908   240,438
----------------------------------------------------------------------
         Total home loan volume                    $161,411  $326,649
======================================================================

Note: Pursuant to regulatory guidance issued in December 2003, buyouts
    of delinquent mortgages contained within Government National
    Mortgage Association (GNMA) loan servicing pools must be
    classified as loans on the balance sheet. Accordingly, total home
    loan volume includes GNMA pool buy-out volume of $2.64 billion and
    $5.65 billion for the nine months ended September 30, 2004 and
    September 30, 2003.

(1) Represents purchased Specialty Mortgage Finance loan portfolios
    and mortgages originated by Long Beach Mortgage.

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

(3) Represents construction loans made directly to the intended
    occupant of a single- family residence.

(4) Includes loan refinancing entered into by both new and
    pre-existing loan customers.

(5) Short term is defined as adjustable-rate loans that reprice within
    one year or less.

(6) Medium term is defined as adjustable-rate loans that reprice after
    one year.


WM-13


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

                                Change from
                              June 30, 2004 Sept. 30,  June 30,
                          to Sept. 30, 2004     2004      2004
----------------------------------------------------------------------
Loans by Property Type
   Loans held in
    portfolio:
      Loans secured by
       real estate:
         Home             $          5,918  $112,230  $106,312
          Purchased
           specialty
           mortgage
           finance                   1,088    17,305    16,217
----------------------------------------------------------------------
            Total home
             loans                   7,006   129,535   122,529
         Home equity
          loans and lines
          of credit                  4,428    40,505    36,077
         Home
          construction:
            Builder(1)                   7     1,248     1,241
            Custom(2)                  120     1,484     1,364
         Multi-family                  484    21,640    21,156
         Other real
          estate                      (245)    6,268     6,513
----------------------------------------------------------------------
               Total
                loans
                secured
                by real
                estate              11,800   200,680   188,880
      Consumer                         (61)      831       892
      Commercial business             (124)    4,647     4,771
----------------------------------------------------------------------
               Total
                loans
                held in
                portfolio           11,615   206,158   194,543
   Less: allowance for
    loan and lease losses              (29)   (1,322)   (1,293)
----------------------------------------------------------------------
               Total net
                loans
                held in
                portfolio           11,586   204,836   193,250
   Loans held for sale(3)            1,389    29,184    27,795
----------------------------------------------------------------------
               Total net
                loans     $         12,975  $234,020  $221,045
======================================================================



                          Mar. 31,  Dec. 31, Sept. 30,
                             2004      2003      2003
------------------------------------------------------
Loans by Property Type
   Loans held in
    portfolio:
      Loans secured by
       real estate:
         Home            $104,946  $100,043  $ 90,243
          Purchased
           specialty
           mortgage
           finance         15,437    12,973    11,366
------------------------------------------------------
            Total home
             loans        120,383   113,016   101,609
         Home equity
          loans and lines
          of credit        31,264    27,647    24,060
         Home
          construction:
            Builder(1)      1,105     1,052     1,061
            Custom(2)       1,265     1,168     1,032
         Multi-family      20,579    20,324    20,191
         Other real
          estate            6,508     6,649     6,932
------------------------------------------------------
               Total
                loans
                secured
                by real
                estate    181,104   169,856   154,885
      Consumer                954     1,028     1,121
      Commercial business   4,322     4,266     4,223
------------------------------------------------------
               Total
                loans
                held in
                portfolio 186,380   175,150   160,229
   Less: allowance for
    loan and lease losses  (1,260)   (1,250)   (1,549)
------------------------------------------------------
               Total net
                loans
                held in
                portfolio 185,120   173,900   158,680
   Loans held for sale(3)  34,207    20,837    35,820
------------------------------------------------------
               Total net
                loans    $219,327  $194,737  $194,500
======================================================



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

(2) Represents construction loans made directly to the intended
    occupant of a single-family residence.

(3) Fair value of loans held for sale was $29.32 billion, $27.92
    billion, $34.36 billion, $20.84 billion and $35.86 billion as of
    September 30, 2004, June 30, 2004, March 31, 2004, December 31,
    2003 and September 30, 2003.


WM-14

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




                                                        Weighted
                               Change from               Average
                                 June 30, 2004 Sept. 30, Coupon
                             to Sept. 30, 2004     2004   Rate
----------------------------------------------------------------
Loans Secured by Real Estate
 and MBS
   Selected loans held in
    portfolio secured by
    real estate(1):
       Short-term
        adjustable-rate
        loans(2):
           COFI             $            (734)$  8,304    4.81%
           Treasury indices             7,373   72,065    3.97
           Other                        3,992   38,582    4.97
----------------------------------------------------------------
                Total short-
                 term
                 adjustable-
                 rate loans            10,631  118,951    4.35
       Medium-term
        adjustable-rate
        loans(3)                          705   52,396    5.39
       Fixed-rate loans                   582   20,333    6.61
----------------------------------------------------------------
                Total loans
                 held in
                 portfolio
                 secured by
                 real
                 estate(4)             11,918  191,680    4.87
   Loans held for sale(5)               1,401   29,061    4.87
----------------------------------------------------------------
                Total loans
                 secured by
                 real estate           13,319  220,741    4.87
   MBS(6):
       Short-term
        adjustable-rate
        MBS(2):
           COFI                          (416)   4,117    3.74
           Treasury indices               (31)   4,550    2.89
           Other                           (1)       8    3.42
----------------------------------------------------------------
                Total short-
                 term
                 adjustable-
                 rate MBS                (448)   8,675    3.30
       Medium-term
        adjustable-rate MBS(3)            249      249    3.22
       Fixed-rate MBS                     112      780    6.47
----------------------------------------------------------------
                Total MBS(7)              (87)   9,704    3.55
----------------------------------------------------------------
                Total loans
                 secured by
                 real estate
                 and MBS    $          13,232 $230,445    4.82
================================================================


                                     Weighted          Weighted
                                     Average           Average
                             June 30, Coupon  Sept. 30, Coupon
                                2004   Rate       2003   Rate
----------------------------------------------------------------
Loans Secured by Real Estate
 and MBS
   Selected loans held in
    portfolio secured by
    real estate(1):
       Short-term
        adjustable-rate
        loans(2):
           COFI             $  9,038    4.83% $ 11,708    5.05%
           Treasury indices   64,692    3.77    39,947    3.99
           Other              34,590    4.70    24,243    4.96
----------------------------------------------------------------
                Total short-
                 term
                 adjustable-
                 rate loans  108,320    4.15    75,898    4.46
       Medium-term
        adjustable-rate
        loans(3)              51,691    5.41    49,983    5.65
       Fixed-rate loans       19,751    6.65    19,979    7.16
----------------------------------------------------------------
                Total loans
                 held in
                 portfolio
                 secured by
                 real
                 estate(4)   179,762    4.79   145,860    5.24
   Loans held for sale(5)     27,660    5.13    35,714    5.88
----------------------------------------------------------------
                Total loans
                 secured by
                 real estate 207,422    4.84   181,574    5.37
   MBS(6):
       Short-term
        adjustable-rate
        MBS(2):
           COFI                4,533    3.78     6,832    3.95
           Treasury indices    4,581    2.68     5,065    3.14
           Other                   9    3.09       412    4.62
----------------------------------------------------------------
                Total short-
                 term
                 adjustable-
                 rate MBS      9,123    3.23    12,309    3.64
       Medium-term
        adjustable-rate MBS(3)    --      --        --      --
       Fixed-rate MBS            668    6.99     1,450    6.98
----------------------------------------------------------------
                Total MBS(7)   9,791    3.49    13,759    3.99
----------------------------------------------------------------
                Total loans
                 secured by
                 real estate
                 and MBS    $217,213    4.77  $195,333    5.27
================================================================


(1) Includes total home loans, home equity loans and lines of credit
    and multi-family loans.

(2) Short term is defined as adjustable-rate loans and MBS that
    reprice within one year or less.

(3) Medium term is defined as adjustable-rate loans that reprice after
    one year.

(4) At September 30, 2004, June 30, 2004 and September 30, 2003, the
    adjustable-rate loans with lifetime caps were $167.6 billion,
    $156.12 billion and $123.96 billion with a lifetime weighted
    average cap rate of 12.24%, 12.24% and 12.16%.

(5) Excludes student loans.

(6) Excludes principal-only strips and interest-only strips.

(7) At September 30, 2004, June 30, 2004 and September 30, 2003, the
    adjustable-rate MBS with lifetime caps were $5.22 billion, $6.60
    billion and $11.82 billion with a lifetime weighted average cap
    rate of 11.44%, 11.33% and 11.27%.



                                                  June 30,   Dec. 31,
                                                    2004       2003
                                                  to Sept.   to Sept.
                                                  30, 2004   30, 2004
----------------------------------------------------------------------
Rollforward of Loans Held for Sale
    Balance, beginning of period                 $ 27,795  $  20,837
        Loans originated and purchased             30,829    111,432
        Loans sold and other                      (29,440)  (103,085)
----------------------------------------------------------------------
    Balance, end of period                       $ 29,184  $  29,184
======================================================================

Rollforward of Loans Held in Portfolio
    Balance, beginning of period                 $194,543  $ 175,150
        Loans originated and purchased             30,996     92,079
        Loan payments and other                   (19,381)   (61,071)
----------------------------------------------------------------------
    Balance, end of period                       $206,158  $ 206,158
======================================================================

WM-15

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

                                          Quarter Ended
----------------------------------------------------------------------
                        Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
                          2004      2004     2004     2003     2003
----------------------------------------------------------------------
Home Loan Mortgage Banking
 Income (Expense)
   Loan servicing fees   $ 482     $ 485   $  502  $   524  $   542
   Amortization of mortgage
    servicing rights      (589)     (546)    (750)    (604)    (665)
   Mortgage servicing
    rights valuation
    adjustments(1)         165       (51)    (606)     615      368
   Other, net              (62)      (89)     (66)     (75)    (220)
----------------------------------------------------------------------
        Net home loan
         servicing income
         (expense)          (4)     (201)    (920)     460       25
   Revaluation gain (loss)
    from derivatives:
       Mortgage servicing
        rights risk
        management(2)      130      (322)   1,108     (314)    (317)
       Loans held for sale
        risk management(3) (23)      142      (66)       8      145
----------------------------------------------------------------------
             Total revaluation
              gain (loss)
              from
              derivatives  107      (180)   1,042     (306)    (172)
   Net settlement income
    from certain
    interest-rate swaps    126       192      167      190      130
   Gain (loss) from mortgage
    loans(3)               210       113      171       63     (204)
   Loan related income      65        76       71      124      108
   Gain from sale of
    originated mortgage-backed
    securities               -         -        -       61      258
----------------------------------------------------------------------
        Total home loan
         mortgage banking
         income            504         -      531      592      145
----------------------------------------------------------------------
   Impact of other mortgage
    servicing rights risk management
    instruments(4):
       Gain (loss) from
        certain
        available-for-sale
        securities           -         -        5      (11)     176
       Revaluation gain from
        principal only -
        stripped MBS        45         -        -        -        -
----------------------------------------------------------------------
            Total home loan
             mortgage banking
             income, net of other
             mortgage servicing
             rights risk
             management
             instruments $ 549     $   -   $  536  $   581  $   321
======================================================================

                                                 Nine Months Ended
----------------------------------------------------------------------
                                                 Sept. 30,  Sept. 30,
                                                    2004      2003
----------------------------------------------------------------------
Home Loan Mortgage Banking
 Income (Expense)
   Loan servicing fees                           $ 1,469  $ 1,748
   Amortization of mortgage
    servicing rights                              (1,884)  (2,665)
   Mortgage servicing rights
    valuation adjustments(1)                        (493)      96
   Other, net                                       (217)    (515)
----------------------------------------------------------------------
        Net home loan
         servicing expense                        (1,125)  (1,336)
   Revaluation gain (loss)
    from derivatives:
       Mortgage servicing
        rights risk
        management(2)                                917      840
       Loans held for sale
        risk management(3)                            52     (197)
----------------------------------------------------------------------
             Total revaluation
              gain from
              derivatives                            969      643
   Net settlement income from
    certain interest-rate
    swaps                                            485      354
   Gain from mortgage loans(3)                       494    1,186
   Loan related income                               212      274
   Gain from sale of
    originated mortgage-backed
    securities                                         -      260
----------------------------------------------------------------------
        Total home loan
         mortgage banking
         income                                    1,035    1,381
----------------------------------------------------------------------
   Impact of other mortgage
    servicing rights risk management
    instruments(4):
       Gain from certain
        available-for-sale
        securities                                     5      316
       Revaluation gain from
        principal only - stripped MBS                 45        -
----------------------------------------------------------------------
             Total home loan
              mortgage banking
              income, net of other
              mortgage
               servicing
                rights risk
                management
                instruments                      $ 1,085  $ 1,697
======================================================================


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

(2) Represents the change in fair value from certain derivatives that
    economically hedge the MSR.

(3) Gain (loss) from mortgage loans net of revaluation gain (loss)
    from derivatives used for loans held for sale risk management was
    a net gain of $187 million for the quarter ended September 30,
    2004, compared with a net gain of $255 million for the quarter
    ended June 30, 2004, a net gain of $105 million for the quarter
    ended March 31, 2004, a net gain of $71 million for the quarter
    ended December 31, 2003, and a net loss of $59 million for the
    quarter ended September 30, 2003. Gain from mortgage loans net of
    revaluation gain (loss) from derivatives used for loans held for
    sale risk management was a net gain of $546 million for the nine
    months ended September 30, 2004, compared with a net gain of $989
    million for the nine months ended September 30, 2003.

(4) Includes only instruments designated for mortgage servicing rights
    risk management and does not include the effects of instruments
    held for asset/liability risk management.


WM-16

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


                                                          Nine Months
                                         Quarter Ended       Ended
---------------------------------------------------------------------
                                 Sept. 30, June 30, Mar. 31, Sept. 30,
                                   2004     2004    2004     2004
---------------------------------------------------------------------
Mortgage Servicing Rights ("MSR")
 Performance
   Statement No. 133 MSR
    accounting valuation
    adjustments                  $ (885)   $ 1,707  $    -   $   822
   Statement No. 133 fair value
    hedging adjustments           1,316     (1,985)      -      (669)
---------------------------------------------------------------------
        Statement No. 133
         ineffectiveness            431       (278)      -       153
   Change in value of MSR accounted
    for under lower of aggregate
    cost or market value
    methodology                    (266)       227    (606)     (646)
---------------------------------------------------------------------
        Mortgage servicing rights
         valuation adjustments(1)   165        (51)   (606)     (493)
   Revaluation gain (loss) from
    derivatives - MSR risk
    management                      130       (322)  1,108       917
   Amortization of mortgage
    servicing rights               (589)      (546)   (750)   (1,884)
   Net settlement income from
    certain interest-rate swaps     126        195     160       481
   Gain from certain available-for-
    sale securities                   -          -       5         5
   Revaluation gain from principal
    only - stripped MBS              45          -       -        45
---------------------------------------------------------------------
              Net MSR valuation
               less hedging
               expense           $ (123)   $  (724) $  (83)  $  (929)
=====================================================================

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



WM-17

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



                                           Quarter Ended
---------------------------------------------------------------------
                    Sept. 30,  June 30,  Mar. 31,  Dec. 31,  Sept. 30,
                      2004      2004      2004      2003       2003
----------------------------------------------------------------------
Rollforward of
 Mortgage Servicing
 Rights ("MSR")(1)
   Balance, beginning
    of period       $  7,501  $  5,239  $  6,354  $  5,870  $   4,598
      Home loans:
         Additions       348       874       241       701      1,587
         Amortization   (589)     (546)     (750)     (604)      (665)
         (Impairment)
          reversal      (266)      227      (606)      615        368
         Statement No.
          133 MSR
          accounting
          valuation
          adjustments   (885)    1,707         -         -          -
         Sales             -         -         -      (231)       (18)
      Net change in
       commercial
       real estate
       MSR                 3         -         -         3          -
----------------------------------------------------------------------
   Balance, end of
    period(2)       $  6,112  $  7,501  $  5,239  $  6,354  $   5,870
======================================================================
Rollforward of
 Valuation Allowance
 for MSR Impairment
   Balance, beginning
    of period       $  2,417  $  3,035  $  2,435  $  3,075  $   3,444
      Impairment
       (reversal)        266      (227)      606      (615)      (368)
      Other than
       temporary
       impairment        (22)     (388)        -         -          -
      Sales                -         -         -       (25)        (1)
      Other               (8)       (3)       (6)        -          -
----------------------------------------------------------------------
   Balance, end of
    period          $  2,653  $  2,417  $  3,035  $  2,435  $   3,075
======================================================================
Rollforward of Loans
 Serviced for Others
   Balance, beginning
    of period       $558,388  $559,807  $582,669  $577,822  $ 583,823
      Home loans:
         Additions    29,699    54,201    22,009    51,480    105,883
         Sales             -         -         -      (195)         -
         Loan
          payments
          and other  (37,035)  (56,388)  (46,058)  (47,062)  (111,834)
      Net change in
       commercial real
       estate loans
       serviced for
       others            193       768     1,187       624        (50)
----------------------------------------------------------------------
   Balance, end of
    period          $551,245  $558,388  $559,807  $582,669  $ 577,822
======================================================================

                    Sept. 30,  June 30,  Mar. 31,  Dec. 31,  Sept. 30,
                      2004      2004      2004      2003       2003
----------------------------------------------------------------------
Total Servicing
 Portfolio
      Loans serviced
       for others   $551,245  $558,388  $559,807  $582,669  $ 577,822
      Servicing on
       retained MBS
       without MSR     2,713     2,938     3,208     3,455      3,810
      Servicing on
       owned loans   217,592   205,714   204,449   182,604    182,570
      Subservicing
       portfolio         502       563     1,528     1,852        249
----------------------------------------------------------------------
   Total servicing
    portfolio       $772,052  $767,603  $768,992  $770,580  $ 764,451
======================================================================

                                                   Sept. 30, 2004
--------------------------------------------------------------------
                                                  Unpaid    Weighted
                                                 Principal  Average
                                                  Balance  Servicing
                                                               Fee
---------------------------------------------------------------------
                                                           (in basis
                                                             points,
Loans Serviced for                                         annualized)
 Others by Loan Type
      Government                                 $ 57,267         48
      Agency                                      358,413         30
      Private                                     116,763         34
      Specialty home loans                         18,802         50
----------------------------------------------------------------------
   Total loans serviced for
    others(3)                                    $551,245         33
======================================================================


(1) Net of valuation allowance.

(2) At September 30, 2004, the aggregate MSR fair value was $6.11
    billion.

(3) Weighted average coupon rate (annualized) was 5.90% at September
    30, 2004.


WM-18

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

                              Quarter Ended
----------------------------------------------------------------------
                        Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
                           2004    2004     2004      2003     2003
----------------------------------------------------------------------
Allowance for Loan and Lease
 Losses
   Balance, beginning of
    quarter               $1,293  $1,260   $1,250    $1,549   $1,530
   Allowance for certain
    loan
    commitments/other          -      (3)       -         -       17
   Provision (reversal of
    reserve) for loan and
    lease losses              56      60       56      (202)      76
----------------------------------------------------------------------
                           1,349   1,317    1,306     1,347    1,623
   Loans charged off:
      Loans secured by real
       estate:
         Home                 (6)     (8)     (16)      (18)     (22)
         Purchased specialty
          mortgage finance   (11)     (9)      (9)      (11)      (9)
----------------------------------------------------------------------
              Total home loan
               charge-offs   (17)    (17)     (25)      (29)     (31)
         Home equity loans
          and lines of credit (6)     (5)      (7)       (2)      (4)
         Home construction -
          builder (1)          -       -       (1)       (1)      (1)
         Multi-family          -       -        -        (1)      (4)
         Other real estate    (1)     (1)      (8)      (52)     (16)
----------------------------------------------------------------------
              Total loans
               secured by
               real estate   (24)    (23)     (41)      (85)     (56)
      Consumer               (11)    (11)     (14)      (14)     (20)
      Commercial business     (4)     (4)      (6)      (15)     (19)
----------------------------------------------------------------------
              Total loans
               charged off   (39)    (38)     (61)     (114)     (95)
   Recoveries of loans
    previously charged off:
      Loans secured by real
       estate:
         Home                  -       -        -         1        7
         Purchased specialty
          mortgage finance     1       1        1         1        1
----------------------------------------------------------------------
              Total home loan
               recoveries      1       1        1         2        8
         Home equity loans
          and lines of credit  -       1        1         -        -
         Multi-family          1       -        2         -        -
         Other real estate     2       4        2         5        6
----------------------------------------------------------------------
              Total loans
               secured by
               real estate     4       6        6         7       14
      Consumer                 5       5        5         5        5
      Commercial business      3       3        4         5        2
----------------------------------------------------------------------
              Total recoveries
               of loans
               previously
               charged off    12      14       15        17       21
----------------------------------------------------------------------
      Net charge-offs        (27)    (24)     (46)      (97)     (74)
----------------------------------------------------------------------
   Balance, end of
    quarter               $1,322  $1,293   $1,260    $1,250   $1,549
======================================================================

   Net charge-offs
    (annualized) as a
    percentage of average
    loans held in
    portfolio               0.05 %  0.05 %   0.10 %    0.23 %   0.19 %
   Allowance as a percentage
    of total loans held in
    portfolio               0.64    0.66     0.68      0.71     0.97


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


WM-19

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

                        Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
                          2004     2004     2004      2003     2003
----------------------------------------------------------------------
Nonperforming Assets and
 Restructured Loans
  Nonaccrual loans(1):
     Loans secured by real
      estate:
        Home             $  538   $  535   $  622    $  736   $  760
        Purchased specialty
         mortgage finance   608      585      615       597      553
----------------------------------------------------------------------
              Total home
               nonaccrual
               loans      1,146    1,120    1,237     1,333    1,313
        Home equity loans and
         lines of credit     50       48       45        47       46
        Home construction:
           Builder(2)        23       18       23        25       31
           Custom(3)          8        6        8        10        9
        Multi-family         23       20       23        19       39
        Other real estate   173      133      153       153      309
----------------------------------------------------------------------
              Total nonaccrual
               loans secured
               by real
               estate     1,423    1,345    1,489     1,587    1,747
     Consumer                11        9        7         8       10
     Commercial business     37       42       46        31       56
----------------------------------------------------------------------
              Total nonaccrual
               loans held in
               portfolio  1,471    1,396    1,542     1,626    1,813
  Foreclosed assets         281      286      307       311      293
----------------------------------------------------------------------
              Total
               nonperforming
               assets    $1,752   $1,682   $1,849    $1,937   $2,106
              As a percentage
               of total
               assets      0.61%    0.60%    0.66%     0.70%    0.73%
  Restructured loans     $   38   $   79   $  107    $  111   $  118
----------------------------------------------------------------------
                 Total
                  nonperforming
                  assets and
                  restructured
                  loans  $1,790   $1,761   $1,956    $2,048   $2,224
======================================================================



(1) Excludes nonaccrual loans held for sale of $84 million at
    September 30, 2004. Prior periods also reflect the exclusion of
    nonaccrual loans held for sale of $99 million, $135 million, $66
    million and $67 million at June 30, 2004, March 31, 2004, December
    31, 2003 and September 30, 2003. Loans held for sale are accounted
    for at lower of aggregate cost or market value, with valuation
    changes included as adjustments to gain from mortgage loans.

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

(3) Represents construction loans made directly to the intended
    occupant of a single-family residence.


    CONTACT: Washington Mutual
             Media Contact:
             Alan Gulick, 206-377-3637
             alan.gulick@wamu.net
             or
             Investor Relations Contact:
             Alan Magleby, 206-490-5182
             alan.magleby@wamu.net

    SOURCE: Washington Mutual, Inc.