[ skip to main content ]

About WaMu | Locations | Contact Us |
Log in to Your Accounts
Log in to your accounts
Forgot password?

News Releases

News Release

Printer Friendly Version View printer-friendly version
BACK
Washington Mutual Announces Record Earnings; Company Delivers Second Consecutive $1 Billion Quarter; Board of Directors Increases Cash Dividend by 33 Percent
To view a printable version of the Q2 2003 financial release, click here.

To view a downloadable version of the Q2 2003 financial release, click here.

SEATTLE--(BUSINESS WIRE)--July 15, 2003--Washington Mutual, Inc. (NYSE:WM) today announced record earnings of $1.02 billion, or $1.10 per diluted share, for the quarter ended June 30, 2003, up 9 percent on a per share basis from $990 million, or $1.01 per diluted share for the same period a year ago.

Based on the company's continued strong operating fundamentals, financial performance and capital generating ability, Washington Mutual's Board of Directors declared a cash dividend of 40 cents per share on the company's common stock, up 33 percent or 10 cents from 30 cents per share in the previous quarter. The company has now increased its cash dividend for 32 consecutive quarters.

"The board's decision to significantly increase the cash dividend reflects the overall strength of our business and capital position as well as management's continued commitment to creating shareholder value," said Kerry Killinger, the company's chairman, president and CEO. "In addition, the recent reduction in the tax rate on dividend income allows us to more efficiently return capital to our shareholders."

Killinger emphasized that in addition to the higher dividend payout, the company is maintaining its stated growth targets.

    Additional highlights of the recently completed quarter included:

    --  Record loan volume of $120.32 billion, up 108 percent from the
        second quarter of 2002 and 13 percent higher than the first
        quarter of 2003;

    --  Home equity loans and lines of credit and multi-family loan
        volume increased by 30 percent from the first quarter of 2003
        to $9.46 billion and 80 percent from the second quarter of
        2002's $5.27 billion;

    --  Continued growth in retail checking accounts, one of the
        company's key relationship-building products, which increased
        by more than 176,000 during the quarter;

    --  Depositor and other retail banking fees of $454 million, up 14
        percent from the same period a year ago;

    --  A decline in nonperforming assets (NPAs) as a percentage of
        total assets to 0.82 percent from 0.90 percent at the end of
        the first quarter;

    --  The opening of 50 new retail banking stores and six new home
        loan stores throughout the country. The company is on pace to
        open approximately 250 retail banking stores and 70 home loans
        stores in 2003 as it continues to expand its national
        franchise; and

    --  A strong 19.25 percent return on average common equity.

"Building on first quarter's momentum, Washington Mutual's balanced business model continued to deliver strong results in the second quarter," said Killinger. "Our record-breaking results reflect the strength of our underlying strategy of serving the broad middle market. We are extremely proud of the results that our talented employees have produced."

    SECOND QUARTER RESULTS

    Net Interest Income

For the second quarter of 2003, net interest income held steady at $2.03 billion, virtually the same as in the first quarter of 2003. The continued strength in net interest income was the result of growth in average loans held for sale and home equity loan balances. As expected, the net interest margin in the current quarter declined to 3.30 percent, a decrease of 24 basis points from the second quarter of 2002, mainly due to the continued downward repricing of loans and securities from the higher interest rate environment of 2002.

Noninterest Income

Noninterest income increased 35 percent or $421 million from the second quarter of 2002 due to strong results in the home loan mortgage banking business.

Consumers continued to choose Washington Mutual to serve their financial needs, leading to an increase of more than 176,000 net retail checking accounts during the second quarter and an increase of over 820,000 net retail checking accounts year over year.

Depositor and other retail banking fees increased $34 million to $454 million, up 8 percent from $420 million in first quarter 2003 and increased $56 million, up 14 percent from $398 million in the second quarter of 2002.

The company continues to make good progress in its expansion efforts in the New York/New Jersey retail banking market. Washington Mutual entered the market through the acquisition of Dime Bancorp and its 123-branch network last January. Since then, it has opened an additional 35 retail banking stores in the greater New York area and plans to add another 33 by the end of this year. From the beginning of July 2002 through the end of the second quarter this year, the company has acquired over 130,000 net retail checking accounts in that market, which represents a 37 percent increase in its New York/New Jersey retail checking account base year over year. In addition, Washington Mutual is now positioned number two in advertising awareness, and is the most recognized name in providing free checking.

In its home loan mortgage banking business, gain from mortgage loans increased 6 percent to a record $622 million, up from $587 million during the first quarter of 2003 and increased 183 percent from $220 million in the second quarter of 2002.

With interest rates remaining at near historic lows, high prepayment rates have reduced the value of the mortgage servicing asset; however, as in prior periods, the company's risk management activities effectively mitigated the change in the MSR valuation.

Lending

Driven by continued strong demand for refinancing of home loan mortgages, Washington Mutual produced record loan volume of $120.32 billion for the quarter, up 108 percent from $57.78 billion in the second quarter of 2002 and up 13 percent from $106.62 billion in the first quarter of 2003.

Of the total loan volume in the second quarter, home loan volume totaled $108.16 billion, versus $50.17 billion in the same period a year ago and up 11 percent from $97.47 billion in the first quarter of 2003.

The portfolio of home equity loans and lines of credit has increased to $22.58 billion at June 30, 2003, or an increase of 12 percent from the March 31, 2003 balance of $20.11 billion.

Efficiency Ratio

For the quarter, the efficiency ratio was 52.49 percent compared with 49.91 percent in the first quarter of 2003 and 47.95 percent in the second quarter of 2002. Noninterest expense totaled $1.92 billion, which was up from $1.71 billion during the first quarter of 2003. A significant portion of this increase was due to additional temporary staffing required for the refinancing boom.

Credit Risk Management

Credit quality continued to perform to the company's expectations. For the quarter, nonperforming assets (NPAs) declined $187 million and as a percentage of total assets were 0.82 percent versus 0.90 percent at the end of the first quarter.

Overall portfolio trends remained stable-to-improving during the quarter. Charge offs increased from $95 million in the first quarter to $118 million in the current quarter, which were fully in line with expectations and historical performance.

Given the overall level of NPAs and management's expectations, the provision for loan and lease losses was $118 million for the second quarter, compared with $125 million in the first quarter of the year.

Balance Sheet and Capital Management

Consolidated assets at June 30, 2003 were $283.20 billion, compared with $268.30 billion at December 31, 2002, which is an annualized growth rate of 11 percent. The company continues to expect asset growth of 5 to 10 percent in 2003.

At June 30, 2003, balances of transaction deposits, including checking, savings and money market deposits, represented 82 percent of total deposits, compared with 78 percent at December 31, 2002. Total deposits were $166.46 billion at the end of the second quarter, up from $155.52 billion at December 31, 2002.

Washington Mutual continues to manage its capital position by repurchasing its common stock. During the second quarter, the company repurchased 15.3 million shares of its common stock at an average price of $40.52. The company's tangible common equity was 5.28 percent of total tangible assets at June 30, 2003.

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

Outlook

"Washington Mutual is well-positioned to achieve its business objectives while progressing toward our long-term goal of building the nation's leading retailer of financial services to the broad middle market," said Killinger. "Our credit profile is in very good shape and we have a strong management team and disciplined business strategies in place to execute on our goals. In short, we have built a very powerful and unique national franchise with excellent opportunities to grow organically in the future. We believe the prospects for delivering a superior return for shareholders over the long term are very good."

    Company Updates

    --  Washington Mutual announced that it is extending its presence
        in Florida by opening 40 to 60 retail banking stores in the
        Tampa-St. Petersburg area starting in 2004. The company
        currently operates approximately 150 retail banking stores in
        Central and Southeast Florida.

    --  The company opened 28 retail banking stores in Chicago on June
        23, the first wave of 70 stores to be opened by year-end 2003.

    --  Dividends on common stock are payable August 15, 2003 to
        shareholders of record as of July 31, 2003.

    --  Michelle McCarthy, a 17-year veteran of the Deutsche Bank
        Group, joined Washington Mutual as Senior Vice President,
        Market Risk Management.

    --  Washington Mutual was selected by Fortune magazine as one of
        the best companies for minorities, making the company one of
        only seven companies nationally to be recognized by the
        magazine in three areas: Best Companies to Work For, Best
        Companies for Minorities and Most Admired Companies.

    --  Washington Mutual was also selected as one of Family Digest
        magazine's "Best Companies for African Americans."

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 small businesses. At June 30, 2003, Washington Mutual and its subsidiaries had assets of $283.20 billion. Washington Mutual currently operates more than 2,650 consumer banking, mortgage lending, commercial banking, consumer finance and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamu.com.

A conference call to discuss the company's financial results will be held on Wednesday, July 16, 2003, at 10:30 am EDT and will be hosted by Killinger and Tom Casey, executive vice president and chief financial officer. The conference call is available by telephone or on the Internet.

The telephone number for the conference call is 1-877-546-1566. Participants calling from outside the United States may dial 1-773-756-4600. 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 p.m. EDT on Wednesday, July 16, 2003 through 11:59 p.m. EDT on Friday, July 25, 2003. The recorded message will be available at 1-888-566-0617. Callers from outside the United States may dial 1-402-998-0718.

Forward Looking Statement

These presentations contain forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this document that are not historical facts. When used in these presentations, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed under the heading "Factors That May Affect Future Results" in Washington Mutual's 2002 Annual Report on Form 10-K and under the heading, "Cautionary Statements," in Washington Mutual's Quarterly Report on Form 10-Q for the period ended March 31, 2003, which include: changes in general business and economic conditions may significantly affect our earnings; the risk that our inability to effectively manage the volatility of our mortgage banking business could adversely affect our earnings; a failure to effectively implement our business operations technology solutions could adversely affect our earnings and financial condition; competition from other financial services companies in our markets could adversely affect our ability to achieve our financial goals; and changes in the regulation of financial services companies could adversely affect our business.


WM-1
                        Washington Mutual, Inc.
                   Consolidated Statements of Income
             (dollars in millions, except per share data)
                              (unaudited)

                                    Quarter Ended     Six Months Ended
----------------------------------------------------------------------
                                 June    Mar.    June    June    June
                                  30,     31,     30,     30,     30,
                                 2003    2003    2002    2003    2002
----------------------------------------------------------------------
Interest Income
 Loans held for sale             $626 $589 $361 $1,216 $804
 Loans held in portfolio        2,050   2,106   2,335   4,155   4,746
 Available-for-sale securities    469     517     812     986   1,759
 Other interest and dividend
  income                           72      80      77     152     159
----------------------------------------------------------------------
  Total interest income         3,217   3,292   3,585   6,509   7,468
Interest Expense
 Deposits                         548     587     666   1,135   1,317
 Borrowings                       644     688     819   1,332   1,655
----------------------------------------------------------------------
  Total interest expense        1,192   1,275   1,485   2,467   2,972
----------------------------------------------------------------------
    Net interest income         2,025   2,017   2,100   4,042   4,496
 Provision for loan and lease
  losses                          118     125     160     243     335
----------------------------------------------------------------------
    Net interest income after
     provision for
     loan and lease losses      1,907   1,892   1,940   3,799   4,161
Noninterest Income
 Home loan mortgage banking
  income (expense):
  Loan servicing fees             593     613     560   1,206   1,100
  Amortization of mortgage
   servicing rights            (1,032)   (969)   (504) (2,000)   (983)
  Mortgage servicing rights
   (impairment) recovery         (309)     37  (1,107)   (272) (1,062)
  Revaluation gain from
   derivatives                    598     217     857     815     842
  Net settlement income from
   certain interest-rate swaps     84     140     101     224     107
  Gain from mortgage loans        622     587     220   1,210     471
  Other home loan mortgage
   banking income, net            149      98     117     246     156
----------------------------------------------------------------------
   Total home loan mortgage
    banking income                705     723     244   1,429     631
 Depositor and other retail
  banking fees                    454     420     398     875     759
 Securities fees and commissions  100      89      98     189     180
 Insurance income                  53      52      39     105      86
 Portfolio loan related income    111     117      75     227     140
 Gain (loss) from other
  available-for-sale securities   137      (5)    137     131    (161)
 (Loss) gain on extinguishment
  of securities sold under
  agreements to repurchase        (49)    (87)    121    (136)    195
 Other income                     118      97      96     215     186
----------------------------------------------------------------------
   Total noninterest income     1,629   1,406   1,208   3,035   2,016
Noninterest Expense
 Compensation and benefits        867     771     732   1,638   1,422
 Occupancy and equipment          375     304     283     679     571
 Telecommunications and
  outsourced
  information services            143     144     134     287     273
 Depositor and other retail
  banking losses                   50      52      48     102      98
 Amortization of other
  intangible assets                15      16      17      31      34
 Advertising and promotion         83      63      69     146     113
 Professional fees                 68      56      52     124     107
 Other expense                    317     303     251     619     490
----------------------------------------------------------------------
   Total noninterest expense    1,918   1,709   1,586   3,626   3,108
----------------------------------------------------------------------
   Income before income taxes   1,618   1,589   1,562   3,208   3,069
     Income taxes                 598     586     572   1,185   1,123
----------------------------------------------------------------------
Net Income                     $1,020 $1,003 $990 $2,023 $1,946
======================================================================
Net Income Attributable to
 Common Stock                  $1,020 $1,003 $988 $2,023 $1,942
======================================================================

Net income per common share:
   Basic                        $1.12 $1.09 $1.04 $2.21 $2.04
   Diluted                       1.10    1.07    1.01    2.17    2.00
Dividends declared per common
 share                           0.30    0.29    0.26    0.59    0.51
Basic weighted average number
 of common shares outstanding
 (in thousands)               910,921 921,084 954,662 915,974 951,177
Diluted weighted average
 number of common shares
 outstanding (in thousands)   929,386 934,889 974,153 932,109 968,717


WM-2
                        Washington Mutual, Inc.
            Consolidated Statements of Financial Condition
             (dollars in millions, except per share data)
                              (unaudited)


                                            June 30, Dec. 31, June 30,
                                             2003      2002    2002
----------------------------------------------------------------------
Assets
   Cash and cash equivalents                 $7,388 $7,208 $4,709
   Federal funds sold and securities
    purchased under resale agreements         2,085    2,015      314
   Available-for-sale securities, total
    amortized cost of $43,309,
    $42,592 and $58,450:
        Mortgage-backed securities           24,875   28,375   24,698
        Investment securities                20,292   15,597   34,119
   Loans held for sale                       40,631   33,996   21,940
   Loans held in portfolio                  153,866  147,528  145,873
   Allowance for loan and lease losses       (1,680)  (1,653)  (1,665)
----------------------------------------------------------------------
       Total loans held in portfolio,
        net of allowance for loan and
        lease losses                        152,186  145,875  144,208
   Investment in Federal Home Loan Banks      3,596    3,703    3,908
   Mortgage servicing rights                  4,598    5,341    6,489
   Goodwill                                   6,253    6,270    6,220
   Other assets                              21,299   19,918   14,693
----------------------------------------------------------------------
             Total assets                  $283,203 $268,298 $261,298
======================================================================

Liabilities
   Deposits:
      Noninterest-bearing deposits          $46,505 $37,515 $20,628
      Interest-bearing deposits             119,952  118,001  108,441
----------------------------------------------------------------------
         Total deposits                     166,457  155,516  129,069
   Federal funds purchased and commercial
    paper                                     3,579    1,247    3,775
   Securities sold under agreements to
    repurchase                               22,964   16,717   32,069
   Advances from Federal Home Loan Banks     46,127   51,265   58,321
   Other borrowings                          14,700   15,264   14,017
   Other liabilities                          8,315    8,155    4,348
----------------------------------------------------------------------
         Total liabilities                  262,142  248,164  241,599
   Redeemable preferred stock                     -        -      102
Stockholders' equity                         21,061   20,134   19,597
----------------------------------------------------------------------
            Total liabilities, redeemable
            preferred stock, and
            stockholders' equity           $283,203 $268,298 $261,298
======================================================================

Common shares outstanding at end of period
 (in thousands) (1)                         924,238  944,047  974,188

Book value per common share(2)               $23.22 $21.74 $20.50
Tangible book value per common share(2)       16.45    15.06    14.04

Full-time equivalent employees at end of
 period                                      57,516   52,459   50,001
-----------------------
(1) Includes 17,100,000 shares at June 30, 2003, and 18,000,000
    shares at December 31, 2002 and June 30, 2002, held in escrow
    pending resolution of the Company's asserted right to the
    return of such shares.

(2) Excludes 17,100,000 shares at June 30, 2003, and 18,000,000
    shares at December 31, 2002 and June 30, 2002, held in escrow
    pending resolution of the Company's asserted right to the
    return of such shares.


WM-3
                        Washington Mutual, Inc.
                    Selected Financial Information
                         (dollars in millions)
                              (unaudited)

                                                     Six Months Ended
----------------------------------------------------------------------
                                                        June    June
                                                         30,     30,
                                                        2003    2002
----------------------------------------------------------------------
Stockholders' Equity Rollforward
Balance, beginning of period                          $20,134 $14,063
Net income                                              2,023   1,946
Other comprehensive income, net of tax                    211     231
Cash dividends declared on common stock                  (539)   (496)
Cash dividends declared on redeemable preferred stock       -      (4)
Common stock repurchased and retired                     (972)    (37)
Common stock issued for acquisitions                        -   3,672
Fair value of Dime stock options                            -      90
Common stock issued                                       204     132
----------------------------------------------------------------------
Balance, end of period                                $21,061 $19,597
======================================================================


WM-4
                        Washington Mutual, Inc.
                    Selected Financial Information
             (dollars in millions, except per share data)
                              (unaudited)

                                         Quarter Ended
----------------------------------------------------------------------
                             June     Mar.     Dec.     Sept.    June
                              30,      31,      31,      30,      30,
                             2003     2003     2002     2002     2002
----------------------------------------------------------------------
PROFITABILITY
  Net interest income      $2,025 $2,017 $1,926 $1,919 $2,100
  Net interest margin        3.30%    3.32%    3.25%    3.36%    3.54%
  Noninterest income       $1,629 $1,406 $1,394 $1,380 $1,208
  Noninterest expense       1,918    1,709    1,658    1,616    1,586
  Net income                1,020    1,003      969      981      990
  Net income per common
   share:
        Basic               $1.12 $1.09 $1.05 $1.04 $1.04
        Diluted              1.10     1.07     1.03     1.02     1.01
  Dividends declared per
   common share             $0.30 $0.29 $0.28 $0.27 $0.26
  Return on average
   assets                    1.44%    1.43%    1.42%    1.50%    1.48%
  Return on average
   common equity            19.25    19.44    18.34    18.79    20.37
  Efficiency ratio(1)       52.49    49.91    49.94    48.99    47.95

ASSET QUALITY
  Nonaccrual loans(2)      $1,996 $2,166 $2,257 $2,188 $2,232
  Foreclosed assets           317      334      336      309      274
  Total nonperforming
   assets                   2,313    2,500    2,593    2,497    2,506
  Nonperforming
   assets/total assets       0.82%    0.90%    0.97%    0.95%    0.96%
  Restructured loans          $89 $99 $98 $112 $119
   Total nonperforming
    assets and
    restructured loans      2,402    2,599    2,691    2,609    2,625
  Allowance for loan and
   lease losses             1,680    1,680    1,653    1,705    1,665
   Allowance as a
    percentage of total
    loans held in
    portfolio                1.09%    1.12%    1.12%    1.15%    1.14%
  Provision for loan and
   lease losses              $118 $125 $125 $135 $160
  Net charge-offs             118       95      108       88      116

CAPITAL ADEQUACY
  Stockholders'
   equity/total assets       7.44%    7.47%    7.50%    7.68%    7.50%
  Tangible common
   equity(3)/total
   tangible assets(3)        5.28     5.29     5.29     5.27     5.28
  Estimated total risk-
   based capital/risk-
   weighted assets(4)       11.72    11.73    11.57    11.16    12.32

SUPPLEMENTAL DATA
  Average balance sheet:
   Loans held for sale    $46,727 $42,327 $37,322 $25,740 $22,211
   Loans held in
    portfolio             151,489  148,382  149,173  146,160  146,668
   Interest-earning
    assets                246,021  241,690  237,842  229,364  236,504
   Total assets           284,118  280,850  273,729  261,170  266,849
   Interest-bearing
    deposits              120,144  119,056  116,177  111,408  108,231
   Noninterest-bearing
    deposits               43,536   38,851   32,375   24,065   22,417
   Stockholders' equity    21,193   20,633   21,121   20,872   19,401
  Period-end balance
   sheet:
   Loans held for sale     40,631   44,014   33,996   29,508   21,940
   Loans held in
    portfolio, net of
    allowance for loan
    and lease losses      152,186  148,877  145,875  146,157  144,208
   Interest-earning
    assets                245,345  242,451  231,214  230,167  230,852
   Assets                 283,203  276,970  268,298  262,631  261,298
   Interest-bearing
    deposits              119,952  119,394  118,001  112,969  108,441
   Noninterest-bearing
    deposits               46,505   40,478   37,515   27,639   20,628
   Stockholders' equity    21,061   20,687   20,134   20,178   19,597

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

(2) Excludes nonaccrual loans held for sale.

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

(4) Estimate of what the total risk-based capital ratio would be
    if Washington Mutual, Inc. was a bank holding company that
    complies with Federal Reserve Board capital requirements.


WM-5
                       Washington Mutual, Inc.
                    Selected Financial Information
                        (dollars in millions)
                             (unaudited)

                                                    Quarter Ended
----------------------------------------------------------------------
                                                    June 30, 2003
                                                              Interest
                                                              Income/
                                                 Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
   Federal funds sold and securities purchased
      under resale agreements                     $3,448  1.29%   $11
   Available-for-sale securities(1):
      Mortgage-backed securities                  24,087  5.22    314
      Investment securities                       14,969  4.15    155
   Loans held for sale(2)                         46,727  5.36    626
   Loans held in portfolio(2):
      Loans secured by real estate:
         Home loans                               83,426  4.95  1,033
         Purchased specialty mortgage finance     10,475  5.50    144
---------------------------------------------------------      -------
            Total home loans                      93,901  5.01  1,177
         Home construction loans:
            Builder (3)                            1,103  4.77     13
            Custom (4)                               927  7.48     17
         Home equity loans and lines of credit:
            Banking subsidiaries                  19,238  5.13    246
            Washington Mutual Finance              2,041 11.77     60
         Multi-family                             19,036  5.34    255
         Other real estate                         7,306  6.25    114
---------------------------------------------------------      -------
           Total loans secured by real estate    143,552  5.25  1,882
      Consumer:
         Banking subsidiaries                      1,253  8.93     28
         Washington Mutual Finance                 1,732 19.61     85
      Commercial business                          4,952  4.38     55
---------------------------------------------------------      -------
         Total loans held in portfolio           151,489  5.41  2,050
  Other                                            5,301  4.61     61
---------------------------------------------------------      -------
                Total interest-earning assets    246,021  5.23  3,217
Noninterest-earning assets:
   Mortgage servicing rights                       4,754
   Goodwill                                        6,253
   Other                                          27,090
---------------------------------------------------------
         Total assets                           $284,118
=========================================================

Liabilities
Interest-bearing liabilities:
   Deposits:
      Interest-bearing checking                  $60,597  1.74    262
      Savings accounts and money market deposit
       accounts                                   28,229  0.98     69
      Time deposit accounts                       31,318  2.77    217
---------------------------------------------------------      -------
         Total interest-bearing deposits         120,144  1.83    548
   Federal funds purchased and commercial paper    3,843  1.37     13
   Securities sold under agreements to
    repurchase                                    20,040  2.66    134
   Advances from Federal Home Loan Banks          51,916  2.56    334
   Other                                          14,898  4.37    163
---------------------------------------------------------      -------
         Total interest-bearing liabilities      210,841  2.26  1,192
                                                               -------
Noninterest-bearing sources:
   Noninterest-bearing deposits                   43,536
   Other liabilities                               8,548
   Stockholders' equity                           21,193
---------------------------------------------------------
            Total liabilities and stockholders'
             equity                             $284,118
=========================================================

   Net interest spread and net interest income            2.97 $2,025
                                                               =======
   Impact of noninterest-bearing sources                  0.33
   Net interest margin                                    3.30

                                                     Quarter Ended
----------------------------------------------------------------------
                                                     Mar. 31, 2003
                                                              Interest
                                                              Income/
                                                 Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
   Federal funds sold and securities purchased
      under resale agreements                     $5,132  1.25%   $16
   Available-for-sale securities(1):
      Mortgage-backed securities                  26,209  5.30    347
      Investment securities                       14,989  4.55    170
   Loans held for sale(2)                         42,327  5.57    589
   Loans held in portfolio(2):
      Loans secured by real estate:
         Home loans                               83,105  5.21  1,083
         Purchased specialty mortgage finance     10,075  5.95    150
---------------------------------------------------------      -------
            Total home loans                      93,180  5.29  1,233
         Home construction loans:
            Builder (3)                            1,056  5.03     13
            Custom (4)                               920  7.75     18
         Home equity loans and lines of credit:
            Banking subsidiaries                  17,247  5.43    234
            Washington Mutual Finance              1,958 11.94     58
         Multi-family                             18,476  5.66    262
         Other real estate                         7,747  6.34    122
---------------------------------------------------------      -------
           Total loans secured by real estate    140,584  5.52  1,940
      Consumer:
         Banking subsidiaries                      1,343  8.90     30
         Washington Mutual Finance                 1,720 19.30     83
      Commercial business                          4,735  4.47     53
---------------------------------------------------------      -------
         Total loans held in portfolio           148,382  5.68  2,106
  Other                                            4,651  5.56     64
---------------------------------------------------------      -------
                Total interest-earning assets    241,690  5.45  3,292
Noninterest-earning assets:
   Mortgage servicing rights                       5,456
   Goodwill                                        6,267
   Other                                          27,437
---------------------------------------------------------
         Total assets                           $280,850
=========================================================

Liabilities
Interest-bearing liabilities:
   Deposits:
      Interest-bearing checking                  $58,222  1.92    276
      Savings accounts and money market deposit
       accounts                                   27,968  1.07     74
      Time deposit accounts                       32,866  2.93    237
---------------------------------------------------------      -------
         Total interest-bearing deposits         119,056  2.00    587
   Federal funds purchased and commercial paper    2,385  1.42      9
   Securities sold under agreements to
    repurchase                                    20,371  2.76    140
   Advances from Federal Home Loan Banks          55,844  2.72    378
   Other                                          15,487  4.16    161
---------------------------------------------------------      -------
         Total interest-bearing liabilities      213,143  2.41  1,275
                                                               -------
Noninterest-bearing sources:
   Noninterest-bearing deposits                   38,851
   Other liabilities                               8,223
   Stockholders' equity                           20,633
---------------------------------------------------------
       Total liabilities and stockholders'
             equity                             $280,850
=========================================================

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

                                                     Quarter Ended
----------------------------------------------------------------------
                                                     June 30, 2002
                                                              Interest
                                                              Income/
                                                 Balance Rate Expense
----------------------------------------------------------------------
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
   Federal funds sold and securities purchased
      under resale agreements                     $1,995  1.89%   $10
   Available-for-sale securities(1):
      Mortgage-backed securities                  22,471  5.96    335
      Investment securities                       38,436  4.97    477
   Loans held for sale(2)                         22,211  6.50    361
   Loans held in portfolio(2):
      Loans secured by real estate:
         Home loans                               86,315  6.02  1,299
         Purchased specialty mortgage finance      9,028  6.39    144
---------------------------------------------------------      -------
            Total home loans                      95,343  6.05  1,443
         Home construction loans:
            Builder (3)                            1,379  6.15     21
            Custom (4)                               893  8.58     19
         Home equity loans and lines of credit:
            Banking subsidiaries                  12,819  6.01    193
            Washington Mutual Finance              2,116 12.16     64
         Multi-family                             17,425  5.98    261
         Other real estate                         8,410  6.71    142
---------------------------------------------------------      -------
           Total loans secured by real estate    138,385  6.19  2,143
      Consumer:
         Banking subsidiaries                      2,719  9.31     63
         Washington Mutual Finance                 1,702 18.68     79
      Commercial business                          3,862  5.13     50
---------------------------------------------------------      -------
         Total loans held in portfolio           146,668  6.37  2,335
  Other                                            4,723  5.67     67
---------------------------------------------------------      -------
                Total interest-earning assets    236,504  6.06  3,585
Noninterest-earning assets:
   Mortgage servicing rights                       7,828
   Goodwill                                        6,152
   Other                                          16,365
---------------------------------------------------------
         Total assets                           $266,849
=========================================================

Liabilities
Interest-bearing liabilities:
   Deposits:
      Interest-bearing checking                  $36,991  2.65    245
      Savings accounts and money market deposit
       accounts                                   32,249  1.51    122
      Time deposit accounts                       38,991  3.09    299
---------------------------------------------------------      -------
         Total interest-bearing deposits         108,231  2.47    666
   Federal funds purchased and commercial paper    3,562  1.96     17
   Securities sold under agreements to
    repurchase                                    35,812  2.44    218
   Advances from Federal Home Loan Banks          59,651  2.75    410
   Other                                          13,976  4.98    174
---------------------------------------------------------      -------
         Total interest-bearing liabilities      221,232  2.69  1,485
                                                               -------
Noninterest-bearing sources:
   Noninterest-bearing deposits                   22,417
   Other liabilities                               3,799
   Stockholders' equity                           19,401
---------------------------------------------------------
            Total liabilities and stockholders'
             equity                             $266,849
=========================================================

   Net interest spread and net interest income            3.37 $2,100
                                                               =======
   Impact of noninterest-bearing sources                  0.17
   Net interest margin                                    3.54
----------------------
(1) The average balance and yield are based on average amortized
    cost balances.

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

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

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


WM-6


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


                                     Six Months Ended
----------------------------------------------------------------------
                        June 30, 2003 June 30, 2002
                                    Interest                  Interest
                                    Income/                   Income/
                    Balance   Rate  Expense   Balance   Rate  Expense
----------------------------------------------------------------------
Average Balances and Weighted
 Average Interest Rates
Assets
Interest-earning
 assets:
   Federal funds
    sold and
    securities
    purchased
    under resale
    agreements       $4,286   1.27%     $27 $1,569   1.79%     $14
   Available-for-
    sale
    securities(1):
      Mortgage-
       backed
       securities    25,142   5.26      661    23,852   5.66      676
      Investment
       securities    14,979   4.35      325    43,822   4.96    1,083
   Loans held for
    sale(2)          44,539   5.46    1,216    24,712   6.51      804
   Loans held in
    portfolio(2):
     Loans
      secured by
      real estate:
       Home loans    83,255   5.08    2,116    87,255   6.10    2,661
       Purchased
        specialty
        mortgage
        finance      10,286   5.72      294     8,785   6.64      292
------------------ ---------        -------- ---------        --------
         Total
          home
          loans      93,541   5.15    2,410    96,040   6.15    2,953
       Home
        construction
        loans:
         Builder(3)   1,080   4.90       27     1,473   6.09       44
         Custom(4)      923   7.61       35       911   8.14       37
       Home equity
        loans and
        lines of
        credit:
         Banking
          sub-
          sidiaries  18,248   5.28      480    11,966   6.01      360
         Washington
          Mutual
          Finance     2,004  11.91      118     2,106  12.05      127
       Multi-family  18,758   5.50      516    17,483   6.16      539
       Other real
        estate        7,525   6.30      237     8,417   6.88      289
------------------ ---------        -------- ---------        --------
         Total loans
          secured
          by real
          estate    142,079   5.39    3,823   138,396   6.29    4,349
   Consumer:
    Banking
     subsidiaries     1,293   8.94       57     2,784   9.32      130
    Washington Mutual
     Finance          1,728  19.57      168     1,715  18.59      159
   Commercial
    business          4,844   4.42      107     4,202   5.12      108
------------------ ---------        -------- ---------        --------
     Total loans
      held in
      portfolio     149,944   5.55    4,155   147,097   6.45    4,746
Other                 4,978   5.05      125     4,737   6.15      145
------------------ ---------        -------- ---------        --------
         Total
          interest-
          earning
          assets    243,868   5.34    6,509   245,789   6.08    7,468
Noninterest-
 earning assets:
   Mortgage
    servicing
    rights            5,103                     7,419
   Goodwill           6,259                     5,875
   Other             27,246                    16,468
------------------ ---------                 ---------
     Total assets  $282,476 $275,551
================== =========                 =========

Liabilities
Interest-bearing
 liabilities:
   Deposits:
    Interest-
     bearing
     checking       $59,416   1.83      538   $30,468   2.70      407
   Savings accounts
    and money
    market deposit
    accounts          28,056   1.03      143    33,771   1.54      262
   Time deposit
    accounts          32,088   2.85      454    40,504   3.20      648
------------------ ---------        -------- ---------        --------
     Total interest-
      bearing
      deposits       119,560   1.91    1,135   104,743   2.52    1,317
   Federal funds
    purchased and
    commercial
    paper             3,118   1.42       22     4,558   1.94       45
   Securities sold
    under
    agreements to
    repurchase       20,205   2.71      274    44,582   1.95      431
   Advances from
    Federal Home
    Loan Banks       53,869   2.64      712    62,461   2.69      833
   Other             15,208   4.26      324    14,066   4.96      346
------------------ ---------        -------- ---------        --------
     Total interest-
      bearing
      liabilities   211,960   2.34    2,467   230,410   2.59    2,972
                                    --------                  --------
Noninterest-
 bearing sources:
   Noninterest-
    bearing
    deposits         41,249                    22,526
   Other
    liabilities       8,369                     3,669
   Stockholders'
    equity           20,898                    18,946
------------------ ---------                 ---------
     Total
      liabilities
      and
      stockholders'
      equity       $282,476 $275,551
================== =========                 =========

   Net interest
    spread and net
    interest
    income                    3.00   $4,042             3.49   $4,496
                                    ========                  ========
   Impact of
    noninterest-
    bearing
    sources                   0.31                      0.16
   Net interest
    margin                    3.31                      3.65

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

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

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

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


WM-7

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


                              Quarter Ended          Six Months Ended
----------------------------------------------------------------------
                       June 30,  Mar. 31, June 30,  June 30,  June 30,
                         2003      2003     2002      2003      2002
----------------------------------------------------------------------
Loan Volume
  Home loans:
   Adjustable rate     $ 24,847 $ 23,431 $16,093 $ 48,278 $ 32,701
   Fixed rate            78,650    69,510   30,999   148,160    70,230
   Specialty mortgage
    finance(1)            4,658     4,529    3,074     9,187     6,201
---------------------- -------- --------- -------- --------- ---------
      Total home loan
       volume           108,155    97,470   50,166   205,625   109,132
 Home construction
  loans:
   Builder(2)               606       477      519     1,083       885
   Custom(3)                273       163      206       436       354
 Home equity loans and
  lines of credit:
   Banking subsidiaries   7,152     5,196    3,679    12,348     7,159
   Washington Mutual
    Finance                 287       287      349       574       591
 Multi-family             2,022     1,797    1,242     3,819     2,106
 Other real estate          595       281      324       876       668
---------------------- -------- --------- -------- --------- ---------
      Total loans
       secured by real
       estate           119,090   105,671   56,485   224,761   120,895
 Consumer:
   Banking subsidiaries      61        59      231       120       469
   Washington Mutual
    Finance                 462       424      471       886       873
 Commercial business        709       466      592     1,175     1,229
---------------------- -------- --------- -------- --------- ---------
     Total loan volume $120,322 $106,620 $57,779 $226,942 $123,466
====================== ======== ========= ======== ========= =========
Loan Volume by Channel
 Originated            $ 73,711 $ 61,288 $39,667 $134,999 $ 83,205
 Purchased/Correspondent 46,611    45,332   18,112    91,943    40,261
---------------------- -------- --------- -------- --------- ---------
     Total loan volume
      by channel       $120,322 $106,620 $57,779 $226,942 $123,466
====================== ======== ========= ======== ========= =========
Refinancing Activity(4)
 Home loan refinancing $ 81,511 $ 72,448 $27,160 $153,959 $ 67,250
 Home construction loans     13        12       15        25        28
 Home equity loans and
  lines of credit and
  consumer                1,203       693      687     1,896     1,328
 Multi-family and other
  real estate               893       707      536     1,600       858
---------------------- -------- --------- -------- --------- ---------
     Total refinancing $ 83,620 $ 73,860 $28,398 $157,480 $ 69,464
====================== ======== ========= ======== ========= =========
Home Loan Volume by Index:
  Short-term adjustable-
   rate mortgages:
    Treasury indices   $  5,510 $  4,539 $ 5,002 $ 10,049 $ 11,482
    COFI                    198       249    1,444       447     2,172
    Other                   223       218      122       441       212
---------------------- -------- --------- -------- --------- ---------
      Total short-term
       adjustable-rate
       mortgages          5,931     5,006    6,568    10,937    13,866
 Medium-term adjustable-
  rate mortgages         22,070    21,530   12,317    43,600    24,149
 Fixed-rate mortgages    80,154    70,934   31,281   151,088    71,117
---------------------- -------- --------- -------- --------- ---------
      Total home loan
       volume          $108,155 $ 97,470 $50,166 $205,625 $109,132
====================== ======== ========= ======== ========= =========

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

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

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

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


WM-8

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

                               Change from
                                 Mar. 31,
                                  2003
                               to June 30, June 30,  Mar. 31, June 30,
                                  2003       2003      2003     2002
-------------------------------- -------- --------- ------------------
Loans by Property Type and Mortgage-
 Backed Securities ("MBS")
   Loans held in portfolio:
      Loans secured by real
       estate:
         Home loans              $    94 $ 83,839 $ 83,745 $ 84,896
         Purchased specialty
          mortgage finance           232    10,836    10,604    8,808
-------------------------------- -------- --------- -------- ---------
            Total home loans         326    94,675    94,349   93,704
      Home construction loans:
         Builder(1)                   74     1,121     1,047    1,236
         Custom(2)                    37       963       926      897
      Home equity loans and
       lines of credit:
         Banking subsidiaries      2,416    20,505    18,089   13,553
         Washington Mutual
          Finance                     56     2,073     2,017    2,229
      Multi-family                   864    19,482    18,618   17,567
      Other real estate             (228)    7,122     7,350    8,379
-------------------------------- -------- --------- -------- ---------
            Total loans secured
             by real estate        3,545   145,941   142,396  137,565
      Consumer:
         Banking subsidiaries        (73)    1,207     1,280    2,664
         Washington Mutual
          Finance                     25     1,743     1,718    1,706
      Commercial business           (188)    4,975     5,163    3,938
-------------------------------- -------- --------- -------- ---------
            Total loans held in
             portfolio             3,309   153,866   150,557  145,873
   Less: allowance for loan and
    lease losses                       -    (1,680)   (1,680)  (1,665)
   Loans securitized and
    retained as MBS                 (893)   22,776    23,669   19,344
-------------------------------- -------- --------- -------- ---------
            Total net loans held
             in portfolio and
             loans securitized
               and retained as
                MBS                2,416   174,962   172,546  163,552
   Loans held for sale(3)         (3,383)   40,631    44,014   21,940
-------------------------------- -------- --------- -------- ---------
            Total net loans and
             loans securitized
             and retained as MBS    (967)  215,593   216,560  185,492
   Purchased MBS                  (1,000)    2,099     3,099    5,354
-------------------------------- -------- --------- -------- ---------
            Total net loans and
             MBS                 $(1,967) $217,692 $219,659 $190,846
================================ ======== ========= ======== =========

(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 $40.63 billion, $44.02
    billion and $21.95 billion as of June 30, 2003, March 31, 2003 and
    June 30, 2002.


WM-9

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

                                          Change from
                                            Mar. 31,
                                            2003 to
                                            June 30,  June 30,   % of
                                              2003     2003      total
----------------------------------------------------------------------
Loans Secured by Real Estate and MBS
   Short-term adjustable-rate loans and
    MBS:
      COFI                                 $(2,198) $ 24,065      12%
      Treasury indices                       2,694    47,001      22
      Other                                    773    30,401(1)   14
----------------------------------------------------------------------
         Total short-term adjustable-rate
          loans and MBS                      1,269   101,467      48
   Medium-term adjustable-rate loans and MBS  (426)   53,068      25
   Fixed-rate loans                         (2,945)   52,870      25
   Fixed-rate MBS                              403     3,938       2
----------------------------------------------------------------------
         Total loans secured by real estate
          and MBS                          $(1,699) $211,343     100%
======================================================================


                                 Mar. 31,    % of  June 30,    % of
                                   2003      total   2002      total
----------------------------------------------------------------------
Loans Secured by Real Estate and
 MBS
   Short-term adjustable-rate
    loans and MBS:
      COFI                       $ 26,263      12% $ 31,293      17%
      Treasury indices             44,307      21    37,527      20
      Other                        29,628(1)   14    23,749(1)   13
----------------------------------------------------------------------
         Total short-term
          adjustable-rate loans
          and MBS                 100,198      47    92,569      50
   Medium-term adjustable-rate
    loans and MBS                  53,494      25    49,835      27
   Fixed-rate loans                55,815      26    37,211      20
   Fixed-rate MBS                   3,535       2     4,511       3
----------------------------------------------------------------------
         Total loans secured by
          real estate and MBS    $213,042     100% $184,126     100%
======================================================================

(1) The balance included the following amount of securities retained
    which bear COFI to LIBOR basis risk (dollars in billions):

                   June 30, 2003:  $ 2.8
                   Mar. 31, 2003:    2.8
                   June 30, 2002:    2.8

                                             Mar. 31,     Dec. 31,
                                             2003 to      2002 to
                                             June 30,     June 30,
                                               2003         2003
----------------------------------------------------------------------
Rollforward of Loans Held for Sale
    Balance, beginning of period            $ 44,014 $  33,996
       Loans originated and purchased         94,708      177,282
       Loans sold and other                  (98,091)    (170,647)
----------------------------------------------------------------------
    Balance, end of period                  $ 40,631 $  40,631
======================================================================

Rollforward of Loans Held in Portfolio
    Balance, beginning of period            $150,557 $ 147,528
       Loans originated and purchased         25,614       49,660
       Loan payments and other               (22,305)     (43,322)
----------------------------------------------------------------------
    Balance, end of period                  $153,866 $ 153,866
======================================================================


WM-10

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

                                                 Mar. 31,    Dec. 31,
                                                 2003 to     2002 to
                                                 June 30,    June 30,
                                                   2003        2003
----------------------------------------------------------------------
Rollforward of Mortgage Servicing Rights
 ("MSR")(1)
   Balance, beginning of period                $   5,210 $   5,341
      Home loans:
         Additions                                   976        1,915
         Amortization                             (1,032)      (2,000)
         Impairment                                 (309)        (272)
         Sales of MSR                               (247)        (388)
      Net change in commercial real estate MSR         -            2
----------------------------------------------------------------------
   Balance, end of period(2)                   $   4,598 $   4,598
======================================================================

Rollforward of Valuation Allowance for MSR Impairment
   Balance, beginning of period                $   3,864 $   4,521
      Impairment                                     309          272
      Other than temporary impairment               (579)      (1,115)
      Sales of MSR                                  (150)        (234)
----------------------------------------------------------------------
   Balance, end of period                      $   3,444 $   3,444
======================================================================

Rollforward of Loans Serviced for Others
   Balance, beginning of period                $ 591,917 $ 604,504
      Home loans:
         Additions                               105,992      185,508
         Sales of servicing                       (2,960)      (2,960)
         Loan payments and other                (110,867)    (203,423)
      Net change in commercial real estate
       loans serviced for others                    (259)         194
----------------------------------------------------------------------
   Balance, end of period                      $ 583,823 $ 583,823
======================================================================

                                                             June 30,
                                                               2003
                                                             Balance
----------------------------------------------------------------------
Total Servicing Portfolio
      Loans serviced for others                             $ 583,823
      Servicing on retained MBS                                 4,293
      Servicing on owned loans                                180,377
      Subservicing portfolio                                    2,453
----------------------------------------------------------------------
   Total servicing portfolio                                $ 770,946
======================================================================

                                                   June 30, 2003
                                               ----------------------
                                                            Weighted
                                                Unpaid       Average
                                               Principal    Servicing
                                                Balance        Fee
----------------------------------------------------------------------
Loans Serviced for Others by Loan Type                     (in basis
                                                             points,
                                                           annualized)

      Government                               $  74,618        53
      Agency                                     387,922        30
      Private                                    106,449        40
      Specialty home loans                        14,834        50
----------------------------------------------------------------------
   Total loans serviced for others(3)          $ 583,823        36
======================================================================

(1) Net of valuation allowance.

(2) At June 30, 2003, aggregate mortgage servicing rights fair value
    was $4.63 billion.

(3) Weighted average coupon (annualized) was 6.44% at June 30, 2003.


WM-11


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

                                          Quarter Ended
----------------------------------------------------------------------
                               June    Mar.   Dec.     Sept.    June
                                30,     31,    31,      30,      30,
                               2003    2003   2002     2002     2002
----------------------------------------------------------------------
Home Loan Mortgage Banking
 Income (Expense)
   Loan servicing fees       $   593 $ 613 $ 628 $   508 $   560
   Loan subservicing fees          7      5     14       34       38
   Amortization of mortgage
    servicing rights          (1,032)  (969)  (920)    (713)    (504)
   Mortgage servicing rights
    (impairment) recovery       (309)    37   (308)  (1,849)  (1,107)
   Other, net                   (168)  (137)  (134)     (97)     (78)
----------------------------------------------------------------------
    Net home loan servicing
     income (expense)           (909)  (451)  (720)  (2,117)  (1,091)
   Revaluation gain (loss)
    from derivatives:
    Mortgage servicing rights
     risk management             745    412    109    1,694      857
    Other mortgage banking
     risk management            (147)  (195)  (128)       -        -
----------------------------------------------------------------------
      Total revaluation gain
       (loss) from
       derivatives               598    217    (19)   1,694      857
   Net settlement income from
    certain interest-rate swaps   84    140    158      116      101
   Gain from mortgage
    loans(1)                     622    587    392      418      220
   GNMA pool buy-out income      219    154    119      109       78
   Loan related income            91     75     76       60       61
   Gain (loss) from sale of
    originated mortgage-backed
    securities                     -      1     15       (1)      18
----------------------------------------------------------------------
      Total home loan
       mortgage banking
       income                    705    723     21      279      244
----------------------------------------------------------------------
   Impact of other mortgage servicing rights
    risk management instruments(2):
     Gain from certain
      available-for-sale
      securities                 140      -    407      388        -
     Gain on extinguishment
      of securities sold
      under agreements to
      repurchase                   -      -      -      136      121
----------------------------------------------------------------------

        Total home loan
         mortgage banking
         income, net of other
         mortgage servicing
         rights risk
         management
         instruments         $   845 $ 723 $ 428 $   803 $   365
======================================================================

                                                  Six Months Ended
----------------------------------------------------------------------
                                                   June 30,  June 30,
                                                      2003     2002
----------------------------------------------------------------------
Home Loan Mortgage Banking
 Income (Expense)
   Loan servicing fees                              $ 1,206 $ 1,100
   Loan subservicing fees                                12       53
   Amortization of mortgage
    servicing rights                                 (2,000)    (983)
   Mortgage servicing rights
    impairment                                         (272)  (1,062)
   Other, net                                          (306)    (140)
----------------------------------------------------------------------
      Net home loan servicing expense                (1,360)  (1,032)
   Revaluation gain (loss)
    from derivatives:
      Mortgage servicing
       rights risk management                         1,157      842
      Other mortgage banking
       risk management                                 (342)       -
----------------------------------------------------------------------
          Total revaluation
           gain from
           derivatives                                  815      842
   Net settlement income from
    certain interest-rate
    swaps                                               224      107
   Gain from mortgage
    loans(1)                                          1,210      471
   GNMA pool buy-out income                             373       91
   Loan related income                                  166      132
   Gain from sale of
    originated mortgage-backed
    securities                                            1       20
----------------------------------------------------------------------
        Total home loan
         mortgage banking
         income                                       1,429      631
----------------------------------------------------------------------
   Impact of other mortgage servicing rights
    risk management instruments(2):
       Gain from certain
        available-for-sale
        securities                                      140        -
       Gain on extinguishment of securities
        sold under agreements to repurchase               -      121
----------------------------------------------------------------------
             Total home loan
              mortgage banking income,
              net of other mortgage servicing
              rights risk management
              instruments                           $ 1,569 $   752
======================================================================

(1) The Company's policy of recording the fair value of rate lock
    commitments on its Consolidated Statements of Financial Condition
    has the effect of recognizing gain from mortgage loans before the
    loans are sold. Rate lock commitment volume, adjusted for actual
    and anticipated fallout factors, totaled $101.08 billion and
    $194.74 billion for the three and six months ended June 30, 2003.

(2) 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-12

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


                                         June 30,  Dec. 31,  June 30,
                                           2003      2002      2002
----------------------------------------------------------------------
Deposits
   Deposits:
      Checking accounts:
         Interest-bearing               $ 61,440 $ 56,132 $ 41,509
         Noninterest-bearing              43,702    35,730    20,402
----------------------------------------------------------------------
            Total checking accounts      105,142    91,862    61,911
      Savings and money market
       deposit accounts                   30,650    29,886    31,045
      Time deposit accounts(1)            30,665    33,768    36,113
----------------------------------------------------------------------
               Total deposits(2)        $166,457 $155,516 $129,069
======================================================================

(1) Weighted average remaining maturity of time deposits was 16 months
    at June 30, 2003, 15 months at December 31, 2002 and 14 months at
    June 30, 2002.

(2) Includes custodial and escrow deposits of $32.95 billion at June
    30, 2003, $25.90 billion at December 31, 2002 and $9.44 billion at
    June 30, 2002.

             June 30,   Mar. 31,    Dec. 31,    Sept. 30,   June 30,
               2003       2003        2002        2002        2002
----------------------------------------------------------------------
Retail Checking Accounts(1)

Accounts,
 beginning
 of period  7,461,320  7,258,555   7,091,568   6,817,543   6,536,635

  Net accounts
   opened
   during the
   quarter    176,594    202,765     166,987     274,025     280,908
----------------------------------------------------------------------
Accounts,
 end of
 period     7,637,914  7,461,320   7,258,555   7,091,568   6,817,543
======================================================================

(1) Retail checking accounts exclude commercial business accounts. The
    information provided refers to the number of accounts, not dollar
    amounts.


WM-13

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

                                             Quarter Ended
----------------------------------------------------------------------
                                June    Mar.    Dec.   Sept.   June
                                 30,     31,     31,    30,     30,
                                2003    2003    2002   2002    2002
----------------------------------------------------------------------
Allowance for Loan and Lease
 Losses
   Balance, beginning of
    quarter                   $1,680 $1,653 $1,705 $1,665 $1,621
   Allowance transferred to
    loans held for sale            -      (3)    (17)     (7)      -
   Allowance for certain
    loan commitments               -       -     (52)      -       -
   Provision for loan and
    lease losses                 118     125     125     135     160
----------------------------- ------- ------- ------- ------- ------
                               1,798   1,775   1,761   1,793   1,781
   Loans charged off:
      Loans secured by real
       estate:
         Home loans               (9)    (15)    (23)     (9)    (11)
         Purchased specialty
          mortgage finance        (9)    (10)     (7)     (9)     (8)
----------------------------- ------- ------- ------- ------- ------
               Total home
                loan charge-
                offs             (18)    (25)    (30)    (18)    (19)
         Home equity loans
          and lines of
          credit:
            Banking
             subsidiaries         (4)     (4)     (9)     (3)     (1)
            Washington
             Mutual Finance       (1)     (3)     (4)     (2)     (3)
         Multi-family              -       -       -      (1)      -
         Other real estate       (21)    (10)     (5)    (11)    (32)
----------------------------- ------- ------- ------- ------- ------
               Total loans
                secured by
                real estate      (44)    (42)    (48)    (35)    (55)
      Consumer:
         Banking
          subsidiaries           (18)    (17)    (16)    (15)    (20)
         Washington Mutual
          Finance                (42)    (40)    (43)    (42)    (44)
      Commercial business        (31)    (14)    (20)    (17)    (19)
----------------------------- ------- ------- ------- ------- ------
               Total loans
                charged off     (135)   (113)   (127)   (109)   (138)
   Recoveries of loans
    previously charged off:
      Loans secured by real
       estate:
         Home loans                2       -       -       2       -
         Purchased specialty
          mortgage finance         1       1       -       -       -
         Multi-family              -       -       -       1       -
         Other real estate         2       4       5       6       1
----------------------------- ------- ------- ------- ------- ------
               Total loans
                secured by
                real estate        5       5       5       9       1
      Consumer:
         Banking
          subsidiaries             3       3       5       3       3
         Washington Mutual
          Finance                  6       6       4       5       5
      Commercial business          3       4       5       4      13
----------------------------- ------- ------- ------- ------- ------
                Total
                 recoveries of
                 loans
                 previously
                 charged off      17      18      19      21      22
----------------------------- ------- ------- ------- ------- ------
      Net charge-offs           (118)    (95)   (108)    (88)   (116)
----------------------------- ------- ------- ------- ------- ------
   Balance, end of quarter    $1,680 $1,680 $1,653 $1,705 $1,665
============================= ======= ======= ======= ======= ======

   Net charge offs
    (annualized) as a
    percentage
     of average loans held
      in portfolio              0.31%   0.26%   0.29%   0.24%   0.32%
   Allowance as a percentage
    of total loans held in
    portfolio                   1.09    1.12    1.12    1.15    1.14


WM-14

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


                                     June   Mar.   Dec.  Sept.   June
                                      30,    31,    31,    30,    30,
                                     2003   2003   2002   2002   2002
---------------------------------------------------------------------
Nonperforming Assets and
 Restructured Loans
  Nonaccrual loans(1):
    Home loans                       $804 $954 $1,068 $1,117 $1,136
    Purchased specialty mortgage
     finance                          483    479    438    358    359
---------------------------------- ------ ------ ------ ------ ------
        Total home loan nonaccrual
         loans                      1,287  1,433  1,506  1,475  1,495
    Home construction loans:
        Builder(2)                     31     38     42     48     44
        Custom(3)                       9      9      7      6      8
    Home equity loans and lines of
     credit:
        Banking subsidiaries           49     44     36     35     35
        Washington Mutual Finance      41     41     37     35     31
    Multi-family                       54     49     50     58     64
    Other real estate                 369    402    413    356    371
---------------------------------- ------ ------ ------ ------ ------
        Total nonaccrual loans
         secured by real estate     1,840  2,016  2,091  2,013  2,048
    Consumer:
        Banking subsidiaries           13     10     18     13     13
        Washington Mutual Finance      64     67     69     76     75
    Commercial business                79     73     79     86     96
---------------------------------- ------ ------ ------ ------ ------
       Total nonaccrual loans held
        in portfolio                1,996  2,166  2,257  2,188  2,232
  Foreclosed assets                   317    334    336    309    274
---------------------------------- ------ ------ ------ ------ ------
       Total nonperforming assets  $2,313 $2,500 $2,593 $2,497 $2,506
       As a percentage of total
        assets                       0.82%  0.90%  0.97%  0.95%  0.96%

  Restructured loans                  $89 $99 $98 $112 $119
---------------------------------- ------ ------ ------ ------ ------
        Total nonperforming assets
         and restructured loans    $2,402 $2,599 $2,691 $2,609 $2,625
================================== ====== ====== ====== ====== ======

(1) Excludes nonaccrual loans held for sale of $73 million at June 30,
    2003. Prior periods also reflect the exclusion of nonaccrual loans
    held for sale of $72 million, $119 million, $105 million and $114
    million at March 31, 2003, December 31, 2002, September 30, 2002
    and June 30, 2002. Loans held for sale are accounted for at lower
    of aggregate cost or market value, with valuation changes included
    as adjustments to gain from mortgage loans.

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

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


    CONTACT: Washington Mutual
             Media Contact:
             Alan Gulick, 206-377-3637
             alan.gulick@wamu.net
             or
             Investor Contacts:
             JoAnn DeGrande, 206-461-3186
             joann.degrande@wamu.net
             or
             Ruthanne King, 206-461-6421
             ruthanne.king@wamu.net

    SOURCE: Washington Mutual, Inc.