SEATTLE, Oct 05, 2007 (BUSINESS WIRE) -- Washington Mutual, Inc. (NYSE:WM) announced today that a weakening
housing market and disruptions in the secondary market through the end
of the third quarter will result in a decline in net income of
approximately 75% from the prior year quarter, subject to the
finalization of third-quarter 2007 results.
The expected decline in third quarter net income results
principally from the following items that are reported on a pre-tax
-- The third-quarter loan loss provision will be
approximately $975 million, which exceeds net charge-offs
for the quarter by approximately $550 million. The
provision reflects ongoing weakness in the housing market,
primarily as it affects subprime and home equity loans, as
well as growth in the company's loan portfolio;
-- Downward adjustments of approximately $150 million,
related to approximately $17 billion in held-for-sale
mortgage loans that were transferred to the company's
investment portfolio due to secondary market conditions;
-- Net losses of approximately $150 million in the company's
trading securities portfolio, including market valuation
adjustments on capital markets assets, retained interests
on credit cards and other residual interests; and,
-- Impairment losses of approximately $110 million on
investment grade mortgage-backed securities in the
company's available for sale portfolio.
WaMu Chairman and CEO Kerry Killinger said, "While we're
disappointed with our anticipated third-quarter results, we look
forward to an improved fourth quarter as we continue to see good
operating performance in our Retail Banking, Card Services and
Commercial Group businesses."
Killinger added that the company continues to have the liquidity
and capital necessary to grow the company's businesses and support its
current dividend, as it continues to execute its long-term strategic
Washington Mutual is providing preliminary information about its
third-quarter results prior to its scheduled earnings announcement
date in light of the impact of the very challenging market
environment. No further details will be provided concerning the
company's third-quarter performance until its regularly scheduled
earnings release on Oct. 17, 2007. In the conference call following
its earnings release on Oct. 17, the company will update its 2007
earnings drivers, including its updated expectations for loan loss
provisioning levels in the fourth quarter of 2007.
WaMu, through its subsidiaries, is one of the nation's leading
consumer and small business banks. At June 30, 2007, WaMu and its
subsidiaries had assets of $312.22 billion. The company has a history
dating back to 1889 and its subsidiary banks currently operate
approximately 2,700 consumer and small business banking stores
throughout the nation. WaMu's press releases are available at
This document contains forward-looking statements, which are not
historical facts and pertain to future operating results. These
forward-looking statements are within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements about our
plans, objectives, expectations and intentions and other statements
contained in this document that are not historical facts. When used in
this presentation, the words "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," or words of similar
meaning, or future or conditional verbs, such as "will," "would,"
"should," "could," or "may" are generally intended to identify
forward-looking statements. These forward-looking statements are
inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control.
In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions
that are subject to change.
SOURCE: Washington Mutual, Inc.
Washington Mutual, Inc.
Libby Hutchinson, 206-500-2770
Investor Relations Contact:
212-702-6955 (New York)