SEATTLE & MELBOURNE, Australia, Dec 11, 2001 (BUSINESS WIRE) --
The National retains mortgage servicing rights for measured exit Washington
Mutual, Inc. (NYSE: WM) today signed a definitive agreement to acquire for cash
the operating assets of HomeSide Lending, Inc., the U.S. mortgage unit of the
National Australia Bank Limited (the "National") (ASX: NAB; NYSE: NAB).
In addition, Washington Mutual will subservice HomeSide's US$187.4 (A$363.9)
billion mortgage servicing portfolio, representing approximately 2 million
The National will retain its financial interest in the mortgage servicing rights
to be subserviced by Washington Mutual, the related hedges and certain other
HomeSide assets and liabilities. The mortgage servicing rights will be in
run-off mode and will continue to be managed by a National team assisted by
external consultants including BlackRock and Cohane Rafferty Securities.
Washington Mutual will acquire the HomeSide servicing technology and other
corporate assets. The acquisition includes HomeSide's wholesale, correspondent
and consumer direct production channels and servicing sites in Jacksonville,
Florida and San Antonio, Texas.
Under the terms of the agreement, Washington Mutual will acquire US$1.9 (A$3.7)
billion in HomeSide assets, including US$1.8 (A$3.5) billion of performing
warehoused prime residential mortgage loans. Washington Mutual will pay a US$25
(A$49) million premium over the value of the acquired assets. The transaction is
expected to be modestly accretive to Washington Mutual's 2002 earnings per
"This acquisition is a logical next step in our continuing effort to build out
our mortgage business, and it increases fee income without acquiring additional
mortgage servicing rights," said Kerry Killinger, Washington Mutual's chairman,
president and chief executive officer. "It adds a technology platform to support
a subservicing capability, while simultaneously increasing our loan servicing
capacity and creating opportunities for greater efficiencies."
Frank Cicutto, managing director and chief executive officer of the National
Australia Bank said, "This transaction is the result of an extensive and
competitive sale process focused on three objectives - value, timing and
transaction certainty. This is a good result; it provides the best solution and
a measured way to exit the mortgage business in the U.S. Also, it is consistent
with our previously announced intention to pursue a sale of HomeSide and
concentrate on growing our core banking and wealth management franchises in
Australia, the United Kingdom and New Zealand. This transaction allows us to
move the mortgage servicing rights into run-off mode and take advantage of sale
opportunities that may arise at a more opportune time in the market cycle.
Moreover, we are pleased to be associated with the leading player in the U.S.
Mr. Killinger said that Washington Mutual will begin integrating HomeSide's
technology and operational platform after fully integrating the Fleet Mortgage
and Dime/North American Mortgage acquisitions, which the company expects to
complete in 2002. Washington Mutual sees specific opportunities to leverage the
HomeSide servicing technology and operations to complement and enhance
Washington Mutual's servicing platform.
"Consistent with our previous acquisitions, we expect to find significant
opportunities for HomeSide employees as they join Washington Mutual," added
Craig S. Davis, president, Washington Mutual Home Loans & Insurance Services
Group. "We look forward to welcoming these valued employees to the Washington
The transaction is anticipated to close in the first quarter of 2002, subject to
customary closing conditions.
Morgan Stanley and Heller Ehrman White & McAuliffe LLP represented Washington
Mutual. The National Australia Bank was represented by Cohane Rafferty, Merrill
Lynch and Sullivan & Cromwell.
About the National Australia Bank Limited
The National Australia Bank is an international financial services group,
providing a comprehensive and integrated range of financial products and
services across four continents and 15 countries. As of September 30, 2001, the
Group had total assets of US$193 (A$375) billion with more than 8.2 million
banking customers and 2.8 million wealth management clients. It is the largest
financial services institution, by market capitalization, listed on the
Australian Stock Exchange Limited and was listed as the 20th largest financial
services company in the world by profitability in Fortune magazine's July 2001
edition. Additional information on the National Australia Bank is available at
About HomeSide Lending, Inc.
HomeSide, ranked as one of the top ten largest residential mortgage lenders in
the U.S., is the operating subsidiary of HomeSide International, Inc., a wholly
owned subsidiary of the National Australia Bank (ASX: NAB; NYSE: NAB).
Headquartered in Jacksonville, Florida, HomeSide has a servicing portfolio of
approximately US$187.4 (A$363.9) billion, representing 2 million homeowners.
Additional information about HomeSide is available at www.homeside.com. HomeSide
Lending is an Equal Housing Lender.
About Washington Mutual, Inc.
With a history dating back to 1889, Washington Mutual is a national financial
services company that provides a diversified line of products and services to
consumers and small- to mid-sized businesses. At September 30, 2001, Washington
Mutual and its subsidiaries had consolidated assets of US$223.6 (A$434.2)
billion. Washington Mutual currently operates approximately 2,300 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.
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, (i) statements about the effect of
the acquisition on our estimates of future financial results, (ii) statements
about our plans, objectives, expectations and intentions and other statements
that are not historical facts; and (iii) other statements identified by words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," or words of similar meaning. These forward-looking statements are
based on current beliefs and expectations of our management and 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.
The following factors, among others, could cause actual results to differ
materially from the anticipated results or other expectations expressed in the
- delays or difficulties in the integration by Washington Mutual
of the acquired business;
- interest rates may increase, which would adversely affect our
gains on sales of loans;
- competition from other financial services companies in our
- the current economic slowdown may continue longer than
anticipated, causing an adverse effect on credit quality and
loan originations from the acquired business.
Additional factors that could cause actual results to differ materially from
those expressed in the forward-looking statements are discussed in our reports
filed with the SEC.
All subsequent written and oral forward-looking statements concerning other
matters attributable to either us or any person acting on our behalf are
expressly qualified in their entirety by the cautionary statements above. We do
not undertake any obligation to update any forward-looking statement to reflect
circumstances or events that occur after the date the forward-looking statements
Note to editors: To listen to a brief pre-recorded message to investors from
Kerry Killinger of Washington Mutual, please dial 800.925.1757 in the U.S. or
402.530.8065 for international callers.
Washington Mutual's Acquisition of the National's U.S. Mortgage
Banking Operations At-A-Glance
-- Washington Mutual will pay a US$25 (A$49) million premium over
the value of the acquired assets.
Washington Mutual acquires:
-- Servicing technology platform
-- Wholesale, correspondent and consumer direct production
channels (wholesale $3.9 billion; correspondent $28.7 billion;
consumer direct $1.5 billion in originations, YTD as of
-- Performing pipeline and warehouse mortgage loans
-- Loan servicing sites in Jacksonville, Florida and San Antonio,
-- Related corporate assets
-- Approximately 2,700 employees
-- Right to subservice the National's US$187.4 (A$363.9) billion
servicing portfolio of U.S. direct loans (as of 9/30/01)
-- A right of first offer to acquire the National's mortgage
The National Australia Bank retains:
-- Mortgage servicing rights and related hedges
-- Debt financing and related hedges
Summary of Assets and Liabilities Acquired By Washington Mutual
As of 9/30/01 - US$ in Millions
Mortgage Warehouse $ 1,815
Cash and Other Assets 96
Total Assets Acquired 1,911
Total Liabilities Assumed 16
Net Assets Acquired $ 1,895
CONTACT: Media Contacts
Washington Mutual, Inc.
Libby Hutchinson, 206/461.2484
National Australia Bank Limited
Tim O'Leary, +61.414.446.826
HomeSide Lending, Inc.
Judy Garfinkel, 904/281.3319
Abernathy MacGregor Group
Steve Bruce/Ian Campbell
212/371.5999 / 213/630.6550
Investor Relations Contacts
Washington Mutual, Inc.
JoAnn DeGrande/Ruthanne King
206/461.3186 / 206/461.6421
National Australia Bank Limited
Callum Davidson, +61.386.413.500