-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q3Db2BoSNjecH8ZULs5ao8frZ8YjScpdOi+JO/m/T0pIl/fUHMXgle5yY37N8Dug CjdgUrik7LdlrrYaOlRomQ== 0000933136-00-000004.txt : 20000424 0000933136-00-000004.hdr.sgml : 20000424 ACCESSION NUMBER: 0000933136-00-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 ITEM INFORMATION: FILED AS OF DATE: 20000421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON MUTUAL INC CENTRAL INDEX KEY: 0000933136 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 911653725 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14667 FILM NUMBER: 606191 BUSINESS ADDRESS: STREET 1: 1201 THIRD AVE STREET 2: STE 1500 CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 2064612000 MAIL ADDRESS: STREET 1: 1201 THIRD AVE STREET 2: SUITE 1500 CITY: SEATTLE STATE: WA ZIP: 98101 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: April 18, 2000 Washington Mutual, Inc. (Exact name of registrant as specified in its charter) Washington 1-14667 91-1653725 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation) Number) Identification No.) 1201 Third Avenue, Seattle, Washington 98101 (Address of principal executive offices) (Zip Code) (206) 490-1347 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. On April 18, 2000, Washington Mutual, Inc. issued a press release reporting its results of operations during the three months ended March 31, 2000. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 99.1 Press release dated April 18, 2000 reporting results of operations during the three months ended March 31, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WASHINGTON MUTUAL, INC. Date: April 20, 2000 By: /s/ Fay L. Chapman ----------------------- Fay L. Chapman Senior Executive Vice President and General Counsel EX-99.1 2 Media Contact: Libby Hutchinson 1-800-228-9268 (206) 461-2484 Investor Contacts: Doug Wisdorf (206) 461-3805 JoAnn DeGrande April 18, 2000 (206) 461-3186 FOR IMMEDIATE RELEASE WASHINGTON MUTUAL ANNOUNCES RECORD FIRST-QUARTER EARNINGS, INCREASED CASH DIVIDEND AND NEW SHARE REPURCHASE INITIATIVE SEATTLE -- Washington Mutual, Inc. (NYSE: WM) today announced record first-quarter earnings of $458.5 million or 83 cents per diluted share, up from first-quarter 1999 earnings of $444.1 million or 76 cents per share. Highlights of the recent quarter included: a return on average common equity of 20.64 percent; an efficiency ratio of 47.61 percent; double-digit, year-over-year increases in depositor and other retail banking fees and securities fees and commissions; record net growth of more than 133,000 retail checking accounts; and continued strength in overall loan originations despite the more challenging interest rate environment in 2000. Based on the company's first-quarter performance, the board of directors declared a cash dividend on the common stock of 28 cents per share, an increase from the previous quarter's cash dividend of 27 cents per share. Dividends on the common stock are payable May 15, 2000 to shareholders of record as of April 28, 2000. "Washington Mutual's first-quarter results reflect the continued strength of our underlying operating fundamentals and core business," said Kerry Killinger, the company's chairman, president and chief executive officer. "Our employees continue to deliver outstanding results, despite a challenging interest rate environment, by focusing on the elements of our business plan that are within our control and finding new and innovative ways to serve our fast-growing customer base." -more- WM - 2 In other news, the board of directors today authorized an expanded share repurchase program under which Washington Mutual will acquire, from time to time, up to 55 million additional shares of its common stock. As of March 31, 2000, the company had repurchased approximately 51.3 million shares of stock since April 20, 1999, as part of the previously announced purchase programs totaling 56.3 million shares. Washington Mutual had approximately 553 million shares outstanding at March 31, 2000. FIRST-QUARTER RESULTS First-quarter 1999 results do not reflect the operations of Long Beach Mortgage, which was acquired in a purchase transaction on Oct. 1 of last year. NET INTEREST AND NONINTEREST INCOME Strong growth in noninterest income more than offset the effect of compression in the net interest margin that occurred over the past year as short-term interest rates on deposits and borrowings repriced upward faster than Washington Mutual's assets. In the first quarter of 2000, net interest income was $1.08 billion versus $1.13 billion a year earlier. The spread during the quarter was 2.25 percent, compared with 2.60 percent for the same period last year. The margin was 2.38 percent in the most recent quarter versus 2.79 percent for first quarter 1999. Depositor and other retail banking fees were a record $211.0 million, up 29 percent from $163.4 million a year earlier. Helping drive this increase in fee income was the addition of 133,292 net new retail checking accounts during the first quarter of 2000. The company added over 427,000 net new retail checking accounts, year over year. The strong growth in noninterest income was also fueled by a significant increase in securities fees and commissions, which were $82.6 million for the first quarter of 2000, up 39 percent from $59.5 million for the same period one year ago. As part of its initiative to remix its balance sheet, Washington Mutual securitized $6.70 billion of seasoned residential mortgage loans and sold $5.08 billion of the resulting senior and subordinated certificates while retaining the remainder. During the quarter, the company also sold $1.76 billion of seasoned residential loans, $736.3 million of current production residential loans and the majority of loans originated by Long Beach Mortgage. These activities led to gain on sale of loans of $61.2 million for the most recent quarter, compared with $38.4 million for the first quarter of 1999, when Long Beach Mortgage was not part of the company. The gains that resulted from these sales were partially offset by losses incurred on the sale of certain mortgage-backed securities. -more- WM - 3 LENDING Total loan originations increased to $12.16 billion for the quarter, up from $11.88 billion one year ago. Single-family residential (SFR) loan originations (excluding residential construction) were $8.50 billion, as compared with $9.67 billion one year ago. Of the first-quarter SFR originations, 91 percent were adjustable-rate mortgages, up from 54 percent for the same period in 1999. Originations of second mortgage and other consumer, specialty mortgage finance, commercial business, commercial real estate and residential construction loans totaled $3.67 billion for the most recent quarter, up 66 percent over $2.21 billion in the first quarter of 1999. EFFICIENCY RATIO The strong growth in noninterest income, combined with effective expense management, led to an efficiency ratio (defined as other expenses, excluding amortization of intangible assets, as a percentage of net interest income and other income) of 47.61 percent for the most recent quarter, comparable with 47.62 percent in last year's first quarter. Noninterest expense, excluding expenses associated with Long Beach Mortgage, totaled $720.8 million in the first quarter of 2000, compared with first-quarter 1999's figure of $706.1 million, after excluding the $23.8 million of transaction-related expenses. CREDIT QUALITY Total nonperforming assets were a low $979.3 million at March 31, 2000, versus $1.03 billion at Dec. 31, 1999 and represented just 0.52 percent of total assets at the end of the first quarter of 2000. The company's provision for loan losses was $41.2 million, versus $41.7 million for the same period in the previous year. Net loan charge-offs for the first quarter were $41.0 million, compared with $45.0 million a year earlier. At March 31, 2000, loan loss reserves totaled $1.03 billion, and represented 130 percent of nonaccrual loans. -more- WM - 4 BALANCE SHEET AND CAPITAL MANAGEMENT Consolidated assets at March 31, 2000, were $188.61 billion, up from $186.51 billion at Dec. 31, 1999. (Approximately $5.47 billion of the asset sales previously discussed settled after the quarter end and therefore were still included in the company's total assets at March 31, 2000.) Stockholders' equity at March 31, 2000 was $8.71 billion and the capital ratios of Washington Mutual's banking subsidiaries continued to exceed regulatory requirements for classification as "well-capitalized," the highest regulatory standard. At March 31, 2000, transaction account balances, including checking, savings and money market deposits, represented 55 percent of total deposits, up from 50 percent at the end of the first quarter of 1999 and 54 percent at the end of 1999. Total deposits were $82.51 billion at the end of the current quarter, up from $81.13 billion at the end of 1999. Killinger noted that the company continued to actively deploy its capital during the first quarter by purchasing 19.8 million shares of its common stock at an average price of $23.42. COMPANY UPDATES On April 5, the company opened the first five of 21 new retail concept financial stores in Southern Nevada. The remaining 16 stores will open by the end of the summer. The company projects that the stores will break even shortly after one year of operation and will reach a return on common equity of 20 percent by the end of year two. On Feb. 9, Washington Mutual announced a collaborative initiative with iPlanet E-Commerce Solutions, a Sun-Netscape Alliance. The collaboration will extend Washington Mutual's e-commerce initiatives, including the development of a platform that will support the company's net-based messaging applications, gaining additional internal efficiencies and forging stronger relationships with both its consumer and corporate customers. On March 30, the company offered and sold $500 million in non-callable 8.25 percent subordinated notes due April 1, 2010. The net proceeds from the sale will be used for general corporate purposes. -more- WM - 5 OUTLOOK "Although the current interest rate environment provides an immediate challenge for our company, we are focused on the successful execution of our business plan," Killinger said. "Key components of that plan are to remix our balance sheet by increasing the proportion of higher-margin loans, diversify revenues, launch new and innovative ways of serving our customers, operate even more efficiently and maintain credit quality. We're in an excellent position to successfully implement all of financial targets and continue to be one of the nation's top financial services companies." With a history dating back to 1889, Washington Mutual is a financial services company that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At March 31, 2000, Washington Mutual and its subsidiaries had consolidated assets of $188.61 billion. The company operates more than 2,000 offices throughout the nation. Washington Mutual press releases are available at www.wamu.com. # # # WM - 6 WASHINGTON MUTUAL, INC. CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands, except per share amounts) (unaudited)
Quarter Ended - --------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - --------------------------------------------------------------------------------------------------------- INTEREST INCOME Loans $2,221,191 $2,179,532 $2,028,502 Available-for-sale ("AFS") securities 692,244 651,868 539,012 Held-to-maturity ("HTM") securities 339,096 305,031 247,377 Other interest and dividend income 51,115 52,511 39,227 - --------------------------------------------------------------------------------------------------------- Total interest income 3,303,646 3,188,942 2,854,118 INTEREST EXPENSE Deposits 787,855 788,141 813,627 Borrowings 1,431,081 1,344,580 913,296 - --------------------------------------------------------------------------------------------------------- Total interest expense 2,218,936 2,132,721 1,726,923 - --------------------------------------------------------------------------------------------------------- Net interest income 1,084,710 1,056,221 1,127,195 Provision for loan losses 41,162 41,720 41,700 - --------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 1,043,548 1,014,501 1,085,495 NONINTEREST INCOME Depositor and other retail banking fees 211,033 219,695 163,417 Securities fees and commissions 82,573 71,662 59,522 Insurance fees and commissions 11,479 11,575 10,670 Loan servicing income 33,269 38,540 26,031 Loan related income 24,021 24,792 26,547 Gain on sale of loans 61,228 28,362 38,362 Gain (loss) from securities (21,566) 299 (2,693) Other income 21,027 28,291 30,288 - --------------------------------------------------------------------------------------------------------- Total noninterest income 423,064 423,216 352,144 NONINTEREST EXPENSE Compensation and benefits 330,406 288,361 301,609 Occupancy and equipment 152,501 153,280 134,904 Telecommunications and outsourced information services 76,927 67,857 70,064 Depositor and other retail banking losses 25,522 30,004 25,247 Transaction-related expense - 22,678 23,802 Amortization of goodwill and other intangible assets 26,746 26,305 25,373 Foreclosed asset (income) expense (1,395) 21 3,794 Other expense 133,871 143,098 145,074 - --------------------------------------------------------------------------------------------------------- Total noninterest expense 744,578 731,604 729,867 - --------------------------------------------------------------------------------------------------------- Income before income taxes 722,034 706,113 707,772 Income taxes 263,542 255,821 263,654 - --------------------------------------------------------------------------------------------------------- NET INCOME $ 458,492 $ 450,292 $ 444,118 ========================================================================================================= NET INCOME ATTRIBUTABLE TO COMMON STOCK $ 458,492 $ 450,292 $ 444,118 ========================================================================================================= Net income per common share: Basic $0.83 $0.80 $0.76 Diluted 0.83 0.80 0.76
WM - 7 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in thousands) (unaudited)
Quarter Ended - ---------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - ---------------------------------------------------------------------------------------------------------- DATA USED TO COMPUTE PER SHARE AMOUNTS Net income attributable to basis and diluted common stock $458,492 $450,292 $444,118 Average common shares used to calculate earnings per share: Basic 551,787,125 563,378,599 581,939,740 Common stock equivalents 871,533 1,449,079 2,640,443 - ---------------------------------------------------------------------------------------------------------- Diluted 552,658,658 564,827,678 584,580,183 FINANCIAL RATIOS Return on average assets 0.98% 0.98% 1.08% Return on average common equity 20.64 20.01 18.72 Efficiency ratio: Including amortization of intangible assets 49.38 49.45 49.34 Excluding amortization of intangible assets 47.61 47.67 47.62 WEIGHTED AVERAGE INTEREST RATES Yield on loans 7.64% 7.45% 7.43% Yield on mortgage-backed securities ("MBS") 6.81 6.67 6.78 Yield on investment securities 5.88 5.96 5.56 - ---------------------------------------------------------------------------------------------------------- Yield on interest-earning assets 7.33 7.17 7.20 Cost of deposits 3.91 3.83 3.91 Cost of borrowings 6.08 5.84 5.44 - ---------------------------------------------------------------------------------------------------------- Cost of interest-bearing liabilities 5.08 4.89 4.60 Net interest spread 2.25 2.28 2.60 Net interest margin 2.38 2.41 2.79 AVERAGE BALANCES Loans $116,289,707 $116,858,676 $109,289,268 MBS 60,046,653 56,801,218 45,765,022 Investment securities 4,120,524 4,136,732 3,606,580 - ---------------------------------------------------------------------------------------------------------- Total interest-earning assets 180,456,884 177,796,626 158,660,870 Deposits 80,967,950 81,694,852 84,289,648 Borrowings 94,727,478 91,354,999 68,015,000 - ---------------------------------------------------------------------------------------------------------- Total interest-bearing liabilities 175,695,428 173,049,851 152,304,648 Total assets 186,376,917 183,722,193 164,220,074 Stockholders' equity 8,885,473 8,999,852 9,488,284
WM - 8 WASHINGTON MUTUAL, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in thousands, except per share amounts) (unaudited)
Mar. 31, 2000 Dec. 31, 1999 Mar. 31, 1999 - ----------------------------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 2,818,015 $ 3,040,167 $ 1,907,920 Trading securities 35,320 34,660 29,757 AFS securities: MBS 40,704,634 40,972,653 41,425,579 Investment securities 444,394 411,665 574,118 HTM securities: MBS 18,596,688 19,263,413 14,663,994 Investment securities 138,014 138,052 137,918 Loans: Loans held in portfolio 110,859,979 113,745,650 107,942,189 Loans held for sale 362,202 793,504 1,171,720 Reserve for loan losses (1,025,244) (1,041,929) (1,069,719) - ----------------------------------------------------------------------------------------------------- Total loans 110,196,937 113,497,225 108,044,190 Mortgage servicing rights 767,596 643,185 482,873 Foreclosed assets 190,030 198,961 287,154 Premises and equipment 1,541,906 1,558,649 1,439,547 Investment in Federal Home Loan Banks ("FHLBs") 3,091,918 2,916,749 2,207,034 Goodwill and other intangible assets 1,165,221 1,199,854 980,233 Other assets 8,914,545 2,638,397 $2,114,735 - ---------------------------------------------------------------------------------------------------- Total assets $188,605,218 $186,513,630 $174,295,052 ==================================================================================================== LIABILITIES Deposits: Checking accounts $ 15,553,923 $ 13,489,471 $ 13,079,328 Savings accounts and money market deposit accounts ("MMDAs") 29,702,330 30,048,378 29,381,930 Time deposit accounts 37,256,706 37,591,919 41,718,368 - ---------------------------------------------------------------------------------------------------- Total deposits 82,512,959 81,129,768 84,179,626 Federal funds purchased and commercial paper 2,410,693 866,543 2,424,302 Securities sold under agreements to repurchase ("reverse repurchase agreements") 28,467,663 30,162,823 24,483,163 Advances from FHLBs 57,853,022 57,094,053 42,775,203 Other borrowings 6,832,067 6,203,197 4,613,294 Other liabilities 1,823,241 2,004,567 6,209,938 - ---------------------------------------------------------------------------------------------------- Total liabilities 179,899,645 177,460,951 164,685,526 STOCKHOLDERS' EQUITY 8,705,573 9,052,679 9,609,526 - --------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $188,605,218 $186,513,630 $174,295,052 ==================================================================================================== Common shares outstanding at end of period 552,626,483 571,589,272 594,566,383 Book value per common share $16.10 $16.18 $16.50 Tangible book value per common share 14.24 14.32 15.15 Full-time equivalent employees at end of period 28,205 28,509 27,931
WM - 9 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in thousands, except per share amounts) (unaudited) Note: The following analysis of reported and operating earnings is based upon the Company's opinion and is intended to provide the user additional information about the Company's operations. It is not intended to replace traditional financial statement disclosures in accordance with generally accepted accounting principles and may not be comparable to similarly titled measures reported by other companies.
Quarter Ended - --------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - --------------------------------------------------------------------------------------------------------- REPORTED FINANCIAL RESULTS Net income $458,492 $450,292 $444,118 Net income per diluted common share $0.83 $0.80 $0.76 Financial ratios on reported financial results: Return on average assets 0.98% 0.98% 1.08% Return on average common equity 20.64 20.01 18.72 Efficiency ratio, excluding amortization of intangible assets 47.61 47.67 47.62 OPERATING FINANCIAL RESULTS, EXCLUDING TRANSACTION-RELATED EXPENSE Reported pretax income $722,034 $706,113 $707,772 Transaction-related expense - 22,678 23,802 - --------------------------------------------------------------------------------------------------------- Adjusted pretax income 722,034 728,791 731,574 Provision for income taxes 263,542 264,037 272,521 - --------------------------------------------------------------------------------------------------------- Earnings from operations, excluding transaction-related expense(a) $458,492 $464,754 $459,053 ========================================================================================================= Earnings per diluted common share $0.83 $0.82 $0.79 Financial ratios on operating financial results: Return on average assets 0.98% 1.01% 1.12% Return on average common equity 20.64 20.66 19.35 Efficiency ratio, excluding amortization of intangible assets 47.61 46.14 46.01 EARNINGS FROM OPERATIONS, EXCLUDING TRANSACTION-RELATED EXPENSE AND AMORTIZATION OF INTANGIBLE ASSETS (a)Earnings from operations, excluding transaction-related expense $458,492 $464,754 $459,053 Total amortization of intangible assets during the period 26,746 26,305 25,373 Tax benefit(1) 6,058 3,438 5,093 - --------------------------------------------------------------------------------------------------------- Amortization of intangible assets, net of tax 20,688 22,867 20,280 - --------------------------------------------------------------------------------------------------------- Earnings from operations, excluding transaction-related expense and amortization of intangible assets $479,180 $487,621 $479,333 ======================================================================================================== Earnings per diluted common share $0.87 $0.86 $0.82 Financial ratios on earnings from operations: Return on average assets 1.03% 1.06% 1.17% Return on average common equity 21.57 21.67 20.21 (1) Cash basis calculations exclude intangible assets and the related amortization expense.
WM - 10 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (unaudited)
Mar. 31, Dec. 31, 2000 1999 - --------------------------------------------------------------------------------------- CAPITAL ADEQUACY Stockholders' equity/total assets(1) 4.62% 4.85% Stockholder's equity(2)/total assets(2) 5.04 5.18 (1) During the first quarter of 2000, $8.75 billion of loans were securitized into MBS. Of that amount, $5.08 billion was sold on March 31, 2000 with a settlement date of April 12, 2000 and is a component of "Other assets." (2) Excludes unrealized net gain (loss) on available-for-sale securities. Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - --------------------------------------------------------------------------------------- RETAIL CHECKING ACCOUNTS(3) WMB and WMBfsb 1,026,450 1,006,749 940,842 WMB, FA 3,401,775 3,288,184 3,059,707 - --------------------------------------------------------------------------------------- Total retail checking accounts 4,428,225 4,294,933 4,000,549 ======================================================================================= RETAIL CHECKING ACCOUNT ACTIVITY(3) Net accounts opened during the quarter: WMB and WMBfsb 19,701 11,024 32,765 WMB,FA 113,591 73,367 60,897 - --------------------------------------------------------------------------------------- Net new retail checking accounts 133,292 84,391 93,662 ======================================================================================= (3) Retail checking accounts exclude commercial business accounts. The information provided refers to the number of accounts, not dollar volume.
WM - 11 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Quarter Ended - --------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - --------------------------------------------------------------------------------------- LOAN ORIGINATIONS Single-family residential ("SFR"): Adjustable rate ("ARMs") $ 7,767.2 $ 8,588.8 $ 5,174.5 Fixed rate 732.4 994.4 4,495.5 SFR - construction 427.9 470.2 380.6 Second mortgage and other consumer 1,348.2 1,393.8 1,025.8 Specialty mortgage finance 925.2 990.0 121.5 Commercial business 408.6 364.9 298.4 Commercial real estate 555.3 483.2 383.6 - --------------------------------------------------------------------------------------- Total loan originations $12,164.8 $13,285.3 $11,879.9 ======================================================================================= As a percentage of total loan originations: SFR, excluding SFR construction 70% 72% 81% All other 30 28 19 SFR LOAN ORIGINATIONS Short-term ARMs: Treasury index $5,326.4 $5,598.7 $1,946.4 COFI 378.6 257.0 125.7 Other 2.3 1.1 5.5 - --------------------------------------------------------------------------------------- Total short-term ARMs 5,707.3 5,856.8 2,077.6 Medium-term ARMs: Treasury index 2,059.9 2,732.0 3,096.9 - --------------------------------------------------------------------------------------- Total medium-term ARMs 2,059.9 2,732.0 3,096.9 Fixed-rate mortgages 732.4 994.4 4,495.5 - --------------------------------------------------------------------------------------- Total SFR loan originations $8,499.6 $9,583.2 $9,670.0 =======================================================================================
WM - 12 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Change from Dec. 31, 1999 Mar. 31, Dec. 31, Mar. 31, to Mar. 31, 2000 2000 1999 1999 - ------------------------------------------------------------------------------------------------------------ LOANS AND MBS BY PROPERTY TYPE Loans held in portfolio: SFR(1)(2) $(2,988.5) $77,245.9 $80,234.4 $79,313.9 SFR - construction 34.3 1,277.1 1,242.8 1,002.7 Second mortgage and other consumer 191.6 8,665.9 8,474.3 7,231.0 Specialty mortgage finance (excludes Long Beach Mortgage) (332.2) 3,772.9 4,105.1 1,194.8 Commercial business 71.1 1,522.6 1,451.5 1,149.2 Commercial real estate 138.1 18,375.6 18,237.5 18,050.6 ----------------------------------------------------------------------------------------------------------- Total loans held in portfolio (2,885.6) 110,860.0 113,745.6 107,942.2 Loans securitized and retained as MBS(1)(2) 577.4 34,082.8 33,505.4 25,541.0 - ------------------------------------------------------------------------------------------------------------ Total loans held in portfolio and loans securitized and retained as MBS (2,308.2) 144,942.8 147,251.0 133,483.2 Loans held for sale (includes Long Beach Mortgage) (431.3) 362.2 793.5 1,171.7 Less: reserve for loan losses 16.7 (1,025.2) (1,041.9) (1,069.7) - ------------------------------------------------------------------------------------------------------------ Total loans and loans securitized and retained as MBS (2,722.8) 144,279.8 147,002.6 133,585.2 Purchased MBS (1,512.2) 25,218.5 26,730.7 30,548.6 - ------------------------------------------------------------------------------------------------------------ Total loans and MBS $(4,235.0) $169,498.3 $173,733.3 $164,133.8 ============================================================================================================ Dec. 31, 1999 Mar. 31, 1999 to Mar. 31, 2000 to Mar. 31, 2000 - ------------------------------------------------------------------------------------------------------------ RECONCILIATION OF LOANS HELD IN PORTFOLIO Balance, beginning of period: $113,745.6 $107,942.2 Loans originated and purchased 9,789.6 50,332.9 Loans securitized(1)(2) (8,754.1) (19,950.6) Loans sold (123.6) (168.3) Loan payments and other (3,797.5) (27,296.2) - ------------------------------------------------------------------------------------------------------------ Change in loans held in portfolio (2,885.6) (2,917.8) Balance, end of period $110,860.0 $110,860.0 ============================================================================================================ (1) During the first quarter of 2000, $8.75 billion of loans were securitized into MBS. Of that amount, $5.08 billion was sold on March 31, 2000 with a settlement date of April 12, 2000. The receivable of $5.08 billion is a component of "Other assets." The remaining $1.62 billion was retained and held in the AFS MBS portfolio. This increase in the MBS portfolio was partially offset by paydowns and additional unrealized net losses on available-for-sale securities. (2) $12.43 billion of loans were securitized during the fourth quarter of 1999. Approximately $10 billion were attributed to REMICs, which are classified as AFS and HTM securities in the MBS portfolio.
WM - 13 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (unaudited)
Change from Dec. 31, 1999 Mar. 31, % of Dec. 31, % of Mar. 31, % of to Mar. 31, 2000 2000 total 1999 total 1999 total - ------------------------------------------------------------------------------------------------------------ (dollars in millions) REAL ESTATE LOANS AND MBS Short-term ARMs: COFI $(6,306.7) $ 49,532.0 32% $ 55,838.7 35% $ 73,673.9 48% Treasury index 3,503.2 33,351.6 21 29,848.4 18 14,533.1 9 Other 1,529.2 7,742.6 5 6,213.4 4 6,518.3 4 - ------------------------------------------------------------------------------------------------------------ Total short-term ARMs (1,274.3) 90,626.2 58 91,900.5 57 94,725.3 61 Medium-term ARMs: Treasury index 1,171.6 26,980.4 17 25,808.8 16 19,455.7 12 COFI 43.2 604.7 1 561.5 - 736.4 1 Other (108.1) 1,935.7 1 2,043.8 2 1,577.4 1 - ------------------------------------------------------------------------------------------------------------ Total medium-term ARMs 1,106.7 29,520.8 19 28,414.1 18 21,769.5 14 Fixed-rate loans held in portfolio (2,189.6) 11,560.2 7 13,749.8 8 15,615.8 10 Fixed-rate loans held for sale (431.3) 362.2 - 793.5 1 1,171.7 1 Fixed-rate MBS (1,393.7) 24,492.7 16 25,886.4 16 22,346.2 14 - ------------------------------------------------------------------------------------------------------------ Total real estate loans and MBS $(4,182.2) $156,562.1 100% $160,744.3 100% $155,628.5 100% ============================================================================================================ LOANS SERVICED FOR OTHERS $ 73,444.7(1) $ 65,159.4(2) $ 52,424.2 (1) During the first quarter of 2000, $8.75 billion of loans were securitized into MBS. Of that amount, $5.08 billion was sold on March 31, 2000 with a settlement date of April 12, 2000. The receivable of $5.08 billion is a component of "Other assets." The remaining $1.62 billion was retained and held in the AFS MBS portfolio. (2) $12.43 billion of loans were securitized during the fourth quarter of 1999. Approximately $4 billion of loans were from Long Beach Mortgage and approximately $10 billion were attributed to REMICs, which are classified as AFS and HTM securities in the MBS portfolio. Quarter Ended ------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 ------------------------------------------------------------------------- INCOME RELATED TO MORTGAGE LOANS (dollars in thousands) Loan related income $ 24,021 $24,792 $26,547 Loan servicing income 33,269 38,540 26,031 Gain on sale of loans 61,228 28,362 38,362 ------------------------------------------------------------------------- Total $118,518 $91,694 $90,940 =========================================================================
WM - 14 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Mar. 31, 2000 Dec. 31, 1999 - ----------------------------------------------------------------------------------------------- Balance Term(1) Balance Term(1) - ----------------------------------------------------------------------------------------------- DEPOSITS, BORROWINGS AND DERIVATIVES OUTSTANDING (in months) (in months) Deposits: Noninterest bearing checking accounts $ 9,136.5 NA $ 7,274.6 NA Interest bearing checking accounts, savings accounts and MMDAs 36,119.8 NA 36,263.3 NA Time deposit accounts 37,256.7 8 37,591.9 8 - ---------------------------------------------------------------------------------------------- Total deposits 82,513.0 81,129.8 Borrowings: Adjustable 57,401.1 1 55,481.7 1 Short-term fixed 22,531.7 2 26,925.0 2 Long-term fixed 15,630.6 45 11,919.9 51 - ---------------------------------------------------------------------------------------------- Total borrowings 95,563.4 94,326.6 - ---------------------------------------------------------------------------------------------- Total deposits and borrowings $178,076.4 $175,456.4 ============================================================================================== Notional amount of derivatives: WM pay rate swaps: Fixed rate $13,707.0 14 $ 9,292.8 13 Variable rate 1,060.0 1 1,110.0 1 - ---------------------------------------------------------------------------------------------- Total swaps 14,767.0 10,402.8 Caps\Collars\Corridors 10,138.8 1 11,128.8 1 - ---------------------------------------------------------------------------------------------- Total derivatives $24,905.8 $21,531.6 ============================================================================================== (1) Terms used are remaining term for deposits and term to reprice for borrowings and notional amount of derivatives.
WM - 15 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Quarter Ended - ---------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2000 1999 1999 1999 1999 - ---------------------------------------------------------------------------------------------------------- RESERVE FOR LOAN LOSSES Balance, beginning of quarter $1,041.9 $1,051.4 $1,053.6 $1,069.7 $1,067.8 Provision for loan losses 41.2 41.7 40.8 42.9 41.7 Transfers of reserves(1)(2) (16.9) (6.4) - - 5.2 Loans charged off: SFR and SFR construction (6.8) (8.3) (9.9) (8.5) (11.1) Second mortgage and other consumer (37.7) (36.4) (35.7) (33.1) (37.2) Specialty mortgage finance (0.6) (0.3) (0.1) (0.1) - Commercial business (0.8) (1.1) (0.7) (1.3) (2.5) Commercial real estate (1.6) (6.9) (3.4) (22.9) (3.9) - ---------------------------------------------------------------------------------------------------------- Total loans charged off (47.5) (53.0) (49.8) (65.9) (54.7) Recoveries of loans previously charged off: SFR and SFR construction 0.1 1.4 0.5 0.2 2.1 Second mortgage and other consumer 5.2 4.8 4.8 4.8 4.7 Specialty mortgage finance 0.5 0.3 - - - Commercial business 0.2 0.2 0.1 0.2 0.2 Commercial real estate 0.5 1.5 1.4 1.7 2.7 - ---------------------------------------------------------------------------------------------------------- Total recoveries of loans previously charged off 6.5 8.2 6.8 6.9 9.7 - ---------------------------------------------------------------------------------------------------------- Net charge offs (41.0) (44.8) (43.0) (59.0) (45.0) - ---------------------------------------------------------------------------------------------------------- Balance, end of quarter $1,025.2 $1,041.9 $1,051.4 $1,053.6 $1,069.7 ========================================================================================================== Net charge offs (annualized) as a percentage of average loans 0.14% 0.15% 0.15% 0.22% 0.16% (1) During the first quarter of 2000, approximately $16.9 million was transferred out of the reserve for loan losses due to the securitization of $8.75 billion of loans. (2) During the fourth quarter of 1999, approximately $6.4 million was transferred out of the reserve loan losses due to approximately $10 billion of loans securitized into REMICs and classified as AFS and HTM securities in the MBS portfolio.
WM - 16 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - ------------------------------------------------------------------------------------------------ RESERVE FOR LOAN LOSSES Specific and allocated reserves: Commercial real estate $ 33.3 $ 59.0 $ 112.1 Commercial business 8.4 17.6 16.1 Builder construction 0.8 5.0 0.8 - ------------------------------------------------------------------------------------------------ Total specific and allocated reserves 42.5 81.6 129.0 Unallocated reserves 982.7 960.3 940.7 - ------------------------------------------------------------------------------------------------ Total reserve for loan losses $1,025.2 $1,041.9 $1,069.7 ================================================================================================ Reserve for loan losses as a percentage of: Nonaccrual loans(1)(2) 130% 126% 119% Nonperforming assets(1)(2) 105 102 90 Changes in the liability for losses on loans securitized with recourse and retained or sold, included in "Other liabilities," were as follows: RECOURSE LIABILITY Balance, beginning of quarter $113.1 $117.0 $144.3 Transfer to reserve for loan losses - - (15.0) Charge offs, net of provision for recourse losses (3.6) (3.9) (1.3) - ------------------------------------------------------------------------------------------------ Balance, end of quarter $109.5 $113.1 $128.0 ================================================================================================ The total loss coverage represents the reserve for loan losses and recourse liability as a percentage of nonaccrual loans: Total loss coverage percentage(1)(2) 144% 140% 134% (1) During the first quarter of 2000, approximately $16.9 million was transferred out of the reserve for loan losses due to the securitization of $8.75 billion of loans. (2) During the fourth quarter of 1999, approximately $6.4 million was transferred out of the reserve for loan losses due to approximately $10 billion of loans securitized into REMICs and classified as AFS and HTM securities in the MBS portfolio.
WM - 17 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited)
Mar. 31, Dec. 31, Mar. 31, 2000 1999 1999 - ----------------------------------------------------------------------------------- NONPERFORMING ASSETS ("NPAs") Nonaccrual loans: SFR and SFR construction $ 584.7 $ 619.9 $ 733.3 Second mortgage and other consumer 91.5 98.1 94.5 Specialty mortgage finance 65.9 57.2 4.0 Commercial business 15.6 9.8 7.0 Commercial real estate 31.6 42.0 57.1 - ----------------------------------------------------------------------------------- Total nonaccrual loans 789.3 827.0 895.9 Foreclosed assets: SFR and SFR construction 137.2 143.3 220.5 Second mortgage and other consumer 20.7 19.0 14.8 Specialty mortgage finance 3.1 6.6 - Commercial real estate 29.0 30.1 51.9 - ----------------------------------------------------------------------------------- Net foreclosed assets 190.0 199.0 287.2 - ----------------------------------------------------------------------------------- Total NPAs $979.3 $1,026.0 $1,183.1 =================================================================================== NPAs by property type: SFR and SFR construction $721.9 $ 763.2 $ 953.8 Second mortgage and other consumer 112.2 117.1 109.3 Specialty mortgage finance 69.0 63.8 4.0 Commercial business 15.6 9.8 7.0 Commercial real estate 60.6 72.1 109.0 ---------------------------------------------------------------------------------- Total NPAs $979.3 $1,026.0 $1,183.1 =================================================================================== NPAs as a percentage of: Total loans 0.88% 0.90% 1.08% Total loans and recourse loans and recourse MBS 0.74 0.75 0.86 Total assets 0.52 0.55 0.68
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