EX-99.1 2 0002.txt PRESS RELEASE Apr. 17, 2001 FOR IMMEDIATE RELEASE --------------------- WASHINGTON MUTUAL ANNOUNCES RECORD QUARTERLY EARNINGS AND CONTINUED STRONG OPERATING FUNDAMENTALS; BOARD OF DIRECTORS DECLARES 3-FOR-2 STOCK SPLIT AND INCREASES CASH DIVIDEND SEATTLE -- Washington Mutual, Inc. (NYSE: WM) today announced record quarterly earnings of $641.0 million or $1.15 per diluted share, up 40 percent from first-quarter 2000 earnings of $458.5 million or 83 cents per diluted share. Earnings for the first quarter of 2001 include partial quarter results from the former mortgage operations of The PNC Financial Services Group, Inc. and Bank United Corp., which were acquired this year by Washington Mutual on Jan. 31 and Feb. 9, respectively. Both acquisitions were accounted for as purchase transactions, therefore the results of those operations are not included in previous periods. Highlights of the recent quarter include: o A return on common equity of 22.34 percent; o A substantially improved net interest margin, which produced a 25 percent increase in net interest income over last year; o Record noninterest income, including a 32 percent increase in depositor and other retail banking fees, as well as a significant increase in gain from loans activity resulting from strong growth in residential mortgage volume and the company's adoption of Financial Accounting Standard (FAS) No. 133; o Record loan volume of $24.38 billion, including a 100 percent increase in single-family residential (SFR) loan volume and a 57 percent increase in other loan volume; o Record checking account growth of 159,271, net of accounts acquired from Bank United; o An operating efficiency ratio of 46.33 percent. "Washington Mutual has entered 2001 on a very successful note," said Kerry Killinger, the company's chairman, president and CEO. "By all key measures - for both top line growth and bottom line results - our company produced excellent results in the first quarter. We look forward to building on that momentum and continuing to profitably grow our national franchises." - more - WM - 2 BOARD DECLARES STOCK SPLIT; INCREASES CASH DIVIDEND Based on the company's continued strong operating fundamentals and financial performance, Washington Mutual's Board of Directors declared a 3-for-2 stock split, which will be paid in the form of a 50 percent stock dividend. The stock split is payable on May 15 of this year to shareholders of record as of April 30, 2001. The stock price will adjust to reflect the split effective May 16, 2001. In addition, the board declared a cash dividend of 22 cents on the company's common stock, payable on all shares of common stock including those resulting from the stock split, up from an adjusted 20.67 cents in the previous quarter. Dividends on the common stock are payable May 15, 2001 to shareholders of record as of April 30, 2001. The board also declared a $0.90625 dividend on Washington Mutual's Series H Preferred Stock payable on May 16, 2001. FIRST QUARTER RESULTS NET INTEREST AND NONINTEREST INCOME GROW Reflecting the improved net interest margin, which was driven primarily by a 150-basis-point reduction in the Federal funds rate during the period, net interest income increased 25 percent to $1.36 billion in the first quarter versus $1.08 billion a year earlier. The net interest spread for the quarter improved to 2.59 percent, compared with 2.25 percent for the same period last year, reflecting the company's higher yield on interest-earning assets. Likewise, the margin was 2.65 percent in the most recent quarter versus 2.38 percent for first quarter 2000. Depositor and other retail banking fees were a record $278.8 million, up 32 percent from $211.0 million a year earlier. During the first quarter, the company added 430,454 net new retail checking accounts, including 271,183 checking accounts acquired from Bank United. Reflecting the weakening stock market, securities fees and commissions were $72.2 million for the first quarter of 2001, versus $82.6 million for the same period one year ago. A significant pick up in fixed-rate loan volume - particularly in the second half of the quarter -- and the addition of the mortgage operations acquired from The PNC Financial Services Group, Inc. contributed to gain from loans of $187.0 million, up sharply from the gain of $61.2 million a year ago. The company's adoption of FAS 133 accelerated recognition of approximately $102 million of the gain from loans, which otherwise would have been recorded in the second quarter. Anticipated strong fixed-rate loan volume in the second quarter is expected to generate above-average gain from loans, the company said. - more - WM - 3 During the quarter, the company recorded a $62.8 million impairment of mortgage servicing rights. However, as part of Washington Mutual's macro-hedging strategy, this impairment was offset by realized net gains of $70.3 million on the sale of securities. LENDING Robust refinancing activity, combined with the company's recent acquisitions previously noted, contributed to record total loan volume of $24.38 billion for the quarter, up 90 percent from $12.80 billion one year ago. Single-family residential (SFR) loan volume (excluding residential construction) was $19.93 billion, up 100 percent from $9.97 billion one year ago. Reflecting the current interest rate environment, 52 percent of the first-quarter's SFR volume represented fixed-rate mortgages versus last year's 7 percent. In addition, 53 percent of the SFR mortgage loan volume represented refinance activity, versus last year's 32 percent. Lending volume for loans other than SFR totaled $4.45 billion for the most recent quarter, up 57 percent over $2.84 billion in the first quarter of 2000. EFFICIENCY RATIO IMPROVES The efficiency ratio (defined as noninterest expense, excluding amortization of goodwill and other intangible assets, as a percentage of net interest income and noninterest income) improved to 46.33 percent in the most recent quarter compared with 47.61 percent in the first quarter of last year. Including the operations of the recently-acquired companies, noninterest expense totaled $1.01 billion in the first quarter of 2001, compared with first-quarter 2000's figure of $744.6 million. This increase was more than offset, however, by the strong growth in noninterest income. CREDIT QUALITY REMAINS STEADY Killinger said that credit quality, a key focus for Washington Mutual, remains strong and that the company continues to closely monitor it given the signs of a slowing national economy. While total nonperforming assets (NPAs) were $1.45 billion at March 31, 2001 versus $1.04 billion at Dec. 31, 2000, approximately 67 percent of this increase was due to the acquisition of the NPA portfolios of Bank United and the mortgage operations of The PNC Financial Services Group, Inc.. Total NPAs represented just 0.66 percent of total assets at the end of the first quarter of 2001, well below the company's target of less than 1.00 percent. "Credit quality remains in line with what our expectations were prior to the Bank United acquisition," Killinger noted. - more - WM - 4 Reflecting the company's larger and more diversified balance sheet, including Bank United's commercial loan portfolio, the provision for loan and lease losses was $82.3 million, versus $41.2 million for the same period in the previous year. Net loan charge-offs for the first quarter were $57.7 million, compared with $41.0 million a year earlier, but remained comparable to the fourth quarter level as an annualized percentage of average loans. At March 31, 2001, the allowance for loan and lease losses totaled $1.16 billion, and represented 91 percent of nonaccrual loans, as compared with 114 percent at Dec. 31, 2000. BALANCE SHEET AND CAPITAL MANAGEMENT Consolidated assets at March 31, 2001 were $219.93 billion, compared with $194.72 billion at Dec. 31, 2000 and $188.61 billion at March 31, 2000. The previously noted acquisitions added approximately $26.34 billion of assets to Washington Mutual's balance sheet. At March 31, 2001, transaction account balances, including checking, savings and money market deposits, represented 62 percent of total deposits, compared with 57 percent at Dec. 31, 2000. Total deposits were $93.34 billion at the end of the first quarter, up from $79.57 billion at Dec. 31, 2000. The company's recent acquisitions contributed 76 percent of this growth, while organic growth contributed 24 percent. Stockholders' equity at March 31, 2001 was $12.34 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. COMPANY UPDATES o In addition to completing the acquisitions of Bank United Corp. and the mortgage operations of The PNC Financial Services Group, Inc., the company announced on April 2, 2001, its plans to acquire Fleet Mortgage Corp., a unit of FleetBoston Financial Corp. (NYSE: FBF). The transaction would increase Washington Mutual's residential mortgage servicing portfolio to $451.5 billion, on a pro forma basis at Dec. 31, 2000, making it the nation's second largest mortgage servicing business. In addition, the company would become the nation's leading mortgage loan originator, on a pro forma basis. The assets Washington Mutual will acquire from Fleet total approximately $6 billion. The transaction, which will be accounted for as a purchase, is expected to be modestly accretive to earnings per share in 2001 without revenue enhancements. Annual cost savings are anticipated to be approximately 30 percent of the acquired Fleet Mortgage expense base. - more - WM - 5 The transaction is anticipated to close in the second quarter of 2001, subject to regulatory notifications, including the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and Hart-Scott-Rodino, as well as other closing conditions. o The company announced today that Atlanta has been selected as the newest site for its successful Occasio financial stores. Washington Mutual, which currently has no retail banking presence in the area, plans to open approximately 60 - 80 financial stores in the greater Atlanta area within the next few years. "We're setting a new standard in retail banking by combining WaMu's proven sales and service culture with a contemporary retail look and feel," said Deanna Oppenheimer, president of the company's Banking and Financial Services Group. "Our innovative use of people, technology and design elements unite to provide something that banks have never consistently delivered: an inviting customer experience." OUTLOOK "In all areas of our business, our employees continue to drive very impressive results, profitably growing accounts, generating loans and expanding the number of new households served by Washington Mutual," Killinger said. "Looking to the remainder of this year, we expect to further benefit from the more favorable interest rate environment while generating strong growth in noninterest income. We further expect credit quality to remain within our target levels. In short, we expect a very solid 2001." 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 March 31, 2001, Washington Mutual and its subsidiaries had consolidated assets of $219.93 billion. Washington Mutual currently operates more than 2,000 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 live webcast of the company's quarterly earnings conference call will be held on Wed., Apr. 18 at 10:30 a.m. Eastern Time at www.wamu.com or via phone at 1.800.946.0705. # # # Media Contact: Libby Hutchinson 1-800-228-9268 (206) 461-2484 libby.hutchinson@wamu.net Investor Contacts: JoAnn DeGrande (206) 461-3186 joann.degrande@wamu.net Ruthanne King (206) 461-6421 ruthanne.king@wamu.net WM - 7 WASHINGTON MUTUAL, INC. CONSOLIDATED STATEMENTS OF INCOME (dollars in millions, except per share data) (unaudited) Quarter Ended ----------------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2001 2000 2000 ----------------------------------------------------------------------------------------------------------------- INTEREST INCOME Loans $2,811.1 $2,533.3 $2,221.2 Available-for-sale ("AFS") securities 1,031.7 712.1 692.2 Held-to-maturity ("HTM") securities - 320.8 339.1 Other interest and dividend income 70.9 66.2 51.1 ----------------------------------------------------------------------------------------------------------------- Total interest income 3,913.7 3,632.4 3,303.6 INTEREST EXPENSE Deposits 886.8 854.0 787.8 Borrowings 1,667.9 1,677.4 1,431.1 ----------------------------------------------------------------------------------------------------------------- Total interest expense 2,554.7 2,531.4 2,218.9 ----------------------------------------------------------------------------------------------------------------- Net interest income 1,359.0 1,101.0 1,084.7 Provision for loan and lease losses 82.3 52.5 41.2 ----------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan and lease losses 1,276.7 1,048.5 1,043.5 NONINTEREST INCOME Depositor and other retail banking fees 278.8 269.1 211.0 Securities fees and commissions 72.2 73.8 82.6 Insurance fees and commissions 12.3 11.0 11.5 Loan servicing income (expense) (7.2) 36.7 33.3 Loan related income 55.6 33.7 24.0 Gain from loans 187.0 64.2 61.2 Gain (loss) from securities 70.3 13.1 (21.6) Other income 80.8 47.8 21.1 ------------------------------------------------------------------------------------------------------------------ Total noninterest income 749.8 549.4 423.1 NONINTEREST EXPENSE Compensation and benefits 416.0 342.9 330.4 Occupancy and equipment 183.7 157.3 152.5 Telecommunications and outsourced information services 106.4 86.8 76.9 Depositor and other retail banking losses 29.5 28.9 25.5 Amortization of goodwill and other intangible assets 36.0 25.7 26.7 Other expense 241.4 179.9 132.6 ----------------------------------------------------------------------------------------------------------------- Total noninterest expense 1,013.0 821.5 744.6 ----------------------------------------------------------------------------------------------------------------- Income before income taxes 1,013.5 776.4 722.0 Income taxes 372.5 279.5 263.5 ----------------------------------------------------------------------------------------------------------------- NET INCOME $ 641.0 $ 496.9 $ 458.5 ================================================================================================================= NET INCOME ATTRIBUTABLE TO COMMON STOCK $ 639.8 $ 496.9 $ 458.5 ================================================================================================================= Net income per common share: Basic $1.16 $0.94 $0.83 Diluted 1.15 0.94 0.83 Basic weighted average number of common shares outstanding (in thousands) 551,426 525,859 551,787 Diluted weighted average number of common shares outstanding (in thousands) 558,083 530,977 552,659
WM - 8 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions, except share data) (unaudited) Quarter Ended ---------------------------------------------------------------------------------------------------------------------------- Mar. 31, 2001 Dec. 31, 2000 Mar. 31, 2000 Balance Rate Balance Rate Balance Rate ---------------------------------------------------------------------------------------------------------------------------- AVERAGE BALANCES AND WEIGHTED AVERAGE INTEREST RATES Loans $136,856.9 8.22% $122,619.0 8.26% $116,289.7 7.64% Mortgage-backed securities ("MBS") 53,908.6 7.10 56,230.1 7.20 60,046.7 6.81 Investment securities and other 9,552.2 6.14 5,196.8 6.67 4,120.5 5.88 ---------------------------------------------------------------------------------------------------------------------------- Total interest-earning assets 200,317.7 7.82 184,045.9 7.89 180,456.9 7.33 Deposits: Checking accounts 17,108.1 14,299.3 13,515.5 Savings accounts and money market deposit accounts ("MMDAs") 34,929.5 30,242.5 29,853.9 Time deposit accounts 35,608.5 35,315.2 37,598.5 ---------------------------------------------------------------------------------------------------------------------------- Total deposits 87,646.1 4.10 79,857.0 4.25 80,967.9 3.91 Borrowings 110,254.0 6.14 99,852.9 6.68 94,727.5 6.08 ---------------------------------------------------------------------------------------------------------------------------- Total interest-bearing liabilities 197,900.1 5.23 179,709.9 5.60 175,695.4 5.08 Net interest spread 2.59 2.29 2.25 Net interest margin 2.65 2.42 2.38 Total assets 212,764.0 192,127.8 186,376.9 Stockholders' equity 11,456.4 9,668.3 8,885.5
--------------------------------------------------------------------------------------- Quarter Ended Mar. 31, 2001 --------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY ROLLFORWARD Balance, Dec. 31, 2000 $10,165.5 Net income 641.0 Cash dividends declared on common stock (167.6) Cash dividends declared on reedemable preferred stock (1.2) Common stock issued to acquire Bank United Corp. 1,389.0 Common stock issued through employee stock plans, including tax benefit 83.9 Other comprehensive income, net of tax 225.0 --------------------------------------------------------------------------------------- Balance, Mar. 31, 2001 $12,335.6 =======================================================================================
WM - 9 WASHINGTON MUTUAL, INC. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (dollars in millions, except per share data) (unaudited) Mar. 31, 2001 Dec. 31, 2000 Mar. 31, 2000 ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Cash and cash equivalents $ 2,962.7 $ 2,621.8 $ 2,818.0 AFS securities: MBS 46,483.5 40,348.4 40,704.6 Investment securities 9,198.8 1,810.4 444.4 HTM securities: MBS - 16,428.1 18,596.7 Investment securities - 136.5 138.0 Loans held for sale 13,850.3 3,403.9 362.2 Loans: Loans held in portfolio 132,459.6 119,626.1 110,860.0 Allowance for loan and lease losses (1,157.8) (1,013.8) (1,025.2) ------------------------------------------------------------------------------------------------------------------------------------ Total loans, net of allowance for loan and lease losses 131,301.8 118,612.3 109,834.8 Mortgage servicing rights ("MSR") 3,456.4 1,017.3 767.6 Investment in Federal Home Loan Banks ("FHLBs") 3,706.8 3,260.1 3,091.9 Goodwill and other intangible assets 2,192.2 1,083.7 1,165.2 Other assets 6,772.8 5,993.5 10,681.8 ------------------------------------------------------------------------------------------------------------------------------------ Total assets $219,925.3 $194,716.0 $188,605.2 ==================================================================================================================================== LIABILITIES Deposits: Checking accounts $ 19,236.8 $ 14,499.8 $ 15,553.9 Savings accounts and MMDAs 38,792.1 30,655.8 29,702.4 Time deposit accounts 35,306.4 34,418.2 37,256.7 ------------------------------------------------------------------------------------------------------------------------------------ Total deposits 93,335.3 79,573.8 82,513.0 Federal funds purchased and commercial paper 4,029.5 4,114.7 2,410.7 Securities sold under agreements to repurchase ("repurchase agreements") 29,513.9 29,756.1 28,467.7 Advances from FHLBs 66,779.5 57,854.9 57,853.0 Other borrowings 10,318.2 9,930.3 6,832.1 Other liabilities 3,613.3 3,320.7 1,823.1 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 207,589.7 184,550.5 179,899.6 STOCKHOLDERS' EQUITY 12,335.6 10,165.5 8,705.6 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities and stockholders' equity $219,925.3 $194,716.0 $188,605.2 ==================================================================================================================================== Common shares outstanding at end of period (in thousands) (1) 584,754 539,856 552,626 Book value per common share $21.54 $19.26 $16.10 Tangible book value per common share 18.21 17.49 14.24 Full-time equivalent employees at end of period 33,525 28,798 28,205 (1) Includes 12 million shares held in escrow that were not included in the book value per share calculations.
WM - 10 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions, 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, 2001 2000 2000 ------------------------------------------------------------------------------------------------------------------------------- REPORTED FINANCIAL RESULTS Net income $641.0 $496.9 $458.5 Net income per common share $1.16 $0.94 $0.83 Net income per diluted common share 1.15 0.94 0.83 Financial ratios on reported financial results: Return on average assets 1.21% 1.03% 0.98% Return on average common equity 22.34 20.56 20.64 Efficiency ratio, excluding amortization of goodwill and other intangible assets 46.33 48.22 47.61 Efficiency ratio, including amortization of goodwill and other intangible assets 48.04 49.78 49.38 EARNINGS FROM OPERATIONS, EXCLUDING AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS Net income attributable to common stock $639.8 $496.9 $458.5 Total amortization of goodwill and other intangible assets 36.0 25.7 26.7 Income tax expense (6.6) (6.0) (6.0) ------------------------------------------------------------------------------------------------------------------------------------ Amortization of goodwill and other intangible assets, net of tax 29.4 19.7 20.7 ------------------------------------------------------------------------------------------------------------------------------------ Earnings from operations, excluding amortization of goodwill and other intangible assets $669.2 $516.6 $479.2 ==================================================================================================================================== Earnings per diluted common share, excluding amortization of goodwill and other intangible assets $1.20 $0.97 $0.87 Financial ratios on earnings from operations: Return on average assets 1.26% 1.08% 1.03% Return on average common equity 23.37 21.37 21.57
PRO FORMA (1) Income before income tax expense and amortization of goodwill $1,042.9 Income tax expense (374.2) ------------------------------------------------------------------------------------------------ Net income, excluding amortization of goodwill 668.7 Redeemable preferred stock dividends (1.2) ------------------------------------------------------------------------------------------------ Net income attributable to common stock, excluding amortization of goodwill $ 667.5 ================================================================================================ Earnings per diluted common share, excluding amortization of goodwill $1.20 (1) Represents pro forma impact to year-to-date March 31, 2001 net income assuming application of the proposed business combinations accounting standard, which eliminates the amortization of goodwill from net income.
WM - 11 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (unaudited) Mar. 31, Dec. 31, 2001 2000 ------------------------------------------------------------------------------------------------------------------------------ CAPITAL ADEQUACY Stockholders' equity/total assets 5.61% 5.22% Stockholders' equity (1)/total assets (1) 5.54 5.24 Estimated total risk-based capital (2) 10.91 11.07 (1) Excludes unrealized net gain/loss on available-for-sale securities and derivatives. (2) Estimate of what WMI's total risk-based capital ratio would be if it was a bank holding company that complies with Federal Reserve Board capital requirements.
Mar. 31, Dec. 31, Mar. 31, 2001 2000 2000 ------------------------------------------------------------------------------------------------------------------------------ RETAIL CHECKING ACCOUNTS (3) WMB and WMBfsb 1,079,569 1,064,780 1,026,450 WMB, FA 4,159,860 (4) 3,744,195 3,401,775 ------------------------------------------------------------------------------------------------------------------------------ Total retail checking accounts 5,239,429 4,808,975 4,428,225 ============================================================================================================================== RETAIL CHECKING ACCOUNT ACTIVITY (3) Net accounts opened during the quarter: WMB and WMBfsb 14,789 7,656 19,701 WMB, FA 415,665 (4) 98,384 113,591 ------------------------------------------------------------------------------------------------------------------------------ Net new retail checking accounts 430,454 106,040 133,292 ============================================================================================================================== (3) Retail checking accounts exclude commercial business accounts. The information provided refers to the number of accounts, not dollar volume. (4) Includes 271,183 checking accounts acquired from Bank United Corp.
WM - 12 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Quarter Ended -------------------------------------------------------------------------------------------------------------------- Mar. 31, Dec. 31, Mar. 31, 2001 2000 2000 -------------------------------------------------------------------------------------------------------------------- LOAN VOLUME Single-family residential ("SFR"): Adjustable rate ("ARMs") $ 7,374.4 $ 8,766.8 $ 7,970.5 Fixed rate 10,418.0 2,860.4 738.9 Specialty mortgage finance 2,138.4 1,913.4 1,256.5 -------------------------------------------------------------------------------------------------------------------- Total SFR loan volume 19,930.8 13,540.6 9,965.9 SFR - construction 1,197.2 413.9 427.9 Second mortgage and other consumer: Banking subsidiaries 1,335.0 1,426.1 896.2 Washington Mutual Finance 500.8 587.9 513.0 Commercial business 756.2 806.3 445.6 Commercial real estate: Apartment buildings 480.3 410.9 471.9 Other commercial real estate 180.0 124.0 83.4 -------------------------------------------------------------------------------------------------------------------- Total loan volume $24,380.3 $17,309.7 $12,803.9 ==================================================================================================================== LOAN VOLUME BY CHANNEL Originated $20,408.6 $15,665.9 $12,164.8 Purchased 1,228.6 959.3 435.7 Correspondent 2,743.1 684.5 203.4 -------------------------------------------------------------------------------------------------------------------- Total loan volume by channel $24,380.3 $17,309.7 $12,803.9 ==================================================================================================================== REFINANCING ACTIVITY SFR: ARMs $4,321.1 $3,824.1 $2,969.9 Fixed rate 6,290.6 787.4 200.5 SFR - construction 6.2 6.2 4.9 Commercial real estate: Apartment buildings 194.7 154.4 175.7 Other commercial real estate 58.5 68.1 114.0 -------------------------------------------------------------------------------------------------------------------- Total refinances $10,871.1 $4,840.2 $3,465.0 ==================================================================================================================== SFR LOAN ORIGINATIONS (1) Short-term ARMs: Treasury indices $5,228.0 $6,451.5 $5,326.4 COFI 513.7 1,434.4 378.6 Other 2.5 1.9 2.3 -------------------------------------------------------------------------------------------------------------------- Total short-term ARMs 5,744.2 7,887.8 5,707.3 Medium-term ARMs 1,311.6 434.9 2,059.9 Fixed-rate mortgages 7,977.2 2,664.2 732.4 -------------------------------------------------------------------------------------------------------------------- Total SFR loan originations $15,033.0 $10,986.9 $8,499.6 ==================================================================================================================== (1) Does not include purchased and correspondent SFR loans and specialty mortgage finance loans.
WM - 13 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Change from Dec. 31, 2000 Mar. 31, Dec. 31, Mar. 31, to Mar. 31, 2001 2001 2000 2000 ------------------------------------------------------------------------------------------------------------------------------------ LOANS AND MBS BY PROPERTY TYPE Loans held in portfolio: SFR $ 3,353.3 $ 83,534.0 $ 80,180.7 $ 77,245.9 SFR - construction 1,569.7 3,000.4 1,430.7 1,277.1 Second mortgage and other consumer: Banking subsidiaries 1,234.2 9,225.9 7,991.7 6,534.8 Washington Mutual Finance 81.6 2,568.1 2,486.5 2,131.1 Specialty mortgage finance 616.2 7,399.4 6,783.2 3,772.9 Commercial business 2,589.0 4,862.6 2,273.6 1,522.6 Commercial real estate: Apartment buildings 1,432.0 17,089.6 15,657.6 15,442.6 Other commercial real estate 1,957.5 4,779.6 2,822.1 2,933.0 ------------------------------------------------------------------------------------------------------------------------------------ Total loans held in portfolio 12,833.5 132,459.6 119,626.1 110,860.0 Less: allowance for loan and lease losses (144.0) (1,157.8) (1,013.8) (1,025.2) Loans securitized and retained as MBS (5,653.3) 29,115.5 34,768.8 34,179.3 ------------------------------------------------------------------------------------------------------------------------------------ Total loans held in portfolio and loans securitized and retained as MBS 7,036.2 160,417.3 153,381.1 144,014.1 Loans held for sale 10,446.4 13,850.3 3,403.9 362.2 ------------------------------------------------------------------------------------------------------------------------------------ Total loans and loans securitized and retained as MBS 17,482.6 174,267.6 156,785.0 144,376.3 Purchased MBS (4,639.7) 17,368.0 22,007.7 25,122.0 ------------------------------------------------------------------------------------------------------------------------------------ Total loans and MBS $12,842.9 $191,635.6 $178,792.7 $169,498.3 ====================================================================================================================================
Mar. 31, 2001 Dec. 31, 2000 Mar. 31, 2000 ------------------------------------------------------------------------------------------------------------------------ MBS BALANCES BY ORIGINATED AND PURCHASED: AFS MBS: Originated $29,115.5 $18,434.6 $15,729.7 Purchased 17,368.0 21,913.8 24,974.9 ------------------------------------------------------------------------------------------------------------------------ $46,483.5 $40,348.4 $40,704.6 ======================================================================================================================== HTM MBS: Originated $- $16,334.2 $18,449.6 Purchased - 93.9 147.1 ------------------------------------------------------------------------------------------------------------------------ $- $16,428.1 $18,596.7 ========================================================================================================================
WM - 14 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Dec. 31, 2000 to Mar. 31, 2001 ---------------------------------------------------------------------------------------------------- ROLLFORWARD OF LOANS HELD FOR SALE Balance, beginning of period $ 3,403.9 Loans added through acquisitions 6,005.4 Loans originated and purchased 14,931.7 Loans sold or securitized (10,052.5) Loan payments and other (438.2) ---------------------------------------------------------------------------------------------------- Change in loans 10,446.4 ---------------------------------------------------------------------------------------------------- Balance, end of period $13,850.3 ==================================================================================================== ROLLFORWARD OF LOANS HELD IN PORTFOLIO Balance, beginning of period $119,626.1 Loans added through acquisitions 12,333.7 Loans originated and purchased 9,448.6 Loans securitized - Loan payments and other (8,948.8) ---------------------------------------------------------------------------------------------------- Change in loans 12,833.5 ---------------------------------------------------------------------------------------------------- Balance, end of period $132,459.6 ==================================================================================================== ROLLFORWARD OF MORTGAGE SERVICING RIGHTS ("MSR") Balance, beginning of period $1,017.3 Additions through acquisitions 2,143.0 Additions 483.1 Amortization (124.2) Impairment adjustment (62.8) ---------------------------------------------------------------------------------------------------- Balance, end of period(1) $3,456.4 ==================================================================================================== ROLLFORWARD OF LOAN SERVICING PORTFOLIO WITH MSR Balance, beginning of period $ 79,335.3 Additions through acquisitions 112,792.6 Additions 19,005.3 Loan payments and other (9,832.8) ---------------------------------------------------------------------------------------------------- Balance, end of period $201,300.4 ==================================================================================================== Mar. 31, 2001 Balance ---------------------------------------------------------------------------------------------------- TOTAL SERVICING PORTFOLIO Loan servicing portfolio with MSR $201,300.4 Loan servicing portfolio without MSR 6,428.2 Servicing on retained MBS without MSR 12,677.3 Servicing on owned loans 136,361.8 ---------------------------------------------------------------------------------------------------- Total servicing portfolio $356,767.7 ====================================================================================================
Mar. 31, 2001 ----------------------------------------- Unpaid Principal Weighted Average Balance Servicing Fee ---------------------------------------------------------------------------------------------------- TOTAL SERVICING PORTFOLIO, EXCLUDING RETAINED MBS WITHOUT MSR (in basis points, AND OWNED LOANS annualized) Government $ 13,704.2 51 Agency 126,595.9 45 Private 61,377.7 45 Long Beach 6,050.8 50 ---------------------------------------------------------------------------------------------------- Total servicing portfolio, excluding retained MBS without MSR and owned loans $207,728.6 46 ==================================================================================================== (1) At March 31, 2001, aggregate MSR fair value was $3.60 billion.
WM - 15 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Change from Dec. 31, 2000 Mar. 31, Dec. 31, Mar. 31, to Mar. 31, 2001 2001 % of total 2000 % of total 2000 % of total ------------------------------------------------------------------------------------------------------------------------------------ REAL ESTATE LOANS AND MBS Short-term ARMs: COFI $ (1,383.6) $ 41,174.1 25% $ 42,557.7 27% $ 49,532.0 32% Treasury indices (1,162.5) 43,589.5 26 44,752.0 28 33,351.6 21 Other 4,929.1 13,482.6 (1) 8 8,553.5 (1) 5 7,742.6 5 ------------------------------------------------------------------------------------------------------------------------------------ Total short-term ARMs 2,383.0 98,246.2 59 95,863.2 60 90,626.2 58 Medium-term ARMs 3,561.5 32,553.0 19 28,991.5 18 29,520.8 19 Fixed-rate loans 7,996.0 20,831.8 12 12,835.8 8 11,922.4 7 Fixed-rate MBS (5,474.6) 17,106.4 10 22,581.0 14 24,492.7 16 ------------------------------------------------------------------------------------------------------------------------------------ Total real estate loans and MBS $8,465.9 $168,737.4 100% $160,271.5 100% $156,562.1 100% ==================================================================================================================================== (1) At March 31, 2001, the balance included $2.68 billion of securities retained which bear COFI to LIBOR basis risk. At December 31, 2000, the balance included $ 2.75 billion of securities retained which bear COFI to LIBOR basis risk.
Quarter Ended ------------------------------------------------------------------------------ Mar. 31, Dec. 31, Mar. 31, 2001 2000 2000 ------------------------------------------------------------------------------ MORTGAGE BANKING INCOME Loan servicing income $199.3 $94.7 $65.2 Amortization of MSR (124.2) (41.7) (26.0) Impairment of MSR (62.8) (8.7) - Other (19.5) (7.6) (5.9) ------------------------------------------------------------------------------ Net loan servicing income (expense) (7.2) 36.7 33.3 Mortgage related income 48.1 31.7 22.9 Gain from mortgage loans: Realized 84.4 64.0 58.6 Unrealized 102.4 - - ------------------------------------------------------------------------------ Total gain from mortgage loans 186.8 64.0 58.6 Gain on sale of originated MBS 48.7 2.4 - ------------------------------------------------------------------------------ Total mortgage banking income $276.4 $134.8 $114.8 ==============================================================================
WM - 16 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Mar. 31, 2001 Dec. 31, 2000 ----------------------------------------------------------------------------------------------------------------------------------- Balance Term (1) Balance Term (1) ----------------------------------------------------------------------------------------------------------------------------------- DEPOSITS, BORROWINGS AND DERIVATIVES OUTSTANDING (in months) (in months) Deposits: Noninterest-bearing checking accounts, savings accounts, MMDAs and time deposit accounts $ 13,527.5 N/A $ 8,754.8 NA Interest-bearing checking accounts, savings accounts and MMDAs 44,501.6 N/A 36,401.5 NA Interest-bearing time deposit accounts 35,306.2 7 34,417.5 7 ------------------------------------------------------------------------------------------------------------------------------------ Total deposits 93,335.3 79,573.8 Borrowings: Adjustable (2) 58,437.5 1 57,219.1 1 Short-term fixed 38,990.1 2 30,456.6 2 Long-term fixed 13,213.5 49 13,980.3 48 ------------------------------------------------------------------------------------------------------------------------------------ Total borrowings 110,641.1 101,656.0 ------------------------------------------------------------------------------------------------------------------------------------ Total deposits and borrowings $203,976.4 $181,229.8 ====================================================================================================================================
Mar. 31, 2001 Dec. 31, 2000 ------------------------------------------------------------------------------------------------------------------------------------ Notional Fair Notional Fair Amount Value Term (1) Amount Value Term (1) ------------------------------------------------------------------------------------------------------------------------------------ Derivatives: (in months) (in months) WM pay rate swaps: Fixed rate $ 8,461.0 $(112.0) 9 $11,008.1 $(46.4) 9 Variable rate 3,680.0 189.4 1 2,890.0 140.0 2 ------------------------------------------------------------------------------------------------------------------------------------ Total swaps 12,141.0 77.4 13,898.1 93.6 Caps\Collars\Corridors\Swaptions 7,086.2 41.9 6 8,286.2 16.4 1 ------------------------------------------------------------------------------------------------------------------------------------ Total derivatives $19,227.2 $119.3 $22,184.3 $110.0 ==================================================================================================================================== (1) Terms used are remaining term for deposits and term to reprice for borrowings and notional amount of derivatives. (2) Adjustable-rate borrowings included notional values of $13.20 billion of embedded purchased interest rate floors at March 31, 2001 and December 31, 2000. At March 31, 2001, $7.10 billion of these contracts were effective. Contractual start dates for the remaining floors range from April 2001 to July 2003. Once effective, the floors reprice every three months.
WM - 17 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Quarter Ended ------------------------------------------------------------------------------------------------------------------------------------ Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31, 2001 2000 2000 2000 2000 ------------------------------------------------------------------------------------------------------------------------------------ ALLOWANCE FOR LOAN AND LEASE LOSSES Balance, beginning of quarter $1,013.8 $1,011.8 $1,009.7 $1,025.2 $1,041.9 Provision for loan and lease losses 82.3 52.5 47.6 44.1 41.2 Identified allowance for loans sold or securitized (1) - - (2.6) (17.1) (16.9) Allowance acquired through business combinations 119.4 - - - - ------------------------------------------------------------------------------------------------------------------------------------ 1,215.5 1,064.3 1,054.7 1,052.2 1,066.2 Loans charged off: SFR and SFR construction (5.7) (5.2) (3.1) (5.6) (6.8) Second mortgage and other consumer: Banking subsidiaries (12.0) (10.8) (11.6) (9.9) (10.6) Washington Mutual Finance (33.4) (34.1) (30.2) (28.2) (27.1) Specialty mortgage finance (7.2) (2.5) (0.8) (0.8) (0.6) Commercial business (3.7) (3.0) (3.4) (3.7) (0.8) Commercial real estate: Apartment buildings (0.2) (0.3) (0.3) (0.5) (1.2) Other commercial real estate (2.5) (0.3) (0.4) (0.6) (0.4) ------------------------------------------------------------------------------------------------------------------------------------ Total loans charged off (64.7) (56.2) (49.8) (49.3) (47.5) Recoveries of loans previously charged off: SFR and SFR construction 0.7 0.2 0.3 0.8 0.1 Second mortgage and other consumer: Banking subsidiaries 0.9 0.9 0.7 1.0 0.8 Washington Mutual Finance 5.0 3.9 4.4 4.3 4.4 Specialty mortgage finance - - - - 0.5 Commercial business 0.3 0.3 0.3 0.4 0.2 Commercial real estate: Apartment buildings - - 0.8 - 0.5 Other commercial real estate 0.1 0.4 0.4 0.3 - ------------------------------------------------------------------------------------------------------------------------------------ Total recoveries of loans previously charged off 7.0 5.7 6.9 6.8 6.5 ------------------------------------------------------------------------------------------------------------------------------------ Net charge offs (57.7) (50.5) (42.9) (42.5) (41.0) ------------------------------------------------------------------------------------------------------------------------------------ Balance, end of quarter $1,157.8 $1,013.8 $1,011.8 $1,009.7 $1,025.2 ==================================================================================================================================== Net charge offs (annualized) as a percentage of average loans 0.17% 0.16% 0.14% 0.15% 0.14% (1) Allowance is due to loan sales and securitizations during the applicable quarters.
WM - 18 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Mar. 31, Dec. 31, Mar. 31, 2001 2000 2000 ------------------------------------------------------------------------------------------------------------------------------- ALLOWANCE FOR LOAN AND LEASE LOSSES AS A PERCENTAGE OF: Nonaccrual loans 91% 114% 128% Nonperforming assets 80 98 104 Changes in the liability for losses on loans securitized with recourse and retained or sold, included in "Other liabilities," were as follows: ALLOWANCE FOR RECOURSE OBLIGATIONS: Balance, beginning of quarter $104.3 $106.1 $113.1 Acquisitions 4.1 - - Charge offs, net of provision for recourse losses (2.9) (1.8) (3.6) ------------------------------------------------------------------------------------------------------------------------------- Balance, end of quarter $105.5 $104.3 $109.5 =============================================================================================================================== The total loss coverage represents the allowance for loan and lease losses and allowance for recourse obligations as a percentage of nonaccrual loans: Total loss coverage percentage 99% 126% 142%
WM - 19 WASHINGTON MUTUAL, INC. SELECTED FINANCIAL INFORMATION (dollars in millions) (unaudited) Mar. 31, 2001 Dec. 31, 2000 Mar. 31, 2000 -------------------------------------------------------------------------------------------------------------------------------- NONPERFORMING ASSETS ("NPAS") Nonaccrual loans: SFR and SFR construction $ 709.3 $ 547.0 $584.7 Second mortgage and other consumer: Banking subsidiaries 46.2 51.2 37.6 Washington Mutual Finance 66.2 65.6 53.9 Specialty mortgage finance 261.4 178.5 75.5 Commercial business 58.2 12.3 15.6 Commercial real estate: Apartment buildings 19.6 10.1 16.5 Other commercial real estate 110.4 21.0 15.1 -------------------------------------------------------------------------------------------------------------------------------- Total nonaccrual loans 1,271.3 885.7 798.9 Foreclosed assets: SFR and SFR construction 111.0 96.8 137.2 Second mortgage and other consumer: Banking subsidiaries 19.5 16.2 16.7 Washington Mutual Finance 7.1 6.0 4.0 Specialty mortgage finance 31.0 23.9 3.1 Commercial real estate: Apartment buildings 1.4 0.7 3.7 Other commercial real estate 13.3 9.6 25.3 -------------------------------------------------------------------------------------------------------------------------------- Foreclosed assets 183.3 153.2 190.0 -------------------------------------------------------------------------------------------------------------------------------- Total NPAs $1,454.6 $1,038.9 $988.9 ================================================================================================================================ NPAs by property type: SFR and SFR construction $ 820.3 $ 643.8 $721.9 Second mortgage and other consumer: Banking subsidiaries 65.7 67.4 54.3 Washington Mutual Finance 73.3 71.6 57.9 Specialty mortgage finance 292.4 202.4 78.6 Commercial business 58.2 12.3 15.6 Commercial real estate: Apartment buildings 21.0 10.8 20.2 Other commercial real estate 123.7 30.6 40.4 -------------------------------------------------------------------------------------------------------------------------------- Total NPAs $1,454.6 $1,038.9 $988.9 ================================================================================================================================ NPAs as a percentage of: Total loans held in portfolio 1.10% 0.87% 0.89% Total loans held in portfolio and recourse loans and recourse MBS 0.95 0.74 0.74 Total assets 0.66 0.53 0.52