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: July 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.)
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1201 Third Avenue, Seattle, Washington 98101
(Address of principal executive offices) (Zip Code)
(206) 461-2000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On July 18, 2000, Washington Mutual, Inc. issued a press release reporting its results of operations during the three and six months ended June 30, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Press release dated July 18, 2000 reporting results of operations during the three and six months ended June 30, 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: July 21, 2000 By: /s/ Fay L. Chapman
-----------------------
Fay L. Chapman
Senior Executive Vice President
and General Counsel
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Media Contact: Libby Hutchinson
1-800-228-9268
(206) 461-2484
Investor Contacts:JoAnn DeGrande
(206) 461-3186 Ruthanne King July 18, 2000 (206) 461-6421 FOR IMMEDIATE RELEASE |
WASHINGTON MUTUAL ANNOUNCES RECORD SECOND-QUARTER EARNINGS;
BOARD OF DIRECTORS INCREASES CASH DIVIDEND
SEATTLE -- Washington Mutual, Inc. (NYSE: WM) today announced record second-quarter earnings of $490.8 million or 92 cents per diluted share, up from second-quarter 1999 earnings of $452.7 million or 78 cents per share. Earnings per share on a year-to-date basis were $1.75 for the first six months of 2000 versus $1.54 for the same period in 1999.
Highlights of the recent quarter included:
o a return on average common equity of 22.97 percent;
o $80.7 million gain resulting from the sale of $8.45 billion of loans,
which included $7.27 billion of seasoned residential loans;
o an efficiency ratio, excluding amortization of intangible assets, of 46.99
percent;
o record total loan volume of $17.95 billion, which included on a
year-over-year-basis, a 38 percent increase in residential adjustable-rate
mortgage loan originations and an 82 percent increase in second mortgage
and other consumer loans generated by the company's banking subsidiaries;
o a 32 percent increase in depositor and other retail banking fees, year
over year; and
o net growth of more than 133,000 retail checking accounts.
Based on the company's second-quarter performance, the board of directors declared a cash dividend on the common stock of 29 cents per share, an increase from the previous quarter's cash dividend of 28 cents per share. Dividends on the common stock are payable August 15, 2000 to shareholders of record as of July 31, 2000.
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"The strength of Washington Mutual's core operations was evident in our second-quarter performance," said Kerry Killinger, the company's chairman, president and CEO. "Loan volume was even stronger than in last year's second quarter despite a much more challenging interest rate environment. Our efforts to significantly increase noninterest income continued to produce excellent results and we continued to effectively manage expenses. All in all, it was a very good quarter in a tough operating environment."
SECOND-QUARTER RESULTS
Second-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
Higher short-term interest rates and controlled growth of the balance sheet produced net interest income of $1.09 billion versus $1.15 billion a year earlier. Killinger noted that rising rates continued to place pressure on the margin during the second quarter and will continue to do so in the third quarter. The spread during the quarter was 2.30 percent, compared with 2.58 percent for the same period last year. The margin was 2.43 percent in the most recent quarter versus 2.74 percent for second quarter 1999. The spread benefited during the quarter from a special dividend of $28.2 million paid by the Federal Home Loan Bank of San Francisco.
Depositor and other retail banking fees were a record $239.8 million, up 32 percent from $182.1 million a year earlier. Helping drive this increase in fee income was the addition of 482,064 net new retail checking accounts over the twelve-month period ending June 30, 2000. During the second quarter, the company added over 133,000 net new retail checking accounts.
The strong growth in noninterest income was also fueled by a significant increase in securities fees and commissions, which were $83.5 million for the second quarter of 2000, up 20 percent from $69.4 million for the same period one year ago.
It is the company's strategy to sell the majority of its conforming fixed-rate loan production as it is originated as well as to sell the loans originated through Long Beach Mortgage. Sales of fixed-rate loans and those loans originated through Long Beach were low during the quarter, however. In order to take advantage of the favorable pricing of its stock, the company sold seasoned adjustable-rate mortgage loans. During the quarter, the sale of current and seasoned production totaling $8.45 billion resulted in a gain of $80.7 million, compared with $28.0 million for the second quarter of 1999. The company retained $1.06 billion of securities from these transactions.
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LENDING
Total loan volume, which includes loans originated by the company, purchased loans and loans originated by correspondents, increased to a record $17.95 billion for the quarter, up 16 percent from $15.47 billion one year ago.
Single-family residential (SFR) loan volume (excluding residential construction) was $11.61 billion, as compared with $12.15 billion one year ago. Of the second-quarter SFR volume, 88 percent were adjustable-rate mortgages, up from 69 percent for the same period in 1999.
Killinger noted that the company continues to make good progress toward its five-year plan to remix the balance sheet. Originations and purchases of second mortgage and other consumer, specialty mortgage finance, commercial business, commercial real estate and residential construction loans totaled $6.34 billion for the most recent quarter, up 91 percent over $3.31 billion in the second quarter of 1999.
EFFICIENCY RATIO
The efficiency ratio (defined as noninterest expense, excluding amortization of intangible assets, as a percentage of net interest income and other income) was 46.99 percent for the most recent quarter compared with 47.95 percent in last year's second quarter.
Noninterest expense, including expenses associated with Long Beach Mortgage, totaled $775.2 million in the second quarter of 2000, compared with second-quarter 1999's figure of $748.6 million, which included $36.6 million of transaction-related expense but did not include Long Beach expenses.
CREDIT QUALITY
Total nonperforming assets were $973.6 million at June 30, 2000, down from $988.9 million at March 31, 2000 and represented just 0.52 percent of total assets at the end of the second quarter of 2000.
The company's provision for loan losses was $44.1 million, versus $42.9 million for the same period in the previous year. Net loan charge-offs for the second quarter were $42.5 million, compared with $59.0 million a year earlier. At June 30, 2000, loan loss reserves totaled $1.01 billion, and represented 126 percent of nonaccrual loans.
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BALANCE SHEET AND CAPITAL MANAGEMENT
The sale of seasoned loans during the first half of 2000 limited balance sheet growth during the period and enabled the company to deploy excess capital toward the repurchase of its common stock. Consolidated assets at June 30, 2000, were $185.69 billion, compared with $188.61 billion at March 31, 2000 and $186.51 billion at Dec. 31, 1999.
During the second quarter, the company purchased 15 million shares of its common stock at an average price of $26.94. From April 20, 1999 through June 30, 2000, the company repurchased approximately 66 million shares of stock as part of its previously announced purchase programs totaling 111 million shares. Washington Mutual had approximately 539 million shares outstanding at June 30, 2000.
Stockholders' equity at June 30, 2000 was $8.55 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 June 30, 2000, transaction account balances, including checking, savings and money market deposits, represented 55 percent of total deposits, compared with 54 percent at the end of the second quarter of 1999. The average deposit balance during the second quarter was $80.34 billion, versus $83.92 billion during the second quarter of 1999.
COMPANY UPDATES
oBased on the favorable customer acceptance and strong initial results of its project "Occasio" in Las Vegas, the company recently announced plans to open 40 financial stores (branches) in the greater Phoenix area beginning in the first quarter of 2001. Occasio stores combine banking and customer service with a retail experience and environment more reminiscent of The Gap or Starbucks than a typical bank branch.
Results from the initial five Southern Nevada financial stores have surpassed the company's expectations. In the first few months of operation, the stores have generated twice as many checking account openings and three times the dollar volume of deposits as the average for previous new Washington Mutual branches.
The Occasio concept, which was 18 months in development, was driven by extensive customer research and testing. The end result is an emotionally appealing retail environment that offers broad services to maximize customer choice and streamlined processes that make banking quick and easy.
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o On May 8, the company's Mortgage Banking Group announced partnerships with two electronic mortgage origination companies, GHR Systems, Inc., and Framework, Inc., to develop an industry-leading mortgage origination and decisioning platform known as "Optis."
Project Optis, derived from the Latin word optimus, meaning "best," and options, implying the power of freedom of choice, will enable increased originations and operating efficiency for the company, and improved service, flexibility and access for borrowers, brokers, realtors and correspondents.
The end-to-end origination system will service all Washington Mutual distribution channels, including retail, wholesale, and correspondent mortgage lending, and the company's mortgage origination web site, www.wamumortgage.com.
o In June, Washington Mutual's Financial Services Group launched an innovative suite of web sites at its new online destination, www.Invest1to1.com. The sites provide online financial planning, stock trading and research, and investment information for the mutual fund family known as the WM Group of Funds.
Invest1to1.com features personalized and custom content driven by the visitor's demographics and knowledge level. Using the site's online calculators, guests can determine their net worth and establish financial goals. The site also features a financial services "university," offering financial IQ tests, risk questionnaires and a comprehensive investing and financial glossary. Future developments at the site will include proprietary asset allocation and portfolio analysis tools.
OUTLOOK
"Our company will continue to execute the business plan that management believes will place Washington Mutual in the top quartile of industry performers," Killinger said. "Although the current interest rate environment presents a near-term challenge, we're confident we are creating shareholder value over time. Value creation can be achieved by continuing to profitably grow all areas of our business, finding ways to effectively deploy capital, further implementing our eBusiness initiatives, keeping a watchful eye on credit quality and continuing to deliver a superior level of service to our customers. Meanwhile, should interest rates stabilize, we would anticipate an even brighter outlook in the months to come."
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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 June 30, 2000, Washington Mutual and its subsidiaries had consolidated assets of $185.69 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 Wednesday, July 19 at 10:30 a.m. Eastern time at www.wamu.com.
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WASHINGTON MUTUAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
(unaudited)
Quarter Ended Six Months Ended
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June 30, Mar. 31, June 30, June 30, June 30,
2000 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Loans $2,237,514 $2,221,191 $2,013,372 $4,458,705 $4,041,874
Available-for-sale ("AFS") securities 702,647 692,244 646,322 1,394,891 1,185,334
Held-to-maturity ("HTM") securities 333,187 339,096 258,416 672,283 505,793
Other interest and dividend income 88,655 51,115 41,512 139,770 80,739
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Total interest income 3,362,003 3,303,646 2,959,622 6,665,649 5,813,740
INTEREST EXPENSE
Deposits 803,068 787,855 792,694 1,590,923 1,606,321
Borrowings 1,467,044 1,431,081 1,018,220 2,898,125 1,931,516
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Total interest expense 2,270,112 2,218,936 1,810,914 4,489,048 3,537,837
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Net interest income 1,091,891 1,084,710 1,148,708 2,176,601 2,275,903
Provision for loan losses 44,076 41,162 42,857 85,238 84,557
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Net interest income after provision for loan losses 1,047,815 1,043,548 1,105,851 2,091,363 2,191,346
NONINTEREST INCOME
Depositor and other retail banking fees 239,773 211,033 182,114 450,806 345,531
Securities fees and commissions 83,516 82,573 69,364 166,089 128,886
Insurance fees and commissions 10,836 11,479 10,269 22,315 20,939
Loan servicing income 39,134 33,269 23,881 72,403 49,912
Loan related income 29,044 24,021 26,859 53,065 53,406
Gain on sale of loans 80,671 61,228 28,021 141,899 66,383
Gain (loss) from securities (1,758) (21,566) 342 (23,324) (2,351)
Other income 19,027 21,027 23,268 40,054 53,556
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Total noninterest income 500,243 423,064 364,118 923,307 716,262
NONINTEREST EXPENSE
Compensation and benefits 335,480 330,406 302,120 665,886 603,729
Occupancy and equipment 148,080 152,501 137,160 300,581 272,064
Telecommunications and outsourced information services 77,359 76,927 67,180 154,286 137,244
Depositor and other retail banking losses 23,169 25,522 22,642 48,691 47,889
Transaction-related expense - - 36,569 - 60,371
Amortization of goodwill and other intangible assets 27,137 26,746 23,262 53,883 48,635
Foreclosed asset (income) expense (3,777) (1,395) 1,956 (5,172) 5,750
Other expense 167,755 133,871 157,735 301,626 302,809
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Total noninterest expense 775,203 744,578 748,624 1,519,781 1,478,491
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Income before income taxes 772,855 722,034 721,345 1,494,889 1,429,117
Income taxes 282,093 263,542 268,671 545,635 532,325
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NET INCOME $490,762 $458,492 $452,674 $949,254 $896,792
========================================================================================================================
NET INCOME ATTRIBUTABLE TO COMMON STOCK $490,762 $458,492 $452,674 $949,254 $896,792
========================================================================================================================
Net income per common share:
Basic $0.92 $0.83 $0.78 $1.75 $1.54
Diluted 0.92 0.83 0.78 1.75 1.54
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WM - 8
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
Quarter Ended Six Months Ended
-----------------------------------------------------------------------------------------------------------------------------------
June 30, Mar. 31, June 30, June 30, June 30,
2000 2000 1999 2000 1999
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DATA USED TO COMPUTE PER SHARE AMOUNTS
Net income attributable to basic and diluted common stock $490,762 $458,492 $452,674 $949,254 $896,792
Average common shares used to calculate earnings per share:
Basic 532,327,052 551,787,125 580,214,730 542,057,088 581,072,470
Common stock equivalents 1,172,475 871,533 2,179,938 1,022,004 2,387,996
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Diluted 533,499,527 552,658,658 582,394,668 543,079,092 583,460,466
FINANCIAL RATIOS
Return on average assets 1.07% 0.98% 1.05% 1.03% 1.06%
Return on average common equity 22.97 20.64 19.04 21.78 18.91
Efficiency ratio:
Including amortization of intangible assets 48.69 49.38 49.49 49.03 49.41
Excluding amortization of intangible assets 46.99 47.61 47.95 47.29 47.79
WEIGHTED AVERAGE INTEREST RATES
Yield on loans 7.88% 7.64% 7.36% 7.76% 7.40%
Yield on mortgage-backed securities ("MBS") 6.90 6.81 6.61 6.85 6.68
Yield on investment securities 8.43 5.88 5.54 7.24 5.55
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Yield on interest-earning assets 7.57 7.33 7.07 7.44 7.14
Cost of deposits 4.02 3.91 3.79 3.97 3.85
Cost of borrowings 6.35 6.08 5.26 6.21 5.34
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Cost of interest-bearing liabilities 5.27 5.08 4.49 5.17 4.54
Net interest spread 2.30 2.25 2.58 2.27 2.60
Net interest margin 2.43 2.38 2.74 2.41 2.76
AVERAGE BALANCES
Loans $113,597,564 $116,289,707 $109,523,390 $114,943,499 $109,400,323
MBS 59,525,121 60,046,653 54,227,044 59,785,887 50,019,420
Investment securities 4,674,386 4,120,524 3,681,555 4,397,455 3,646,188
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Total interest-earning assets 177,797,071 180,456,884 167,431,989 179,126,841 163,065,931
Deposits:
Checking accounts 14,375,905 13,515,496 14,084,977 13,945,700 13,717,228
Savings accounts and money market deposit accounts("MMDAs") 29,264,717 29,853,950 30,147,595 29,559,334 29,451,511
Time deposit accounts 36,697,784 37,598,504 39,687,533 37,148,144 40,934,433
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Total deposits 80,338,406 80,967,950 83,920,105 80,653,178 84,103,172
Borrowings 92,903,373 94,727,478 77,666,546 93,815,288 72,861,536
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Total interest-bearing liabilities 173,241,779 175,695,428 161,586,651 174,468,466 156,964,708
Total assets 183,712,586 186,376,917 173,205,859 185,044,732 168,748,350
Stockholders' equity 8,544,297 8,885,473 9,509,791 8,714,885 9,483,253
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WM - 9
WASHINGTON MUTUAL, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands, except per share amounts)
(unaudited)
June 30, 2000 Dec. 31, 1999 June 30, 1999
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ASSETS
Cash and cash equivalents $2,810,397 $3,040,167 $1,706,954
Trading securities 35,737 34,660 29,899
AFS securities:
MBS 40,193,874 40,972,653 39,663,120
Investment securities 450,087 411,665 405,992
HTM securities:
MBS 17,888,680 19,263,413 14,145,918
Investment securities 137,414 138,052 138,135
Loans:
Loans held in portfolio 112,918,396 113,745,650 111,142,106
Loans held for sale 1,746,486 793,504 824,494
Reserve for loan losses (1,009,728) (1,041,929) (1,053,589)
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Total loans, net of reserve for loan losses 113,655,154 113,497,225 110,913,011
Mortgage servicing rights 841,048 643,185 492,619
Foreclosed assets 172,091 198,961 244,188
Premises and equipment 1,539,702 1,558,649 1,530,636
Investment in Federal Home Loan Banks ("FHLBs") 3,151,187 2,916,749 2,419,151
Goodwill and other intangible assets 1,134,406 1,199,854 960,091
Other assets 3,677,413 2,638,397 2,391,700
---------------------------------------------------------------------------------------------------------------
Total assets $185,687,190 $186,513,630 $175,041,414
===============================================================================================================
LIABILITIES
Deposits:
Checking accounts $ 15,021,583 $ 13,489,471 $ 13,546,078
Savings accounts and MMDAs 29,358,141 30,048,378 31,499,804
Time deposit accounts 36,216,624 37,591,919 38,079,432
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Total deposits 80,596,348 81,129,768 83,125,314
Federal funds purchased and commercial paper 1,491,998 866,543 3,448,525
Securities sold under agreements to repurchase
("reverse repurchase agreements") 26,745,734 30,162,823 26,286,536
Advances from FHLBs 59,324,779 57,094,053 46,223,504
Other borrowings 6,780,208 6,203,197 4,894,603
Other liabilities 2,196,358 2,004,567 2,001,370
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Total liabilities 177,135,425 177,460,951 165,979,852
STOCKHOLDERS' EQUITY 8,551,765 9,052,679 9,061,562
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Total liabilities and stockholders' equity $185,687,190 $186,513,630 $175,041,414
===============================================================================================================
Common shares outstanding at end of period (1) 538,780,421 571,589,272 582,765,123
Book value per common share $16.23 $16.18 $15.88
Tangible book value per common share 14.38 14.32 14.53
Full-time equivalent employees at end of period 28,255 28,509 28,108
(1) Includes 12 million shares held in escrow that were not included in the book
value per share calculations.
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WM - 10
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 Six Months Ended
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June 30, Mar. 31, June 30, June 30, June 30,
2000 2000 1999 2000 1999
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REPORTED FINANCIAL RESULTS
Net income $490,762 $458,492 $452,674 $949,254 $896,792
Net income per diluted common share $0.92 $0.83 $0.78 $1.75 $1.54
Financial ratios on reported financial results:
Return on average assets 1.07% 0.98% 1.05% 1.03% 1.06%
Return on average common equity 22.97 20.64 19.04 21.78 18.91
Efficiency ratio, excluding amortization of intangible assets 46.99 47.61 47.95 47.29 47.79
OPERATING FINANCIAL RESULTS, EXCLUDING TRANSACTION-RELATED EXPENSE
Reported pretax income $772,855 $722,034 $721,345 $1,494,889 $1,429,117
Transaction-related expense - - 36,569 - 60,371
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Adjusted pretax income 772,855 722,034 757,914 1,494,889 1,489,488
Provision for income taxes 282,093 263,542 282,291 545,635 554,812
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Earnings from operations, excluding transaction-related expense(a) $490,762 $458,492 $475,623 $949,254 $ 934,676
==================================================================================================================================
Earnings per diluted common share $0.92 $0.83 $0.82 $1.75 $1.60
Financial ratios on operating financial results:
Return on average assets 1.07% 0.98% 1.10% 1.03% 1.11%
Return on average common equity 22.97 20.64 20.01 21.78 19.71
Efficiency ratio, excluding amortization of intangible assets 46.99 47.61 45.53 47.29 45.77
EARNINGS FROM OPERATIONS, EXCLUDING TRANSACTION-RELATED EXPENSE AND AMORTIZATION OF INTANGIBLE ASSETS
(a) Earnings from operations, excluding transaction-related expense $490,762 $458,492 $475,623 $949,254 $934,676
Total amortization of intangible assets during the period 27,137 26,746 23,262 53,883 48,635
Tax benefit (1) 6,275 6,058 4,619 12,333 9,712
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Amortization of intangible assets, net of tax 20,862 20,688 18,643 41,550 38,923
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Earnings from operations, excluding transaction-related
expense and amortization of intangible assets $511,624 $479,180 $494,266 $990,804 $973,599
==================================================================================================================================
Earnings per diluted common share $0.96 $0.87 $0.85 $1.82 $1.67
Financial ratios on earnings from operations:
Return on average assets 1.11% 1.03% 1.14% 1.07% 1.15%
Return on average common equity 23.95 21.57 20.79 22.74 20.53
(1) Cash basis calculations exclude intangible assets and the related amortization expense.
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WM - 11
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(unaudited)
June 30, Mar. 31,
2000 2000
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CAPITAL ADEQUACY
Stockholders' equity/total assets 4.61% 4.62%
Stockholders' equity (1)/total assets (1) 5.09 5.04
Estimated risk-based capital (2) 11.29 11.45
(1) Excludes unrealized net loss on available-for-sale securities.
(2) Estimate of what WMI's risk-based capital would be if it were a bank
holding company that complies with Federal Reserve capital requirements.
June 30, Mar. 31, June 30,
2000 2000 1999
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RETAIL CHECKING ACCOUNTS (3)
WMB and WMBfsb 1,040,850 1,026,450 966,135
WMB, FA 3,520,385 3,401,775 3,113,036
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Total retail checking accounts 4,561,235 4,428,225 4,079,171
====================================================================================================
RETAIL CHECKING ACCOUNT ACTIVITY (3)
Net accounts opened during the quarter:
WMB and WMBfsb 14,400 19,701 25,293
WMB, FA 118,610 113,591 53,329
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Net new retail checking accounts 133,010 133,292 78,622
====================================================================================================
(3) Retail checking accounts exclude commercial business accounts. The information provided refers
to the number of accounts, not dollar volume.
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WM - 12
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Quarter Ended Six Months Ended
--------------------------------------------------------------------------------------------------------------
June 30, Mar. 31, June 30, June 30, June 30,
2000 2000 1999 2000 1999
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LOAN VOLUME
Single-family residential ("SFR"):
Adjustable rate ("ARMs") $10,220.1 $ 7,970.5 $ 8,377.3 $18,190.6 $14,501.8
Fixed rate 1,392.6 738.9 3,774.5 2,131.5 8,270.1
SFR - construction 540.6 427.9 570.7 968.5 951.3
Second mortgage and other consumer:
Banking subsidiaries 1,299.9 896.2 712.9 2,196.1 1,336.1
Washington Mutual Finance 527.1 452.0 460.3 979.1 862.8
Specialty mortgage finance 2,800.5 1,382.7 775.7 4,183.2 1,248.0
Commercial business 704.5 445.6 303.7 1,150.1 602.1
Commercial real estate:
Apartment buildings 412.1 471.9 427.0 884.0 751.7
Other commercial real estate 50.5 83.4 63.0 133.9 122.0
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Total loan volume $17,947.9 $12,869.1 $15,465.1 $30,817.0 $28,645.9
==============================================================================================================
As a percentage of total loan volume:
SFR, excluding SFR construction 65% 68% 79% 66% 79%
All other 35 32 21 34 21
LOAN VOLUME BY CHANNEL
Originated $15,855.9 $12,164.8 $13,663.5 $28,020.7 $25,543.5
Purchased 1,651.6 500.9 1,801.6 2,109.1 3,102.4
Correspondent 440.4 203.4 - 687.2 -
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Total loan volume by channel $17,947.9 $12,869.1 $15,465.1 $30,817.0 $28,645.9
==============================================================================================================
SFR LOAN ORIGINATIONS (1)
Short-term ARMs:
Treasury indices $ 7,214.6 $5,326.4 $ 2,791.1 $12,541.0 $ 4,737.5
COFI 1,598.6 378.6 150.5 1,977.2 276.2
Other 1.3 2.3 1.4 3.6 6.9
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Total short-term ARMs 8,814.5 5,707.3 2,943.0 14,521.8 5,020.6
Medium-term ARMs 1,126.8 2,059.9 4,281.8 3,186.7 7,378.8
Fixed-rate mortgages 1,386.5 732.4 3,774.5 2,118.9 8,270.0
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Total SFR loan originations $11,327.8 $8,499.6 $10,999.3 $19,827.4 $20,669.4
==============================================================================================================
(1) Does not include purchased and correspondent SFR loans.
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WM - 13
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Change from
Mar. 31, 2000 June 30, Mar. 31, June 30,
to June 30, 2000 2000 2000 1999
-----------------------------------------------------------------------------------------------------------------
LOANS AND MBS BY PROPERTY TYPE
Loans held in portfolio:
SFR (1) $(536.8) $76,709.1 $77,245.9 $81,701.3
SFR - construction 83.0 1,360.1 1,277.1 1,067.1
Second mortgage and other consumer:
Banking subsidiaries 466.8 7,001.6 6,534.8 6,036.2
Washington Mutual Finance 184.1 2,315.2 2,131.1 1,868.6
Specialty mortgage finance 1,459.8 5,232.7 3,772.9 1,641.2
Commercial business 314.4 1,837.0 1,522.6 1,248.8
Commercial real estate:
Apartment buildings 127.3 15,569.9 15,442.6 14,405.8
Other commercial real estate (40.2) 2,892.8 2,933.0 3,173.1
-----------------------------------------------------------------------------------------------------------------
Total loans held in portfolio 2,058.4 112,918.4 110,860.0 111,142.1
Loans securitized and retained as MBS (1) (185.3) 33,897.5 34,082.8 24,282.1
-----------------------------------------------------------------------------------------------------------------
Total loans held in portfolio and loans
securitized and retained as MBS 1,873.1 146,815.9 144,942.8 135,424.2
Loans held for sale 1,384.3 1,746.5 362.2 824.5
Less: reserve for loan losses 15.5 (1,009.7) (1,025.2) (1,053.6)
-----------------------------------------------------------------------------------------------------------------
Total loans and loans securitized and retained as MBS 3,272.9 147,552.7 144,279.8 135,195.1
Purchased MBS (1,033.5) 24,185.0 25,218.5 29,526.9
-----------------------------------------------------------------------------------------------------------------
Total loans and MBS $2,239.4 $171,737.7 $169,498.3 $164,722.0
=================================================================================================================
(1) During the second quarter of 2000, loan sales and securitizations totaled $8.45 billion. Of that amount,
$1.06 billion was securitized and retained. During the first quarter of 2000, loan sales and
securitizations totaled $10.66 billion. 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."
June 30, 2000 Dec. 31, 1999 June 30, 1999
--------------------------------------------------------------------------------------------------
MBS BALANCES BY ORIGINATED AND PURCHASED:
AFS MBS:
Originated $16,150.0 $14,381.5 $10,576.0
Purchased 24,043.9 26,591.2 29,087.1
--------------------------------------------------------------------------------------------------
$40,193.9 $40,972.7 $39,663.1
==================================================================================================
HTM MBS:
Originated $17,747.6 $19,123.9 $13,706.1
Purchased 141.1 139.5 439.8
--------------------------------------------------------------------------------------------------
$17,888.7 $19,263.4 $14,145.9
==================================================================================================
|
WM - 14
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Mar. 31, 2000 Dec. 31, 1999
to June 30, 2000 to June 30, 2000
--------------------------------------------------------------------------------------------------
ROLLFORWARD OF LOANS (HELD FOR SALE AND HELD IN PORTFOLIO)
Balance, beginning of period $111,222.2 $114,539.2
Loans originated and purchased 17,947.9 30,817.0
Loans sold or securitized (8,447.0) (19,196.0)
Loan payments and other (6,058.2) (11,495.3)
--------------------------------------------------------------------------------------------------
Change in loans 3,442.7 125.7
--------------------------------------------------------------------------------------------------
Balance, end of period $114,664.9 $114,664.9
==================================================================================================
ROLLFORWARD OF MORTGAGE SERVICING RIGHTS ("MSR")
Balance, beginning of period $767.6 $643.2
Additions 102.4 252.8
Amortization (29.0) (55.0)
Impairment adjustment - -
--------------------------------------------------------------------------------------------------
Balance, end of period $841.0 $841.0
==================================================================================================
ROLLFORWARD OF LOAN SERVICING PORTFOLIO WITH MSR (1)
Balance, beginning of period $64,273.0 $55,268.2
Additions 8,431.8 19,057.3
Loan payments and other (2,204.6) (3,825.3)
--------------------------------------------------------------------------------------------------
Balance, end of period $70,500.2 $70,500.2
==================================================================================================
(1) Rollforward does not include approximately $8.26 billion of loans sold or
securitized without capitalized MSR.
|
WM - 15
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(unaudited)
Change from
Mar. 31, 2000 June 30, Mar. 31, June 30,
to June 30, 2000 2000 % of total 2000 % of total 1999 % of total
----------------------------------------------------------------------------------------------------------------------
(dollars in millions)
REAL ESTATE LOANS AND MBS
Short-term ARMs:
COFI $(7,484.2) $42,047.8 27% $49,532.0 32% $63,296.1 41%
Treasury indices 5,581.7 38,933.3 25 33,351.6 21 18,164.3 12
Other 1,028.8 (1) 8,771.4 5 7,742.6 5 5,277.9 3
----------------------------------------------------------------------------------------------------------------------
Total short-term ARMs (873.7) 89,752.5 57 90,626.2 58 86,738.3 56
Medium-term ARMs 1,031.7 30,552.5 20 29,520.8 19 26,389.9 17
Fixed-rate loans 471.1 12,393.5 8 11,922.4 7 17,650.1 11
Fixed-rate MBS (830.3) 23,662.4 15 24,492.7 16 24,202.5 16
----------------------------------------------------------------------------------------------------------------------
Total real estate loans and MBS $(201.2) $156,360.9 100% $156,562.1 100% $154,980.8 100%
======================================================================================================================
(1) Includes $1.06 billion of REMIC securities retained which bear the COFI to LIBOR basis risk on $3.25 billion
of loans contributed to REMICs.
Quarter Ended Six Months Ended
-------------------------------------------------------------------------------------------------------------------
June 30, Mar. 31, June 30, June 30, June 30,
2000 2000 1999 2000 1999
-------------------------------------------------------------------------------------------------------------------
(dollars in thousands)
INCOME RELATED TO MORTGAGE LOANS
Loan related income $ 29,044 $ 24,021 $26,859 $ 53,065 $ 53,406
Loan servicing income 39,134 33,269 23,881 72,403 49,912
Gain on sale of loans 80,671 61,228 28,021 141,899 66,383
-------------------------------------------------------------------------------------------------------------------
Total income related to mortgage loans $148,849 $118,518 $78,761 $267,367 $169,701
===================================================================================================================
|
WM - 16
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
June 30, 2000 Mar. 31, 2000
-----------------------------------------------------------------------------------------------------------------
Balance Term (1) Balance Term (1)
-----------------------------------------------------------------------------------------------------------------
(in months) (in months)
DEPOSITS, BORROWINGS AND DERIVATIVES OUTSTANDING
Deposits:
Noninterest-bearing checking accounts $ 8,952.7 NA $ 9,136.5 NA
Interest-bearing checking accounts, savings accounts and MMDAs 35,427.0 NA 36,119.8 NA
Time deposit accounts 36,216.6 8 37,256.7 8
-------------------------------------------------------------------------------------------------------------------
Total deposits 80,596.3 82,513.0
Borrowings:
Adjustable 53,247.5 1 57,401.1 1
Short-term fixed 26,221.7 2 22,531.7 2
Long-term fixed 14,873.5 47 15,630.6 45
-------------------------------------------------------------------------------------------------------------------
Total borrowings 94,342.7 95,563.4
-------------------------------------------------------------------------------------------------------------------
Total deposits and borrowings $174,939.0 $178,076.4
===================================================================================================================
Notional amount of derivatives:
WM pay rate swaps:
Fixed rate $12,967.0 14 $13,707.0 14
Variable rate 2,140.0 2 1,060.0 1
-------------------------------------------------------------------------------------------------------------------
Total swaps 15,107.0 14,767.0
Caps\Collars\Corridors 9,333.8 1 10,138.8 1
-------------------------------------------------------------------------------------------------------------------
Total derivatives $24,440.8 $24,905.8
===================================================================================================================
(1) Terms used are remaining term for deposits and term to reprice for borrowings and notional amount
of derivatives.
|
WM - 17
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
Quarter Ended
----------------------------------------------------------------------------------------------------------------------------
June 30, Mar. 31, Dec. 31, Sept. 30, June 30,
2000 2000 1999 1999 1999
----------------------------------------------------------------------------------------------------------------------------
RESERVE FOR LOAN LOSSES
Balance, beginning of quarter $1,025.2 $1,041.9 $1,051.4 $1,053.6 $1,069.7
Provision for loan losses 44.1 41.2 41.7 40.8 42.9
Transfers of reserves (1) (17.1) (16.9) (6.4) - -
Loans charged off:
SFR and SFR construction (5.6) (6.8) (8.3) (9.9) (8.5)
Second mortgage and other consumer:
Banking subsidiaries (9.9) (10.6) (9.9) (12.2) (10.4)
Washington Mutual Finance (28.2) (27.1) (26.5) (23.5) (22.7)
Specialty mortgage finance (0.8) (0.6) (0.3) (0.1) (0.1)
Commercial business (3.7) (0.8) (1.1) (0.7) (1.3)
Commercial real estate:
Apartment buildings (0.5) (1.2) (2.2) (1.2) (10.2)
Other commercial real estate (0.6) (0.4) (4.7) (2.2) (12.7)
----------------------------------------------------------------------------------------------------------------------------
Total loans charged off (49.3) (47.5) (53.0) (49.8) (65.9)
Recoveries of loans previously charged off:
SFR and SFR construction 0.8 0.1 1.4 0.5 0.2
Second mortgage and other consumer:
Banking subsidiaries 1.0 0.8 0.8 1.0 0.7
Washington Mutual Finance 4.3 4.4 4.0 3.8 4.1
Specialty mortgage finance - 0.5 0.3 - -
Commercial business 0.4 0.2 0.2 0.1 0.2
Commercial real estate:
Apartment buildings - 0.5 1.4 0.7 -
Other commercial real estate 0.3 - 0.1 0.7 1.7
----------------------------------------------------------------------------------------------------------------------------
Total recoveries of loans previously charged off 6.8 6.5 8.2 6.8 6.9
----------------------------------------------------------------------------------------------------------------------------
Net charge offs (42.5) (41.0) (44.8) (43.0) (59.0)
----------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter $1,009.7 $1,025.2 $1,041.9 $1,051.4 $1,053.6
============================================================================================================================
Net charge offs (annualized) as a percentage of average loans 0.15% 0.14% 0.15% 0.15% 0.22%
(1) Transfers are due to loan sales and securitizations during the applicable quarters.
|
WM - 18
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
June 30, Mar. 31, June 30,
2000 2000 1999
--------------------------------------------------------------------------------------------------------
RESERVE FOR LOAN LOSSES AS A PERCENTAGE OF:
Nonaccrual loans 126% 128% 128%
Nonperforming assets 104 104 99
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 $109.5 $113.1 $128.0
Charge offs, net of provision for recourse losses (3.2) (3.6) (6.0)
--------------------------------------------------------------------------------------------------------
Balance, end of quarter $106.3 $109.5 $122.0
========================================================================================================
The total loss coverage represents the reserve for loan losses and recourse liability as a percentage
of nonaccrual loans:
Total loss coverage percentage 139% 142% 143%
|
WM - 19
WASHINGTON MUTUAL, INC.
SELECTED FINANCIAL INFORMATION
(dollars in millions)
(unaudited)
June 30, 2000 Mar. 31, 2000 June 30, 1999
------------------------------------------------------------------------------------------------------
NONPERFORMING ASSETS ("NPAS")
Nonaccrual loans:
SFR and SFR construction $545.6 $584.7 $ 661.5
Second mortgage and other consumer:
Banking subsidiaries 38.1 37.6 46.7
Washington Mutual Finance 61.2 53.9 48.8
Specialty mortgage finance 104.2 75.5 5.0
Commercial business 15.7 15.6 7.0
Commercial real estate:
Apartment buildings 14.5 16.5 37.2
Other commercial real estate 22.2 15.1 14.2
------------------------------------------------------------------------------------------------------
Total nonaccrual loans 801.5 798.9 820.4
Foreclosed assets:
SFR and SFR construction 119.5 137.2 181.3
Second mortgage and other consumer:
Banking subsidiaries 16.4 16.7 14.2
Washington Mutual Finance 6.3 4.0 1.9
Specialty mortgage finance 8.5 3.1 -
Commercial real estate:
Apartment buildings 2.4 3.7 19.9
Other commercial real estate 19.0 25.3 26.9
------------------------------------------------------------------------------------------------------
Net foreclosed assets 172.1 190.0 244.2
------------------------------------------------------------------------------------------------------
Total NPAs $973.6 $988.9 $1,064.6
======================================================================================================
NPAs by property type:
SFR and SFR construction $665.1 $721.9 $ 842.8
Second mortgage and other consumer:
Banking subsidiaries 54.5 54.3 60.9
Washington Mutual Finance 67.5 57.9 50.7
Specialty mortgage finance 112.7 78.6 5.0
Commercial business 15.7 15.6 7.0
Commercial real estate:
Apartment buildings 16.9 20.2 57.1
Other commercial real estate 41.2 40.4 41.1
------------------------------------------------------------------------------------------------------
Total NPAs $973.6 $988.9 $1,064.6
======================================================================================================
NPAs as a percentage of:
Total loans 0.85% 0.89% 0.95%
Total loans and recourse loans and recourse MBS 0.72 0.74 0.77
Total assets 0.52 0.52 0.61
|