Filed by Washington Mutual, Inc. pursuant
to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to Rule
14a-12 of the Securities Exchange Act of
1934.
Subject company: Bank United Corp.
Commission File No: 0-21017
[Logo] Washington Mutual Inc.
Acquisition of
[Logo] Bank United
August 21, 2000
Forward-Looking Statement
This presentation contains forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this presentation that are not historical facts. When used in this presentation, the words "expects," "anticipates," "intends," "plans," "believes," " seeks," "estimates" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed under the heading "Business-Risk Factors" in the company's 1999 Annual Report on Form 10-K, which reasons include: the risk of the interest rate environment further compressing our margin and adversely affecting our net interest income; the risk of continued diversification of our assets and adverse changes to credit quality; competition from other financial services companies in all our markets; and the concentration of operations in California adversely affecting our operating results if the California economy or real estate market declines; the risk of our inability to integrate the operations of Bank United in an efficient manner and achieve the projected cost savings; and the risk of a slowdown in the Texas economy that would adversely affect credit quality and loan origination.
[Logo] Washington Mutual, Inc. [Logo] Bank United
Transaction Summary
Summary Terms of the Merger Agreement
Purchase Price per Bank United Share (a): $42.6562
Fixed Exchange Ratio: 1.30 WAMU Shares for each BNKU Share
Total Transaction Value: (b) $1,485 million
Consideration: 100% common stock/ mandatorily convertible securities
Accounting: Purchase Accounting
Tax Treatment to Bank United Shareholders Common stock consideration tax free / Forbearance units taxable
Caps / Collars: None
Termination Fee: Approximately 3.5% of transaction value ($52 million)
Expected Closing Date: Late 4th Quarter 2000/Early 1st Quarter 2001
Contingencies and Conditions: Bank United shareholder approval and regulatory approvals
Forbearance Claim Lawsuit: Exclusive rights to be separately distributed to Bank United shareholders
Trust established to administer forbearance litigation claim
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(a) Based on closing price for WAMU of $32.8125 on August 18, 2000
(b) Includes value of common stock, mandatorily convertible securities and
options issued
[Logo] Washington Mutual, Inc. [Logo] Bank United
Strategic Rationale
Bank United: Solid Business Fundamentals, Attractive Market Extension
Opportunity, Consistent with Washington Mutual's Strategy
o Financially attractive transaction
o Favorable Texas market dynamics
o Substantially improved competitive position in Texas
o New lending opportunities
o Low risk execution
[Logo] Washington Mutual, Inc. [Logo] Bank United
Financially Attractive Transaction
Across a Complete Range of Metrics, the Acquisition of Bank United is
Attractively Valued and Structured
o Valuation multiples compare favorably to comparable transactions
o Conservative pro forma assumptions
o Accretive to GAAP EPS in 2002
o Immediately accretive to cash EPS
o IRR in excess of 20%
[Logo] Washington Mutual, Inc. Bank United [Logo]
Financially Attractive Transaction
Selected Comparable Transactions
Implied WAMU/BNKU
Multiples (a)
Price as a Multiple of:
LTM GAAP Earnings 11.6 x
Forward GAAP EPS (b) 9.9
Book Value (c) 1.67 x
Tangible Book Value (c) 1.85
Tangible Book Premium to Deposits (d) 7.8%
Market Premium (30 days) - 21.0%
Including Litigation Units (e)
Market Premium (30 days) - 14.9%
Excluding Limitation Units (e)
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(a) Based on purchase price of $42.65625 and 32.477 million diluted Bank United
shares outstanding
(b) Based on First Call Calendar Year 2001 EPS projections for BNKU
(c) Based on reported June 30, 2000 data
(d) Deposit premium calculated as premium as a percent of total deposits less
brokered deposits
(e) Based on WAMU closing stock price as of August 18, 2000 and BNKU closing
stock price as of July 18, 2000
[Logo] Washington Mutual, Inc. [Logo] Bank United
Financially Attractive Transaction
Conservative Financial Assumptions
o First call estimates for WAMU and BNKU
o Fully phased-in pre-tax cost savings of $87 million (30% of Bank United's core
operating expenses)
o No operating revenue/fee enhancements assumed
o $185.5 million of non-tax deductible Bank United fixed rate preferred stock
refinanced with FHLB advances
o Estimated intangibles approximately $800 million
[Logo] Washington Mutual, Inc. [Logo] Bank United
Financially Attractive Transaction
Summary EPS Accretion/(Dilution)
$ in millions except per share values
Projected December 31,
2001E 2002E
----------------------- -----------------------
WAMU Estimated Net Income (a) $ 2,156 $ 2,437
Bank United Estimated Net Income (b) 144 162
Combined Net Income 2,300 2,598
Combined Cash Net Income (c) 2,392 2,689
Adjustments (After-Tax)
Cost Savings Synergies (d) $ 29 $ 60
Goodwill Amortization (e) (27) (27)
Financing Savings (f) 13 13
----------------------- -----------------------
Total Adjustments 14 46
Pro Forma Combined Net Income $ 2,314 $ 2,645
Pro Forma Cash Net Income (g) 2,433 2,763
Status Quo Diluted Shares Outstanding 534 534
Shares Issued in Transaction 43 43
Pro Forma Diluted Shares Outstanding 577 577
Status Quo GAAP EPS $ 4.04 $ 4.57
Pro Forma GAAP EPS 4.01 4.59
$ Accretion / (Dilution) (0.03) 0.02
% Accretion / (Dilution) -0.75% 0.37%
Status Quo Cash EPS $ 4.20 $ 4.72
Pro Forma Cash EPS 4.22 4.79
$ Accretion / (Dilution) 0.02 0.07
% Accretion / (Dilution) 0.43% 1.38%
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Based on First Call estimates as of 8/18/00.
(a) Assuming $4.04 2001 EPS estimate, growing at 13% with 533.7 mm diluted
shares outstanding.
(b) Assuming $4.32 2001 EPS estimate, growing at 12% with 33.4 mm diluted shares
outstanding.
(c) Includes $92.0 mm of existing goodwill amortization for WAMU and BNKU.
(d) Assumes 5% growth in core operating expense base. Excluding anticipated
transition costs.
(e) Assumes acquisition goodwill of $545.9 million amortized over 20 yrars; does not include core deposit intangibles of $160 million amortized over 7 years, which is offset by accretion of purchase accounting adjustments.
(f) Includes FHLB funding advantage, benefit from preferred refinancing and
cash-on-cash effect.
(g) Includes add-back of goodwill amortization.
Financially Attractive Transaction
Pro Forma Analysis
Projected Cost Savings
$ in millions Cost Bank United
Savings LTM G&A
2000 as of 6/30/00
-------------- ---------------
Compensation and Benefits $ 49.9 36%
Occupancy 8.5 32%
Data Processing 7.3 27%
Other Non-Interest Expenses 21.4 21%
-------------- ---------------
After-Tax Cost Savings $ 87.1 30%
-------------- ---------------
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[Logo] Washington Mutual, Inc. [Logo] Bank United
Texas is an Attractive, High Growth Banking Market
o Large and Growing Economy
- Third largest U.S. state economy
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- 20 million people
- 4.4% projected average annual economic growth in Texas vs. 2.9% for the
U.S. (2000-2004)
- 4.3% CAGR in per capita income in Texas vs. 4.0% in the U.S. (2000-2004)
o Attractive Retail Banking Market
- 4th largest deposit market in the country / 4th largest branch network
in the country
o Expanding Market
- 8.4% projected population growth in Texas vs 4.2% nationwide (1999-
2004)
- Leading U.S. state in net job creation (7.2% of U.S. Employment)
- Dallas and Houston (Bank United's two largest markets) are the fastest
growing markets in Texas
Sources: U.S. Census Bureau, Texas Comptroller, Texas Department of Economic Development
[Logo] Washington Mutual, Inc. [Logo] Bank United
Substantially Improved Competitive Position in Texas Texas Franchise Comparison
$ in mils) WAMU Bank United Pro Forma Total Deposits $1,930 $8,819 $10,749 Average Branch Size 40.2 56.9 56.3 Depository Branches (a)(b) 48 155 191 Branches in Supermarket Stores 11 72 83 ATMs 64 158 222 FTEs 330 2,622 2,302 (c) Number of Households (000s) 103 300 403 Number of Checking Accounts (000s) 79 264 343 |
(a) Assumes 12 branch closings.
(b) Includes branches in supermarket stores.
(c) Assumes reduction in 650 FTEs.
[Logo] Washington Mutual, Inc. [Logo] Bank United
Substantially Improved Competitive Position in Texas Further Strengthens WAMU's Presence in Leading Retail Banking Markets
[Map of Western U.S., Texas and Florida showing distribution of WAMU and Bank United branches]
National Depository Branch Franchise
State Deposits ($ in bn) Deposit Share Branch Rank California $56.2 12.4% 549 2 Texas (pro forma) (a) 10.7 4.0 191 5 Washington 9.7 13.8 184 2 Florida 7.2 3.1 129 5 Oregon 3.8 10.0 79 2 Nevada 0.0 n/a 12 n/a Other States 0.7 n/a 45 n/a Total $88.3 1,189 |
Sources include regulatory reports as of 6/30/00 and SNL Securities as of 6/30/99 (market share) (a) Texas data assumes 12 branch closings.
[Logo] Washington Mutual, Inc. [Logo] Bank United
Substantially Improved Competitive Position in Texas Bank United provides WAMU with a Strong Position in Texas' Two Key MSAs
Texas Franchise
Pro Forma Texas Market Share Rank: #5
[Map Graphic of Texas showing distribution of Bank United branches]
Houston MSA ($ in millions)
Rank Institution Branches Deposits Market Share 1 Chase Manhattan 51 $9,945 19.20% 2 Bank of America 89 5,756 11.11 3 Pro Forma WAMU/Bank United 86 5,460 10.54 3 Wells Fargo 96 4,700 9.07 4 Bank United 59 4,229 8.16 5 Bank One 42 3,737 7.21 9 Washington Mutual 27 1,231 2.38 |
Dallas MSA ($ in millions)
Rank Institution Branches Deposits Market Share 1 Bank of America 122 $9,609 20.1% 2 Bank One 53 7,880 16.49 3 Chase Manhattan 34 3,599 7.53 4 Pro Forma WAMU/Bank United 72 2,195 4.59 4 Compass Bancshares 32 1,881 3.94 5 Bank United 56 1,668 3.49 17 Washington Mutual 16 527 1.10 |
Sources: SNL Securities deposit data as of June 30, 1999 Does not assume any branch closing.
[Logo] Washington Mutual, Inc. [Logo] Bank United
o Increases origination of higher margin commercial loans ($4.8 billion of originations over past 9 months)
o Experienced management team
o Attractive commercial lending businesses extend WAMU product line
Adds 23 commercial banking offices nationwide
Business lines include: Mortgage Banker Finance; Multi-Family Lending; Residential Construction Lending; Commercial Real Estate Lending; Healthcare Lending; SBA and Small Business Lending; Commercial Syndication; Energy and Agricultural Lending
o Complementary mortgage servicing business
Servicing portfolio of $26.5 billion at June 30, 2000
Approximately 49% of portfolio comprised of GNMA
o Adds 19 SBA leading offices nationwide
- #1 SBA lender in Texas / #4 nationwide
o Adds 11 wholesale mortgage offices nationwide
Attractive Business Line Extension
Bank United Maintains a Diversified Portfolio of Loans
$ in mils
Loan Portfolio
WAMU % of Total Bank United % of Total WAMU/ % of Total
(a) (b) Bank United
Pro Forma
One-to-Four Family (c) $134,791 79% $503 49% $142,294 76%
Construction 1,360 1% 2,274 15% 3,634 3%
Multifamily 15,570 9% 955 6% 16,525 9%
Commercial Real Estate 2,893 2% 985 6% 3,877 2%
Construction 1,360 1% 2,274 15% 3,634 3%
Consumer 9,317 5% 828 5% 10,145 5%
SBA & Other Commercial 1,837 1% 2,764 18% 4,601 2%
Specialty Mortgage Finance 5,233 3% - 0% 5,233 3%
Gross Loans $171,000 100% $15,309 100% $186,309 100%
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(a) Source: Bank United Press Release June 30, 2000, excludes SFR loans held for
sale.
(b) Source: WAMU Press Release filed June 30, 2000, excludes SFR loans held for
sale.
(c) Includes mortgage-backed securities.
[Logo] Washington Mutual, Inc. [Logo] Bank United
Bank United is a Well-Managed Franchise/Straight Forward Integration
o Straightforward integration process o Compatible consumer strategy
o Bank United's management team and infrastructure focused on minimizing
interest rate and credit risk
o Thorough due diligence
[Logo] Washington Mutual, Inc. [Logo] Bank United
Low Risk Transaction
History of Strong Credit Quality at Bank United
o Low-level of NPAs
Bank United Non Performing Assets/Total Assets
[Bar Graph] 1.12% 0.62% 0.59% 0.67% 0.70% FY 1996 FY 1997 FY 1998 FY 1999 6/30/00 |
o Complementary Commercial Banking Strategy
o Focus on real estate-related industries/companies on a national basis
o Emphasis on origination of higher yielding assets
o Low loss experience
Bank United Historical Net Charge-off/Avg. Loans
[Bar Graph] 0.17% 0.23% 0.13% 0.05% FY 1996 FY 1997 FY 1998 FY 1999 6/30/00 Annualized |
Source: Bank United 9/30/99 10-K, 6/30/00 Press Release
[Logo] Washington Mutual, Inc. [Logo] Bank United
Strategic Rationale
Well-Positioned Franchise, Coupled With Attractive Market Fundamentals, Customer
Demographics and Competitive Environment in Texas; Conducive to Profitable
Implementation of WAMU's Strategy
o Financially Attractive Transaction
o Attractive Texas market dynamics
o Substantially improved competitive position in Texas
o New lending opportunities
o Low risk execution
[Logo] Washington Mutual, Inc. [Logo] Bank United