WASHINGTON MUTUAL, INC (Form: 8-K, Received: 07/18/2007 16:37:58)

UNITED STATES

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, 2007

Washington Mutual, Inc.

(Exact name of registrant as specified in its charter)

Washington	1-14667	91-1653725
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)


1301 Second Avenue, Seattle, Washington	98101
(Address of principal executive offices)	(Zip Code)

(206) 461-2000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS

Item 1.01 Entry into a Material Definitive Agreement

Effective July 17, 2007, Washington Mutual, Inc. (the “Company”) entered into indemnification agreements (the “Agreements”) with Anne V. Farrell, Stephen E. Frank, Kerry K. Killinger, Thomas C. Leppert, Charles M. Lillis, Philip D. Matthews, Regina T. Montoya, Michael K. Murphy, Margaret Osmer McQuade, Mary E. Pugh, William G. Reed, Jr., Orin C. Smith, and James H. Stever, all of the current directors of the Company. The Agreements supplement and clarify existing indemnification provisions currently contained in the Company’s articles of incorporation and bylaws.

Along with the Company’s articles of incorporation and bylaws, the Agreements generally provide that the Company will indemnify and hold harmless each director to the fullest extent permitted by applicable law for all expenses, liabilities and losses actually and reasonably incurred in connection with any actual, threatened or pending actions, suits or proceedings brought because of the director’s service to the Company or the director’s service to any other entity provided at the request of the Company, in each case subject to the terms, conditions and limitations contained in the Agreements. In addition, each Agreement provides for the advancement of expenses incurred by a director, subject to certain exceptions, in connection with any action, suit or proceeding covered by the Agreement. A form of the Agreements is filed as Exhibit 10.1 to this Current Report on Form 8-K and the foregoing description of the Agreements contained herein is qualified in its entirety by reference to such exhibit.

SECTION 2 – FINANCIAL INFORMATION

Item 2.02 Results of Operations and Financial Condition

On July 18, 2007, Washington Mutual, Inc. issued a press release and held a conference call regarding its results of operations and financial condition for the quarter and six months ended June 30, 2007. The text of the press release is included as Exhibit 99.1 to this report, the financial supplement to the press release is included as Exhibit 99.2 to this report and management’s prepared remarks for the conference call is included as Exhibit 99.3 to this report. The information included in the press release text, financial supplement and management’s prepared remarks for the conference call is considered to be “furnished” under the Securities Exchange Act of 1934. The Company will include final financial statements and additional analyses for the quarter and six months ended June 30, 2007, as part of its Form 10-Q covering that period.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits

(d) The following exhibits are being either filed or furnished herewith:

Exhibit No.		Exhibit Description

10.1		Form of Indemnification Agreement executed by each Company director, effective as of July 17, 2007 (Filed herewith).
99.1		Press release text of Washington Mutual, Inc. dated July 18, 2007 (Furnished herewith).
99.2		Financial supplement of Washington Mutual, Inc. (Furnished herewith).
99.3		Management’s prepared remarks for Washington Mutual, Inc. Conference Call held on July 18, 2007 (Furnished herewith).

SIGNATURE

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.

Dated: July 18, 2007	By:	/s/ Fay L. Chapman
		Fay L. Chapman
		Senior Executive Vice President

Exhibit 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement, dated as of July ___, 2007, is made by and between Washington Mutual, Inc., a Washington corporation (the “Corporation”) and ____________ (the “Indemnitee”).

RECITALS

A. The Corporation recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors;

B. The statutes and judicial decisions regarding the duties of directors are often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors with adequate, reliable knowledge of legal risks to which they are exposed or information regarding the proper course of action to take;

C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large amounts and the costs of litigation may be so enormous (whether or not the case is meritorious), that the defense and/or settlement of such litigation is often beyond the personal resources of directors;

D. The Corporation believes that it is unfair for its directors to assume the risk of huge judgments and other expenses which may occur in cases in which the director received no personal profit or benefit to which he or she was not entitled, did not improperly vote for or assent to a distribution and was not culpable of intentional misconduct or a knowing violation of law;

E. The Corporation believes that the interests of the Corporation and its shareholders would best be served by a combination of liability insurance and the indemnification by the Corporation of the directors of the Corporation;

F. The Corporation’s articles of incorporation (the “Articles”) and bylaws (the “Bylaws”) require the Corporation to indemnify its directors to the fullest extent permitted by the Washington Business Corporation Act (the “WBCA”). The Bylaws expressly provide that the indemnification provisions set forth therein are not exclusive, and contemplate that agreements may be entered into between the Corporation and its directors with respect to indemnification;

G. The WBCA, under which the Corporation is organized, empowers the Corporation to indemnify its directors by agreement and to indemnify persons who serve, at the request of the Corporation, as the directors, officers, employees or agents of other corporations or enterprises, and expressly provides that the indemnification provided by the WBCA is not exclusive;

H. Section 8.32 of the WBCA allows a corporation to include in its Articles a provision limiting or eliminating the personal liability of a director for monetary damages to the Corporation or its shareholders except in certain enumerated circumstances, and the Corporation has provided in its Articles that each director shall be exculpated from such liability to the maximum extent permitted by law;

I. The Board of Directors has determined that contractual indemnification as set forth herein is not only reasonable and prudent but also promotes the best interests of the Corporation and its shareholders;

J. The Corporation desires Indemnitee to serve or continue to serve as a director of the Corporation free from undue concern for unwarranted claims for damages arising out of or related to such services to the Corporation; and

K. Indemnitee is willing to serve, continue to serve or to provide additional service for or on behalf of the Corporation on the condition that he or she is furnished the indemnity provided for herein.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Generally.

To the fullest extent permitted by the laws of the State of Washington:

(a) The Corporation shall indemnify and hold harmless Indemnitee if Indemnitee was or is a party or is threatened to be made a party to or is involved in (including, without limitation, as a witness) any actual, pending or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee is or was, or has agreed to serve as, a director of the Corporation, or being or having been a director of the Corporation, is or was serving or has agreed to serve at the request of the Corporation as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of the Corporation or another corporation or of a partnership, joint venture, trust, other enterprise including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity or in any other capacity while serving in an official capacity. For the avoidance of doubt, the foregoing indemnification obligation includes, without limitation, claims for monetary damages against Indemnitee in respect of an alleged breach of fiduciary duties, to the fullest extent permitted under the WBCA.

(b) The indemnification provided by this Section 1 shall be from and against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement), actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such action, suit or proceeding and any appeal therefrom.

(c) Notwithstanding the foregoing provisions of this Section 1, the Corporation shall not indemnify any person from or on account of any acts or omissions of such person finally adjudged to be intentional misconduct or knowing violation of the law by such person, from conduct of the person in violation of Section 8.31 of the WBCA or from or on account of any transaction with respect to which it is finally adjudged that such person personally received a benefit in money, property or services to which such person was not legally entitled (collectively, the “indemnification standards”). In addition, except as provided in Section 8 hereof with respect to proceedings seeking indemnification, the Corporation shall not indemnify any person with respect to an action, suit or proceeding initiated by that person unless such action, claim or proceeding was authorized by the Board of Directors of the Corporation.

(d) Without limiting the situations in which a person shall be considered to be serving at the request of the Corporation, a director who serves as a director, officer, employee or agent of the Corporation or another corporation or other enterprise that is a subsidiary of the Corporation shall be deemed to be serving at the request of the Corporation, where “subsidiary” means (i) a corporation or other enterprise in which a majority of the voting stock or other voting power is owned or controlled by the Corporation directly or though one or more subsidiaries or (ii) a corporation or other enterprise which is consolidated on the Corporation’s financial statements or is reported using the equity method.

(e) The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not satisfy the indemnification standards.

Section 2. Successful Defense; Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the expenses, liabilities or losses (including attorneys’ fees, judgments, fines or amounts paid in settlement) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any action, suit, proceeding or investigation, or in defense of any claim, issue or matter therein, and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses, liabilities or losses (including attorneys’ fees, judgments, fines or amounts paid in settlement) to which Indemnitee is entitled.

Section 3. Determination That Indemnification Is Proper; Authorization.

(a) If and to the extent that under applicable law or otherwise the Corporation is required to make a determination that the Indemnitee has met the indemnification standards, any such determination may be made (i) by a majority vote of the directors who are not parties to the action, suit or proceeding in question (“disinterested directors”), (ii) by a majority vote of a committee consisting solely of two or more disinterested directors designated by the Board of Directors, in which designation directors who are parties may participate, (iii) by special legal counsel or other persons (A) selected by the Board of Directors or its committee in the manner described in clauses (i) or (ii) of this sentence or (B) if a quorum of the Board of Directors cannot be attained under clause (i) and a committee cannot be designated under clause (ii), selected by majority vote of the full Board of Directors, in which selection directors who are parties may participate, (iv) by the shareholders, but shares owned by or voted under the control of directors who are at the time not disinterested directors may not be voted on the determination, or (v) by a court of competent jurisdiction.

(b) Authorization of indemnification and evaluation as to reasonableness of expenses and costs, if and to the extent required by applicable law or otherwise, may be made in the same manner as the determination that indemnification is proper under Section 1(c), except that if the determination is made by special legal counsel, authorizations of indemnification and evaluation as to reasonableness of expenses and costs may be made by those entitled under clause (iii) of Section 3(a) to select counsel.

Section 4. Advance Payment of Expenses; Notification and Defense of Claim.

(a) Expenses (including attorneys’ fees) incurred by Indemnitee in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding, or in connection with an enforcement action pursuant to Section 5(b), shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding within twenty (20) days after receipt by the Corporation of (i) a statement or statements from Indemnitee requesting such advance or advances from time to time, and (ii) an undertaking by or on behalf of Indemnitee to repay such amount or amounts, only if, and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized by this Agreement or otherwise. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment. Advances shall be unsecured and interest-free.

(b) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim thereof is to be made against the Corporation hereunder, notify the Corporation of the commencement thereof. The failure to promptly notify the Corporation of the commencement of the action, suit or proceeding, or Indemnitee’s request for indemnification, will not relieve the Corporation from any liability that it may have to Indemnitee hereunder, except to the extent the Corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.

(c) In the event the Corporation shall be obligated to pay the expenses of Indemnitee with respect to an action, suit or proceeding, as provided in this Agreement, the Corporation, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same action, suit or proceeding, provided that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such action, suit or proceeding at Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously authorized in writing by the Corporation, (ii) counsel to the Corporation or Indemnitee shall have reasonably concluded that there may be a conflict of interest or position, or reasonably believes that a conflict is likely to arise, on any significant issue between the Corporation and Indemnitee in the conduct of any such defense, (iii) the Corporation shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding, or (iv) the Corporation is not financially or legally able to pay or otherwise perform its indemnification obligations, then the fees and expenses of Indemnitee’s counsel shall be at the expense of the Corporation, except as otherwise expressly provided by this Agreement. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Corporation or Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

(d) Notwithstanding any other provision of this Agreement to the contrary, to the extent that Indemnitee is, by reason of Indemnitee’s corporate status with respect to the Corporation or any corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee is or was serving or has agreed to serve at the request of the Corporation, a witness or otherwise participates in any action, suit or proceeding at a time when Indemnitee is not a party in the action, suit or proceeding, the Corporation shall indemnify Indemnitee against all expenses (including attorneys’ fees) actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

Section 5. Procedure for Indemnification.

(a) To obtain indemnification, Indemnitee shall promptly submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b) The Corporation’s determination whether to grant Indemnitee’s indemnification request shall be made promptly, and in any event within sixty (60) days following receipt of a request for indemnification pursuant to Section 5(a). The right to indemnification as granted by Section 1 of this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or fails to respond within such 60-day period, or 20 days in the case of a claim for expenses incurred in defending a proceeding in advance of its final disposition. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under Section 4 hereof where the required undertaking, if any, has been received by the Corporation) that Indemnitee has not met the indemnification standards, but the burden of proving such defense by clear and convincing evidence shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors or one of its committees, its special legal counsel, and its shareholders) to have made a determination prior to the commencement of such action that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the indemnification standards, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors or one of its committees, its special legal counsel, and its shareholders) that Indemnitee has not met the indemnification standards of conduct, shall be a defense to the action or create a presumption that Indemnitee has or has not met the indemnification standards. The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Corporation.

(c) The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification pursuant to this Section 5, and the Corporation shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used as a basis for a determination of entitlement to indemnification unless the Corporation overcomes such presumption by clear and convincing evidence. Such presumption shall apply both to the determination and/or authorization made by the Corporation in connection with the claim and in any suit or action to enforce the claim or otherwise relating to the claim. Such presumption shall include a presumption that Indemnitee has satisfied the indemnification standards and, in addition, has acted in good faith and in a manner in which Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation. The knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the Corporation or a subsidiary, shall not be imputed to the Indemnitee for purposes of determining the right to indemnification under this Agreement or otherwise.

Section 6. Insurance and Subrogation.

(a) The Corporation may purchase and maintain insurance on behalf of Indemnitee who is or was or has agreed to serve at the request of the Corporation as a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf in any such capacity, or arising out of Indemnitee’s status as such, whether or not the Corporation would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. If the Corporation has such insurance in effect at the time the Corporation receives from Indemnitee any notice of the commencement of a proceeding, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the policy. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.

(b) In the event of any payment by the Corporation under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Corporation shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

(c) The Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.

Section 7. Certain Definitions . For purposes of this Agreement, the following definitions shall apply:

(a) The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative.

(b) The term “expenses” shall be broadly and reasonably construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the rate of compensation and estimated time involved is approved in accordance with Section 3(b)), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to indemnification under this Agreement.

(c) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever (including, without limitation, all penalties and amounts required to be forfeited or reimbursed to the Corporation), as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).

Section 8. Limitation on Indemnification . Notwithstanding any other provision herein to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

(a) Claims Initiated by Indemnitee . To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof) initiated by Indemnitee, except with respect to an action, suit or proceeding brought to establish or enforce a right to indemnification (which shall be governed by the provisions of Section 8(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

(b) Action for Indemnification . To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in establishing Indemnitee’s right to indemnification in such action, suit or proceeding, in whole or in part, or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish their right to indemnification, Indemnitee is entitled to indemnity for such expenses; provided, however, that nothing in this Section 8(b) is intended to limit the Corporation’s obligation with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 4 hereof.

(c) Section 16 Violations . To indemnify Indemnitee on account of any proceeding with respect to which final judgment is rendered against Indemnitee for payment or an accounting of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

(d) Banking Law . To indemnify Indemnitee to the extent that such indemnification is not permitted pursuant to any applicable banking laws, regulations, rules or policies including without limitation 12 U.S.C. §1828(k) and 12 C.F.R. Part 359 or is prohibited by any banking regulator with jurisdiction over the Corporation.

(e) Court Prohibition . To indemnify Indemnitee to the extent that a final, unappealable decision rendered by a court of competent jurisdiction finds that paying such indemnification is prohibited by applicable law or determines that the amount of indemnification claimed to be unreasonable.

Section 9. Mutual Acknowledgment . The Corporation and Indemnitee acknowledge that, in certain instances, federal law or public policy may override applicable state law and prohibit the Corporation from indemnifying Indemnitee under this Agreement or otherwise. For example, the Corporation and Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC") has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Furthermore, Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company's right under public policy to indemnify Indemnitee. In addition, Indemnitee further understands and acknowledges that applicable banking laws, regulations, rules and policies could prohibit the Corporation from indemnifying Indemnitee under this Agreement or otherwise with respect to expenses, liabilities and losses incurred in connection with Indemnitee's service as a director, officer, employee or agent of a depository institution or an entity controlled by a depository institution.

Section 10. Certain Settlement Provisions . The Corporation shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Corporation’s prior written consent, which shall not be unreasonably withheld. The Corporation shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld. The Corporation shall not enter into any settlement of any action, suit or proceeding in which the Corporation is jointly liable with the Indemnitee unless such settlement provides for a full and final release of all claims asserted against the Indemnitee.

Section 11. Savings Clause . If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify Indemnitee as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

Section 12. Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is finally adjudicated by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Corporation shall, to the fullest extent permitted by law, contribute to the payment of Indemnitee’s costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, in an amount that is just and equitable in the circumstances, taking into account, among other things, contributions by other directors and officers of the Corporation or others pursuant to indemnification agreements or otherwise; provided, that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of Indemnitee to meet the indemnification standards, or (ii) any limitation on indemnification set forth in Section 6(c), 8 or 10 hereof. The Corporation hereby agrees to fully indemnify and hold the Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Corporation or of a subsidiary who may be jointly liable with the Indemnitee.

Section 13. Form and Delivery of Communications . Any notice, request or other communication required or permitted to be given to the parties under this Agreement shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at such other addresses for a party as shall be specified by like notice):

If to the Corporation:

Washington Mutual, Inc.

1301 Second Avenue

Seattle, WA 98101

Attn: Fay M. Chapman

Facsimile: ______________

If to Indemnitee:

_________________

Attn: ____________

Facsimile: ________

Section 14. Subsequent Legislation . If the WBCA is amended after adoption of this Agreement to expand further the indemnification permitted to directors, then the Corporation shall indemnify Indemnitee to the fullest extent permitted by the WBCA, as so amended.

Section 15. Nonexclusivity . The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Corporation’s Articles or Bylaws, in any court in which a proceeding is brought, the vote of the Corporation’s shareholders or disinterested directors, other agreements or otherwise, and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the benefit of the heirs, executors and administrators of Indemnitee. However, no amendment or alteration of the Corporation’s Articles or Bylaws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.

Section 16. Enforcement . The Corporation shall be precluded from asserting in any judicial proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable. The Corporation agrees that its execution of this Agreement shall constitute a stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which a proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced, continued or appealed, that its obligations set forth in this Agreement are unique and special, and that failure of the Corporation to comply with the provisions of this Agreement will cause irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As a result, in addition to any other right or remedy Indemnitee may have at law or in equity with respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief directing specific performance by the Corporation of its obligations under this Agreement.

Section 17. Interpretation of Agreement . It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by law.

Section 18. Entire Agreement . This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.

Section 19. Modification and Waiver . No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 20. Successor and Assigns . All of the terms and provisions of this Agreement, together with all indemnification rights and benefits of the Indemnitee under the Articles and the Bylaws, shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement, and to honor the Indemnitee’s rights and benefits under the Articles and the Bylaws, in the same manner and to the same extent that the Corporation would be so required if no such succession had taken place.

Section 21. Service of Process and Venue . For purposes of any claims or proceedings to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or state court of competent jurisdiction in the State of Washington, and waives and agrees not to raise any defense that any such court is an inconvenient forum or any similar claim.

Section 22. Supersedes Prior Agreement . This Agreement supersedes any prior indemnification agreement between Indemnitee and the Corporation or its predecessors.

Section 23. Governing Law . Except to the extent preempted by federal law, this Agreement shall be governed by and construed in accordance to the laws of the State of Washington, without giving effect to principles of conflicts of law. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state or jurisdiction other than Washington govern indemnification by the Corporation of its directors, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

Section 24. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.

Section 25. Headings . The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective as of the date first above written.

	WASHINGTON MUTUAL, INC.

	By
		Name:
		Title:

	INDEMNITEE

	By
		Name:
		Title: Director

Exhibit 99.1

Washington Mutual, Inc.

(NYSE: WM)

July 18, 2007

WaMu Reports Second Quarter Earnings Per Share of $0.92, up 16 Percent

Increases Cash Dividend to 56 Cents

WaMu announced today that second quarter 2007 earnings per share increased 16 percent from a year ago. Continued strong performance led to net income of $830 million, or $0.92 per diluted share, compared with net income of $767 million, or $0.79 per diluted share, in the second quarter of 2006. Second quarter net income was also up from $784 million, or $0.86 per share, in the prior quarter.

“We delivered record growth in our retail banking, credit card and commercial businesses during the second quarter. Our Home Loans’ results improved from the first quarter and we are targeting a return to profitability by the end of the year,” said Chairman and CEO Kerry Killinger. “I’m pleased with the job our employees are doing in growing the franchise, delivering best-in-class customer service, as evidenced by our recent J.D. Power award recognition, and focusing on improving our operating efficiency.”

Based on the quarter’s solid performance and the company’s strong financial position, the Board of Directors increased the cash dividend on the company’s common stock for the 48 ^th consecutive quarter to 56 cents per share.

SECOND QUARTER FINANCIAL SUMMARY AND HIGHLIGHTS

Financial Summary
	Three Months Ended
(in millions, except per share data)	June 30, 2007			Mar. 31, 2007			June 30, 2006
Income Statement
Net interest income	$	2,034		$	2,081		$	2,060
Provision for loan and lease losses		372			234			224
Noninterest income		1,758			1,541			1,578
Noninterest expense		2,138			2,105			2,229
Income from continuing operations		830			784			759
Income from discontinued operations, net of taxes		-			-			8
Net income		830			784			767

Diluted earnings per common share	$	0.92		$	0.86		$	0.79

Balance Sheet
Total assets, end of period	$	312,219		$	319,985		$	350,884
Average total assets		316,004			331,905			348,664
Average interest-earning assets		279,836			295,700			313,239
Average total deposits		206,765			210,764			200,252

Performance Ratios
Return on average common equity		13.74	%		12.99	%		11.82	%
Net interest margin		2.90			2.79			2.65
Efficiency ratio		56.38			58.13			61.27
Nonperforming assets/total assets		1.29			1.02			0.62
Tangible equity/total tangible assets		6.07			5.78			5.84

·	New production records set. During the second quarter, the Retail Bank added a record 406,000 net new checking accounts, Card Services opened a record 928,000 new credit card accounts, and the Commercial Group produced record loan volume of $4.3 billion.

Depositor and other retail banking fees up 12 percent year over year. Since the end of last year’s second quarter, the company added over 1.2 million net new checking accounts to its retail base. This tremendous growth in new accounts helped drive depositor and other retail banking fees up 12 percent year over year, or 16 percent after excluding a one-time $21 million incentive payment recognized in the second quarter of last year.

Net interest margin expands 11 basis points to 2.90 percent. During the first quarter, the company sold approximately $17.5 billion of low yielding loans. During the second quarter, the company improved its funding mix, which included reducing the average balance of FHLB advances by $14 billion and increasing lower cost retail deposits by $1.2 billion. The result was a 13 basis point reduction in the company’s cost of funds, which more than offset the 2 basis point decline in the yield on interest-earning assets.

The modest decline in net interest income from the prior quarter and a year ago reflected a decline in average interest-earning assets that overshadowed a substantially improved net interest margin.

The decline in assets reflected not only the portfolio repositioning, but also constrained asset growth in the current interest rate and credit environment.

Home Loans’ results improve. Second quarter results for Home Loans were a loss of $37 million, an improvement from a loss of $113 million in the prior quarter as a result of more stable market conditions for subprime loans in the second quarter. Net losses from the sales of subprime mortgage loans and adjustments to reflect changes in market values of loans held for sale totaled $38 million. In addition, the company decreased the value of its subprime residuals by $93 million for a combined total loss for the quarter of $131 million, or about half the $252 million in losses recognized in the first quarter.

Increase in provision reflects credit card growth and soft housing market. The quarter’s provision increased to $372 million from $234 million in the prior quarter. With the strong growth in credit card receivables held in portfolio, the company increased the provision for loan losses for credit cards to $229 million from $106 million in the first quarter. The mortgage component of the provision continued to reflect the difficult housing environment. Nonperforming assets as a percentage of total assets increased to 1.29 percent from 1.02 percent at the end of the prior quarter reflecting the continued softness of the housing market, along with a decrease in total assets.

Focus on productivity reflects disciplined expense management. Second quarter’s noninterest expense of $2.1 billion was down from the prior year as the benefits of the company’s productivity initiatives continue to be realized. At 56.38 percent, the company’s efficiency ratio for the second quarter showed a significant improvement from 61.27 percent a year ago and reflected the company’s success in growing revenue and its continued focus on productivity.

SECOND QUARTER OPERATING SEGMENT RESULTS

Retail Banking Group

Selected Segment Information
	Three Months Ended
(in millions, except accounts and households)	June 30, 2007		Mar. 31, 2007		June 30, 2006
Net interest income	$	1,283	$	1,275	$	1,323
Provision for loan and lease losses		91		62		13
Noninterest income		819		751		732
Noninterest expense		1,139		1,075		1,109
Net income from continuing operations		558		569		586

Average loans	$	149,716	$	155,206	$	182,891
Average retail deposits		145,252		144,030		138,803
Net change in number of retail checking accounts		406,243		327,776		404,190
Net change in retail households		228,000		195,000		259,000

Retail Bank continues strong performance. With record account growth and a 12 percent year over year increase in depositor fees, the Retail Bank delivered another strong quarter. The modest decline in net income from a year ago reflected an increase in credit costs, particularly for home equity lending, and the 3 percent decline in net interest income, primarily as a result of the 18 percent decline in average loans.

Checking account growth at record level. During the second quarter, the company added a record 406,000 net new checking accounts, up 24 percent from the first quarter. The quarter’s growth was also up 1 percent from the record set in the second quarter a year ago, which included a full quarter of WaMu’s new free checking product. The attractiveness of WaMu’s free checking contributed to the 5 percent increase in average retail deposits from the prior year. The company’s success in attracting new customers also led to an increase in the number of retail households, up 2 percent from the end of the prior quarter and up 9 percent from a year earlier.

Card Services Group (managed basis)

Selected Segment Information
	Three Months Ended
(in millions)	June 30, 2007			Mar. 31, 2007			June 30, 2006
Net interest income	$	660		$	653		$	615
Provision for loan and lease losses		523			388			417
Noninterest income		393			474			389
Noninterest expense		300			325			293
Net income		141			256			181

Average managed receivables	$	24,234		$	23,604		$	20,474
Period-end managed receivables		24,987			23,597			21,095
30+ day managed delinquency rate		5.11	%		5.15	%		5.23	%
Managed net credit losses		6.49			6.31			5.99

Card Services’ fundamentals remain strong. Second quarter results continued to show solid net interest income and expense containment. The decrease in net income from prior periods was due to a higher level of provisioning from the quarter’s strong growth in period-end receivables and a reduction in noninterest income from the lower level of securitization activity in the second quarter.

Card Services opens record number of new accounts. During the quarter, Card Services opened a record 928,000 new credit card accounts. Marketing to WaMu customers is an important growth opportunity for Card Services and has accounted for approximately a third of production. Period-end managed receivables of $25 billion were up 6 percent from the first quarter and up 18 percent from the prior year.

Credit quality reflects strong economy. At 5.11 percent of period-end managed receivables, the 30+ day managed delinquency rate was down from prior quarters due to the strong receivables growth in the quarter. Net credit losses of 6.49 percent during the quarter were up from prior periods with an increase in contractual and bankruptcy losses.

Commercial Group

Selected Segment Information
	Three Months Ended
(in millions)	June 30, 2007		Mar. 31, 2007			June 30, 2006
Net interest income	$	195	$	200		$	166
Provision for loan and lease losses		2		(10	)		(10	)
Noninterest income		62		14			17
Noninterest expense		74		74			57
Net income		113		94			84

Loan volume	$	4,348	$	3,671		$	2,961
Average loans		38,789		38,641			31,505

·	Commercial Group net income up 35 percent year over year. Net income of $113 million for the second quarter was up 35 percent from the same quarter a year ago and was up 20 percent compared with the prior quarter. The improved results primarily reflect the quarter’s higher gain on sale.

·	Loan volume hits record level. Record loan volume of $4.3 billion was up 47 percent from a year ago and was up 18 percent from the prior quarter as a result of the strong growth in multi-family and commercial real estate loans.

Home Loans Group

Selected Segment Information
	Three Months Ended
(in millions)	June 30, 2007			Mar. 31, 2007			June 30, 2006
Net interest income	$	215		$	245		$	290
Provision for loan and lease losses		101			49			38
Noninterest income		391			162			461
Noninterest expense		548			521			617
Net income (loss)		(37	)		(113	)		50

Loan volume	$	31,541		$	30,609		$	41,747
Average loans		43,312			53,254			43,988

Home Loans shows improvement in a difficult environment. While the quarter’s $37 million loss was an improvement from the loss of $113 million in the prior quarter, the difficult mortgage environment continues to pressure results. Net losses from the sales of subprime mortgage loans and adjustments to reflect changes in market values of loans held for sale totaled $38 million, which was a substantial improvement from net losses of $164 million in the first quarter. During the second quarter, the company reduced the value of its subprime residuals by $93 million to a balance of $79 million at quarter end. This decline in fair value was similar to the first quarter and reflected the poor performance of subprime loans and the slowdown in home price appreciation.

Prime business continues to improve. Gain on sale for the prime portion of the business remained strong, but was down slightly primarily on lower sales volume. MSR valuation and risk management results improved during the quarter with the rise in long-term interest rates and lower net hedging costs.

Increase in home loan volume reflects seasonal growth. Prime home loan volume was up 7 percent from the first quarter, as the business rebounded from the typically low first quarter. Subprime mortgage production for the second quarter was down 30 percent from the prior quarter as the company has chosen to reduce its subprime exposure through this point in the cycle. Compared with a year ago, home loan volume was down as the company reduced not only its subprime lending, but also decided to exit its traditional correspondent business.

COMPANY UPDATES

·	On April 18, WaMu launched a $2 billion subprime borrowers’ assistance program which offers a refinance opportunity at a discount to borrowers who are current on their existing mortgage. The goal of the program is to keep as many borrowers as possible in their homes.

·	On April 26, WaMu launched its new Mortgage Plus ^TM product nationwide. The WaMu Mortgage Plus home loan is an all-in-one product that combines a mortgage with the flexibility of a built-in equity line of credit.

·	On May 21, WaMu was named the bank with the best reputation in the U.S. According to U.S. consumers surveyed by Reputation Institute, WaMu’s corporate reputation outranks its banking peers and was the only bank included in the top 50 best regarded companies in the United States.

·	On June 4, J.D. Power and Associates released their 2007 Retail Banking Satisfaction Study. The results, which were reported by region, placed WaMu #1 in the Midwest and West/Pacific regions and #3 in the Mid-Atlantic and Southwest regions.

On July 17, WaMu’s Board of Directors declared a cash dividend of 56 cents per share on the company’s common stock, up from 55 cents per share in the previous quarter. Dividends on the common stock are payable on August 15, 2007 to shareholders of record as of July 31, 2007. In addition to declaring a dividend on the company’s common stock, the company will pay a dividend of $0.3956 per depository share of Series K Preferred Stock to be payable on Sept. 15, 2007 to holders of record on Sept. 1, 2007.

ABOUT WAMU

WaMu, through its subsidiaries, is one of the nation’s leading consumer and small business banks. At June 30, 2007, WaMu and its subsidiaries had assets of $312.22 billion. The company has a history dating back to 1889 and its subsidiary banks currently operate approximately 2,700 consumer and small business banking stores throughout the nation. WaMu’s press releases are available at http://newsroom.wamu.com.

WEBCAST INFORMATION

A conference call to discuss the company’s financial results will be held on Wednesday, July 18, 2007, at 5:00 p.m. ET and will be hosted by Kerry Killinger, chairman and chief executive officer and Tom Casey, executive vice president and chief financial officer. The conference call is available by telephone or on the Internet. The dial-in number for the live conference call is 888-677-5720. Participants calling from outside the United States may dial 210-795-2680. The passcode “WaMu” is required to access the call. Via the Internet, the conference call is available on the Investor Relations portion of the company’s web site at www.wamu.com/ir. A transcript of the prepared remarks will be available on the company’s web site prior to the call and archived for at least 30 days. A recording of the conference call will be available from 7:00 p.m. ET on Wednesday, July 18, 2007, through 11:59 p.m. ET on Friday, August 17, 2007. The recorded message will be available at 800-819-5743. Callers from outside the United States may dial 203-369-3828.

CAUTIONARY STATEMENTS

This document 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 document that are not historical facts. When used in this presentation, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or words of similar meaning, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may” 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 “Factors That May Affect Future Results” in Washington Mutual’s 2006 Annual Report on Form 10-K and “Cautionary Statements” in our Form 10-Q for the quarter ended March 31, 2007 which include:

Volatile interest rates and their impact on the mortgage banking business;

Credit risk;

Operational risk;

Risks related to credit card operations;

Changes in the regulation of financial services companies, housing government-sponsored enterprises and credit card lenders;

Competition from banking and nonbanking companies;

General business, economic and market conditions; and

Reputational risk.

There are other factors not described in our 2006 Form 10-K and Form 10-Q for the quarter ended March 31, 2007 which are beyond the Company’s ability to anticipate or control that could cause results to differ.

####

Media Contact	Investor Relations Contact
Alan Gulick	Alan Magleby
Washington Mutual	Washington Mutual
206-500-2760	206-500-4148 (Seattle)
alan.gulick@wamu.net	212-702-6955 (New York)
	alan.magleby@wamu.net

WM-1

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions, except per share data)
(unaudited)

	Quarter Ended															Six Months Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2007			2007			2006			2006			2006			2007			2006
PROFITABILITY
Net income	$	830		$	784		$	1,058		$	748		$	767		$	1,614		$	1,752
Net interest income		2,034			2,081			1,998			1,947			2,060			4,115			4,176
Noninterest income		1,758			1,541			1,592			1,570			1,578			3,299			3,216
Noninterest expense		2,138			2,105			2,257			2,184			2,229			4,244			4,367

Diluted earnings per common share:
Income from continuing operations	$	0.92		$	0.86		$	0.66		$	0.76		$	0.78		$	1.78		$	1.75
Income from discontinued operations		-			-			0.44			0.01			0.01			-			0.02
Net income		0.92			0.86			1.10			0.77			0.79			1.78			1.77

Diluted weighted average number of common shares outstanding
(in thousands)		893,090			899,706			955,817			967,376			975,504			896,304			989,408
Net interest margin		2.90	%		2.79	%		2.58	%		2.53	%		2.65	%		2.85	%		2.70	%
Dividends declared per common share	$	0.55		$	0.54		$	0.53		$	0.52		$	0.51		$	1.09		$	1.01
Book value per common share (period end) ⁽¹⁾		27.27			27.30			28.21			27.65			27.31			27.27			27.31
Return on average assets		1.05	%		0.95	%		1.20	%		0.86	%		0.88	%		1.00	%		1.01	%
Return on average common equity		13.74			12.99			16.03			11.47			11.82			13.36			13.28
Efficiency ratio ⁽²⁾⁽³⁾		56.38			58.13			62.87			62.09			61.27			57.24			59.08

ASSET QUALITY
Nonperforming assets ⁽⁴⁾ to total assets		1.29	%		1.02	%		0.80	%		0.69	%		0.62	%		1.29	%		0.62	%
Allowance as a percentage of loans held in portfolio		0.73			0.71			0.72			0.64			0.68			0.73			0.68

CREDIT PERFORMANCE
Provision for loan and lease losses	$	372		$	234		$	344		$	166		$	224		$	606		$	306
Net charge-offs		271			183			136			154			116			454			221

CAPITAL ADEQUACY
Capital Ratios for WMI:
Tangible equity to total tangible assets ⁽⁵⁾		6.07	%		5.78	%		6.04	%		5.86	%		5.84	%		6.07	%		5.84	%
Total risk-based capital to total risk-weighted assets ⁽⁶⁾		10.98			11.17			11.77			11.10			11.26			10.98			11.26
Tier 1 capital to average total assets ⁽⁶⁾		6.09			5.87			6.35			6.28			6.24			6.09			6.24
Capital Ratios for WMB (well-capitalized minimum) ⁽⁷⁾ :
Tier 1 capital to adjusted total assets (5.00%)		7.02			6.70			6.79			6.47			6.33			7.02			6.33
Adjusted tier 1 capital to total risk-weighted assets (6.00%)		8.06			7.88			8.28			8.12			8.13			8.06			8.13
Total risk-based capital to total risk-weighted assets (10.00%)		12.05			11.94			12.16			11.30			11.39			12.05			11.39

SUPPLEMENTAL DATA
Average balance sheet:
Total loans held in portfolio	$	216,004		$	222,617		$	239,265		$	242,165		$	242,334		$	219,292		$	237,446
Total interest-earning assets ⁽²⁾		279,836			295,700			314,784			312,827			313,239			287,724			310,523
Total assets		316,004			331,905			353,056			349,542			348,664			323,911			346,175
Total deposits		206,765			210,764			214,801			208,912			200,252			208,753			195,668
Total stockholders' equity		24,436			24,407			26,700			26,147			25,958			24,422			26,388
Period-end balance sheet:
Total loans held in portfolio, net		213,434			215,481			223,330			240,215			241,840			213,434			241,840
Total assets		312,219			319,985			346,288			348,877			350,884			312,219			350,884
Total deposits		201,380			210,209			213,956			210,882			204,558			201,380			204,558
Total stockholders' equity		24,210			24,578			26,969			26,458			26,131			24,210			26,131
Common shares outstanding at the end of period (in thousands) ⁽⁸⁾		875,722			888,111			944,479			945,098			962,880			875,722			962,880
Employees at end of period		49,989			49,693			49,824			51,056			56,247			49,989			56,247

⁽¹⁾	Excludes six million shares held in escrow.
⁽²⁾	Based on continuing operations.
⁽³⁾	The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).
⁽⁴⁾	Excludes nonaccrual loans held for sale.
⁽⁵⁾	Excludes unrealized net gain/loss on available-for-sale securities and derivatives, goodwill and intangible assets (except MSR) and the impact from the adoption and application of FASB Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, as of December 31, 2006. Minority interests of $2.94 billion for June 30, 2007, $2.45 billion for March 31, 2007 and December 31, 2006 and $1.96 billion for September 30, 2006 and June 30, 2006 are included in the numerator.
⁽⁶⁾	The capital ratios are estimated as if Washington Mutual, Inc. were a bank holding company subject to Federal Reserve Board capital requirements.
⁽⁷⁾	Capital ratios for Washington Mutual Bank ("WMB") at June 30, 2007 are preliminary.
⁽⁸⁾	Includes six million shares held in escrow.

WM-2

Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Interest Income
Loans held for sale	$	421		$	562		$	515		$	435		$	395
Loans held in portfolio		3,786			3,900			4,053			4,012			3,887
Available-for-sale securities		351			332			392			379			368
Trading assets		108			113			102			140			165
Other interest and dividend income		82			101			148			139			120
Total interest income		4,748			5,008			5,210			5,105			4,935
Interest Expense
Deposits		1,723			1,772			1,843			1,739			1,461
Borrowings		991			1,155			1,369			1,419			1,414
Total interest expense		2,714			2,927			3,212			3,158			2,875
Net interest income		2,034			2,081			1,998			1,947			2,060
Provision for loan and lease losses		372			234			344			166			224
Net interest income after provision for loan and lease losses		1,662			1,847			1,654			1,781			1,836
Noninterest Income
Revenue from sales and servicing of home mortgage loans		300			125			164			118			222
Revenue from sales and servicing of consumer loans		403			443			372			355			424
Depositor and other retail banking fees		720			665			692			655			641
Credit card fees		183			172			182			165			152
Securities fees and commissions		70			60			54			52			56
Insurance income		29			29			30			31			33
Net gain (loss) on trading assets		(145	)		(108	)		(81	)		68			(129	)
Gain (loss) from sales of other available-for-sale securities		7			35			(1	)		(1	)		-
Other income		191			120			180			127			179
Total noninterest income		1,758			1,541			1,592			1,570			1,578
Noninterest Expense
Compensation and benefits		977			1,002			945			939			1,021
Occupancy and equipment		354			376			476			408			435
Telecommunications and outsourced information services		132			129			133			142			145
Depositor and other retail banking losses		58			61			64			57			51
Advertising and promotion		113			98			107			124			117
Professional fees		55			38			89			57			45
Other expense		449			401			443			457			415
Total noninterest expense		2,138			2,105			2,257			2,184			2,229
Minority interest expense		42			43			34			34			37
Income from continuing operations before income taxes		1,240			1,240			955			1,133			1,148
Income taxes		410			456			315			394			389
Income from continuing operations		830			784			640			739			759
Discontinued Operations ⁽¹⁾
Income from discontinued operations before income taxes		-			-			2			14			12
Gain on disposition of discontinued operations		-			-			667			-			-
Income taxes		-			-			251			5			4
Income from discontinued operations		-			-			418			9			8
Net Income	$	830		$	784		$	1,058		$	748		$	767
Net Income Available to Common Stockholders	$	822		$	777		$	1,050		$	748		$	767

Basic Earnings Per Common Share:
Income from continuing operations	$	0.95		$	0.89		$	0.68		$	0.78		$	0.80
Income from discontinued operations		-			-			0.45			0.01			0.01
Net Income		0.95			0.89			1.13			0.79			0.81

Diluted Earnings Per Common Share:
Income from continuing operations	$	0.92		$	0.86		$	0.66		$	0.76		$	0.78
Income from discontinued operations		-			-			0.44			0.01			0.01
Net Income		0.92			0.86			1.10			0.77			0.79

Dividends declared per common share		0.55			0.54			0.53			0.52			0.51
Basic weighted average number of common shares outstanding (in thousands)		868,968			874,816			931,484			941,898			947,023
Diluted weighted average number of common shares outstanding (in thousands)		893,090			899,706			955,817			967,376			975,504

⁽¹⁾	Represents WM Advisors, Inc., the Company's retail mutual fund management business, which was sold in the fourth quarter of 2006.

WM-3

Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)

	Six Months Ended
	June 30,			June 30,
	2007			2006
Interest Income
Loans held for sale	$	984		$	856
Loans held in portfolio		7,686			7,468
Available-for-sale securities		682			690
Trading assets		221			363
Other interest and dividend income		183			215
Total interest income		9,756			9,592
Interest Expense
Deposits		3,495			2,682
Borrowings		2,146			2,734
Total interest expense		5,641			5,416
Net interest income		4,115			4,176
Provision for loan and lease losses		606			306
Net interest income after provision for loan and lease losses		3,509			3,870
Noninterest Income
Revenue from sales and servicing of home mortgage loans		425			486
Revenue from sales and servicing of consumer loans		846			801
Depositor and other retail banking fees		1,385			1,219
Credit card fees		355			291
Securities fees and commissions		131			108
Insurance income		58			66
Net loss on trading assets		(253	)		(142	)
Gain (loss) from sales of other available-for-sale securities		41			(8	)
Other income		311			395
Total noninterest income		3,299			3,216
Noninterest Expense
Compensation and benefits		1,979			2,054
Occupancy and equipment		731			826
Telecommunications and outsourced information services		261			279
Depositor and other retail banking losses		119			108
Advertising and promotion		211			211
Professional fees		93			81
Other expense		850			808
Total noninterest expense		4,244			4,367
Minority interest expense		85			37
Income from continuing operations before income taxes		2,479			2,682
Income taxes		865			947
Income from continuing operations		1,614			1,735
Discontinued Operations ⁽¹⁾
Income from discontinued operations before income taxes		-			27
Income taxes		-			10
Income from discontinued operations		-			17
Net Income	$	1,614		$	1,752
Net Income Available to Common Stockholders	$	1,599		$	1,752

Basic Earnings Per Common Share:
Income from continuing operations	$	1.83		$	1.81
Income from discontinued operations		-			0.02
Net Income		1.83			1.83

Diluted Earnings Per Common Share:
Income from continuing operations	$	1.78		$	1.75
Income from discontinued operations		-			0.02
Net Income		1.78			1.77

Dividends declared per common share		1.09			1.01
Basic weighted average number of common shares outstanding (in thousands)		871,876			960,245
Diluted weighted average number of common shares outstanding (in thousands)		896,304			989,408

⁽¹⁾	Represents WM Advisors, Inc., the Company's retail mutual fund management business, which was sold in the fourth quarter of 2006.

WM-4

Washington Mutual, Inc.
Consolidated Statements of Financial Condition
(dollars in millions)
(unaudited)


	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Assets
Cash and cash equivalents	$	4,167		$	4,047		$	6,948		$	6,649		$	6,675
Federal funds sold and securities purchased under agreements to resell		3,267			8,279			3,743			5,102			4,112
Trading assets		5,534			5,290			4,434			5,391			7,445
Available-for-sale securities, total amortized cost of $28,934, $22,921,
$25,073, $29,136 and $28,504:
Mortgage-backed securities		19,810			15,939			18,063			22,353			21,438
Investment securities		8,530			6,900			6,915			6,664			6,358
Total available-for-sale securities		28,340			22,839			24,978			29,017			27,796
Loans held for sale		19,327			26,874			44,970			23,720			23,342
Loans held in portfolio		214,994			217,021			224,960			241,765			243,503
Allowance for loan and lease losses		(1,560	)		(1,540	)		(1,630	)		(1,550	)		(1,663	)
Loans held in portfolio, net		213,434			215,481			223,330			240,215			241,840
Investment in Federal Home Loan Banks		1,596			2,230			2,705			3,013			3,500
Mortgage servicing rights		7,231			6,507			6,193			6,288			9,162
Goodwill		9,056			9,052			9,050			8,368			8,339
Other assets		20,267			19,386			19,937			21,114			18,673
Total assets	$	312,219		$	319,985		$	346,288		$	348,877		$	350,884
Liabilities
Deposits:
Noninterest-bearing deposits	$	33,557		$	34,367		$	33,386		$	34,667		$	35,457
Interest-bearing deposits		167,823			175,842			180,570			176,215			169,101
Total deposits		201,380			210,209			213,956			210,882			204,558
Federal funds purchased and commercial paper		3,390			563			4,778			5,282			6,138
Securities sold under agreements to repurchase		9,357			8,323			11,953			13,665			19,866
Advances from Federal Home Loan Banks		21,412			24,735			44,297			47,247			55,311
Other borrowings		40,313			39,430			32,852			33,883			27,995
Other liabilities		9,212			9,694			9,035			9,501			8,926
Minority interests		2,945			2,453			2,448			1,959			1,959
Total liabilities		288,009			295,407			319,319			322,419			324,753
Stockholders' equity
Preferred stock		492			492			492			492			-
Capital surplus - common stock		2,715			3,121			5,825			5,761			6,596
Accumulated other comprehensive loss		(568	)		(268	)		(287	)		(180	)		(599	)
Retained earnings		21,571			21,233			20,939			20,385			20,134
Total stockholders' equity		24,210			24,578			26,969			26,458			26,131
Total liabilities and stockholders' equity	$	312,219		$	319,985		$	346,288		$	348,877		$	350,884

WM-5

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

	Quarter Ended
	June 30,			Mar. 31,				Dec. 31,				Sept. 30,			June 30,
	2007			2007				2006				2006			2006

Stockholders' Equity Rollforward
Balance, beginning of period	$	24,578		$	26,969			$	26,458			$	26,131		$	25,819
Net income		830			784				1,058				748			767
Cumulative effect from the adoption of new accounting pronouncements		-			(6	)	⁽¹⁾		(157	)	⁽²⁾		-			-
Other comprehensive income (loss), net of income taxes		(300	)		19				50				419			(151	)
Cash dividends declared on common stock		(484	)		(476	)			(496	)			(497	)		(486	)
Cash dividends declared on preferred stock		(8	)		(7	)			(8	)			-			-
Common stock repurchased and retired ⁽³⁾		(500	)		(2,797	)			-				(930	)		-
Common stock issued		94			92				64				95			182
Preferred stock issued		-			-				-				492			-
Balance, end of period	$	24,210		$	24,578			$	26,969			$	26,458		$	26,131

⁽¹⁾

As of January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.

⁽²⁾

On December 31, 2006, the Company adopted Statement of Financial Accounting Standards ("Statement") No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. Statement No. 158 requires an entity to recognize the overfunded or underfunded status of its defined benefit postretirement plans as an asset or liability in its statement of financial condition and to recognize changes, through comprehensive income, in that funded status in the year in which the changes occur. The cumulative effects, net of income taxes, resulted in a $274 million decrease to December 31, 2006 other assets and a $117 million decrease to December 31, 2006 other liabilities.

⁽³⁾

The Company repurchased 13.5 million, 61.4 million, 1.7 million, 18.8 million and zero shares of its common stock in the three months ended June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006 and June 30, 2006. At June 30, 2007, the total remaining common stock repurchase authority was 54.7 million shares.

WM-6

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

	Quarter Ended															Six Months Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2007			2007			2006			2006			2006			2007			2006
RETAIL BANKING GROUP
Condensed income statement:
Net interest income	$	1,283		$	1,275		$	1,239		$	1,260		$	1,323		$	2,558		$	2,670
Provision for loan and lease losses		91			62			47			53			13			153			67
Noninterest income		819			751			774			738			732			1,571			1,401
Inter-segment revenue		21			22			17			17			16			43			30
Noninterest expense		1,139			1,075			1,102			1,079			1,109			2,215			2,197
Income from continuing operations before income taxes		893			911			881			883			949			1,804			1,837
Income taxes		335			342			336			337			363			677			702
Income from continuing operations		558			569			545			546			586			1,127			1,135
Income from discontinued operations		-			-			12			9			8			-			17
Net income	$	558		$	569		$	557		$	555		$	594		$	1,127		$	1,152
Performance and other data:
Efficiency ratio		53.65	%		52.50	%		54.29	%		53.55	%		53.53	%		53.09	%		53.57	%
Average loans	$	149,716		$	155,206		$	172,029		$	180,829		$	182,891		$	152,445		$	178,396
Average assets		159,518			165,047			182,256			191,288			193,246			162,267			188,721
Average deposits:
Checking deposits:
Noninterest bearing		23,107			22,331			21,873			21,440			21,418			22,722			20,884
Interest bearing		30,282			31,739			33,010			34,792			37,518			31,006			38,922
Total checking deposits		53,389			54,070			54,883			56,232			58,936			53,728			59,806
Savings and money market deposits		43,814			43,103			41,442			38,317			38,143			43,460			37,790
Time deposits		48,049			46,857			47,188			45,405			41,724			47,456			41,334
Average deposits		145,252			144,030			143,513			139,954			138,803			144,644			138,930
Loan volume		10,069			8,492			7,966			9,006			10,105			18,561			17,360
Employees at end of period		28,178			27,883			27,671			28,042			31,432			28,178			31,432
CARD SERVICES GROUP
Managed basis ⁽¹⁾
Condensed income statement:
Net interest income	$	660		$	653		$	664		$	633		$	615		$	1,314		$	1,232
Provision for loan and lease losses		523			388			555			345			417			912			747
Noninterest income		393			474			451			343			389			867			734
Inter-segment expense		5			4			2			2			1			9			2
Noninterest expense		300			325			316			294			293			626			590
Income before income taxes		225			410			242			335			293			634			627
Income taxes		84			154			93			128			112			238			240
Net income	$	141		$	256		$	149		$	207		$	181		$	396		$	387
Performance and other data:
Efficiency ratio		28.68	%		28.96	%		28.41	%		30.16	%		29.19	%		28.82	%		30.05	%
Average loans	$	24,234		$	23,604		$	22,875		$	21,706		$	20,474		$	23,921		$	20,281
Average assets		26,762			26,039			25,472			24,236			23,044			26,403			22,905
Employees at end of period		2,889			2,646			2,676			2,731			2,597			2,889			2,597

Securitization adjustments
Condensed income statement:
Net interest income	$	(459	)	$	(414	)	$	(437	)	$	(411	)	$	(405	)	$	(874	)	$	(837	)
Provision for loan and lease losses		(294	)		(282	)		(280	)		(220	)		(217	)		(577	)		(442	)
Noninterest income		165			132			157			191			188			297			395
Performance and other data:
Average loans		(13,888	)		(12,507	)		(12,811	)		(12,169	)		(11,565	)		(13,201	)		(11,835	)
Average assets		(12,287	)		(10,961	)		(11,035	)		(10,330	)		(9,753	)		(11,627	)		(9,985	)
Adjusted basis
Condensed income statement:
Net interest income	$	201		$	239		$	227		$	222		$	210		$	440		$	395
Provision for loan and lease losses		229			106			275			125			200			335			305
Noninterest income		558			606			608			534			577			1,164			1,129
Inter-segment expense		5			4			2			2			1			9			2
Noninterest expense		300			325			316			294			293			626			590
Income before income taxes		225			410			242			335			293			634			627
Income taxes		84			154			93			128			112			238			240
Net income	$	141		$	256		$	149		$	207		$	181		$	396		$	387
Performance and other data:
Average loans	$	10,346		$	11,097		$	10,064		$	9,537		$	8,909		$	10,720		$	8,446
Average assets		14,475			15,078			14,437			13,906			13,291			14,776			12,920

(This table is continued on "WM-7.")

⁽¹⁾

The managed basis presentation treats securitized and sold credit card receivables as if they were still on the balance sheet. The Company uses this basis in assessing the overall performance of this operating segment. The managed basis presentation of the Card Services Group is derived by adjusting the GAAP financial information to add back securitized loan balances and the related interest, fee income and provision for credit losses. Such adjustments are eliminated as securitization adjustments when reporting GAAP results.

WM-7

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

	Quarter Ended															Six Months Ended
(This table is continued from "WM-6.")	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2007			2007			2006			2006			2006			2007			2006
COMMERCIAL GROUP
Condensed income statement:
Net interest income	$	195		$	200		$	189		$	159		$	166		$	395		$	329
Provision for loan and lease losses		2			(10	)		(69	)		(2	)		(10	)		(7	)		(10	)
Noninterest income		62			14			40			25			17			76			29
Noninterest expense		74			74			72			60			57			148			125
Income before income taxes		181			150			226			126			136			330			243
Income taxes		68			56			86			48			52			124			93
Net income	$	113		$	94		$	140		$	78		$	84		$	206		$	150
Performance and other data:
Efficiency ratio		28.77	%		34.52	%		31.49	%		32.21	%		31.28	%		31.38	%		34.80	%
Average loans	$	38,789		$	38,641		$	37,552		$	32,414		$	31,505		$	38,715		$	31,260
Average assets		41,181			41,001			40,216			34,560			33,709			41,092			33,522
Average deposits		6,160			3,762			3,609			2,323			2,242			4,968			2,250
Loan volume		4,348			3,671			4,019			3,104			2,961			8,018			5,731
Employees at end of period		1,404			1,351			1,409			1,242			1,252			1,404			1,252
HOME LOANS GROUP
Condensed income statement:
Net interest income	$	215		$	245		$	273		$	276		$	290		$	460		$	628
Provision for loan and lease losses		101			49			47			84			38			150			57
Noninterest income		391			162			126			314			461			553			862
Inter-segment expense		16			18			15			15			15			34			28
Noninterest expense		548			521			534			528			617			1,069			1,239
Income (loss) before income taxes		(59	)		(181	)		(197	)		(37	)		81			(240	)		166
Income taxes (benefit)		(22	)		(68	)		(75	)		(14	)		31			(90	)		63
Net income (loss)	$	(37	)	$	(113	)	$	(122	)	$	(23	)	$	50		$	(150	)	$	103
Performance and other data:
Efficiency ratio		92.82	%		133.90	%		138.93	%		92.00	%		83.80	%		109.14	%		84.70	%
Average loans	$	43,312		$	53,254		$	51,048		$	45,407		$	43,988		$	48,255		$	46,934
Average assets		60,330			71,381			71,512			70,565			70,958			65,824			74,541
Average deposits		17,506			16,767			19,788			20,659			20,124			17,139			18,339
Loan volume		31,541			30,609			34,897			37,200			41,747			62,150			86,745
Employees at end of period		12,735			13,025			13,025			13,936			15,560			12,735			15,560
CORPORATE SUPPORT/TREASURY AND OTHER
Condensed income statement:
Net interest income (expense)	$	2		$	(15	)	$	(64	)	$	(107	)	$	(60	)	$	(13	)	$	(104	)
Provision for loan and lease losses		(51	)		27			44			(94	)		(17	)		(25	)		(113	)
Noninterest income (expense)		42			81			142			75			(88	)		123			63
Noninterest expense		77			110			233			223			153			186			216
Minority interest expense		42			43			34			34			37			85			37
Loss from continuing operations before income taxes		(24	)		(114	)		(233	)		(195	)		(321	)		(136	)		(181	)
Income taxes (benefit)		(38	)		(71	)		(103	)		(90	)		(129	)		(109	)		(96	)
Income (loss) from continuing operations		14			(43	)		(130	)		(105	)		(192	)		(27	)		(85	)
Income from discontinued operations		-			-			406			-			-			-			-
Net income (loss)	$	14		$	(43	)	$	276		$	(105	)	$	(192	)	$	(27	)	$	(85	)
Performance and other data:
Average loans	$	1,367		$	1,345		$	1,294		$	1,245		$	1,178		$	1,356		$	1,160
Average assets		41,801			40,877			46,208			40,823			39,061			41,341			38,057
Average deposits		37,847			46,205			47,891			45,976			39,083			42,002			36,149
Loan volume		72			107			144			58			82			179			105
Employees at end of period		4,783			4,788			5,043			5,105			5,406			4,783			5,406

(This table is continued on "WM-8.")

WM-8

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Six Months Ended
(This table is continued from "WM-7.")	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2007			2007			2006			2006			2006			2007			2006
RECONCILING ADJUSTMENTS
Condensed income statement:
Net interest income ⁽¹⁾	$	138		$	137		$	134		$	137		$	131		$	275		$	258
Noninterest income (expense) ⁽²⁾		(114	)		(73	)		(98	)		(116	)		(121	)		(188	)		(268	)
Income (loss) before income taxes		24			64			36			21			10			87			(10	)
Income taxes (benefit) ⁽³⁾		(17	)		43			(22	)		(15	)		(40	)		25			(55	)
Net income	$	41		$	21		$	58		$	36		$	50		$	62		$	45
Performance and other data:
Average loans ⁽⁴⁾	$	(1,301	)	$	(1,479	)	$	(1,573	)	$	(1,600	)	$	(1,601	)	$	(1,389	)	$	(1,586	)
Average assets ⁽⁴⁾		(1,301	)		(1,479	)		(1,573	)		(1,600	)		(1,601	)		(1,389	)		(1,586	)

TOTAL CONSOLIDATED
Condensed income statement:
Net interest income	$	2,034		$	2,081		$	1,998		$	1,947		$	2,060		$	4,115		$	4,176
Provision for loan and lease losses		372			234			344			166			224			606			306
Noninterest income		1,758			1,541			1,592			1,570			1,578			3,299			3,216
Noninterest expense		2,138			2,105			2,257			2,184			2,229			4,244			4,367
Minority interest expense		42			43			34			34			37			85			37
Income from continuing operations before income taxes		1,240			1,240			955			1,133			1,148			2,479			2,682
Income taxes		410			456			315			394			389			865			947
Income from continuing operations		830			784			640			739			759			1,614			1,735
Income from discontinued operations		-			-			418			9			8			-			17
Net income	$	830		$	784		$	1,058		$	748		$	767		$	1,614		$	1,752
Performance and other data:
Efficiency ratio		56.38	%		58.13	%		62.87	%		62.09	%		61.27	%		57.24	%		59.08	%
Average loans	$	242,229		$	258,064		$	270,414		$	267,832		$	266,870		$	250,102		$	264,610
Average assets		316,004			331,905			353,056			349,542			348,664			323,911			346,175
Average deposits		206,765			210,764			214,801			208,912			200,252			208,753			195,668
Loan volume		46,030			42,879			47,026			49,368			54,895			88,908			109,941
Employees at end of period		49,989			49,693			49,824			51,056			56,247			49,989			56,247

⁽¹⁾	Represents the difference between mortgage loan premium amortization recorded by the Retail Banking Group and the amount recognized in the Company's Consolidated Statements of Income. For management reporting purposes, certain mortgage loans that are held in portfolio by the Retail Banking Group are treated as if they are purchased from the Home Loans Group. Since the cost basis of these loans includes an assumed profit factor paid to the Home Loans Group, the amortization of loan premiums recorded by the Retail Banking Group reflects this assumed profit factor and must therefore be eliminated as a reconciling adjustment.
⁽²⁾	Represents the difference between gain from mortgage loans recorded by the Home Loans Group and gain from mortgage loans recognized in the Company's Consolidated Statements of Income. A substantial amount of loans originated or purchased by this segment are considered to be salable for management reporting purposes.
⁽³⁾	Represents the tax effect of reconciling adjustments.
⁽⁴⁾	Represents the inter-segment offset for inter-segment loan premiums that the Retail Banking Group recognized upon transfer of portfolio loans from the Home Loans Group.

WM-9

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30, 2007							Mar. 31, 2007							June 30, 2006
	Balance		Rate			Interest Income/ Expense		Balance		Rate			Interest Income/ Expense		Balance		Rate			Interest Income/ Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets ⁽¹⁾ :
Federal funds sold and securities purchased under agreements to resell	$	3,964		5.39	%	$	53	$	3,930		5.39	%	$	52	$	4,413		4.99	%	$	56
Trading assets		4,995		8.67			108		5,594		8.10			113		8,595		7.69			165
Available-for-sale securities ⁽²⁾ :
Mortgage-backed securities		18,576		5.36			249		17,887		5.47			245		21,840		5.34			292
Investment securities		7,983		5.10			102		6,753		5.17			87		6,215		4.91			76
Loans held for sale		26,225		6.43			421		35,447		6.37			562		24,536		6.42			395
Loans held in portfolio:
Loans secured by real estate:
Home loans ⁽³⁾⁽⁴⁾		90,818		6.44			1,462		97,365		6.45			1,570		125,559		5.77			1,809
Home equity loans and lines of credit ⁽⁴⁾		54,431		7.59			1,031		53,014		7.56			989		52,225		7.28			949
Subprime mortgage channel ⁽⁵⁾		20,152		6.80			343		20,612		6.67			344		19,640		6.21			305
Home construction ⁽⁶⁾		2,043		6.72			34		2,061		6.55			34		2,068		6.47			33
Multi-family		29,419		6.63			488		29,826		6.57			490		26,291		6.23			410
Other real estate		6,843		7.03			120		6,763		7.03			117		5,585		6.97			98
Total loans secured by real estate		203,706		6.83			3,478		209,641		6.79			3,544		231,368		6.23			3,604
Consumer:
Credit card		10,101		10.44			263		10,904		11.57			311		8,448		11.28			238
Other		254		12.44			8		267		12.96			9		594		9.74			14
Commercial		1,943		7.73			37		1,805		7.95			36		1,924		6.61			31
Total loans held in portfolio		216,004		7.02			3,786		222,617		7.04			3,900		242,334		6.42			3,887
Other		2,089		5.47			29		3,472		5.77			49		5,306		4.80			64
Total interest- earning assets		279,836		6.79			4,748		295,700		6.81			5,008		313,239		6.30			4,935
Noninterest-earning assets:
Mortgage servicing rights		6,782							6,304							9,003
Goodwill		9,054							9,054							8,302
Other assets		20,332							20,847							18,120
Total assets	$	316,004						$	331,905						$	348,664
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	30,373		2.51			190	$	31,821		2.63			206	$	37,603		2.61			245
Savings and money market deposits		58,969		3.33			490		54,862		3.27			443		48,095		2.82			339
Time deposits		84,330		4.96			1,043		91,631		4.97			1,123		79,541		4.39			877
Total interest- bearing deposits		173,672		3.98			1,723		178,314		4.03			1,772		165,239		3.53			1,461
Federal funds purchased and commercial paper		2,169		5.36			29		3,846		5.48			52		7,767		4.97			97
Securities sold under agreements to repurchase		8,416		5.35			112		12,098		5.48			164		17,923		4.97			225
Advances from Federal Home Loan Banks		22,063		5.36			295		36,051		5.38			478		60,862		4.85			745
Other		39,886		5.57			555		32,808		5.67			461		26,239		5.27			347
Total interest- bearing liabilities		246,206		4.42			2,714		263,117		4.51			2,927		278,030		4.12			2,875
Noninterest-bearing sources:
Noninterest-bearing deposits		33,093							32,450							35,013
Other liabilities		9,610							9,482							7,698
Minority interests		2,659							2,449							1,965
Stockholders' equity		24,436							24,407							25,958
Total liabilities and stockholders' equity	$	316,004						$	331,905						$	348,664
Net interest spread and net interest income				2.37		$	2,034				2.30		$	2,081				2.18		$	2,060
Impact of noninterest- bearing sources				0.53							0.49							0.47
Net interest margin				2.90							2.79							2.65

⁽¹⁾	Nonaccrual assets and related income, if any, are included in their respective categories.
⁽²⁾	The average balance and yield are based on average amortized cost balances.
⁽³⁾	Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $344 million, $361 million and $245 million for the three months ended June 30, 2007, March 31, 2007 and June 30, 2006.
⁽⁴⁾	Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
⁽⁵⁾	Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
⁽⁶⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM-10

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Six Months Ended
	June 30, 2007							June 30, 2006
						Interest							Interest
						Income/							Income/
	Balance		Rate			Expense		Balance		Rate			Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets ⁽¹⁾ :
Federal funds sold and securities purchased under agreements to resell	$	3,947		5.39	%	$	105	$	4,086		4.82	%	$	99
Trading assets		5,293		8.37			221		10,135		7.18			363
Available-for-sale securities ⁽²⁾ :
Mortgage-backed securities		18,234		5.42			494		20,997		5.31			558
Investment securities		7,372		5.13			188		5,534		4.78			132
Loans held for sale		30,810		6.40			984		27,164		6.30			856
Loans held in portfolio:
Loans secured by real estate:
Home loans ⁽³⁾⁽⁴⁾		94,074		6.45			3,033		121,661		5.68			3,452
Home equity loans and lines of credit ⁽⁴⁾		53,726		7.57			2,020		51,776		7.12			1,831
Subprime mortgage channel ⁽⁵⁾		20,381		6.74			686		19,803		6.08			602
Home construction ⁽⁶⁾		2,052		6.63			68		2,063		6.41			66
Multi-family		29,621		6.60			977		26,026		6.08			791
Other real estate		6,803		7.03			238		5,372		6.90			186
Total loans secured by real estate		206,657		6.81			7,022		226,701		6.12			6,928
Consumer:
Credit card		10,500		11.03			574		8,130		11.02			444
Other		261		12.70			17		607		10.40			32
Commercial		1,874		7.83			73		2,008		6.39			64
Total loans held in portfolio		219,292		7.03			7,686		237,446		6.30			7,468
Other		2,776		5.65			78		5,161		4.50			116
Total interest-earning assets		287,724		6.80			9,756		310,523		6.19			9,592
Noninterest-earning assets:
Mortgage servicing rights		6,545							8,634
Goodwill		9,054							8,300
Other assets		20,588							18,718
Total assets	$	323,911						$	346,175
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	31,093		2.57			397	$	39,012		2.45			473
Savings and money market deposits		56,927		3.31			933		46,464		2.61			602
Time deposits		87,960		4.96			2,165		76,379		4.22			1,607
Total interest-bearing deposits		175,980		4.00			3,495		161,855		3.33			2,682
Federal funds purchased and commercial paper		3,003		5.44			81		7,616		4.72			179
Securities sold under agreements to repurchase		10,247		5.43			276		16,608		4.74			396
Advances from Federal Home Loan Banks		29,019		5.37			773		63,912		4.65			1,491
Other		36,366		5.62			1,016		26,437		5.04			668
Total interest-bearing liabilities		254,615		4.47			5,641		276,428		3.92			5,416
Noninterest-bearing sources:
Noninterest-bearing deposits		32,773							33,813
Other liabilities		9,547							8,284
Minority interests		2,554							1,262
Stockholders' equity		24,422							26,388
Total liabilities and stockholders' equity	$	323,911						$	346,175
Net interest spread and net interest income				2.33		$	4,115				2.27		$	4,176
Impact of noninterest-bearing sources				0.52							0.43
Net interest margin				2.85							2.70

⁽¹⁾	Nonaccrual assets and related income, if any, are included in their respective categories.
⁽²⁾	The average balance and yield are based on average amortized cost balances.
⁽³⁾	Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $706 million and $439 million for the six months ended June 30, 2007 and June 30, 2006.
⁽⁴⁾	Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
⁽⁵⁾	Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
⁽⁶⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM-11

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from Mar. 31, 2007 to June 30, 2007			June 30, 2007		Mar. 31, 2007		Dec. 31, 2006		Sept. 30, 2006		June 30, 2006
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing	$	(258	)	$	24,142	$	24,400	$	22,838	$	22,466	$	22,450
Interest bearing		(1,931	)		29,592		31,523		32,723		33,761		35,958
Total checking deposits		(2,189	)		53,734		55,923		55,561		56,227		58,408
Savings and money market deposits		(441	)		43,617		44,058		41,943		39,481		37,664
Time deposits ⁽¹⁾		878			48,140		47,262		46,821		47,361		43,685
Total retail deposits		(1,752	)		145,491		147,243		144,325		143,069		139,757
Commercial business and other deposits		1,445			19,186		17,741		15,175		15,831		15,625
Brokered deposits:
Consumer		(1,842	)		17,153		18,995		22,299		22,430		14,316
Institutional		(6,231	)		11,025		17,256		22,339		18,236		22,708
Custodial and escrow deposits ⁽²⁾		(449	)		8,525		8,974		9,818		11,316		12,152
Total deposits	$	(8,829	)	$	201,380	$	210,209	$	213,956	$	210,882	$	204,558

⁽¹⁾	Weighted average remaining maturity of time deposits was 8 months at June 30, 2007, 9 months at March 31, 2007 and December 31, 2006 and 10 months at September 30, 2006 and June 30, 2006.
⁽²⁾	Substantially all custodial and escrow deposits are reported as noninterest-bearing checking deposits.

	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2007		2007		2006		2006		2006
Retail Deposit Accounts (number of accounts)
Noninterest bearing checking		10,449,887		9,983,313		9,611,706		9,403,072		9,063,458
Interest bearing checking		1,399,203		1,459,534		1,503,365		1,532,215		1,564,396
Savings and money market		6,936,870		6,708,784		6,525,772		6,379,068		6,161,187
Total transaction accounts, end of period ⁽¹⁾		18,785,960		18,151,631		17,640,843		17,314,355		16,789,041

Net change in noninterest bearing checking accounts		466,574		371,607		208,634		339,614		432,812
Net change in checking accounts		406,243		327,776		179,784		307,433		404,190

⁽¹⁾	Transaction accounts include retail checking, small business checking, retail savings and small business savings.

	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Retail Banking Stores
Stores, beginning of period		2,228			2,225			2,225			2,201			2,168
Stores opened during the quarter		11			6			81	⁽¹⁾		25			35
Stores closed during the quarter		(4	)		(3	)		(81	)		(1	)		(2	)
Stores, end of period		2,235			2,228			2,225			2,225			2,201

⁽¹⁾	Includes 26 retail banking stores acquired through the merger with Commercial Capital Bancorp.

WM-12

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30, 2007		Mar. 31, 2007		Dec. 31, 2006		Sept. 30, 2006		June 30, 2006
Loan Volume
Home loans:
Short-term adjustable-rate loans ⁽¹⁾ :
Option ARMs	$	7,888	$	7,777	$	9,487	$	11,601	$	12,728
Other ARMs		22		36		13		42		387
Total short-term adjustable-rate loans		7,910		7,813		9,500		11,643		13,115
Medium-term adjustable-rate loans ⁽²⁾		14,953		13,567		17,323		16,707		16,041
Fixed-rate loans		8,172		8,824		7,351		8,818		13,695
Total home loan volume		31,035		30,204		34,174		37,168		42,851
Home equity loans and lines of credit		9,880		8,319		8,098		8,498		8,251
Home construction ⁽³⁾		426		298		298		269		421
Multi-family		3,067		2,663		2,977		2,186		2,230
Other real estate		1,246		1,080		1,182		983		787
Total loans secured by real estate ⁽⁴⁾		45,654		42,564		46,729		49,104		54,540
Consumer ⁽⁵⁾		20		26		23		26		36
Commercial		356		289		274		238		319
Total loan volume	$	46,030	$	42,879	$	47,026	$	49,368	$	54,895
Loan Volume by Channel
Retail	$	27,051	$	23,284	$	24,426	$	22,239	$	23,709
Wholesale		14,588		13,378		16,002		14,964		14,798
Purchased		4,391		6,217		6,398		11,560		12,033
Correspondent		-		-		200		605		4,355
Total loan volume by channel	$	46,030	$	42,879	$	47,026	$	49,368	$	54,895
Refinancing Activity ⁽⁶⁾
Home loan refinancing	$	22,637	$	22,552	$	25,060	$	23,993	$	26,667
Home equity loans and lines of credit and consumer		157		550		599		689		161
Home construction loans		121		276		283		254		379
Multi-family and other real estate		1,378		1,131		2,240		1,398		1,419
Total refinancing	$	24,293	$	24,509	$	28,182	$	26,334	$	28,626

⁽¹⁾	Short-term is defined as adjustable-rate loans that reprice within one year.
⁽²⁾	Medium-term is defined as adjustable-rate loans that reprice after one year.
⁽³⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
⁽⁴⁾	Includes mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name of $2.45 billion, $3.48 billion, $6.07 billion, $9.40 billion and $8.20 billion for the three months ended June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006 and June 30, 2006.
⁽⁵⁾	Excludes credit card loan volume.
⁽⁶⁾	Includes loan refinancing entered into by both new and pre-existing loan customers.

WM-13

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Six Months Ended
	June 30,		June 30,
	2007		2006
Loan Volume
Home loans:
Short-term adjustable-rate loans ⁽¹⁾ :
Option ARMs	$	15,666	$	21,505
Other ARMs		58		3,330
Total short-term adjustable-rate loans		15,724		24,835
Medium-term adjustable-rate loans ⁽²⁾		28,519		30,906
Fixed-rate loans		16,996		31,300
Total home loan volume		61,239		87,041
Home equity loans and lines of credit		18,199		15,558
Home construction ⁽³⁾		724		914
Multi-family		5,729		4,264
Other real estate		2,326		1,502
Total loans secured by real estate ⁽⁴⁾		88,217		109,279
Consumer ⁽⁵⁾		46		85
Commercial		645		577
Total loan volume	$	88,908	$	109,941
Loan Volume by Channel
Retail	$	50,335	$	46,289
Wholesale		27,965		31,520
Purchased		10,608		19,351
Correspondent		-		12,781
Total loan volume by channel	$	88,908	$	109,941
Refinancing Activity ⁽⁶⁾
Home loan refinancing	$	45,190	$	53,537
Home equity loans and lines of credit and consumer		707		377
Home construction loans		396		772
Multi-family and other real estate		2,509		2,774
Total refinancing	$	48,802	$	57,460

⁽¹⁾	Short-term is defined as adjustable-rate loans that reprice within one year.
⁽²⁾	Medium-term is defined as adjustable-rate loans that reprice after one year.
⁽³⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
⁽⁴⁾	Includes mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name of $5.93 billion and $15.29 billion for the six months ended June 30, 2007 and June 30, 2006.
⁽⁵⁾	Excludes credit card loan volume.
⁽⁶⁾	Includes loan refinancing entered into by both new and pre-existing loan customers.

WM-14

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from Mar. 31, 2007 to June 30, 2007			June 30, 2007			Mar. 31, 2007			Dec. 31, 2006			Sept. 30, 2006			June 30, 2006
Loans Held in Portfolio
Loans secured by real estate:
Home:
Short-term adjustable-rate loans ⁽¹⁾ :
Option ARMs ⁽²⁾	$	(4,675	)	$	53,455		$	58,130		$	63,557		$	67,142		$	69,224
Other ARMs		37			13,538			13,501			15,091			16,375			15,021
Total short-term adjustable-rate loans		(4,638	)		66,993			71,631			78,648			83,517			84,245
Medium-term adjustable-rate loans ⁽³⁾		(277	)		29,647			29,924			29,774			47,740			52,032
Fixed-rate loans		(1	)		9,505			9,506			9,782			9,928			9,424
Total home loans		(4,916	)		106,145			111,061			118,204			141,185			145,701
Home equity loans and lines of credit		2,508			58,631			56,123			54,924			54,364			52,981
Home construction ⁽⁴⁾		(13	)		2,058			2,071			2,082			2,077			2,082
Multi-family		(225	)		29,290			29,515			30,161			27,407			26,749
Other real estate		151			6,879			6,728			6,745			5,869			5,537
Total loans secured by real estate ⁽⁵⁾		(2,495	)		203,003			205,498			212,116			230,902			233,050
Consumer:
Credit card		423			9,913			9,490			10,861			8,807			8,451
Other		(18	)		243			261			276			281			287
Commercial		63			1,835			1,772			1,707			1,775			1,715
Total loans held in portfolio ⁽⁶⁾		(2,027	)		214,994			217,021			224,960			241,765			243,503
Less: allowance for loan and lease losses		(20	)		(1,560	)		(1,540	)		(1,630	)		(1,550	)		(1,663	)
Total loans held in portfolio, net	$	(2,047	)	$	213,434		$	215,481		$	223,330		$	240,215		$	241,840

⁽¹⁾	Short-term adjustable-rate loans reprice within one year.
⁽²⁾	The total amount by which the unpaid principal balance of Option ARM loans exceeded their original principal amount was $1.30 billion, $1.12 billion, $888 million, $681 million and $474 million at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006 and June 30, 2006.
⁽³⁾	Medium-term adjustable-rate loans reprice after one year.
⁽⁴⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
⁽⁵⁾	Includes subprime mortgage channel loans, comprising mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio as follows:

Subprime Mortgage Channel	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2007		2007		2006		2006		2006
Home loans	$	17,602	$	17,610	$	18,725	$	20,083	$	20,498
Home equity loans and lines of credit		2,855		2,749		2,042		1,522		424
Total	$	20,457	$	20,359	$	20,767	$	21,605	$	20,922

⁽⁶⁾	Includes net unamortized deferred loan origination costs of $1.33 billion, $1.43 billion, $1.48 billion, $1.61 billion and $1.62 billion at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006 and June 30, 2006.

WM-15

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from Mar. 31, 2007 to June 30, 2007			June 30, 2007		Weighted Average Coupon Rate		Mar. 31, 2007		Weighted Average Coupon Rate		June 30, 2006		Weighted Average Coupon Rate
Selected Loans Secured by Real Estate and MBS
Home loans held in portfolio:
Short-term adjustable-rate loans ⁽¹⁾ :
Option ARMs	$	(4,675	)	$	53,455	7.74	%	$	58,130	7.74	%	$	69,224	6.72
Other ARMs		37			13,538	7.28			13,501	7.25			15,021	6.75
Total short-term adjustable-rate loans		(4,638	)		66,993	7.65			71,631	7.65			84,245	6.72
Medium-term adjustable-rate loans ⁽²⁾		(277	)		29,647	5.99			29,924	5.86			52,032	5.68
Fixed-rate loans		(1	)		9,505	6.71			9,506	6.68			9,424	6.50
Total home loans held in portfolio		(4,916	)		106,145	7.10			111,061	7.08			145,701	6.34
Home equity loans and lines of credit:
Short-term (Prime-based or treasury-based) ⁽¹⁾		1,141			34,995	8.47			33,854	8.45			36,640	8.33
Fixed-rate loans		1,367			23,636	7.68			22,269	7.62			16,341	6.88
Total home equity loans and lines of credit		2,508			58,631	8.15			56,123	8.12			52,981	7.88
Multi-family loans held in portfolio:
Short-term adjustable-rate loans ⁽¹⁾ :
Option ARMs		(723	)		7,650	7.28			8,373	7.29			9,255	6.54
Other ARMs		131			7,910	6.77			7,779	7.01			6,095	6.66
Total short-term adjustable-rate loans		(592	)		15,560	7.02			16,152	7.15			15,350	6.59
Medium-term adjustable-rate loans ⁽²⁾		345			11,890	5.93			11,545	5.78			9,781	5.46
Fixed-rate loans		22			1,840	6.35			1,818	6.39			1,618	6.48
Total multi-family loans held in portfolio		(225	)		29,290	6.53			29,515	6.57			26,749	6.17
Total selected loans held in portfolio secured by real estate ⁽³⁾		(2,633	)		194,066	7.33			196,699	7.30			225,431	6.68
Loans held for sale ⁽⁴⁾		(7,395	)		18,999	6.39			26,394	6.44			23,031	6.43
MBS ⁽⁵⁾ :
Short-term adjustable-rate MBS ⁽¹ ⁾		(510	)		5,453	5.70			5,963	5.71			9,058	5.42
Medium-term adjustable-rate MBS ⁽²⁾		349			2,802	5.22			2,453	5.09			3,853	4.97
Fixed-rate MBS		4,032			11,555	5.39			7,523	5.25			8,527	5.27
Total MBS ⁽⁶⁾		3,871			19,810	5.45			15,939	5.40			21,438	5.28
Total selected loans secured by real estate and MBS	$	(6,157	)	$	232,875	7.10		$	239,032	7.08		$	269,900	6.55

⁽¹⁾	Short-term adjustable-rate loans and MBS reprice within one year.
⁽²⁾	Medium-term adjustable-rate loans and MBS reprice after one year.
⁽³⁾	At June 30, 2007, March 31, 2007, and June 30, 2006, adjustable-rate loans with lifetime caps were $158.24 billion, $162.24 billion, and $193.17 billion with a lifetime weighted average cap rate of 12.96%, 12.31% and 12.13%.
⁽⁴⁾	Excludes credit card and student loans.
⁽⁵⁾	Includes only those securities designated as available-for-sale. Excludes principal-only strips and interest-only strips.
⁽⁶⁾	At June 30, 2007, March 31, 2007 and June 30, 2006, the par value of adjustable-rate MBS with lifetime caps were $8.02 billion, $8.16 billion and $12.81 billion with a lifetime weighted average cap rate of 10.57%, 10.55% and 10.42%.

Rollforward of Loans Held for Sale	Mar. 31, 2007 to June 30, 2007			Dec. 31, 2006 to June 30, 2007
Balance, beginning of period	$	26,874		$	44,970
Mortgage loans originated, purchased and transferred from held in portfolio		29,492			59,578
Mortgage loans transferred to held in portfolio		(1,760	)		(2,674	)
Mortgage loans sold and other ⁽¹⁾		(35,127	)		(82,630	)
Net change in consumer loans held for sale		(152	)		83
Balance, end of period	$	19,327		$	19,327

Rollforward of Home Loans Held in Portfolio
Balance, beginning of period	$	111,061		$	118,204
Loans originated, purchased and transferred from held for sale		5,136			10,285
Loan payments, transferred to held for sale and other		(10,052	)		(22,344	)
Balance, end of period	$	106,145		$	106,145

⁽¹⁾	The unpaid principal balance ("UPB") of home loans sold was $30.30 billion and $75.55 billion for the three and six months ended June 30, 2007.

WM-16

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
Detail of Revenue from Sales and Servicing of Home Mortgage Loans	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments ⁽¹⁾ :
Gain from home mortgage loans and originated mortgage-backed securities	$	66		$	149		$	64		$	206		$	190
Revaluation gain (loss) from derivatives economically hedging loans held for sale		126			(54	)		91			(87	)		61
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments		192			95			155			119			251
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue ⁽²⁾		526			514			497			525			586
Change in MSR fair value due to payments on loans and other		(401	)		(356	)		(375	)		(410	)		(460	)
Net mortgage loan servicing revenue		125			158			122			115			126
Change in MSR fair value due to valuation inputs or assumptions		530			(96	)		(80	)		(469	)		435
Revaluation gain (loss) from derivatives economically hedging MSR		(547	)		(32	)		(33	)		353			(433	)
Adjustment to MSR fair value for MSR sale		-			-			-			-			(157	)
Home mortgage loan servicing revenue (expense), net of MSR valuation changes and derivative risk management instruments		108			30			9			(1	)		(29	)
Total revenue from sales and servicing of home mortgage loans	$	300		$	125		$	164		$	118		$	222

	Six Months Ended
Detail of Revenue from Sales and Servicing of Home Mortgage Loans	June 30,			June 30,
	2007			2006
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments ⁽¹⁾ :
Gain from home mortgage loans and originated mortgage-backed securities	$	214		$	356
Revaluation gain from derivatives economically hedging loans held for sale		72			104
Gain from home mortgage loans and originated mortgage-backed securities,
net of hedging and risk management instruments		286			460
Home mortgage loan servicing revenue:
Home mortgage loan servicing revenue ⁽²⁾		1,041			1,159
Change in MSR fair value due to payments on loans and other		(757	)		(869	)
Net mortgage loan servicing revenue		284			290
Change in MSR fair value due to valuation inputs or assumptions		434			849
Revaluation loss from derivatives economically hedging MSR		(579	)		(956	)
Adjustment to MSR fair value for MSR sale		-			(157	)
Home mortgage loan servicing revenue, net of MSR valuation
changes and derivative risk management instruments		139			26
Total revenue from sales and servicing of home mortgage loans	$	425		$	486

⁽¹⁾	Originated mortgage-backed securities represent available-for-sale securities retained on the balance sheet subsequent to the securitization of mortgage loans that were originated by the Company.
⁽²⁾	Includes contractually specified servicing fees, late charges and the shortfall of the scheduled interest required to be remitted to investors and that which is collected from borrowers upon payoff.

WM-17

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
MSR Valuation and Risk Management ⁽¹⁾ :
Change in MSR fair value due to valuation inputs or assumptions	$	530		$	(96	)	$	(80	)	$	(469	)	$	435
Gain (loss) on MSR risk management instruments:
Revaluation gain (loss) from derivatives		(547	)		(32	)		(33	)		353			(433	)
Revaluation gain (loss) from certain trading securities		(4	)		4			(5	)		39			(47	)
Loss from certain available-for-sale securities		-			-			-			(1	)		-
Total gain (loss) on MSR risk management instruments		(551	)		(28	)		(38	)		391			(480	)
Total changes in MSR valuation and risk management	$	(21	)	$	(124	)	$	(118	)	$	(78	)	$	(45	)

	Six Months Ended
	June 30,			June 30,
	2007			2006
MSR Valuation and Risk Management ⁽¹⁾ :
Change in MSR fair value due to valuation inputs or assumptions	$	434		$	849
Loss on MSR risk management instruments:
Revaluation loss from derivatives		(579	)		(956	)
Revaluation loss from certain trading securities		-			(89	)
Total loss on MSR risk management instruments		(579	)		(1,045	)
Total changes in MSR valuation and risk management	$	(145	)	$	(196	)

⁽¹⁾	Excludes $157 million downward adjustment to MSR fair value recognized in the three and six months ended June 30, 2006.

WM-18

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Rollforward of Mortgage Servicing Rights ⁽¹⁾
Balance, beginning of period	$	6,507		$	6,193		$	6,288		$	9,162		$	8,736
Home loans:
Additions		592			760			357			533			607
Change in MSR fair value due to payments on loans and other		(401	)		(356	)		(375	)		(410	)		(460	)
Change in MSR fair value due to valuation inputs or assumptions		530			(96	)		(80	)		(469	)		435
Adjustment to MSR fair value for MSR sale		-			-			-			-			(157	)
Sale of MSR		-			-			1			(2,527	)		-
Net change in commercial real estate MSR		3			6			2			(1	)		1
Balance, end of period	$	7,231		$	6,507		$	6,193		$	6,288		$	9,162
Rollforward of Mortgage Loans Serviced for Others
Balance, beginning of period	$	467,782		$	444,696		$	439,208		$	570,352		$	569,501
Home loans:
Additions		29,949			44,550			25,833			29,899			30,949
Sale of servicing		-			-			-			(141,842	)		(9	)
Loan payments and other		(24,213	)		(22,469	)		(20,744	)		(19,288	)		(30,368	)
Net change in commercial real estate loans		1,349			1,005			399			87			279
Balance, end of period	$	474,867		$	467,782		$	444,696		$	439,208		$	570,352

	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2007		2007		2006		2006		2006
Total Servicing Portfolio
Mortgage loans serviced for others	$	474,867	$	467,782	$	444,696	$	439,208	$	570,352
Consumer loans serviced for others		14,745		13,645		12,415		13,112		12,644
Servicing on retained MBS without MSR		1,023		1,082		1,140		1,199		1,262
Servicing on owned loans		218,122		226,217		251,766		245,925		247,489
Subservicing portfolio		439		465		84,797		137,089		552
Total servicing portfolio	$	709,196	$	709,191	$	794,814	$	836,533	$	832,299

	June 30, 2007
	Unpaid		Weighted
	Principal		Average
	Balance		Servicing Fee
			(in basis points,
Mortgage Loans Serviced for Others by Loan Type			annualized)
Agency	$	246,758		31
Private		193,661		57
Subprime mortgage channel-home		34,448		50
Total mortgage loans serviced for others ⁽²⁾	$	474,867		43

⁽¹⁾	MSR as a percentage of mortgage loans serviced for others was 1.52%, 1.39%, 1.39%, 1.43% and 1.61% at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006 and June 30, 2006.
⁽²⁾	Weighted average coupon rate was 6.33% at June 30, 2007.

WM-19

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30, 2007			Mar. 31, 2007			Dec. 31, 2006			Sept. 30, 2006			June 30, 2006
Allowance for Loan and Lease Losses
Balance, beginning of quarter	$	1,540		$	1,630		$	1,550		$	1,663		$	1,642
Allowance transferred to loans held for sale		(81	)		(148	)		(158	)		(125	)		(87	)
Allowance acquired through business combinations/other		-			7			30			-			-
Provision for loan and lease losses		372			234			344			166			224
		1,831			1,723			1,766			1,704			1,779
Loans charged off:
Loans secured by real estate:
Home loans ⁽¹⁾		(21	)		(35	)		(16	)		(12	)		(11	)
Home equity loans and lines of credit ⁽¹⁾		(55	)		(29	)		(13	)		(8	)		(6	)
Subprime mortgage channel ⁽²⁾		(103	)		(40	)		(52	)		(47	)		(21	)
Home construction ⁽³⁾		(1	)		-			(4	)		(3	)		-
Other real estate		(1	)		-			(1	)		(2	)		-
Total loans secured by real estate		(181	)		(104	)		(86	)		(72	)		(38	)
Consumer:
Credit card		(106	)		(96	)		(68	)		(98	)		(94	)
Other		(2	)		(3	)		(3	)		(3	)		(6	)
Commercial		(15	)		(9	)		(9	)		(6	)		(4	)
Total loans charged off		(304	)		(212	)		(166	)		(179	)		(142	)
Recoveries of loans previously charged off:
Loans secured by real estate:
Home loans ⁽¹⁾		1			1			-			-			1
Home equity loans and lines of credit ⁽¹⁾		3			3			2			2			3
Subprime mortgage channel ⁽²⁾		11			1			4			-			1
Multi-family		-			-			-			-			1
Other real estate		-			-			-			-			1
Total loans secured by real estate		15			5			6			2			7
Consumer:
Credit card		15			16			18			16			15
Other		-			6			3			4			3
Commercial		3			2			3			3			1
Total recoveries of loans previously charged off		33			29			30			25			26
Net charge-offs		(271	)		(183	)		(136	)		(154	)		(116	)
Balance, end of quarter	$	1,560		$	1,540		$	1,630		$	1,550		$	1,663

Net charge-offs (annualized) as a percentage
of average loans held in portfolio		0.50	%		0.33	%		0.23	%		0.26	%		0.19	%
Allowance as a percentage of loans held in portfolio		0.73			0.71			0.72			0.64			0.68

⁽¹⁾	Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
⁽²⁾	Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
⁽³⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM-20

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2007			2007			2006			2006			2006
Nonperforming Assets
Nonaccrual loans ⁽¹⁾⁽²⁾ :
Loans secured by real estate:
Home loans ⁽³⁾	$	991		$	690		$	640		$	568		$	512
Home equity loans and lines of credit ⁽³⁾		378			297			231			162			103
Subprime mortgage channel ⁽⁴⁾		1,707			1,503			1,283			1,121			1,092
Home construction ⁽⁵⁾		47			41			27			35			31
Multi-family		69			60			46			31			19
Other real estate		52			52			51			53			56
Total nonaccrual loans secured by real estate		3,244			2,643			2,278			1,970			1,813
Consumer		1			1			1			1			1
Commercial		30			28			16			16			16
Total nonaccrual loans held in portfolio		3,275			2,672			2,295			1,987			1,830
Foreclosed assets ⁽⁶⁾		750			587			480			405			330
Total nonperforming assets ⁽⁷⁾	$	4,025		$	3,259		$	2,775		$	2,392		$	2,160

Total nonperforming assets
as a percentage of total assets		1.29	%		1.02	%		0.80	%		0.69	%		0.62	%

⁽¹⁾	Nonaccrual loans held for sale, which are excluded from the nonaccrual balances presented above, were $171 million, $195 million, $185 million, $129 million, and $122 million at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006. Loans held for sale are accounted for at lower of aggregate cost or fair value, with valuation changes included as adjustments to noninterest income.
⁽²⁾	Credit card loans are exempt under regulatory rules from being classified as nonaccrual because they are charged off when they are determined to be uncollectible, or by the end of the month in which the account becomes 180 days past due.
⁽³⁾	Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
⁽⁴⁾	Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
⁽⁵⁾	Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
⁽⁶⁾	Foreclosed real estate securing Government National Mortgage Association (“GNMA”) loans of $49 million, $72 million, $99 million, $129 million, and $142 million at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006 have been excluded. These assets are fully collectible as the corresponding GNMA loans are insured by the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veterans Affairs (“VA”).
⁽⁷⁾	Excludes accruing restructured loans of $285 million, $355 million, $330 million, $331 million, and $336 million at June 30, 2007, March 31, 2007, December 31, 2006, September 30, 2006, and June 30, 2006.

Exhibit 99.3

Washington Mutual, Inc.

Prepared Remarks for Second Quarter 2007 Earnings Conference Call

July 18, 2007

Please see the Cautionary Statements at the end of this document

Remarks of Kerry Killinger

Chairman and CEO

Good afternoon, everyone. Thank you for joining us today as we review our second quarter 2007 results.

As Alan mentioned, joining me today on the call is Tom Casey, our CFO. And our President, Steve Rotella, will also be available to answer questions at the end of our remarks this afternoon.

Second Quarter 2007 Earnings

Today we announced second quarter net income of $830 million, or 92 cents per share, up 16 percent from $767 million, or 79 cents per share in the second quarter of 2006. Earnings per share for the second quarter were also up 7 percent from 86 cents in the first quarter.

I’m also pleased to announce that the Board once again increased the quarterly cash dividend – for the 48th consecutive quarter – by one cent, to 56 cents per share.

Overview

Our performance this quarter once again demonstrates the strength and momentum of our retail strategy, which continues to fuel impressive organic growth, and the benefits of our work to diversify the company. The ability to generate strong organic growth is, I believe, a hallmark of the most successful, top-tier performing companies. Our commitment to innovation in products and services – from our new WaMu Free Checking™ to WaMu Mortgage Plus™ to our efficient, low-cost commercial lending platform – as well as our continued focus on delivering best-in-class service, helped drive several performance records in the second quarter.

Our Retail Banking group hit another new record, opening over 406,000 net new checking accounts in the quarter. In Card Services, we opened an impressive 928,000 new credit card accounts – also a record. And our Commercial Group turned in a record $4.3 billion in loan originations – an increase of 18 percent over the prior quarter.

| Prepared Remarks - July 18, 2007

Page 2

We also saw improvement in the performance from our Home Loans Group, despite continued pressure from the challenging rate environment and ongoing weakness in the subprime mortgage market, as well as continued erosion in the housing market.

Following on the heels of being recognized by BusinessWeek in its first-ever ranking of the best 25 companies for customer service last February – WaMu was the only bank to make the list – we were gratified to receive more recognition this quarter. In May, following an extensive survey of U.S. consumers, WaMu was named by the Reputation Institute as the bank with the best reputation in the U.S. and WaMu was the only bank included in its ranking of the top 50 best regarded companies in the country. Then, last month, WaMu was ranked #1 in the Midwest and West/Pacific by J.D. Power and Associates in their 2007 Retail Banking Satisfaction Study.

All in all, we delivered a solid performance last quarter in a difficult business environment.

Our net interest margin was up 11 basis points in the quarter to 2.90 percent reflecting the results of the portfolio repositioning we completed in the first quarter, as well as our ability to grow retail deposits while maintaining strong deposit pricing discipline.

The growth in our retail checking account base helped drive depositor and other retail banking fees up 12 percent year over year.

Increased credit costs and the growth in credit card receivables held in portfolio led to an increase in the provision.

The loss from our Home Loans business was reduced to $37 million primarily from improved subprime gain on sale.

And, finally, our continued focus on productivity and expense management helped us hold expenses essentially flat in the second quarter at $2.1 billion, and our expenses were down 4 percent from the prior year quarter.

In summary, we are pleased with how our business model is performing. We are attracting record numbers of new customers with our innovative products and are then successfully cross selling our customers products from across all our business lines. Great examples are:

Sale of credit cards in our retail stores, which have increased from a run rate of 13 cards per store per month a year ago to 23 cards per store per month this past quarter.

Sales of prime home loans through our retail stores, the volume of which nearly doubled from last year’s second quarter.

And, the sales of prime home equity loans through our Home Loans segment which now comprises a significantly larger portion of our total home equity production.

With that, let me comment in a little more depth on the performance in each of our business units in the second quarter.

Retail Banking

I’ll begin with our Retail Banking business.

Our Retail Bank produced another strong quarter with net income of $558 million and record checking account growth. While net income attributed to portfolio management improved modestly, an increase in credit costs – particularly in home equity lending – resulted in a higher provision for loan and lease losses, which reduced net income from the retail banking network.

An important fact to be aware of is the impact of the company’s decision to limit asset growth on the Retail Bank. Average loans outstanding in the retail bank portfolio declined 18 percent over the past year; however, net interest income was only down 3 percent. This reflects the solid deposit growth we achieved, while maintaining strong deposit pricing discipline. The cost of retail deposits has now declined in each of the last three quarters from 2.93 percent at the end of 2006 to 2.86 percent in the second quarter. Meanwhile, average deposits were up 5 percent year over year and 1 percent from the prior quarter.

| Prepared Remarks - July 18, 2007

Page 3

As I already mentioned, we opened a record 406,000 net new checking accounts in the second quarter, an increase of 24 percent from the first quarter and breaking the record set in the second quarter last year. The results this quarter were particularly gratifying, since the second quarter last year benefited from the first full quarter of our new WaMu Free Checking™ product. Also, net new households grew by 228,000, or 17 percent over the prior quarter. And home equity originations increased to $9.9 billion, surpassing last quarter’s production by 19 percent.

With the 1.2 million new accounts added to our retail checking account base in the last twelve months, depositor and other retail banking fees were up 12 percent year over year, or up 16 percent when the $21 million incentive payment from MasterCard is excluded from last year’s second quarter fees.

| Prepared Remarks - July 18, 2007

Page 4

Our efforts in Small Business continue to deliver good results. During the second quarter, we opened 69,000 net new Small Business checking accounts, up 19 percent from the first quarter and 26 percent from the second quarter of last year. Average small business deposits of $8.3 billion were up 20 percent year over year and contributed to overall retail deposit growth. Average small Business loans increased to $1.2 billion, a 74 percent increase from the prior year quarter.

WaMu.com, our online distribution channel continues to contribute significantly to our growth. In the second quarter, we added 89,000 net new checking accounts – twice the number opened in the second quarter last year – through this fast-growing channel. And according to a recent study published by Web metrics firm, ComScore Networks, WaMu generated 35 percent of all new online checking accounts within our footprint markets, more than double that of our nearest competitor. We also continued to open a significant number of savings, CD and credit card accounts and other products online to meet the needs of our customers.

We opened 11 new retail banking stores in the quarter – a total of 17 new stores year to date – and expect to ramp up our store openings in the second half of the year. We are currently targeting a total of around 100 – at the low end of our projected openings of 100 to 125 for 2007 – as we continue to exercise discipline around our new store openings and take into account the strong growth in our online channel.

Card Services

Our Card Services group continued to deliver strong account and balance growth in the second quarter. During the quarter, we added a record 928,000 new credit card accounts, with strong performance across all channels. Credit card new account sales through our retail channel to WaMu customers accounted for about one-third of overall sales. At the end of the quarter, managed receivables from WaMu customers totaled $3.3 billion, or 13 percent of total receivables. So, we feel we have significant opportunity within that customer base to grow. Managed receivables of $25 billion at the end of the second quarter were up 18 percent year over year and 6 percent from the prior quarter.

| Prepared Remarks - July 18, 2007

Page 5

Net income of $141 million for the quarter was down from $256 million in the first quarter, reflecting the strong growth in receivables. With on-balance sheet receivables growing by $423 million to $9.9 billion, the provision was approximately $125 million higher in the second quarter than the first quarter.

Credit quality remained strong in the quarter. As we’ve said in the past, we anticipate that both the delinquency and loss levels will increase as the economy slows, although the most important economic factor is unemployment, which remained low at 4.5 percent nationally.

Commercial Group

For the Commercial Group, net income of $113 million in the second quarter was up 35 percent from the second quarter last year and 20 percent from the first quarter, primarily due to an increase in noninterest income resulting from higher gain on sale from favorable hedging results. We do not expect similar strength in gain on sale for the third quarter.

As I mentioned, the Commercial Group delivered record loan originations of $4.3 billion in the second quarter, up 47 percent year over year and 18 percent on a linked quarter basis, driven primarily by strong growth in multi-family and commercial real estate lending.

Average loans were relatively flat in the quarter compared to the prior quarter, but were up 23 percent from the same quarter last year, again primarily due to continued growth in multi-family and nonresidential assets, as well as our acquisition of Commercial Capital Bancorp.

Credit quality continued to be outstanding.

Home Loans

Turning to our Home Loans business, I continue to be optimistic that the segment is on track to return to profitability by the end of the year.

The second quarter net loss of $37 million was an improvement over the $113 million loss in the first quarter and was due, in large part, to improved subprime results. Subprime loss on sale of loans, and the decrease in the value of the subprime residual portfolio, totaled a loss of

$131 million in the second quarter, or about half the $252 million in losses recognized in the first quarter.

Favorable MSR performance, the rollout of WaMu Mortgage Plus™ and our continued focus on growing originations through our retail and wholesale distribution network also contributed to the improvement in the segment’s net income.

| Prepared Remarks - July 18, 2007

Page 6

Our prime business continues to perform well and is profitable. Prime home loan volume was up a solid 7 percent for the quarter on a linked quarter basis, gaining ground from the seasonally low first quarter, with most of the growth in fixed-rate and hybrid ARM loans. Gain on sale for this portion of the business remained strong, reflecting solid sales volume of fixed and hybrid loans as well as better gain on sale rates.

We continued to exercise caution, however, with regard to the subprime market and continue to take proactive steps to further reduce our exposure. We reduced our subprime volumes by 30 percent from the first quarter and 70 percent from the second quarter of last year.

I’ll have a few more comments about the housing market and subprime lending after Tom reviews the financials in more detail. Tom?

| Prepared Remarks - July 18, 2007

Page 7

Remarks of Tom Casey

Executive Vice President and CFO

Thank you, Kerry.

As Kerry said, we are making good progress in all our businesses, including record customer growth rates in three of our four segments. We are also seeing the benefit of our efforts over the past 18 months to reduce our operating costs, improve service levels and proactively manage our asset/liability mix and capital. During the second quarter our return on assets equaled

1.05 percent, up nicely from 88 basis point in last year’s second quarter and 95 basis points on a linked quarter basis. We also improved our efficiency ratio in the quarter to 56.38 percent from 61.27 percent in last year’s second quarter.

So, now let’s take a deeper look at the second quarter’s financial performance.

Asset Growth

Halfway through 2007, our average assets are down 7 percent from 2006. The decline is primarily due to the asset repositioning initiated at the end of 2006, which resulted in the sale of approximately $22 billion in low-yielding assets. Excluding the asset repositioning, assets have been relatively flat over the past twelve months. During this period, the yield curve has been mostly inverted and credit spreads have been very tight, and we have been very selective about the new assets we add to our balance sheet.

Yield Curve and Net Interest Margin

The asset repositioning we did earlier in this year had a very favorable impact on our net interest margin, contributing to an 11 basis point increase in the NIM to 2.90 percent in the second quarter. Short-term rates for the quarter remained pretty stable with 3-month LIBOR remaining at 5.35 percent. While we continued to see some upward repricing of certain assets during the second quarter, the securitization of aged higher-yielding credit card loans toward the end of the first quarter resulted in the yield on assets declining 2 basis points for the quarter.

| Prepared Remarks - July 18, 2007

Page 8

The NIM improvement for the quarter was driven by the liability side of the balance sheet. Three things drove most of the 13 basis point decline in the cost of our liabilities during the second quarter:

First, interest bearing deposit costs were lowered 5 basis points, primarily due to significant reduction in the level of high cost brokered CDs.

Second, we lowered the average balance of high-rate FHLB Advances by $14 billion. As of the end of the quarter, we have reduced FHLB Advances by more than $22 billion since year end.

And third, our non interest bearing sources added 4 basis points, primarily driven by our continued success with free checking growth in the Retail Bank.

During the second quarter, we saw the yield curve develop a positive slope as long-term rates increased. The 5-year swap rate increased 59 basis points and the 10-year swap was up 61 basis points. Conversely, short-term rates remained unchanged and the forward yield curve projects that they will stay flat through the end of the year.

| Prepared Remarks - July 18, 2007

Page 9

A favorable impact of the increase in long-term rates was lower than expected MSR hedging costs. MSR hedging costs were $21 million for the quarter compared to $124 million in the first quarter. The improvement was driven, in part, by our long-planned conversion from a static valuation method to the option-adjusted spread, or OAS, valuation approach for our MSR, and in part by rising long-term interest rates that slowed mortgage prepayment speeds during the second quarter. The OAS methodology we adopted is consistent with the method used by most of our peers, and we believe it will improve the efficiency of our hedging strategy and lower the cost of hedging the MSR.

Credit Quality

Now let’s turn to credit. Market conditions are having a material impact on the performance of our home loan and home equity loan portfolios. We are experiencing rising NPAs and charge-offs due to the dramatic slowing in home price appreciation in most parts of the country and absolute declines in home values in some of the markets we serve and continue to monitor all the markets we lend in and adjust our underwriting standards based on changes in market conditions.

During the first quarter, our nonperforming assets were 1.29 percent of total assets at quarter end, up from 1.02 percent of assets at the end of the first quarter. The increase was primarily due to higher nonaccrual loans in our prime, subprime and home equity portfolios.

We also saw an increase in net charge-offs to $271 million in the second quarter, up from

$183 million in the first quarter. The increase was primarily attributable to the subprime loan portfolio, where net charge-offs increased to $92 million from $39 million. Home equity loans also saw an increase in net charge-offs to $52 million from $26 million. Both of these portfolios are seeing an increase in the severity of charge-offs as housing values continue to soften across the country. Despite some challenging trends, overall home equity charge-offs remain within our expectations and we have mortgage insurance on loans with CLTVs greater than 90 percent. We expect the increasing trend of weaker home prices to continue in the second half of the year and anticipate increasing loss severity in both our subprime and home equity portfolios, which are most sensitive to falling home values.

Despite the increase in nonaccrual prime single-family mortgage loans, net charge-offs on those loans declined to $20 million in the quarter from $34 million in the first quarter. While we anticipate that we will see higher NPAs across all our home loan portfolios, we expect losses in prime loans to be much lower due to the lower LTVs and high FICO profile of the prime portfolio. At quarter end, our SFR prime portfolio had an estimated average current LTV of 56 percent and an average FICO score of 707.

| Prepared Remarks - July 18, 2007

Page 10

Our $29.3 billion multi-family loan portfolio continues to perform very well, with NPAs at a low of 24 basis points and no net charge-offs for the year.

We also continue to be pleased with the performance of our credit card portfolio, where 30-plus day delinquencies fell to 5.11 percent at quarter end from 5.15 percent at the end of first quarter, and the quarter’s managed credit losses remained in line with expectations at 6.49 percent.

In discussing credit quality, it’s also important to look at the valuation of subprime residuals. During the second quarter, previously sold subprime loans underlying our residual interests continued to perform poorly. As a result, we recorded a $93 million downward adjustment in subprime residual value, which is similar to the negative adjustment of $88 million in the first quarter. At quarter end, the subprime residual balance was $79 million.

As we did last quarter, we have provided you with a comprehensive set of charts as an appendix to these remarks which include additional credit statistics related to our loan portfolios.

Provision for Loan Losses

The provision for loan losses of $372 million in the second quarter was up from $234 million in the first quarter, primarily due to an increase in provision for credit card loans. The 4 percent increase in balance sheet credit card receivables and an increase in forecasted losses due to higher charge offs and lower recoveries resulted in an increase in provision for credit cards to $229 million in the second quarter from $106 million in the first quarter, when on balance sheet card receivables declined.

The increased provision for the second quarter also reflected the higher level of delinquencies and net charge-offs from our home loans portfolios that I just discussed. As we look forward we expect those trends to continue and our provision level to increase. That expectation will be reflected in our earnings drivers which I’m going to cover right now.

Earnings Driver Guidance

This update of our earnings drivers for 2007 reflects the current environment and our expectations for the remainder of the year.

2007 Earnings Driver Guidance
Driver	April 2007 Guidance	July 2007 Guidance
1) Average assets	0% – 5% decline	Down 5% - 7%
2) Net interest margin	2.85% - 2.95%
3) Credit provisioning	$1.3 – $1.5 billion	$1.5 - $1.7 billion
4) Depositor and other retail banking fees	10% – 12% growth	12% - 14% growth
5) Noninterest income	$6.7 – $6.9 billion	$6.9 - $7.1 billion
6) Noninterest expense	$8.4 - $8.5 billion

Average Assets

Year-to-date average assets are down 7 percent, or $25 billion from 2006. As I said most of that decline was from our proactive asset repositioning to shed low-yielding assets. Beyond that we have also been extremely disciplined in adding assets during a period of very tight credit spreads and an inverted curve and we think this discipline has positioned us well. With the transition to a slightly positive sloping yield curve in the second quarter and some indication of wider credit spreads, we are cautiously optimistic about growing our balance sheet during the second half of the year.

| Prepared Remarks - July 18, 2007

Page 11

But we remain cautious and given our asset levels at the mid-point of the year, we now expect that average assets for all of 2007 will be between 5 and 7 percent lower than average assets of $349 million during 2006. We will remain disciplined in our asset management and if we are not able to find assets that meet our investment hurdles, we will instead deploy our capital through share repurchases.

Net Interest Margin

We continue to be comfortable with our NIM guidance of 2.85 percent to 2.95 percent. We are pleased to be in the middle of our range with a NIM of 2.90 percent in the second quarter, as a result of our asset repositioning and deposit pricing discipline. However, with the forward curve no longer predicting any reduction in short-term rates from this point, any NIM improvement will be more gradual as we continue to remix the balance sheet.

Credit Provision

We are raising our guidance for credit provision based on two factors. First, is our expectation that credit costs will continue to increase as the housing market continues to slow and we see further softening of housing values. Second, is the strong growth of our credit card portfolio, which is above our forecasted growth and requires a higher loan loss provision. Therefore, we are raising our forecasted credit provision by $200 million to $1.5 to $1.7 billion for the year. Given our year-to-date provision of $606 million, this forecasts an additional $900 million to $1.1 billion provision for the second half of the year. Our current guidance is based on our best thinking regarding trends in loan delinquencies, foreclosures and housing valuations at this time.

Depositor and other retail banking fees

The Retail Bank has done a terrific job of adding a record number of net new checking accounts. That growth is reflected in a 14 percent increase in depositor and other retail banking fees over last year’s first half. Given that performance and the continued strong customer growth, we are raising our guidance to 12 to 14 percent.

Noninterest Income

We are seeing benefits of our diversified business model coming through our noninterest income. Despite a very challenging interest rate environment which has made asset growth difficult, we expect to continue to have increases in depositor and retail banking fees and credit card noninterest income. And this quarter, we also had a significant decrease in our MSR risk management costs, which is included in noninterest income. Given these trends, we are increasing our noninterest income guidance by $200 million to $6.9 to $7.1 billion for the year.

Noninterest Expense

One of our business goals is to drive revenues at twice the pace of expenses. Better yet, we like to fund our growth through improved operating efficiency. We continue to do this by keeping our expenses essentially flat and we remain very comfortable with our full-year noninterest expense guidance range of $8.4 to $8.5 billion for the year.

I’ll now turn it back over to Kerry for his closing comments.

| Prepared Remarks - July 18, 2007

Page 12

Kerry Killinger

Chairman and CEO (continued)

Thanks, Tom.

Recap

I'd now like to let you know about some important changes we're making in our subprime mortgage business.

It's been over two years since we first began talking to you about housing prices becoming inflated and of the high risk of a slowdown in housing with price declines in some parts of the country. As a result, we started to take actions to minimize our exposure, including tightening our underwriting, selling off the 2004 and 2005 subprime residuals, delaying our plans to grow our portfolio of subprime loans and consciously decreasing our market share of new subprime originations. In fact, as I noted earlier, our volume is down 70 percent from a year ago.

Now, you may recall back in April we announced a $2 billion commitment to help our subprime customers who are current in their payments, but are feeling the effects of this challenging environment. Our goal is to help these customers stabilize their finances and avoid foreclosure. I’m pleased to say that this program has been well received.

Today, we’re taking another important step to adjust our subprime lending products and practices for new customers to reflect the current difficult conditions – especially softening house prices.

Effective immediately, we are implementing new, industry-leading subprime mortgage lending standards.

First, we will no longer offer subprime stated-income loans. In other words, we will only offer full-income documentation subprime mortgage loans.

Second, we will not offer subprime adjustable rate mortgage loans with initial fixed-rate terms of less than five years - effectively eliminating the 2/28 and 3/27 products.

Third, we will require tax and insurance escrow accounts with all new subprime mortgage loans we originate.

And fourth, we will offer industry leading disclosures and enhanced outreach efforts, including pre-closing contact by WaMu with the borrower, even when the borrower has been represented by a broker.

I want to emphasize that we remain committed to providing subprime loans to credit-worthy borrowers and that we believe these changes are the right thing to do for consumers to help them purchase and stay in their homes. It's also prudent for our business.

Finally, I wish to commend the efforts of our regulators to strengthen the mortgage industry through their newly issued subprime lending guidance. We fully support this guidance and believe it's a step in the right direction. However, we also strongly believe that this type of guidance must apply to ALL subprime mortgage originators if we are ever going to bring about positive, meaningful change to this vital segment of the mortgage industry.

To this end, we urge our regulators and our elected officials to continue to work toward creating a level playing field among subprime originators. In doing so, we believe it will help bring much needed discipline and integrity back to the subprime mortgage industry.

I also want to challenge mortgage investors to require all mortgage originators to adopt similar standards that are disciplined and appropriate for this current market environment.

| Prepared Remarks - July 18, 2007

Page 13

Now, before we take your questions, I’d like to invite you to join us here in Seattle for our upcoming annual Investor Day. We will be holding it on Thursday and Friday, September 13th and 14th. We will get started at 3:00 pm on the 13th and be finished by early afternoon on the 14th. Our focus this year will be on the strength and opportunity of our retail strategy. And, of course, Tom will be giving you a first look at our ’08 earnings guidance. More details and instructions on how to register will be available in the coming weeks. As you make your travel arrangements, remember we typically have very nice weather in September in the Northwest, so you might want to stay over for the weekend.

With that, Tom, Steve and I would be happy to take your questions.

Credit Risk Management Q2 2007 Prepared Remarks Appendix July 18, 2007

Loan Portfolio Mix $215 billion As of 6/30/07 ($ in billions) 1 Single-Family Residential excludes Custom and Builder Construction and home loans in the Subprime Mortgage Channel. 2 Home Equity excludes home equity loans included in the Subprime Mortgage Channel. 3 Managed Credit Card balances are $15.1 billion higher. Single-Family Residential1 $88.5 41% Home Equity2 $55.8 26% 14% Multi-Family $29.3 Subprime Mortgage Channel $20.5 Credit Cards3 $9.9 Other Commercial $8.7 Other $2.3 9% 5% 4% 1%

Current FICO = 707 $110.0 $114.1 $125.2 $121.1 $99.5 $93.5 $88.5 0.04% 0.03% 0.03% 0.04% 0.09% 0.14% 0.06% $0 $20 $40 $60 $80 $100 $120 $140 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Period End Portfolio Balance ($ in billions) 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% Annualized NCO Rate SFR Annualized NCO Rate Original LTV = 70% Est. Current LTV = 56% Est. Current LTV>90% = 1% Est. Current LTV>80% = 7% Single- Family Residential Portfolio1 1 Excludes Custom and Builder Construction and home loans in the Subprime Mortgage Channel.

Amount by which the current principal balance exceeds the original principal balance Loan balance Current> original balance as a % of loan balance Current FICO = 696 Original LTV = 72% Est. Current LTV = 61% Est. Current LTV>90% = 1% Est. Current LTV>80% = 11% $0.04 $0.01 $0.16 $0.89 $1.12 $49.3 $66.3 $71.2 $63.6 $58.1 $1.30 $53.5 Current> original balance as a % of loan balance $0 $10 $20 $30 $40 $50 $60 $70 $80 2003 2004 2005 2006 1Q '07 2Q '07 0.0% 1.0% 2.0% 3.0% 4.0% Amount by which the current principal balance exceeds the original principal balance Loan balance Current> original balance as a % of loan balance Current FICO = 696 Original LTV = 72% Est. Current LTV = 61% Est. Current LTV>90% = 1% Est. Current LTV>80% = 11% $0.04 $0.01 $0.16 $0.89 $1.12 $49.3 $66.3 $71.2 $63.6 $58.1 $1.30 $53.5 Current> original balance as a % of loan balance Option ARM Portfolio Period End Portfolio Balance ($ in billions) $49.3 $66.3 $71.0 $57.0 $52.2 $62.7 2.42% 1.93% 1.40% 0.22% 0.09% 0.02%

$43.6 $50.8 $52.8 $52.9 $53.4 $55.8 $52.6 0.38% 0.20% 0.08% 0.05% 0.02% 0.04% 0.05% $0 $10 $20 $30 $40 $50 $60 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Period End Portfolio Balance ($ in billions) 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% Annualized NCO Rate HEL/HELOC Annualized NCO Current FICO = 727 Original Combined LTV = 72% Original Combined LTV>90% = 2% Original Combined LTV>80% = 34% 1 Excludes home equity loans included in the Subprime Mortgage Channel. Home Equity Loan / Home Equity LOC Portfolio1

$40 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Period End Portfolio Balance ($ in billions) 0.00% 0.20% 0.40% 0.60% Annualized NCO Rate Other Commercial Multi-Family Lending Annualized Other Commercial NCO Rate Annualized Multi-Family NCO Rate 1 $31.2 $32.8 $34.0 $35.1 $38.6 $38.0 $38.0 Commercial Portfolio 0.59% $0 $10 $20 $30 $40 Period End Portfolio Balance ($ in billions) 1 Other Commercial consists of Other Real Estate and Commercial Loans.

Data presented for periods prior to 4Q ‘05 is for Providian Financial Corp. 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Managed Card Services Portfolio Managed Card Services Managed Annualized NCO Rate 0 $5 $10 $15 $20 $25 $30 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Period End Managed Receivables ($ in billions) 18.5 $20.0 $21.1 $21.9 $23.5 $23.6 $25.0 6.49% 6.31% 5.84% 5.68% 5.99% 7.72% 11.65% $0 $5 $10 $15 $20 $25 $30 2004 2005 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 Period End Managed Receivables ($ in billions) 0% 4% 8% 12% 16% 20%

Nonperforming Assets Nonperforming Assets $ Nonperforming Assets as a % of Total Assets $1,937 $1,795 $2,775 $3,259 $4,025 $1,962 0.70% 0.58% 0.57% 0.80% 1.02% 1.29% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2003 2004 2005 2006 1Q '07 2Q '07 Period End Balance ($ in millions) 0.10% 0.10% 0.30% 0.50% 0.70% 0.90% 1.10% 1.30% NPA Rate

Allowance for Loan and Lease Losses $1,695 $1,630 $1,663 $1,560 $244 $510 $116 $271 $316 $816 $224 $372 0.73% 0.68% 0.72% 0.74% $0 $400 $800 $1,200 $1,600 $2,000 2005 2006 2Q '06 2Q '07 Period End Balance ($ in millions) 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Allowance as a % of Loans Held in Portfolio Allowance for loan and lease losses (period end) Net Charge-offs Provision Allowance as a % of loans held in portfolio 1 Net charge-offs and provision for 2005 reflect the acquisition of Providian on 10/1/2005.

Current FICO>=660 620-659 580-619 <580 Total Home Loans <=80% 66% 10% 6% 10% 92%>80-90% 4% 1% 1% 1% 7%>90% 1% 0% 0% 0% 1% Total 71% 11% 7% 11% 100% Home Equity Loans2 <=80% 57% 4% 2% 1% 64%>80-90% 24% 4% 1% 2% 31%>90%3 4% 0% 0% 1% 5% Total 85% 8% 3% 4% 100% Estimated Current Loan-to-Value Combined Origination Loan-to-Value June 2007 1 Includes Subprime Mortgage Channel. 2 Home Equity Loans include the HELOC, HEL and HEL Subprime portfolios. 3 Home Equity Loans with CLTVs in excess of 90% are covered by pool mortgage insurance. Current Credit Quality M

etrics – Home Loans1

Cautionary Statements 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 document that are not historical facts. When used in this presentation, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or words of similar meaning, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may” 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 “Factors That May Affect Future Results” in Washington Mutual’s 2006 Annual Report on Form 10-K and “Cautionary Statements” in our Form 10-Q for the quarter ended March 31, 2007 which include: Volatile interest rates and their impact on the mortgage banking business; Credit risk; Operational risk; Risks related to credit card operations; Changes in the regulation of financial services companies, housing government-sponsored enterprises and credit card lenders; Competition from banking and nonbanking companies; General business, economic and market conditions; and Reputational risk There are other factors not described in our 2006 Form 10-K and Form 10-Q for the quarter ended March 31, 2007 which are beyond the Company’s ability to anticipate or control that could cause results to differ.