-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TPihyHRXAaDJz2iftakipKCZ+kifibjAk3T23KMziPZh0A6McRKLJ2iX8eSFomUf y+RxfXiwo66dIPuw0irWJg== 0000927087-99-000005.txt : 19990125 0000927087-99-000005.hdr.sgml : 19990125 ACCESSION NUMBER: 0000927087-99-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990119 ITEM INFORMATION: FILED AS OF DATE: 19990122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON MUTUAL INC CENTRAL INDEX KEY: 0000933136 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 911653725 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14667 FILM NUMBER: 99511481 BUSINESS ADDRESS: STREET 1: 1201 THIRD AVENUE STREET 2: SUITE 1500 CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 2064612000 MAIL ADDRESS: STREET 1: 1201 THIRD AVE STREET 2: SUITE 1500 CITY: SEATTLE STATE: WA ZIP: 98101 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 19, 1999 Washington Mutual, Inc. (Exact Name of Registrant as specified in its charter) Washington 0-25188 91-1653725 (State or Other Jurisdiction (Commission File Number)(IRS Identification No.) of Incorporation) 1201 Third Avenue, Seattle, Washington 98101 Address of Principal Executive Office Postal Code 206-461-2000 Registrant's telephone number including area code Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) 1. Press Release dated January 19, 1999. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WASHINGTON MUTUAL, INC. Date: January 22, 1999 By:/s/ Fay L. Chapman Executive Vice President and General Counsel EX-99 2 Media Contact: Libby Hutchinson 1-800-228-9268 (206) 461-2484 Investor Contact: Doug Wisdorf (206) 461-3805 JoAnn DeGrande January 19, 1999 (206) 461-3186 FOR IMMEDIATE RELEASE Washington Mutual Announces Fourth-Quarter Earnings Continued Strong Operating Fundamentals and Increased Cash Dividend SEATTLE -- Washington Mutual, Inc. (NYSE: WM) today announced fourth-quarter 1998 earnings of $157.1 million, or 27 cents per diluted share, compared with $337.4 million, or 59 cents per diluted share for the same period a year ago. Adjusted net income for the quarter, excluding charges associated with the completion of the merger with H.F. Ahmanson & Company and applying the effective tax rate for the entire year rather than an unusually low fourth-quarter tax rate, was $430.0 million, or 74 cents per diluted share. Earnings for 1998 were a record $1.49 billion, or $2.56 per diluted share, a 68 percent increase over earnings of $885.1 million, or $1.52 per diluted share, for the same period one year ago. (A number of merger-related and one-time charges affecting both fourth-quarter and 1998 earnings are outlined on page two.) Common Stock Dividend Based on continued strong operating fundamentals, the company's board of directors declared an increase in the cash dividend on common stock to 23 cents per share, up from 22 cents the previous quarter. Dividends on the common stock are payable on Feb. 12, 1999 to shareholders of record as of Jan. 29, 1999. "The fourth quarter of 1998 capped off one of the most significant years in the history of Washington Mutual," said Kerry Killinger, the company's chairman, president and chief executive officer. - more - Washington Mutual - 2 "During the year, we successfully completed the integration of Great Western and finalized our merger with Ahmanson. Meanwhile, operating fundamentals remained strong throughout the year, as evidenced by our record lending activity and significant growth in both households and checking accounts throughout our service territory, thus establishing Washington Mutual as one of the leading consumer banking franchises nationally." Merger-Related and Other Items for the Quarter and the Year Fourth-quarter earnings were significantly reduced by $472.5 million of pre-tax charges associated with the completion of the Ahmanson transaction. These charges were comprised of $431.5 million of transaction-related expenses, and $41.0 million in writedowns, reserves and other Ahmanson-related charges. At the same time, fourth-quarter earnings benefited from an unusually low tax rate of 26.11 percent due to a favorable adjustment in the value of the company's deferred tax assets. In addition to the items noted above, earnings for 1998 were positively impacted by the $289.0 million pretax gain on the sale of Ahmanson's 27 branches on the east coast of Florida. Earnings for 1997 were significantly affected by pretax transaction charges of $431.1 million related to the company's mergers with Great Western Financial Corporation and American Savings Bank, and were also impacted by the company's $100 million pretax writedown resulting from the securitization of approximately $1.2 billion of higher-risk residential mortgage loans originated by Great Western Bank. Net Interest Income and Other Income Net interest income in the fourth quarter was $1.08 billion, up from $999.1 million in the prior year's fourth quarter, primarily due to an increase in average interest-earning assets from $137.53 billion in fourth quarter 1997 to $153.25 billion for the same period in 1998. For the year, net interest income was $4.29 billion, up from $3.92 billion for 1997. The spread in the fourth quarter was 2.66 percent compared with 2.77 percent for the same period a year earlier. The margin was 2.85 percent in the most recent quarter versus 2.94 percent in fourth quarter 1997. - more - Washington Mutual - 3 Killinger pointed out that strong growth in fee-generating checking accounts continues to have a favorable effect on other income. A net increase of approximately 550,000 checking accounts, year over year, contributed to depositor and other retail banking fees of $163.6 million for the quarter, up 30 percent over $126.0 million for the same period one year ago. For the year, depositor and other retail banking fees totaled $568.4 million in 1998, a 19 percent increase over $478.7 million for 1997. Total other income in the fourth quarter was $321.3 million, up from $280.4 million for last year's fourth quarter. Mortgage banking income for the quarter was $31.2 million compared with $17.5 million in fourth quarter 1997, and for the year was $133.1 million versus a loss of $44.4 million in 1997. The loss in 1997 resulted from the company's pretax writedown of $100 million discussed above. Loan Originations Continued relatively low interest rates for residential mortgages helped the company establish a new record for total loan originations in the fourth quarter of 1998 and for the year. Total loan originations during the most recent quarter were $15.53 billion, up from $9.79 billion for the fourth quarter of 1997. For the year, total loan originations were $52.69 billion, compared with $35.50 billion in 1997. In the fourth quarter, single-family residential loan originations (excluding residential construction) were $12.87 billion, up from $7.17 billion a year ago. For the year, single-family residential loan originations totaled $41.87 billion, up from $25.76 billion in 1997. Of the single-family residential loans originated in fourth quarter 1998, approximately 41 percent were adjustable-rate mortgages. On an annual basis, adjustable-rate mortgages represented 44 percent of the residential loans originated in 1998, reflecting the popularity of fixed-rate mortgages. Consumer loan originations were $624.3 million for the current quarter versus $679.8 million in the prior year's fourth quarter; and for the year were $3.07 billion, up from $2.83 billion the previous year. Residential construction originations were $446.0 million during the quarter just ended, up from $375.6 million in fourth quarter 1997; and were $1.75 billion for the current year, as compared with $1.45 billion in 1997. - more - Washington Mutual - 4 Efficiency Ratio The company's operating efficiency ratio (defined as total other expense, excluding amortization of intangible assets, as a percentage of net interest income and other income) was 80.53 percent during the fourth quarter of 1998, compared with 51.09 percent for the fourth quarter of 1997. Without the impact of the previously mentioned adjustments associated with the Ahmanson and Great Western mergers, the efficiency ratio for the fourth quarter of 1998 would have been 46.77 percent, an improvement from 50.60 percent, during the same period one year ago. Killinger noted that the company is making excellent progress in achieving cost savings from recent mergers but is incurring costs to support its strong growth in loan originations and checking accounts. Other expense for the fourth quarter of 1998 was $1.15 billion, including $472.5 million in charges associated with the Ahmanson merger, as previously discussed. For the fourth quarter of 1997, other expense was $675.9 million, including $6.2 million in expenses related to the Great Western merger. Credit Quality and Capital Nonperforming assets declined by 6 percent to $1.21 billion at Dec. 31, 1998, from $1.29 billion at Sept. 30, 1998, and down from $1.37 billion at year-end 1997. The ratio of nonperforming assets to total assets was 0.73 percent at Dec. 31, 1998, a decrease from 0.81 percent at the end of the third quarter, and down from 0.96 percent at year-end 1997. In the fourth quarter, the company made a $33.2 million provision for loan losses and took $11.4 million in writedowns on loans securitized and retained. For the quarter, net loan charge offs were $43.4 million, an improvement from $54.6 million for the same period one year ago. Loan loss reserves and reserves for losses on loans securitized and retained or sold aggregated $1.21 billion at Dec. 31, 1998, and represented 129 percent of nonaccrual loans. Assets, Stockholders' Equity and Capital Ratios Washington Mutual's consolidated assets were $165.49 billion at Dec. 31, 1998, up from $143.52 billion at year-end 1997. The increase was primarily the result of the retention of loans originated by the company, the purchase of mortgage-backed securities and whole loans, and the inclusion of Coast Savings. - more - Washington Mutual - 5 Total deposits were $85.49 billion at Dec. 31, 1998, up $958.5 million from the end of the third quarter of 1998. Transaction accounts, which include checking, money market, and savings accounts, rose $2.97 billion during the fourth quarter of 1998, while time deposits declined by $2.01 billion during the same period. The ratio of transaction accounts to total deposits stood at 49 percent at the end of 1998, an increase from 41 percent at the beginning of the year. At Dec. 31, 1998, stockholders' equity stood at $9.34 billion, or 5.65 percent of consolidated assets. In addition, capital ratios of the company's banking subsidiaries continued to exceed the federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard. Consumer Finance Aristar, Inc., the holding company for Washington Mutual's consumer finance group, reported fourth-quarter net income of $11.5 million, versus $12.0 million for the same period in 1997. For the year, Aristar generated net income of $52.9 million in 1998, up 14 percent from $46.3 million one year ago. Ahmanson Merger Update "We've made significant progress in the integration of Ahmanson over the last three months and we remain on-track to complete our systems conversions by the middle of 1999," Killinger said. That progress included: Completing the merger with Ahmanson, effective Oct. 1, 1998; Reinforcing the company's corporate values, strategies and culture through personal meetings with Ahmanson employee groups by Killinger throughout California and Texas; Comprehensive computer and sales training of Texas consumer banking employees in preparation for the upcoming systems conversion; Technical training for lending managers and loan support employees at former Ahmanson lending offices; Merging Griffin Financial Services (Ahmanson's broker/dealer subsidiary) with WM Financial Services, effective Jan. 1, 1999; and Combining the commercial real estate lending operations of the former Home Savings of America and Washington Mutual. This brings together California's top two multi-family lenders. - more - Washington Mutual - 6 Year 2000 Update Washington Mutual's Year 2000 team is following a disciplined, five-phase process recommended by the Federal Financial Institutions Examination Council (FFIEC). During the fourth quarter, the company made excellent progress in testing key operating systems and continues to progress on schedule. Other News On Dec. 9, 1998, the company's common stock began trading on the New York Stock Exchange (NYSE) under the ticker symbol "WM." Washington Mutual ranks among the top 5 percent of NYSE listed companies on a market capitalization basis. Outlook "During the past two years, we've successfully brought acquired companies together under a unified culture and strategy. The result has been the formation of a financial powerhouse," Killinger said. "As we move forward, our priority is to continue building profitable relationships with both new and existing customers and establishing Washington Mutual as one of the nation's most efficient providers of financial services." With a history dating back to 1889, Washington Mutual is a financial services company that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At Dec. 31, 1998, Washington Mutual and its subsidiaries had assets of $165.49 billion. The company operates more than 2,000 offices throughout the nation. # # # Editor's Note: Washington Mutual's press releases are available at no charge through the News On Demand Plus System. For a menu of Washington Mutual press releases or to retrieve a specific release, call 1-800-329-6236. On the Internet, press releases may be accessed at www.businesswire.com/cnn/wm.htm Washington Mutual, Inc.(1) Consolidated Statements of Income (dollars in thousands, except per share amounts) (unaudited)
Quarter Ended Year Ended Dec. 31, Dec. 31, - ------------------------------------------------------------------------------------------------------------------------------- 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- Interest Income Loans $2,064,500 $1,961,445 $ 8,166,769 $ 7,520,760 Available-for-sale securities 466,815 390,365 1,707,874 1,674,375 Held-to-maturity securities 265,172 221,055 1,175,334 791,242 FHLB dividends and other interest income 40,884 63,636 171,491 216,154 - ------------------------------------------------------------------------------------------------------------------------------- Total interest income 2,837,371 2,636,501 11,221,468 10,202,531 Interest Expense Deposits 866,479 901,497 3,588,015 3,645,542 Borrowings 892,535 735,890 3,341,728 2,641,496 - ------------------------------------------------------------------------------------------------------------------------------- Total interest expense 1,759,014 1,637,387 6,929,743 6,287,038 - ------------------------------------------------------------------------------------------------------------------------------- Net interest income 1,078,357 999,114 4,291,725 3,915,493 Provision for loan losses 33,223 55,430 161,968 246,642 - ------------------------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 1,045,134 943,684 4,129,757 3,668,851 Other Income Depositor and other retail banking fees 163,631 125,971 568,376 478,700 Securities and insurance fees and commissions 61,534 60,815 251,328 244,406 Loan servicing income 26,215 34,989 117,356 141,278 Mortgage banking income (loss) 31,212 17,515 133,084 (44,368) Gain on sale of retail deposit branch systems - - 289,040 57,566 Gain on sale of other assets 3,502 23,865 26,966 41,179 Write down of loans securitized and retained (11,435) (16,697) (52,871) (76,636) Other operating income 46,658 33,964 190,869 154,037 - ------------------------------------------------------------------------------------------------------------------------------- Total other income 321,317 280,422 1,524,148 996,162 Other Expense Salaries and employee benefits 294,256 288,816 1,190,679 1,168,604 Occupancy and equipment 130,723 129,456 498,126 500,119 Telecommunications and outsourced information services 65,143 56,428 255,644 213,372 Regulatory assessments 14,634 14,808 63,204 59,887 Transaction-related expense 431,539 6.239 508,286 431,125 Amortization of intangible assets 26,693 22,229 104,252 89,351 Foreclosed asset expense 6,003 12,887 23,445 80,704 Other operating expense 184,873 145,018 640,812 583,582 - ------------------------------------------------------------------------------------------------------------------------------- Total other expense 1,153,864 675,881 3,284,448 3,126,744 - ------------------------------------------------------------------------------------------------------------------------------- Income before provision for income taxes 212,587 548,225 2,369,457 1,538,269 Provision for income taxes 55,500 210,831 882,525 653,151 - ------------------------------------------------------------------------------------------------------------------------------- Net Income $ 157,087 $ 337,394 $ 1,486,932 $ 885,118 =============================================================================================================================== Net Income Attributable to Common Stock $ 157,087 $ 325,371 $ 1,470,990 $ 830,087 =============================================================================================================================== Net income per common share: Basic $0.27 $0.61 $2.61 $1.56 Diluted 0.27 0.59 2.56 1.52 (1) All data contained in this schedule and the attached schedules have been restated to reflect the merger with H. F. Ahmanson & Company.
Washington Mutual, Inc. Selected Financial Information (dollars in thousands) (unaudited)
Quarter Ended Year Ended Dec. 31, Dec. 31, - ------------------------------------------------------------------------------------------------------------------------------ 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------ Data Used To Compute Per Share Amounts Net income $157,087 $337,394 $1,486,932 $885,118 Preferred stock dividends: Nonconvertible - (7,741) (6,673) (37,812) Convertible - (4,282) (9,269) (17,219) - ------------------------------------------------------------------------------------------------------------------------------ Net income attributable to basic common stock $157,087 $325,371 $1,470,990 $830,087 ============================================================================================================================== Net income $157,087 $337,394 $1,486,932 $885,118 Preferred stock dividends, nonconvertible - (7,741) (6,673) (37,812) - ------------------------------------------------------------------------------------------------------------------------------ Net income attributable to diluted common stock $157,087 $329,653 $1,480,259 $847,306 ============================================================================================================================== Average common shares used to calculate earnings per share: Basic 581,286,242 531,641,681 564,420,541 532,412,178 Common stock equivalents 1,896,694 24,793,236 14,141,764 24,346,845 - ------------------------------------------------------------------------------------------------------------------------------ Diluted 583,182,936 556,434,917 578,562,305 556,759,023 Financial Ratios Return on average assets 0.39% 0.95% 0.96% 0.63% Return on average equity 6.61 17.78 16.62 11.73 Return on average common equity 6.61 18.25 16.67 11.95 Efficiency ratio: Including amortization of intangible assets 82.44 52.82 56.47 63.66 Excluding amortization of intangible assets 80.53 51.09 54.68 61.84 Weighted Average Interest Rates Yield on loans 7.62% 7.85% 7.73% 7.77% Yield on investments 6.88 7.19 7.03 7.14 - ------------------------------------------------------------------------------------------------------------------------------ Yield on interest-earning assets 7.40 7.67 7.53 7.59 Cost of deposits 4.04 4.27 4.15 4.27 Cost of borrowings 5.70 5.97 5.85 6.04 - ------------------------------------------------------------------------------------------------------------------------------ Cost of interest-bearing liabilities 4.74 4.90 4.83 4.87 Net interest spread 2.66 2.77 2.70 2.72 Net interest margin 2.85 2.94 2.88 2.89 Average Balances Loans $108,308,802 $ 99,897,693 $105,595,302 $ 96,824,787 Investments 44,936,531 37,629,969 43,481,623 37,560,324 - ------------------------------------------------------------------------------------------------------------------------------ Total interest-earning assets 153,245,333 137,527,662 149,076,925 134,385,111 Deposits 85,047,378 83,728,890 86,430,382 85,345,158 Borrowings 62,180,217 48,900,846 57,152,872 44,358,746 - ------------------------------------------------------------------------------------------------------------------------------ Total interest-bearing liabilities 147,227,595 132,629,736 143,583,254 129,703,904 Total assets 159,340,139 142,340,922 155,121,396 139,961,182 Stockholders' equity 9,505,740 7,592,124 8,947,229 7,543,211
Washington Mutual, Inc. Consolidated Statements of Income (dollars in thousands, except per share amounts) (unaudited)
Quarter Ended - -------------------------------------------------------------------------------------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, 1998 1998 1998 1998 - -------------------------------------------------------------------------------------------------------------------------------- Interest Income Loans $2,064,500 $2,052,164 $2,059,908 $1,990,197 Available-for-sale securities 466,815 430,077 430,389 380,593 Held-to-maturity securities 265,172 288,197 305,922 316,043 FHLB dividends and other interest income 40,884 43,840 46,364 40,403 - -------------------------------------------------------------------------------------------------------------------------------- Total interest income 2,837,371 2,814,278 2,842,583 2,727,236 Interest Expense Deposits 866,479 890,311 927,429 903,796 Borrowings 892,535 860,598 825,457 763,138 - -------------------------------------------------------------------------------------------------------------------------------- Total interest expense 1,759,014 1,750,909 1,752,886 1,666,934 - -------------------------------------------------------------------------------------------------------------------------------- Net interest income 1,078,357 1,063,369 1,089,697 1,060,302 Provision for loan losses 33,223 34,376 44,394 49,975 - -------------------------------------------------------------------------------------------------------------------------------- Net interest income after provision or loan losses 1,045,134 1,028,993 1,045,303 1,010,327 Other Income Depositor and other retail banking fees 163,631 150,049 135,216 119,480 Securities and insurance fees and commissions 61,534 64,931 65,287 59,576 Loan servicing income 26,215 27,868 30,926 32,347 Mortgage banking income 31,212 34,210 40,614 27,048 Gain on sale of retail deposit branch system - 289,040 - - Gain on sale of other assets 3,502 8,677 13,640 1,147 Write down of loans securitized and retained (11,435) (15,917) (10,314) (15,205) Other operating income 46,658 50,208 54,034 39,969 - -------------------------------------------------------------------------------------------------------------------------------- Total other income 321,317 609,066 329,403 264,362 Other Expense Salaries and employee benefits 294,256 299,785 305,407 291,231 Occupancy and equipment 130,723 120,820 126,366 120,217 Telecommunications and outsourced information services 65,143 64,211 66,729 59,561 Regulatory assessments 14,634 15,679 16,635 16,256 Transaction-related expense 431,539 20,465 24,473 31,809 Amortization of intangible assets 26,693 27,734 26,241 23,584 Foreclosed asset expense (income) 6,003 (1,786) 10,345 8,883 Other operating expense 184,873 181,183 151,552 123,204 - -------------------------------------------------------------------------------------------------------------------------------- Total other expense 1,153,864 728,091 727,748 674,745 - -------------------------------------------------------------------------------------------------------------------------------- Income before provision for income taxes 212,587 909,968 646,958 599,944 Provision for income taxes 55,500 349,498 248,357 229,170 - -------------------------------------------------------------------------------------------------------------------------------- Net Income $ 157,087 $ 560,470 $ 398,601 $ 370,774 ================================================================================================================================ Net Income Attributable to Common Stock $ 157,087 $ 558,092 $ 393,761 $ 362,050 ================================================================================================================================ Net income per common share: Basic $0.27 $0.98 $0.70 $0.66 Diluted 0.27 0.96 0.68 0.64
Washington Mutual, Inc. Selected Financial Information (dollars in thousands) (unaudited)
Quarter Ended - --------------------------------------------------------------------------------------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, 1998 1998 1998 1998 - --------------------------------------------------------------------------------------------------------------------------------- Data Used To Compute Per Share Amounts Net income $157,087 $560,470 $398,601 $370,774 Preferred stock dividends: Nonconvertible - (1,269) (936) (4,468) Convertible - (1,109) (3,904) (4,256) - --------------------------------------------------------------------------------------------------------------------------------- Net income attributable to basic common stock $157,087 $558,092 $393,761 $362,050 ================================================================================================================================= Net income $157,087 $560,470 $398,601 $370,774 Preferred stock dividends, nonconvertible - (1,269) (936) (4,468) - --------------------------------------------------------------------------------------------------------------------------------- Net income attributable to diluted common stock $157,087 $559,201 $397,665 $366,306 ================================================================================================================================= Average common shares used to calculate earnings per share: Basic 581,286,242 571,589,704 560,688,632 545,115,410 Common stock equivalents 1,896,694 11,759,104 22,787,039 24,216,786 - --------------------------------------------------------------------------------------------------------------------------------- Diluted 583,182,936 583,348,808 583,475,671 569,332,196 Weighted Average Interest Rates Yield on loans 7.62% 7.72% 7.79% 7.82% Yield on investments 6.88 7.05 7.05 7.15 - --------------------------------------------------------------------------------------------------------------------------------- Yield on interest-earning assets 7.40 7.53 7.56 7.63 Cost of deposits 4.04 4.14 4.18 4.25 Cost of borrowings 5.70 5.87 5.89 5.96 - --------------------------------------------------------------------------------------------------------------------------------- Cost of interest-bearing liabilities 4.74 4.84 4.84 4.89 Net interest spread 2.66 2.69 2.72 2.74 Net interest margin 2.85 2.88 2.89 2.91 Average Balances Loans $108,308,802 $106,237,972 $105,844,558 $101,912,526 Investments 44,936,531 43,235,725 44,440,046 41,276,673 - -------------------------------------------------------------------------------------------------------------------------------- Total interest-earning assets 153,245,333 149,473,697 150,284,604 143,189,199 Deposits 85,047,378 85,426,522 88,979,283 86,293,066 Borrowings 62,180,217 58,235,865 56,170,181 51,900,360 - --------------------------------------------------------------------------------------------------------------------------------- Total interest-bearing liabilities 147,227,595 143,662,387 145,149,464 138,193,426 Total assets 159,340,139 155,456,034 156,435,935 149,137,681 Stockholders' equity 9,505,740 9,361,631 8,847,867 8,194,071
Washington Mutual, Inc. Selected Financial Information (dollars in thousands, except per share amounts) (unaudited) Note: The following analysis of reported and adjusted earnings is based upon the Company's opinion and is intended to provide the user additional information about the Company's operations. It is not intended to replace traditional financial statement disclosures in accordance with generally accepted accounting principles and may not be comparable to similarly titled measures reported by other companies.
Quarter Ended - ------------------------------------------------------------------------------------------------------------------------------------ Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 1998 1998 1998 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ Reported Financial Results Net income $157,087 $560,470 $398,601 $370,774 $337,394 Net income per diluted common share $0.27 $0.96 $0.68 $0.64 $0.59 Financial ratios on reported financial results: Return on average assets 0.39% 1.44% 1.02% 0.99% 0.95% Return on average equity 6.61 23.95 18.02 18.10 17.78 Return on average common equity 6.61 24.00 18.08 18.28 18.25 Efficiency ratio (excluding amortization of intangible assets) 80.53 41.88 49.43 49.16 51.09 Adjusted Net Earnings Reported pretax income $212,587 $909,968 $646,958 $599,944 $548,225 Adjustments 472,549 (1) 20,465 24,473 31,809 6,239 - ------------------------------------------------------------------------------------------------------------------------------------ Adjusted pretax income 685,136 930,433 671,431 631,753 554,464 Provision for income tax benefit 255,185 357,152 257,698 241,976 213,305 - ------------------------------------------------------------------------------------------------------------------------------------ Adjusted net earnings $429,951 $573,281 $413,733 $389,777 $341,159 ==================================================================================================================================== Earnings per diluted common share: Reported net income $0.27 $0.96 $0.68 $0.64 $0.59 Adjustments (0.47) (1) (0.02) (0.02) (0.03) (0.01) Adjusted net earnings $0.74 $0.98 $0.70 $0.67 $0.60 ==================================================================================================================================== Financial ratios on adjusted net earnings: Return on average assets 1.08% 1.48% 1.06% 1.05% 0.96% Return on average equity 18.09 24.49 18.70 19.03 17.97 Return on average common equity 18.09 24.55 18.77 19.23 18.46 Efficiency ratio (excluding amortization of intangible assets) 46.77 40.65 47.71 46.76 50.60 Amortization of Intangible Assets Total amortization of intangible assets during the period $26,693 $27,734 $26,241 $23,584 $22,229 Tax benefit (2) 4,933 5,192 4,912 4,415 6,589 - ------------------------------------------------------------------------------------------------------------------------------------ Amortization of intangible assets, net of tax benefit $21,760 $22,542 $21,329 $19,169 $15,640 ==================================================================================================================================== (1) Adjustments for fourth quarter 1998 consisted of transaction-related expenses and other charges associated with the completion of the Ahmanson transaction. The tax on this quarter was computed at the rate of 37.25%, the company's rate for the full year. (2) A tax benefit was included on approximately 48% (1998) and 76% (1997) of the amortization of intangible assets.
Washington Mutual, Inc. Consolidated Statements of Financial Position (dollars in thousands, except per share amounts) (unaudited)
Dec. 31, 1998 Dec. 31, 1997 - ------------------------------------------------------------------------------------------------------------------------ Assets Cash $ 2,695,454 $ 1,889,019 Cash equivalents 61,520 830,978 Trading securities 39,068 23,364 Available-for-sale securities: Mortgage-backed securities ("MBS") 32,399,591 18,624,163 Investment securities 517,462 1,193,063 Held-to-maturity securities: MBS 13,992,235 17,085,036 Investment securities 137,247 122,818 Loans: Loans held in portfolio 107,612,197 97,530,826 Loans held for sale 1,826,549 1,141,367 Reserve for loan losses (1,067,840) (1,047,845) - ------------------------------------------------------------------------------------------------------------------------ Total loans 108,370,906 97,624,348 Investment in Federal Home Loan Banks ("FHLBs") 2,030,027 1,471,469 Foreclosed assets 274,767 340,582 Premises and equipment 1,421,162 1,301,824 Intangible assets 1,009,666 636,946 Mortgage servicing rights 461,295 311,480 Other assets 2,082,881 2,067,308 - ------------------------------------------------------------------------------------------------------------------------ Total assets $165,493,281 $143,522,398 ======================================================================================================================== Liabilities Deposits: Checking accounts $ 13,460,731 $ 11,185,954 Savings accounts and money market deposit accounts 28,285,868 22,928,816 Time deposit accounts 43,745,542 49,314,663 - ------------------------------------------------------------------------------------------------------------------------ Total deposits 85,492,141 83,429,433 Federal funds purchased and commercial paper 2,482,830 3,732,282 Securities sold under agreements to repurchase 17,519,538 13,954,040 Advances from FHLBs 39,748,613 25,114,776 Other borrowings 5,449,508 7,175,279 Other liabilities 5,456,251 2,515,503 - ------------------------------------------------------------------------------------------------------------------------ Total liabilities 156,148,881 135,921,313 Stockholders' Equity 9,344,400 7,601,085 - ----------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $165,493,281 $143,522,398 ======================================================================================================================== Common shares outstanding at end of period 593,408,525 589,789,725 Book value per common share $16.07 $12.61 Tangible book value per common share 14.66 11.84
Washington Mutual, Inc. Consolidated Statements of Financial Position (dollars in thousands) (unaudited)
Dec. 31, 1998 Sept. 30, 1998 June 30, 1998 Mar. 31, 1998 - ------------------------------------------------------------------------------------------------------------------------------- Assets Cash $ 2,695,454 $ 1,879,010 $ 1,682,286 $ 1,769,791 Cash equivalents 61,520 169,784 401,289 263,979 Trading securities 39,068 38,452 36,024 130,912 Available-for-sale securities: Mortgage-backed securities ("MBS") 32,399,591 27,070,604 24,129,275 25,161,533 Investment securities 517,462 567,469 730,193 1,204,617 Held-to-maturity securities: MBS 13,992,235 15,113,334 16,403,671 16,799,287 Investment securities 137,247 133,202 129,469 126,793 Loans: Loans held in portfolio 107,612,197 105,830,184 104,795,730 103,781,522 Loans held for sale 1,826,549 1,668,586 1,569,945 2,162,436 Reserve for loan losses (1,067,840) (1,151,486) (1,156,347) (1,153,921) - ------------------------------------------------------------------------------------------------------------------------------- Total loans 108,370,906 106,347,284 105,209,328 104,790,037 Investment in FHLBs 2,030,027 1,946,267 1,749,922 1,625,122 Foreclosed assets 274,767 281,086 314,627 354,493 Premises and equipment 1,421,162 1,443,988 1,440,715 1,386,254 Intangible assets 1,009,666 1,077,188 1,097,149 1,126,670 Mortgage servicing rights 461,295 405,261 386,778 350,772 Other assets 2,082,881 2,279,788 2,342,546 2,367,832 - ------------------------------------------------------------------------------------------------------------------------------- Total assets $165,493,281 $158,752,717 $156,053,272 $157,458,092 =============================================================================================================================== Liabilities Deposits: Checking accounts $ 13,460,731 $ 11,941,954 $ 12,623,882 $ 12,653,030 Savings accounts and money market deposit accounts 28,285,868 26,835,529 24,976,990 24,547,565 Time deposit accounts 43,745,542 45,756,161 50,387,287 52,525,681 - ------------------------------------------------------------------------------------------------------------------------------- Total deposits 85,492,141 84,533,644 87,988,159 89,726,276 Federal funds purchased and commercial paper 2,482,830 5,353,523 4,758,298 5,002,718 Securities sold under agreements to repurchase 17,519,538 15,966,989 16,750,651 16,439,500 Advances from FHLBs 39,748,613 32,999,263 28,928,043 26,653,445 Other borrowings 5,449,508 5,690,820 6,032,211 6,304,544 Other liabilities 5,456,251 4,792,522 2,619,660 4,772,410 - ------------------------------------------------------------------------------------------------------------------------------- Total liabilities 156,148,881 149,336,761 147,077,022 148,898,893 Stockholders' Equity 9,344,400 9,415,956 8,976,250 8,559,199 - ------------------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity $165,493,281 $158,752,717 $156,053,272 $157,458,092 ===============================================================================================================================
Washington Mutual, Inc. Selected Financial Information (dollars in thousands) (unaudited)
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 1998 1998 1998 1998 1997 - -------------------------------------------------------------------------------------------------------------------------------- Capital Adequacy Stockholders' equity/total assets 5.65% 5.93% 5.75% 5.44% 5.30% Common stockholders' equity/total assets 5.65 5.93 5.72 5.40 5.08 Tangible stockholders' equity/total tangible assets 5.18 5.42 5.22 4.89 5.01 Tangible stockholders' equity (including trust preferred securities)/total tangible assets 5.75 6.01 5.82 5.49 5.66 Retail Checking Accounts (1) WMB and WMBfsb 908,077 874,516 833,467 799,447 766,391 WMB,FA 2,990,823 2,950,684 2,997,227 2,974,762 2,582,858 - -------------------------------------------------------------------------------------------------------------------------------- Total retail checking accounts 3,898,900 3,825,200 3,830,694 3,774,209 3,349,249 ================================================================================================================================ Retail Checking Account Activity (1) Net accounts opened during the quarter: WMB and WMBfsb 33,561 41,049 34,020 33,056 31,882 WMB,FA 40,139 13,903 22,465 69,121 89,505 - -------------------------------------------------------------------------------------------------------------------------------- Net new retail checking accounts 73,700 54,952 56,485 102,177 121,387 ================================================================================================================================ Accounts acquired (sold) during the quarter (2) - (60,446) - 322,783 (1,554) (1) Retail checking accounts exclude commercial business accounts. The information provided refers to the number of accounts, not dollar volume. (2) Coast Savings Financial, Inc. was acquired during first quarter 1998 and the east coast Florida branches of Home Savings were sold during third quarter 1998.
Quarter Ended Year Ended Dec. 31, Dec. 31, - ------------------------------------------------------------------------------------------------------------------------------- 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- Consumer Finance Operations Net interest income $76,536 $66,415 $283,191 $247,205 Provision for loan losses 21,660 19,400 79,760 66,600 Other income 7,037 6,908 27,147 26,555 Other expense 42,817 34,544 142,991 131,129 - ------------------------------------------------------------------------------------------------------------------------------- Income before provision for income 19,096 19,379 87,587 76,031 taxes Provision for income taxes 7,600 7,344 34,700 29,744 - ------------------------------------------------------------------------------------------------------------------------------- Net income $11,496 $12,035 $ 52,887 $ 46,287 ================================================================================================================================
Washington Mutual, Inc. Selected Financial Information (dollars in millions) (unaudited)
Quarter Ended Dec. 31, Year Ended Dec. 31, - ------------------------------------------------------------------------------------------------------------------------------- 1998 1997 % Change 1998 1997 % Change - ------------------------------------------------------------------------------------------------------------------------------- Loan Originations Single-family residential ("SFR"): Adjustable rate ("ARMs") $ 5,282.7 $4,192.9 26% $18,342.9 $16,871.4 9% Fixed rate 7,586.0 2,977.6 155 23,526.8 8,892.3 165 SFR - custom construction 261.7 240.7 9 1,017.2 883.2 15 SFR - builder construction 184.3 134.9 37 731.1 565.3 29 Apartment buildings 488.7 484.7 1 2,014.8 1,857.9 8 Other commercial real estate 165.1 130.2 27 471.7 495.0 (5) Commercial business 262.6 224.0 17 1,011.5 759.5 33 Manufactured housing 59.7 76.9 (22) 281.0 324.6 (13) Second mortgage and other consumer 564.6 602.9 (6) 2,792.3 2,505.0 11 Consumer finance 675.0 723.0 (7) 2,500.3 2,345.4 7 - ------------------------------------------------------------------------------------------------------------------------------- Total loan originations $15,530.4 $9,787.8 59% $52,689.6 $35,499.6 48% =============================================================================================================================== As a percentage of total loan originations: SFR, excluding SFR construction 83% 73% 79% 73% All other 17 27 21 27
Quarter Ended Dec. 31, 1998 Year Ended Dec. 31, 1998 - --------------------------------------------------------------------------------------------------------------------------------- Amount % of category % of total Amount % of category % of total - --------------------------------------------------------------------------------------------------------------------------------- SFR Loan Originations Short-term ARMs: MTA $ 1,632.5 90% 13% $ 7,809.5 87% 19% COFI 175.9 9 1 852.2 9 2 CMT 9.3 1 - 174.5 2 1 Other 2.8 - - 143.0 2 - - --------------------------------------------------------------------------------------------------------------------------------- Total short-term ARMs 1,820.5 100% 14 8,979.2 100% 22 Medium-term ARMs: MTA 3,390.1 98% 26 8,819.7 94% 21 CMT 72.1 2 1 544.0 6 1 - --------------------------------------------------------------------------------------------------------------------------------- Total medium-term ARMs 3,462.2 100% 27 9,363.7 100% 22 Fixed-rate mortgages 7,586.0 59 23,526.8 56 - --------------------------------------------------------------------------------------------------------------------------------- Total SFR loan originations $12,868.7 100% $41,869.7 100% =================================================================================================================================
Washington Mutual, Inc. Selected Financial Information (dollars in millions) (unaudited)
Change from Sept. 30, 1998 Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, to Dec. 31, 1998 1998 1998 1998 1998 1997 - ----------------------------------------------------------------------------------------------------------------------------------- Loans and MBS by Property Type Loans held in portfolio: SFR $1,865.3 $ 79,275.2 $ 77,409.9 $ 76,457.0 $ 75,638.6 $ 71,019.3 SFR - custom construction 34.6 515.4 480.8 462.9 453.2 476.6 SFR - builder construction 11.8 504.7 492.9 462.7 420.9 400.9 Apartment buildings (174.4) 14,558.7 14,733.1 14,786.1 14,935.1 14,021.9 Other commercial real estate (52.4) 3,576.2 3,628.6 3,774.7 3,856.8 3,550.9 Commercial business 52.6 1,129.3 1,076.7 1,018.7 885.6 838.4 Manufactured housing, second mortgage and other consumer (107.1) 5,037.8 5,144.9 5,127.2 4,997.2 4,640.2 Consumer finance 151.6 3,014.9 2,863.3 2,706.4 2,594.1 2,582.6 - ------------------------------------------------------------------------------------------------------------------------------------ Total loans held in portfolio 1,782.0 107,612.2 105,830.2 104,795.7 103,781.5 97,530.8 Loans securitized and retained as MBS (2,264.5) 25,524.6 27,789.1 29,702.4 31,111.7 29,771.1 - ------------------------------------------------------------------------------------------------------------------------------------ Total loans held in portfolio and loans securitized and retained as MBS (482.5) 133,136.8 133,619.3 134,498.1 134,893.2 127,301.9 Loans held for sale 157.9 1,826.5 1,668.6 1,570.0 2,162.4 1,141.4 Less: reserve for loan losses 83.7 (1,067.8) (1,151.5) (1,156.3) (1,153.9) (1,047.8) - ------------------------------------------------------------------------------------------------------------------------------------ Total loans and loans securitized and retained as MBS (240.9) 133,895.5 134,136.4 134,911.8 135,901.7 127,395.5 MBS purchased and retained 6,472.4 20,867.2 14,394.8 10,830.5 10,849.1 5,938.1 - ------------------------------------------------------------------------------------------------------------------------------------ Total loans and MBS $6,231.5 $154,762.7 $148,531.2 $145,742.3 $146,750.8 $133,333.6 ==================================================================================================================================== Change in Loans and Securitized MBS Loans held in portfolio: Loans originated $ 10,938.9 $ 9,096.0 $ 9,587.2 $ 6,812.7 $ 8,137.5 Loans purchased or acquired (1) 1,329.2 1,043.4 617.1 6,064.6 0.1 Loans securitized (828.5) (629.1) (1,098.1) (734.4) (3,731.3) Loans sold (23.6) (6.1) (10.0) (8.5) (15.0) Loan payments and other (9,634.0) (8,469.7) (8,082.0) (5,883.7) (4,628.7) - ------------------------------------------------------------------------------------------------------------------------------------ Change in loans held in portfolio 1,782.0 1,034.5 1,014.2 6,250.7 (237.4) Change in loans securitized and retained as MBS (2,264.5) (1,913.3) (1,409.3) 1,340.6 2,859.0 - ------------------------------------------------------------------------------------------------------------------------------------ Change in loans held in portfolio and loans securitized and retained as MBS (482.5) (878.8) (395.1) 7,591.3 2,621.6 Loans held for sale: Loans originated 4,591.5 3,553.5 4,080.8 4,028.9 1,650.3 Loans sold (4,433.6) (3,454.9) (4,673.2) (3,007.9) (2,587.3) - ------------------------------------------------------------------------------------------------------------------------------------ Change in loans held for sale 157.9 98.6 (592.4) 1,021.0 (937.0) Change in reserve for loan losses 83.7 4.8 (2.4) (106.1) 4.4 - ------------------------------------------------------------------------------------------------------------------------------------ Total change in loans and securitized MBS $ (240.9) $ (775.4) $ (989.9) $ 8,506.2 $ 1,689.0 ==================================================================================================================================== As a percentage of total loans and securitized MBS at beginning of quarter (0.2)% (0.6)% (0.7)% 6.7% 1.3% As a percentage of total assets at beginning of quarter (0.2) (0.5) (0.6) 5.9 1.2 (1) First quarter 1998 includes acquisition of $6.04 billion in loans from Coast Savings.
Washington Mutual, Inc. Selected Financial Information (dollars in millions) (unaudited)
Change from Sept. 30, 1998 to Dec. 31, 1998 Dec. 31, 1998 Sept. 30, 1998 - ---------------------------------------------------------------------------------------------------------------------------- Amount % of total Amount % of total - ---------------------------------------------------------------------------------------------------------------------------- Real Estate Loans and MBS Short-term ARMs: COFI $ (860.5) $ 74,901.8 51% $ 75,762.3 54% CMT (787.2) 6,275.9 4 7,063.1 5 MTA 1,208.0 11,747.4 8 10,539.4 8 Other 4,569.8 16,153.4 11 11,583.6 8 - ---------------------------------------------------------------------------------------------------------------------------- Total short-term ARMs 4,130.1 109,078.5 74 104,948.4 75 Medium-term ARMs: MTA 2,181.8 7,529.6 5 5,347.8 4 CMT (1,718.0) 2,033.7 1 3,751.7 2 COFI (163.9) 739.3 1 903.2 1 Other (355.5) 2,303.0 2 2,658.5 2 - ---------------------------------------------------------------------------------------------------------------------------- Total medium-term ARMs (55.6) 12,605.6 9 12,661.2 9 - ---------------------------------------------------------------------------------------------------------------------------- Fixed-rate loans held in portfolio (3,180.7) 9,529.6 7 12,710.3 9 Fixed-rate loans held for sale 157.9 1,826.5 1 1,668.6 1 Fixed-rate MBS 4,998.9 13,608.2 9 8,609.3 6 - ---------------------------------------------------------------------------------------------------------------------------- Total real estate loans and MBS $ 6,050.6 $146,648.4 100% $140,597.8 100% ============================================================================================================================
Washington Mutual, Inc. Selected Financial Information (dollars in millions) (unaudited)
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 1998 1998 1998 1998 1997 - -------------------------------------------------------------------------------------------------------------------------------- Nonperforming Assets ("NPAs") Nonaccrual loans: SFR and SFR construction $ 761.7 $ 849.0 $ 909.5 $ 940.0 $ 856.0 Apartment buildings and other commercial real estate 76.5 68.4 86.8 105.6 95.9 Manufactured housing, second mortgage and other consumer 38.6 36.2 28.7 27.1 28.6 Consumer finance 53.7 55.3 51.3 48.8 51.2 Commercial business 7.4 3.0 2.1 2.5 2.6 - -------------------------------------------------------------------------------------------------------------------------------- Total nonaccrual loans 937.9 1,011.9 1,078.4 1,124.0 1,034.3 Foreclosed assets: SFR and SFR construction 215.2 215.7 233.7 279.0 269.9 Apartment buildings and other commercial real estate 46.4 53.0 73.3 69.8 66.1 Manufactured housing, second mortgage and other consumer 10.6 10.4 8.7 6.8 6.0 Consumer finance 2.6 2.0 2.0 2.0 1.6 Reserve for losses on foreclosed assets - - (3.1) (3.1) (3.0) - -------------------------------------------------------------------------------------------------------------------------------- Net foreclosed assets 274.8 281.1 314.6 354.5 340.6 - -------------------------------------------------------------------------------------------------------------------------------- Total NPAs $1,212.7 $1,293.0 $1,393.0 $1,478.5 $1,374.9 ================================================================================================================================ NPAs by property type: SFR and SFR construction $ 976.9 $1,064.7 $1,143.2 $1,219.0 $1,125.9 Apartment buildings 70.0 80.9 101.7 98.2 72.1 Other commercial real estate 52.8 40.5 58.4 77.2 89.9 Manufactured housing, second mortgage and other consumer 49.2 46.6 37.4 33.9 34.6 Consumer finance 56.4 57.3 53.3 50.8 52.8 Commercial business 7.4 3.0 2.1 2.5 2.6 Reserve for losses on foreclosed assets - - (3.1) (3.1) (3.0) ================================================================================================================================ Total NPAs $1,212.7 $1,293.0 $1,393.0 $1,478.5 $1,374.9 ================================================================================================================================ NPAs as a percentage of : Total loans 1.12% 1.22% 1.32% 1.41% 1.41% Total assets 0.73 0.81 0.89 0.94 0.96
Washington Mutual, Inc. Selected Financial Information (dollars in millions) (unaudited)
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 1998 1998 1998 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- Reserve for Loan Losses Balance, beginning of quarter $1,151.5 $1,156.3 $1,153.9 $1,047.8 $1,052.2 Provision for loan losses 33.2 34.4 44.4 50.0 55.4 Reserves added through business combinations - - - 107.8 - Reserves transferred to other liabilities (73.6) (0.8) - - (5.2) Loans charged off: SFR and SFR construction (13.6) (13.3) (16.0) (20.8) (28.4) Commercial real estate (6.7) (5.8) (9.3) (9.5) (10.2) Manufactured housing, second mortgage and other consumer (8.1) (5.4) (6.1) (7.5) (4.8) Consumer finance (24.5) (23.9) (24.6) (24.0) (23.2) Commercial business (1.0) (1.4) (1.4) (1.4) (1.8) - ------------------------------------------------------------------------------------------------------------------------------- Total loans charged off (53.9) (49.8) (57.4) (63.2) (68.4) Recoveries of loans previously charged off: SFR and SFR construction 3.9 5.7 4.6 1.9 5.7 Commercial real estate 2.2 1.2 5.5 4.7 2.5 Manufactured housing, second mortgage and other consumer 0.4 0.5 0.5 0.4 0.4 Consumer finance 3.6 3.8 4.7 4.3 5.2 Commercial business 0.5 0.2 0.1 0.2 - - ------------------------------------------------------------------------------------------------------------------------------- Total recoveries of loans previously charged off 10.6 11.4 15.4 11.5 13.8 - ------------------------------------------------------------------------------------------------------------------------------- Net charge offs (43.3) (38.4) (42.0) (51.7) (54.6) - ------------------------------------------------------------------------------------------------------------------------------- Balance, end of quarter $1,067.8 $1,151.5 $1,156.3 $1,153.9 $1,047.8 =============================================================================================================================== Specific and allocated reserves: SFR $ 16.3 $ 16.3 $ 16.3 $ 19.3 $ 18.0 Commercial real estate 133.1 133.5 136.8 145.5 129.3 Builder construction 0.9 0.9 1.9 2.0 2.2 Commercial business 9.7 9.0 9.3 5.2 3.3 - ------------------------------------------------------------------------------------------------------------------------------- Total specific and allocated reserves 160.0 159.7 164.3 172.0 152.8 Unallocated reserves 907.8 991.8 992.0 981.9 895.0 - ------------------------------------------------------------------------------------------------------------------------------- Total reserve for loan losses $1,067.8 $1,151.5 $1,156.3 $1,153.9 $1,047.8 =============================================================================================================================== Reserve for loan losses as a percentage of: Nonaccrual loans 114% 114% 107% 103% 101% Nonperforming assets 88 89 83 78 76 Reserve for losses on loans securitized and retained or sold $ 144.3 $ 72.6 $ 74.0 $ 77.7 $ 80.2 Loss coverage as a percentage of nonaccrual loans (1) 129% 121% 114% 110% 109% (1) Nonaccrual loans include loans sold for which the company retains a credit risk. The reserve for losses on loans securitized and retained or sold is included as a component of "other liabilities." The loss coverage calculation includes this reserve in addition to the reserve for loan losses.
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