8-K

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 20, 2005

Washington Mutual, Inc.

(Exact name of registrant as specified in its charter)

Washington	1-14667	91-1653725
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1201Third 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):

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

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

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

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

Item 2.02  Results of Operations and Financial Condition.

On July 20, 2005, Washington Mutual, Inc. issued a press release regarding its results of operations and financial condition for the quarter and six months ended June 30, 2005. The text of the press release is included as Exhibit 99.1 to this report and the financial supplement is included as Exhibit 99.2 to this report. The information included in the press release text and the financial supplement 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, 2005, as part of its Form 10-Q covering that period.

Item 5.02  Departure of Directors of Principal Officers; Election of Directors; Appointment of Principal Officers.

On July 15, 2005, Robert H. Miles, Senior Vice President and Controller (principal accounting officer) of Washington Mutual, Inc., resigned effective August 5, 2005 to accept a position as chief financial officer of the North American unit of a reinsurance company in Charlotte, North Carolina.

Item 9.01  Financial Statements and Exhibits.

(c) The following exhibits are being furnished herewith:

Exhibit No.	Exhibit Description
99.1	Press release text of Washington Mutual, Inc. dated July 20, 2005.
99.2	Financial supplement of Washington Mutual, Inc.

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 20, 2005	By:	/s/ Fay L. Chapman
		Fay L. Chapman
		Senior Executive Vice President

2

EX-99.1

Exhibit 99.1

July 20, 2005

For Immediate Release

Washington Mutual Announces Second Quarter 2005 Earnings
Net Income and EPS Increased 73 Percent; Board of Directors Increases Cash Dividend

SEATTLE – Washington Mutual, Inc. (NYSE: WM) today announced second quarter 2005 net income of $844 million, or $0.95 per diluted share, up 73 percent when compared with net income of $489 million, or $0.55 per diluted share in the second quarter of 2004.

Washington Mutual’s Board of Directors declared a cash dividend of 48 cents per share on the company’s common stock, up from 47 cents per share in the previous quarter. Dividends on the common stock are payable on August 15, 2005 to shareholders of record as of July 29, 2005.

“We recorded solid performance across all of our businesses this quarter as we continue to make excellent progress toward achieving our long-term financial goals,” said Kerry Killinger, chairman and chief executive officer. “Our Retail Bank’s earnings were strong, Home Loans had another good quarter, the Commercial Group’s lending volume was robust and the company continued to demonstrate excellent expense control.”

Killinger added: “A year ago we acknowledged our challenges in integrating our mortgage banking acquisitions effectively into our operations and enhancing the risk management of our mortgage servicing asset. I said we would face those challenges head-on and build a mortgage team that is one of the industry’s best. I am proud to say that we have done exactly that and after four consecutive quarters of solid performance, our Home Loans Group is now positioned for growth.”

Washington Mutual has already taken several steps to ensure a timely and effective integration of the previously announced acquisition of the credit card company Providian Financial. The company has filed its application and related notices with the Office of Thrift Supervision, and Providian and Washington Mutual have filed the initial proxy and registration statement with the Securities and Exchange Commission. Providian has set August 31, 2005, as the date for its special meeting of shareholders to vote on the adoption of the merger agreement. The transaction is expected to close early in the fourth quarter of this year.

“Both companies are committed to completing this transaction quickly and to take advantage of the revenue synergies immediately after the transaction closes,” Killinger said.

Key Results:

•Total assets of $323.53 billion at the end of the second quarter of 2005 increased $3.84 billion from $319.70 billion at the end of the first quarter of 2005 and $44.99 billion from $278.54 billion at the end of the second quarter of 2004, reflecting continued strong asset generation capability;

•The net interest margin declined modestly to 2.66 percent in the second quarter from 2.73 percent in the first quarter of 2005 and 2.86 percent in the second quarter of 2004, despite a 225 basis point increase in the Fed Funds rate over the twelve-month period;

•Net interest income increased to $1.93 billion in the second quarter of 2005 from $1.89 billion in the first quarter of 2005 and $1.79 billion in the second quarter of 2004, as the growth in average interest-earning assets more than offset net interest margin compression;

•The provision for loan and lease losses was $31 million in the second quarter of 2005. While up when compared with $16 million in the first quarter of 2005, it was down from $60 million in the second quarter of 2004 and reflects a continuing favorable credit environment;

—more—

•Depositor and other retail banking fees of $540 million in the second quarter of 2005 were up $50 million, or 10 percent from the first quarter of 2005 and $33 million, or 7 percent from the second quarter of 2004. The improvement reflects not only the expected seasonal recovery from the first quarter of 2005 but also growth in net new checking accounts over the period;

•Revenue from sales and servicing of home mortgage loans, including the results of all MSR risk management instruments, was $403 million in the second quarter of 2005 compared with $624 million in the first quarter of 2005 and zero in the second quarter of 2004. The year-over-year improvement reflects the company’s success in reducing the earnings volatility associated with the MSR asset;

•Noninterest expense of $1.83 billion in the second quarter was down slightly from both the first quarter of 2005 and the second quarter of 2004, reflecting continued success on productivity improvements and expense management.

SECOND QUARTER FINANCIAL SUMMARY

Net Interest Income

The net interest margin in the second quarter was 2.66 percent, down 7 basis points from 2.73 percent in the first quarter of 2005 and 20 basis points from 2.86 percent in the second quarter of 2004. The decrease in the net interest margin from prior quarters reflects the increase in the cost of interest-bearing liabilities, which was driven by the continuing rise in short-term interest rates since June of 2004. This downward pressure was partially offset by disciplined deposit pricing, the partial restructuring of available-for-sale securities in the first quarter of 2005, which increased the yield of this portfolio, and the effect from the termination of higher cost debt in the third quarter of 2004.

Net interest income was $1.93 billion in the second quarter, up from $1.89 billion in the first quarter of 2005 and up 7 percent from $1.79 billion in the second quarter of 2004. The increase from the first quarter of 2005 reflects a 5 percent increase in average interest-earning assets, while the increase from the second quarter of 2004 reflects a 16 percent increase in average interest-earning assets, both of which more than offset the modest net interest margin compression.

Noninterest Income

Noninterest income was $1.27 billion in the second quarter of 2005, compared with $1.41 billion in the first quarter of 2005 and $894 million in the second quarter of 2004.

Revenue from sales and servicing of home mortgage loans, including the results of all MSR risk management instruments, was $403 million in the second quarter of 2005, down from $624 million in the first quarter of 2005, but up from zero in the second quarter of 2004. The results for the second quarter of 2005 reflect the company’s successful efforts to reduce the earnings volatility associated with the MSR asset.  The decline from the first quarter of 2005 reflects a higher total MSR risk management and amortization cost of $295 million in the quarter, compared with a cost of $149 million in the first quarter of 2005.  Further contributing to the decline was a lower gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments of $171 million in the second quarter of 2005, compared with $261 million in the first quarter of 2005.

Noninterest Expense

Noninterest expense of $1.83 billion was down $11 million from the first quarter of 2005 and down $20 million from $1.85 billion in the second quarter 2004. Expenses were down from both prior periods due to continued productivity improvements in all segments of our business and our focus on expense management. The company’s efficiency ratio was 57.24 percent in the second quarter of 2005, compared with 55.77 percent in the first quarter of 2005 and 68.77 percent in the second quarter of 2004.

Lending

Total loan volume was $67.62 billion in the second quarter of 2005, compared with $59.52 billion in the first quarter of 2005 and $79.52 billion in the second quarter of 2004. This quarter’s solid performance reflected the continuing strong loan demand and relatively low interest rates.

Total home loan volume in the second quarter of 2005 was $53.40 billion, compared with $47.75 billion in the first quarter of 2005 and $63.15 billion in the second quarter of 2004. Adjustable-rate loans made up 62 percent of total home loan volume in the second quarter of 2005, compared with 63 percent in the first quarter of 2005 and 55 percent in the second quarter of 2004. Home loan volume in the second quarter of 2005 included record volume from the company’s Long Beach Mortgage Company subsidiary.

The company continued to see strong home equity loan and line of credit and multi-family lending volumes in the second quarter of 2005. Although down from a record of $11.57 billion in the second quarter of 2004, home equity loan and line of credit volume of $10.89 billion in the quarter was up $2 billion, or 23 percent from $8.89 billion in the first quarter of 2005. Multi-family lending volume was $2.46 billion in the second quarter of 2005, up 16 percent from the first quarter of 2005 and 5 percent from the second quarter of 2004.

Credit Quality

At June 30, 2005, nonperforming assets as a percentage of total assets were 0.53 percent, compared with 0.57 percent at March 31, 2005, and 0.60 percent at June 30, 2004. While net charge offs for the quarter were up slightly to $39 million versus $37 million in the first quarter of 2005 and $24 million in the second quarter of 2004, they remained well below expectations due largely to a stable economy and a continued strong housing market. The strong credit performance of the portfolio resulted in a provision of $31 million for the quarter. The allowance for loan and lease losses was $1.24 billion at June 30, 2005, down 3 percent from $1.28 billion at March 31, 2005.

Balance Sheet and Capital Management

Total assets increased $3.84 billion from the first quarter of 2005 to $323.53 billion at the end of the second quarter of 2005, reflecting strong loan volume offset by opportunistic secondary market sales. Loans held for sale of $51.12 billion, increased $9.93 billion from the first quarter of 2005 and $23.33 billion from the second quarter of 2004. At the end of the second quarter of 2005, nearly half of the company’s loan portfolio was made up of assets other than prime single-family residential loans, reflecting the company’s balance sheet diversification.

Total deposits of $184.32 billion as of June 30, 2005, were up slightly during the quarter and up 13 percent from second quarter 2004. The year-over-year increase primarily reflects the growth in retail time deposits and wholesale accounts.

The company’s ratio of tangible common equity to tangible assets was 5.13 percent at the end of the quarter.  In addition, the 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.

SECOND QUARTER OPERATING SEGMENT RESULTS

Retail Banking and Financial Services Group Financial Performance

Net income for the company’s Retail Banking and Financial Services segment was $579 million in the second quarter of 2005, up 7 percent from $539 million in the first quarter of 2005 and up 20 percent from $483 million in the second quarter of 2004. Net interest income continued to grow primarily due to strong average asset growth. Home equity loans and lines of credit totaled $48.45 billion at June 30, 2005, a 34 percent increase in the past twelve months. Noninterest income was up from both the first

quarter of 2005 and the second quarter of 2004 due to growth in depositor and other retail banking fees, as well as securities fees and commissions.

Total retail deposits of $135.80 billion were up $1.21 billion from the first quarter of 2005 and were up $6.34 billion or 5 percent from the second quarter of 2004. Contributing to these increases was the addition of 504,000 net new retail deposit accounts in the second quarter of 2005, including 388,000 net new transaction accounts. The company opened 30 retail banking stores in the second quarter of 2005. The company’s retail banking cross-sell ratio increased to 6.02 products and services, up from 5.79 at June 30, 2004. Over the past year, WM Advisors’ assets under management grew by $3.24 billion, or 16 percent, to $23.35 billion at June 30, 2005.

Home Loans Group Financial Performance

Net income for the Home Loans segment, which excludes purchased specialty mortgage finance and Long Beach Mortgage Company, was $209 million in the second quarter of 2005, compared with $242 million in the first quarter of 2005 and a loss of $59 million in the second quarter of 2004.

The Home Loans segment loan volume in the second quarter of 2005 was $44.86 billion, up 17 percent from $38.50 billion in the first quarter of 2005, as the strong housing market and relatively low interest rates continued to drive volume. Although up from the first quarter, this quarter’s lending volume was below the $56.22 billion of a year ago, reflecting a lower level of refinancing activity.

While noninterest expense of $574 million in the second quarter of 2005 was essentially flat with the first quarter of 2005, it was down $92 million, or 14 percent from $666 million in the second quarter of 2004, due to continued productivity and efficiency improvements.

Commercial Group Financial Performance

Net income for the Commercial Group segment, which includes Long Beach Mortgage Company, was $151 million in the second quarter of 2005, down from $200 million in the first quarter of 2005 and $184 million in the second quarter of 2004. The decrease from the first quarter of 2005 was due primarily to a $59 million pretax gain on sale of a real estate investment property and higher gain from sale of loans in the first quarter of 2005.

Loan volume was $11.06 billion in the second quarter of 2005, a 30 percent increase from $8.52 billion in the first quarter of 2005 and a 33 percent increase from $8.31 billion in the second quarter of 2004. The significant increase in loan volume in the second quarter of 2005 was driven by record loan volume in Long Beach Mortgage Company and continued strong volumes in the multi-family lending business.

Average loans in the Commercial Group were $47.23 billion in the second quarter of 2005, up from $41.78 billion in the first quarter of 2005 and up $8.74 billion, or 23 percent from the second quarter of 2004. Total average commercial deposits were $7.65 billion in the second quarter of 2005.

Company Updates

On June 6, 2005, the company announced a definitive agreement to acquire Providian Financial (NYSE: PVN) in a stock and cash transaction at an announced value of approximately $6.45 billion. The transaction brings together two of the nation’s leading financial services companies focused on serving middle market consumers. Providian had approximately $18.10 billion in managed receivables at March 31, 2005, and serves close to 10 million customer accounts.

Earlier today, the company announced the election of recently retired CEO of Starbucks Orin C. Smith to its board of directors. Smith, 63, brings extensive retailing, branding, financial and operational expertise to the Board.  During his five years as CEO, Starbucks grew from 2,498 stores and annual revenues of $1.7 billion to more than 8,500 locations and more than $5 billion in annual revenues today. Smith was named to the Board of Directors’ Audit and Governance Committees.

On June 23, 2005, the company announced the election of former Media One CEO and Colorado equity investor Charles M. Lillis to its board of directors. Lillis, 63, is co-founder and managing director of LoneTree Capital, of Englewood, Colo., which invests primarily in the communications/information industry. Lillis was named to the Board of Directors’ Human Resources and Finance Committees.

On June 30, 2005, the company announced that it hired David C. Schneider to be president of its Home Loans Group and to oversee all aspects of the company’s Home Loans segment. Schneider will become a member of the company’s Executive Committee.

About Washington Mutual

With a history dating back to 1889, Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients. At June 30, 2005, Washington Mutual and its subsidiaries had assets of $323.53 billion.  Washington Mutual currently operates more than 2,400 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual’s press releases are available at www.wamunewsroom.com.

Webcast information: A conference call to discuss the company’s financial results will be held on Wednesday, July 20, 2005, at 5:00 p.m. EDT and will be hosted by Kerry Killinger, chairman and chief executive officer, Steve Rotella, president and chief operating 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 888-425-9158. Participants calling from outside the United States may dial 212-519-0800. 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 on the company’s web site for 30 days following the call. A recording of the conference call will be available after 7:30 p.m. EDT on Wednesday, July 20, 2005, through 2:59 a.m. EDT on Saturday, July 30, 2005. The recorded message will be available at
888-425-9158.  Callers from outside the United States may dial 402-220-4182.

Important Legal Information

This communication contains information about the proposed merger transaction involving Washington Mutual and Providian Financial Corporation.  In connection with the proposed transaction, Washington Mutual has filed a registration statement on
Form S-4 with the SEC containing a preliminary proxy statement/prospectus for the shareholders of Providian, and Washington Mutual and Providian will each be filing other documents regarding the proposed transaction with the SEC as well. Before making any voting or investment decision, investors are urged to read the definitive proxy statement/prospectus regarding the proposed transaction and any other relevant documents carefully in their entirety when they become available because they will contain important information about the proposed transaction.  The definitive proxy statement/prospectus will be mailed to Providian’s shareholders.  The registration statement containing the proxy statement/prospectus and other documents are available free of charge at the SEC’s Internet site (http://www.sec.gov).  The definitive proxy statement/prospectus (when it is available) and the other documents may also be obtained for free by accessing Washington Mutual’s website at www.wamu.com under the tab “About WaMu” and then under the heading “Investor Relations” or by accessing Providian’s website at www.providian.com under the tab “About Providian” and then under the heading “Investor Relations.”

Washington Mutual, Providian and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction.  Information regarding Washington Mutual’s directors and executive officers is available in Washington Mutual’s proxy statement for its 2005 annual meeting of shareholders and Washington Mutual’s 2004 Annual Report on Form 10-K, which were filed with the SEC on March 23, 2005 and March 14, 2005, respectively, and information regarding Providian’s directors and executive officers is available in Providian’s proxy statement for its 2005 annual meeting of shareholders and Providian’s Annual Report of Form 10-K, which were filed with the SEC on March 31, 2005.

Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of Providian shareholders in connection with the proposed transaction is included in the preliminary proxy statement/prospectus, which is available now, and will be included in the definitive proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.

Forward Looking Statement

Our Form 10-K for 2004 and other documents that we filed with the Securities and Exchange Commission have forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “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.” Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, forward-looking statements are subject to risks and uncertainties. These statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward looking statements were made. There are a number of factors, many of which are beyond our control that could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Some of these factors are:

•Volatile interest rates impact the mortgage banking business and could adversely affect earnings;

•Rising unemployment or a decrease in housing prices could adversely affect credit performance;

•The potential for negative amortization in the Option ARM product could have an adverse affect on the company’s credit performance;

•The company faces competition from banking and nonbanking companies;

•Changes in the regulation of financial services companies and housing government-sponsored enterprises could adversely affect business;

•General business and economic conditions, including movements in interest rates, may significantly affect the company’s business activities and earnings;

•Negative public opinion could damage the company’s reputation and adversely affect earnings; and,

•Matters related to the proposed merger with Providian Financial Corporation (including, among others, risks related to stockholder and regulatory approvals, integration issues, and the realization of expected growth opportunities and cost savings from the merger).

###

Media Contact	Investor Relations Contact
Alan Gulick	Alan Magleby
Washington Mutual	Washington Mutual
206-377-3637	206-490-5182
alan.gulick@wamu.net	alan.magleby@wamu.net

EX-99.2

Exhibit 99.2

WM - 1

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,
	2005		2005			2004			2004			2004
Interest Income
Loans held for sale	$	576	$	470		$	393		$	341		$	406
Loans held in portfolio	2,754		2,544			2,421			2,226			2,111
Available-for-sale securities	234		224			157			163			180
Trading securities	91		79			66			40			21
Other interest and dividend income	51		43			29			41			34
Total interest income	3,706		3,360			3,066			2,811			2,752
Interest Expense
Deposits	852		696			604			539			458
Borrowings	928		774			612			532			500
Total interest expense	1,780		1,470			1,216			1,071			958
Net interest income	1,926		1,890			1,850			1,740			1,794
Provision for loan and lease losses	31		16			37			56			60
Net interest income after provision for loan and lease losses	1,895		1,874			1,813			1,684			1,734
Noninterest Income
Revenue from sales and servicing of home mortgage loans	118		777			352			504			-
Depositor and other retail banking fees	540		490			515			514			507
Securities fees and commissions	112		110			110			104			105
Insurance income	47		46			47			61			57
Portfolio loan related income	96		85			101			109			103
Trading securities income (loss)	285		(98		)	26			51			5
Gain (loss) from other available-for-sale securities	25		(122		)	(23		)	11			41
Loss on extinguishment of borrowings	-		-			-			(147		)	(1		)
Other income	44		120			89			57			77
Total noninterest income	1,267		1,408			1,217			1,264			894
Noninterest Expense
Compensation and benefits	886		876			839			841			849
Occupancy and equipment	350		402			462			404			393
Telecommunications and outsourced information services	100		104			115			118			123
Depositor and other retail banking losses	49		55			61			54			40
Advertising and promotion	77		55			57			76			84
Professional fees	38		34			54			34			32
Other expense	328		313			350			342			327
Total noninterest expense	1,828		1,839			1,938			1,869			1,848
Income before income taxes	1,334		1,443			1,092			1,079			780
Income taxes	490		541			424			405			291
Net Income	$	844	$	902		$	668		$	674		$	489
Earnings Per Common Share:
Basic	$	0.98	$	1.04		$	0.77		$	0.78		$	0.57
Diluted	0.95		1.01			0.76			0.76			0.55
Dividends declared per common share	0.47		0.46			0.45			0.44			0.43
Basic weighted average number of common shares outstanding (in thousands)	865,221		864,933			863,055			862,004			860,496
Diluted weighted average number of common shares outstanding (in thousands)	887,250		888,789			883,991			882,323			883,414

WM - 2

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Six Months Ended
	June 30,			June 30,
	2005			2004
Interest Income
Loans held for sale	$	1,047		$	738
Loans held in portfolio	5,298			4,179
Available-for-sale securities	457			444
Trading securities	170			46
Other interest and dividend income	95			66
Total interest income	7,067			5,473
Interest Expense
Deposits	1,548			901
Borrowings	1,703			1,046
Total interest expense	3,251			1,947
Net interest income	3,816			3,526
Provision for loan and lease losses	47			116
Net interest income after provision for loan and lease losses	3,769			3,410
Noninterest Income
Revenue from sales and servicing of home mortgage loans	895			531
Depositor and other retail banking fees	1,030			969
Securities fees and commissions	223			212
Insurance income	93			118
Portfolio loan related income	181			190
Trading securities income	186			13
Gain (loss) from other available-for-sale securities	(97		)	62
Loss on extinguishment of borrowings	-			(90		)
Other income	163			126
Total noninterest income	2,674			2,131
Noninterest Expense
Compensation and benefits	1,761			1,748
Occupancy and equipment	752			794
Telecommunications and outsourced information services	204			246
Depositor and other retail banking losses	104			80
Advertising and promotion	132			143
Professional fees	72			71
Other expense	642			646
Total noninterest expense	3,667			3,728
Income from continuing operations before income taxes	2,776			1,813
Income taxes	1,031			676
Income from continuing operations, net of taxes	1,745			1,137
Discontinued Operations
Loss from discontinued operations before income taxes	-			(32		)
Gain on disposition of discontinued operations	-			676
Income taxes	-			245
Income from discontinued operations, net of taxes	-			399
Net Income	$	1,745		$	1,536
Basic Earnings Per Common Share:
Income from continuing operations	$	2.02		$	1.32
Income from discontinued operations, net	-			0.46
Net income	2.02			1.78
Diluted Earnings Per Common Share:
Income from continuing operations	1.97			1.29
Income from discontinued operations, net	-			0.45
Net income	1.97			1.74
Dividends declared per common share	0.93			0.85
Basic weighted average number of common shares outstanding (in thousands)	865,078			861,898
Diluted weighted average number of common shares outstanding (in thousands)	888,020			884,940

WM - 3

Washington Mutual, Inc.

Consolidated Statements of Financial Condition

(dollars in millions, except per share data)

(unaudited)

	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Assets
Cash and cash equivalents	$	4,614		$	4,811		$	4,455		$	4,689		$	5,133
Federal funds sold and securities purchased under agreements to resell	625			1,152			82			30			70
Trading securities	5,687			6,066			5,588			3,113			1,336
Available-for-sale securities, total amortized cost of $18,999, $20,569, $19,047, $16,312 and $19,392:
Mortgage-backed securities	14,396			15,947			14,923			10,168			10,042
Investment securities	4,852			4,756			4,296			6,319			9,337
Loans held for sale	51,122			41,197			42,743			29,184			27,795
Loans held in portfolio	212,737			214,114			207,071			206,158			194,543
Allowance for loan and lease losses	(1,243		)	(1,280		)	(1,301		)	(1,322		)	(1,293		)
Total loans held in portfolio, net of allowance for loan and lease losses	211,494			212,834			205,770			204,836			193,250
Investment in Federal Home Loan Banks	4,194			3,973			4,059			3,883			3,965
Mortgage servicing rights	5,730			6,802			5,906			6,112			7,501
Goodwill	6,196			6,196			6,196			6,196			6,196
Other assets	14,623			15,962			13,900			14,298			13,919
Total assets	$	323,533		$	319,696		$	307,918		$	288,828		$	278,544
Liabilities
Deposits:
Noninterest-bearing deposits	$	35,518		$	34,941		$	32,780		$	32,250		$	33,343
Interest-bearing deposits	148,799			148,690			140,878			136,445			129,123
Total deposits	184,317			183,631			173,658			168,695			162,466
Federal funds purchased and commercial paper	5,864			2,053			4,045			7,025			2,293
Securities sold under agreements to repurchase	14,089			16,716			15,944			15,611			15,764
Advances from Federal Home Loan Banks	71,534			66,730			70,074			59,758			61,379
Other borrowings	20,752			21,938			18,498			12,747			12,113
Other liabilities	4,627			6,861			4,473			4,172			4,160
Total liabilities	301,183			297,929			286,692			268,008			258,175
Stockholders’ equity	22,350			21,767			21,226			20,820			20,369
Total liabilities and stockholders’ equity	$	323,533		$	319,696		$	307,918		$	288,828		$	278,544
Common shares outstanding at end of period (in thousands)(1)	878,384			877,287			874,262			873,085			872,246
Book value per common share(2)	$	25.62		$	24.98		$	24.45		$	24.01		$	23.51
Tangible book value per common share(2)	18.66			18.01			17.45			16.99			16.47
Employees at end of period	54,377			52,488			52,579			55,488			57,274

⁽¹⁾Includes 6,000,000 shares held in escrow in all periods reported.

⁽²⁾Excludes 6,000,000 shares held in escrow in all periods reported.

WM - 4

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Stockholders’ Equity Rollforward
Balance, beginning of period	$	21,767		$	21,226		$	20,820		$	20,369		$	20,383
Net income	844			902			668			674			489
Other comprehensive income (loss), net of tax	98			(8		)	49			98			(210		)
Cash dividends declared on common stock	(409		)	(402		)	(390		)	(381		)	(372		)
Common stock repurchased and retired	-			(100		)	-			-			-
Common stock issued	50			149			79			60			79
Balance, end of period	$	22,350		$	21,767		$	21,226		$	20,820		$	20,369

WM - 5

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,
	2005			2005			2004			2004			2004			2005			2004
RETAIL BANKING AND FINANCIAL SERVICES GROUP
Condensed income statement:
Net interest income	$	1,384		$	1,343		$	1,323		$	1,255		$	1,224		$	2,727		$	2,412
Provision for loan and lease losses	42			37			34			42			43			78			101
Noninterest income	751			695			717			715			703			1,445			1,326
Inter-segment revenue	11			12			8			3			7			23			12
Noninterest expense	1,173			1,147			1,129			1,113			1,113			2,320			2,180
Income before income taxes	931			866			885			818			778			1,797			1,469
Income taxes	352			327			318			310			295			679			556
Net income	$	579		$	539		$	567		$	508		$	483		$	1,118		$	913
Performance and other data:
Efficiency ratio(1)	48.61		%	49.74		%	48.83		%	49.83		%	50.87		%	49.16		%	51.29		%
Average loans	$	181,396		$	177,635		$	177,204		$	167,569		$	158,966		$	179,525		$	154,171
Average assets	194,010			190,479			189,872			180,003			171,343			192,254			166,352
Average deposits	135,539			132,982			132,771			131,850			128,680			134,268			128,340
Loan volume	11,704			12,493			13,337			14,178			14,988			24,197			27,766
Employees at end of period	32,429			30,898			30,010			29,967			29,533			32,429			29,533
HOME LOANS GROUP
Condensed income statement:
Net interest income	$	303		$	286		$	293		$	287		$	369		$	589		$	657
Noninterest income	618			682			566			769			208			1,300			969
Inter-segment expense	11			12			8			3			7			23			12
Noninterest expense	574			567			629			614			666			1,141			1,344
Income (loss) before income taxes	336			389			222			439			(96		)	725			270
Income taxes (benefit)	127			147			80			165			(37		)	274			102
Net income (loss)	$	209		$	242		$	142		$	274		$	(59	)	$	451		$	168
Performance and other data:
Efficiency ratio(1)	57.44		%	53.85		%	67.78		%	53.31		%	107.91		%	55.60		%	76.82		%
Average loans	$	31,434		$	27,765		$	24,880		$	22,611		$	26,999		$	29,609		$	23,435
Average assets	51,542			49,019			44,195			40,037			44,568			50,288			41,740
Average deposits	13,940			13,107			15,121			15,385			19,837			13,526			17,357
Loan volume	44,855			38,498			41,782			40,491			56,219			83,353			99,938
Employees at end of period	12,534			12,565			13,843			16,524			18,630			12,534			18,630
COMMERCIAL GROUP
Condensed income statement:
Net interest income	$	349		$	323		$	322		$	325		$	342		$	672		$	685
Provision for loan and lease losses	2			2			11			8			10			4			26
Noninterest income	72			158			61			65			102			230			188
Noninterest expense	195			175			192			164			149			370			305
Income before income taxes	224			304			180			218			285			528			542
Income taxes	73			104			56			75			101			177			190
Net income	$	151		$	200		$	124		$	143		$	184		$	351		$	352
Performance and other data:
Efficiency ratio(1)	39.15		%	30.36		%	42.23		%	34.52		%	26.89		%	34.48		%	28.20		%
Average loans	$	47,233		$	41,783		$	40,917		$	38,799		$	38,496		$	44,523		$	37,740
Average assets	52,439			46,644			45,675			43,727			43,746			49,558			43,274
Average deposits	7,649			7,308			7,791			7,811			6,898			7,479			6,474
Loan volume	11,059			8,524			8,102			7,156			8,314			19,583			13,982
Employees at end of period	3,793			3,530			3,432			3,539			3,477			3,793			3,477

(This table is continued in “WM-6”.)

⁽¹⁾The efficiency ratio is defined as noninterest expense, excluding a cost of capital charge on goodwill, divided by total revenue (net interest income and noninterest income).

WM - 6

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

(This table is continued from “WM-5”.)

	Quarter Ended															Six Months Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2005			2005			2004			2004			2004			2005			2004
CORPORATE SUPPORT/TREASURY AND OTHER
Condensed income statement:
Net interest expense	$	(225	)	$	(175	)	$	(201	)	$	(237	)	$	(247	)	$	(400	)	$	(437	)
Noninterest income (expense)	(39		)	(65		)	12			(123		)	24			(104		)	(45		)
Noninterest expense	96			158			200			190			130			254			319
Loss from continuing operations	(360		)	(398		)	(389		)	(550		)	(353		)	(758		)	(801		)
Income taxes (benefit)	(133		)	(149		)	(151		)	(206		)	(132		)	(282		)	(299		)
Loss from continuing operations	(227		)	(249		)	(238		)	(344		)	(221		)	(476		)	(502		)
Income from discontinued operations, net of taxes	-			-			-			-			-			-			399
Net loss	$	(227	)	$	(249	)	$	(238	)	$	(344	)	$	(221	)	$	(476	)	$	(103	)
Performance and other data:
Average assets	$	24,598		$	23,812		$	19,282		$	21,724		$	26,028		$	24,207		$	28,014
Average deposits	26,393			21,788			18,190			13,820			9,391			24,103			7,209
Employees at end of period	5,621			5,495			5,294			5,458			5,634			5,621			5,634
RECONCILING ADJUSTMENTS
Condensed income statement:
Net interest income(2)	$	115		$	113		$	113		$	110		$	106		$	228		$	209
Provision (reversal of reserve) for loan and lease losses(3)	(13		)	(23		)	(8		)	6			7			(35		)	(11		)
Noninterest income (expense)(4)	(135		)	(62		)	(139		)	(162		)	(143		)	(197		)	(307		)
Noninterest (income) expense(5)	(210		)	(208		)	(212		)	(212		)	(210		)	(418		)	(420		)
Income before income taxes	203			282			194			154			166			484			333
Income taxes(6)	71			112			121			61			64			183			127
Net income	$	132		$	170		$	73		$	93		$	102		$	301		$	206
Performance and other data:
Average loans(7)	$	(1,541	)	$	(1,556	)	$	(1,622	)	$	(1,600	)	$	(1,553	)	$	(1,548	)	$	(1,529	)
Average assets(7)(8)	(1,744		)	(1,782		)	(1,866		)	(1,822		)	(1,745		)	(1,763		)	(1,707		)
TOTAL CONSOLIDATED
Condensed income statement:
Net interest income	$	1,926		$	1,890		$	1,850		$	1,740		$	1,794		$	3,816		$	3,526
Provision for loan and lease losses	31			16			37			56			60			47			116
Noninterest income	1,267			1,408			1,217			1,264			894			2,674			2,131
Noninterest expense	1,828			1,839			1,938			1,869			1,848			3,667			3,728
Income from continuing operations before income taxes	1,334			1,443			1,092			1,079			780			2,776			1,813
Income taxes	490			541			424			405			291			1,031			676
Income from continuing operations	844			902			668			674			489			1,745			1,137
Income from discontinued operations, net of taxes	-			-			-			-			-			-			399
Net income	$	844		$	902		$	668		$	674		$	489		$	1,745		$	1,536
Performance and other data:
Efficiency ratio(9)	57.24		%	55.77		%	63.18		%	62.19		%	68.77		%	56.49		%	65.92		%
Average loans	$	258,522		$	245,627		$	241,379		$	227,379		$	222,908		$	252,109		$	213,817
Average assets	320,845			308,172			297,158			283,669			283,940			314,544			277,673
Average deposits	183,521			175,185			173,873			168,866			164,806			179,376			159,380
Loan volume	67,618			59,515			63,221			61,825			79,521			127,133			141,686
Employees at end of period	54,377			52,488			52,579			55,488			57,274			54,377			57,274

⁽²⁾Represents the difference between home loan premium amortization recorded by the Retail Banking and Financial Services Group and the amount recognized in the Company’s Consolidated Statements of Income. For management reporting purposes, loans that are held in portfolio by the Retail Banking and Financial Services 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 and Financial Services Group includes this assumed profit factor and must therefore be eliminated as a reconciling adjustment.

⁽³⁾Represents the difference between the long-term, normalized net charge-off ratio used to assess expected loan and lease losses for the operating segments and the “losses inherent in the loan portfolio” methodology used by the Company.

⁽⁴⁾Represents the difference between gain from mortgage loans recorded by the Home Loans Group and the gain from mortgage loans recognized in the Company’s Consolidated Statements of Income. As the Home Loans Group holds no loans in portfolio, all loans originated or purchased by this segment are considered to be salable for management reporting purposes.

⁽⁵⁾Represents the corporate offset for the cost of capital related to goodwill that has been allocated to the segments.

⁽⁶⁾Represents the tax effect of reconciling adjustments.

⁽⁷⁾Includes the inter-segment offset for inter-segment loan premiums that the Retail Banking and Financial Services Group recognized from the transfer of portfolio loans from the Home Loans Group.

⁽⁸⁾Includes the impact to the allowance for the loan and lease losses per the following table that results from the difference between the long-term, normalized net charge-off ratio used to assess expected loan and lease losses for the operating segments and the “losses inherent in the loan portfolio” methodology used by the Company.

Quarter Ended															Six Months Ended
June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
2005			2005			2004			2004			2004			2005			2004
$	(203	)	$	(226	)	$	(244	)	$	(222	)	$	(192	)	$	(215	)	$	(178	)

⁽⁹⁾The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

WM - 7

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions, except per share data)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
PROFITABILITY
Net interest income	$	1,926		$	1,890		$	1,850		$	1,740		$	1,794
Net interest margin	2.66		%	2.73		%	2.79		%	2.77		%	2.86		%
Noninterest income	$	1,267		$	1,408		$	1,217		$	1,264		$	894
Noninterest expense	1,828			1,839			1,938			1,869			1,848
Basic earnings per common share	$	0.98		$	1.04		$	0.77		$	0.78		$	0.57
Diluted earnings per common share	0.95			1.01			0.76			0.76			0.55
Dividends declared per common share	0.47			0.46			0.45			0.44			0.43
Return on average assets	1.05		%	1.17		%	0.90		%	0.95		%	0.69		%
Return on average common equity	15.33			16.63			12.71			13.03			9.63
Efficiency ratio(1)	57.24			55.77			63.18			62.19			68.77
ASSET QUALITY
Nonaccrual loans(2)(3)	$	1,463		$	1,569		$	1,534		$	1,471		$	1,396
Foreclosed assets(3)	256			264			261			281			286
Total nonperforming assets(2)(3)	1,719			1,833			1,795			1,752			1,682
Nonperforming assets/total assets(2)(3)	0.53		%	0.57		%	0.58		%	0.61		%	0.60		%
Restructured loans(3)	$	25		$	27		$	34		$	38		$	79
Total nonperforming assets and restructured loans(2)(3)	1,744			1,860			1,829			1,790			1,761
Allowance for loan and lease losses(3)	1,243			1,280			1,301			1,322			1,293
Allowance as a percentage of total loans held in portfolio(3)	0.58		%	0.60		%	0.63		%	0.64		%	0.66		%
Provision for loan and lease losses	$	31		$	16		$	37		$	56		$	60
Net charge-offs	39			37			38			27			24
CAPITAL ADEQUACY(3)
Capital Ratios at WMI -consolidated level:
Stockholders’ equity/total assets	6.91		%	6.81		%	6.89		%	7.21		%	7.31		%
Tangible common equity(4)/total tangible assets(4)	5.13			5.03			5.05			5.26			5.32
Estimated total risk-based capital/total risk-weighted assets(5)	11.16			11.21			11.34			10.64			10.39
Capital Ratios at WMB - bank only level (well-capitalized minimum):(6)
Tier 1 capital to adjusted total assets (5.00%)	5.74			5.69			5.46			5.85			5.96
Adjusted tier 1 capital to total risk-weighted assets (6.00%)	8.42			8.40			8.12			8.24			8.60
Total risk-based capital to total risk-weighted assets (10.00%)	11.56			11.68			11.68			10.94			10.85
SUPPLEMENTAL DATA
Average balance sheet:
Total loans held for sale	$	44,884		$	38,307		$	33,083		$	28,220		$	33,096
Total loans held in portfolio	213,638			207,320			208,296			199,159			189,812
Total interest-earning assets	290,876			277,080			266,375			252,235			251,264
Total assets	320,845			308,172			297,158			283,669			283,940
Total interest-bearing deposits	149,144			142,639			139,938			135,600			127,670
Total noninterest-bearing deposits	34,377			32,546			33,935			33,266			37,136
Total stockholders’ equity	22,014			21,680			21,025			20,703			20,288
Period-end balance sheet:
Loans held for sale	51,122			41,197			42,743			29,184			27,795
Loans held in portfolio, net of allowance for loan and lease losses	211,494			212,834			205,770			204,836			193,250
Interest-earning assets	293,613			287,205			278,762			258,855			247,088
Total assets	323,533			319,696			307,918			288,828			278,544
Interest-bearing deposits	148,799			148,690			140,878			136,445			129,123
Noninterest-bearing deposits	35,518			34,941			32,780			32,250			33,343
Total stockholders’ equity	22,350			21,767			21,226			20,820			20,369

⁽¹⁾The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

⁽²⁾Excludes nonaccrual loans held for sale.

⁽³⁾As of quarter end.

⁽⁴⁾Excludes unrealized net gain/loss on available-for-sale securities and derivatives, goodwill and intangible assets, but includes MSR.

⁽⁵⁾Estimate of what the total risk-based capital ratio would be if Washington Mutual, Inc. were a bank holding company that is subject to Federal Reserve Board capital requirements.

⁽⁶⁾Capital ratios for Washington Mutual Bank (“WMB”) at June 30, 2005 are preliminary.

WM - 8

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30, 2005						Mar. 31, 2005						June 30, 2004
					Interest						Interest						Interest
					Income/						Income/						Income/
	Balance		Rate		Expense		Balance		Rate		Expense		Balance		Rate		Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	1,972	2.96	%	$	15	$	1,354	2.55	%	$	9	$	1,030	1.14	%	$	3
Trading securities	6,252		5.85		91		5,713		5.54		79		1,284		6.68		21
Available-for-sale securities(1):
Mortgage-backed securities	15,065		4.67		176		15,487		4.45		173		9,887		3.92		97
Investment securities	4,764		4.84		58		4,627		4.44		51		11,975		2.76		83
Loans held for sale(2)	44,884		5.13		576		38,307		4.91		470		33,096		4.91		406
Loans held in portfolio(2):
Loans secured by real estate:
Home	111,272		4.80		1,336		110,131		4.59		1,263		105,360		4.12		1,086
Specialty mortgage finance(3)	20,913		5.20		272		18,554		5.05		234		15,361		4.77		183
Total home loans	132,185		4.87		1,608		128,685		4.65		1,497		120,721		4.20		1,269
Home equity loans and lines of credit	47,200		5.71		672		44,679		5.37		593		33,716		4.53		381
Home construction(4)	2,047		6.43		33		2,242		5.77		32		2,510		5.28		33
Multi-family	23,715		5.17		307		22,667		5.00		283		20,809		4.97		259
Other real estate	5,092		6.50		83		5,425		6.02		82		6,502		6.05		98
Total loans secured by real estate	210,239		5.14		2,703		203,698		4.90		2,487		184,258		4.43		2,040
Consumer	722		10.75		19		770		10.50		20		927		9.92		23
Commercial business	2,677		4.69		32		2,852		5.19		37		4,627		4.11		48
Total loans held in portfolio	213,638		5.16		2,754		207,320		4.92		2,544		189,812		4.45		2,111
Other	4,301		3.45		36		4,272		3.21		34		4,180		2.97		31
Total interest-earning assets	290,876		5.10		3,706		277,080		4.86		3,360		251,264		4.38		2,752
Noninterest-earning assets:
Mortgage servicing rights	6,195						6,090						7,128
Goodwill	6,196						6,196						6,196
Other assets	17,578						18,806						19,352
Total assets	$	320,845					$	308,172					$	283,940
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	47,654	1.86		221		$	49,917	1.63		201		$	65,468	1.28		208
Savings and money market deposits	41,424		1.60		165		41,997		1.42		147		29,328		0.82		60
Time deposits	60,066		3.10		466		50,725		2.77		348		32,874		2.31		190
Total interest-bearing deposits	149,144		2.28		852		142,639		1.97		696		127,670		1.44		458
Federal funds purchased and commercial paper	2,749		3.09		21		3,486		2.49		22		3,029		1.07		8
Securities sold under agreements to repurchase	16,390		3.13		130		16,621		2.65		110		17,004		2.28		98
Advances from Federal Home Loan Banks	69,512		3.21		563		66,591		2.82		469		59,233		1.88		281
Other	21,491		4.00		214		18,400		3.78		173		12,774		3.56		113
Total interest-bearing liabilities	259,286		2.74		1,780		247,737		2.39		1,470		219,710		1.74		958
Noninterest-bearing sources:
Noninterest-bearing deposits	34,377						32,546						37,136
Other liabilities	5,168						6,209						6,806
Stockholders’ equity	22,014						21,680						20,288
Total liabilities and stockholders’ equity	$	320,845					$	308,172					$	283,940
Net interest spread and net interest income			2.36		$	1,926			2.47		$	1,890			2.64		$	1,794
Impact of noninterest-bearing sources			0.30						0.26						0.22
Net interest margin			2.66						2.73						2.86

⁽¹⁾The average balance and yield are based on average amortized cost balances.

⁽²⁾Nonaccrual loans and related income, if any, are included in their respective loan categories.

⁽³⁾Represents purchased subprime loan portfolios and certain mortgages originated by Long Beach Mortgage Company.

⁽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.

WM - 9

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Six Months Ended
	June 30, 2005						June 30, 2004
					Interest						Interest
					Income/						Income/
	Balance		Rate		Expense		Balance		Rate		Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	1,665	2.80	%	$	24	$	1,028	1.24	%	$	6
Trading securities	5,984		5.70		170		1,256		7.29		46
Available-for-sale securities(1):
Mortgage-backed securities	15,275		4.56		348		9,943		4.14		205
Investment securities	4,696		4.64		109		15,524		3.08		239
Loans held for sale(2)	41,613		5.03		1,047		28,780		5.13		738
Loans held in portfolio(2):
Loans secured by real estate:
Home	110,705		4.69		2,599		104,025		4.18		2,174
Specialty mortgage finance(3)	19,740		5.13		506		14,689		4.98		366
Total home loans	130,445		4.76		3,105		118,714		4.28		2,540
Home equity loans and lines of credit	45,947		5.54		1,266		31,489		4.62		725
Home construction(4)	2,144		6.09		65		2,413		5.30		64
Multi-family	23,194		5.09		590		20,592		5.02		517
Other real estate	5,257		6.26		164		6,546		5.91		194
Total loans secured by real estate	206,987		5.02		5,190		179,754		4.50		4,040
Consumer	746		10.62		40		962		10.04		48
Commercial business	2,763		4.94		68		4,321		4.15		91
Total loans held in portfolio	210,496		5.04		5,298		185,037		4.52		4,179
Other	4,287		3.33		71		4,053		2.98		60
Total interest-earning assets	284,016		4.98		7,067		245,621		4.46		5,473
Noninterest-earning assets:
Mortgage servicing rights	6,143						6,500
Goodwill	6,196						6,196
Other assets	18,189						19,356
Total assets	$	314,544					$	277,673
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	48,780	1.74		421		$	66,449	1.28		422
Savings and money market deposits	41,709		1.51		312		28,122		0.79		110
Time deposits	55,421		2.95		815		30,932		2.39		369
Total interest-bearing deposits	145,910		2.13		1,548		125,503		1.44		901
Federal funds purchased and commercial paper	3,116		2.75		43		3,261		1.07		18
Securities sold under agreements to repurchase	16,505		2.89		240		19,479		2.08		205
Advances from Federal Home Loan Banks	68,059		3.02		1,032		56,077		2.07		586
Other	19,954		3.90		388		13,403		3.56		237
Total interest-bearing liabilities	253,544		2.57		3,251		217,723		1.79		1,947
Noninterest-bearing sources:
Noninterest-bearing deposits	33,466						33,877
Other liabilities	5,686						5,885
Stockholders’ equity	21,848						20,188
Total liabilities and stockholders’ equity	$	314,544					$	277,673
Net interest spread and net interest income			2.41		$	3,816			2.67		$	3,526
Impact of noninterest-bearing sources			0.28						0.21
Net interest margin			2.69						2.88

(1)	The average balance and yield are based on average amortized cost balances.
(2)	Nonaccrual loans and related income, if any, are included in their respective loan categories.
(3)	Represents purchased subprime loan portfolios and certain mortgages originated by Long Beach Mortgage Company.
(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.

WM - 10

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	Mar. 31, 2005			June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	to June 30, 2005			2005		2005		2004		2004		2004
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing	$	494		$	19,093	$	18,599	$	17,463	$	16,178	$	15,666
Interest bearing	(2,957		)	46,031		48,988		51,099		52,378		59,395
Total checking deposits	(2,463		)	65,124		67,587		68,562		68,556		75,061
Savings and money market deposits	(670		)	34,514		35,184		36,836		38,620		30,413
Time deposits(1)	4,343			36,162		31,819		27,268		24,825		23,990
Total retail deposits	1,210			135,800		134,590		132,666		132,001		129,464
Commercial business deposits	1,201			9,648		8,447		7,611		7,369		7,176
Wholesale deposits	(1,331		)	23,638		24,969		18,448		14,052		8,874
Custodial and escrow deposits(2)	(394		)	15,231		15,625		14,933		15,273		16,952
Total deposits	$	686		$	184,317	$	183,631	$	173,658	$	168,695	$	162,466

⁽¹⁾Weighted average remaining maturity of time deposits was 13 months at June 30, 2005, 14 months at March 31, 2005 and 16 months at December 31, 2004, September 30, 2004 and June 30, 2004.

⁽²⁾Substantially all custodial and escrow deposits reside in noninterest-bearing checking accounts.

	June 30,	Mar. 31,	Dec. 31,	Sept. 30,	June 30,
	2005	2005	2004	2004	2004
Retail Deposit Accounts(1)
Checking	9,427,222	9,183,194	8,981,060	8,874,823	8,731,827
Money market and savings	5,395,091	5,250,907	5,110,674	5,030,884	4,848,134
Total transaction accounts(2)	14,822,313	14,434,101	14,091,734	13,905,707	13,579,961
Time deposits	1,416,689	1,300,580	1,208,870	1,171,127	1,165,002
Total accounts, end of period	16,239,002	15,734,681	15,300,604	15,076,834	14,744,963
Net transaction account changes	388,212	342,367	186,027	325,746	386,663
Net total account changes	504,321	434,077	223,770	331,871	365,937

⁽¹⁾The information provided in this table represents the number of accounts.

⁽²⁾Transaction accounts include retail checking, small business checking, retail savings and small business savings.

	June 30,	Mar. 31,	Dec. 31,	Sept. 30,	June 30,
	2005	2005	2004	2004	2004
Retail Banking Stores
Stores, beginning of period	1,968	1,939	1,872	1,816	1,755
Net stores opened during the quarter	29	29	67	56	61
Stores, end of period	1,997	1,968	1,939	1,872	1,816

	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2005		2005		2004		2004		2004
Assets Under Management	$	23,348	$	22,454	$	22,196	$	20,617	$	20,106

WM - 11

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2005		2005		2004		2004		2004
Loan Volume
Home loans:
Adjustable rate	$	25,293	$	22,947	$	26,141	$	25,589	$	29,753
Fixed rate	19,355		17,147		15,448		14,635		26,076
Specialty mortgage finance(1)	8,753		7,656		9,362		7,536		7,323
Total home loan volume	53,401		47,750		50,951		47,760		63,152
Home equity loans and lines of credit	10,888		8,887		9,307		10,527		11,572
Home construction loans(2)	258		245		293		640		839
Multi-family	2,459		2,121		2,240		2,050		2,346
Other real estate	371		345		257		352		760
Total loans secured by real estate	67,377		59,348		63,048		61,329		78,669
Consumer	82		43		77		138		63
Commercial business	159		124		96		358		789
Total loan volume	$	67,618	$	59,515	$	63,221	$	61,825	$	79,521
Loan Volume by Channel
Retail	$	30,565	$	25,569	$	28,766	$	30,285	$	37,720
Wholesale	20,323		16,716		18,441		16,079		19,534
Purchased/correspondent	16,730		17,230		16,014		15,461		22,267
Total loan volume by channel	$	67,618	$	59,515	$	63,221	$	61,825	$	79,521
Refinancing Activity(3)
Home loan refinancing	$	27,583	$	28,641	$	30,752	$	23,834	$	40,201
Home equity loans and lines of credit and consumer	475		392		336		360		1,147
Home construction loans	13		10		13		9		13
Multi-family and other real estate	700		660		565		621		883
Total refinancing	$	28,771	$	29,703	$	31,666	$	24,824	$	42,244
Home Loan Volume
Short-term adjustable-rate loans(4):
Option ARMs	$	19,564	$	15,644	$	18,898	$	18,902	$	16,420
Other ARMs	367		974		972		171		1,026
Total short-term adjustable-rate loans	19,931		16,618		19,870		19,073		17,446
Medium-term adjustable-rate loans(5)	13,388		13,409		14,890		12,866		17,536
Fixed-rate loans	20,082		17,723		16,191		15,821		28,170
Total home loan volume	$	53,401	$	47,750	$	50,951	$	47,760	$	63,152

Note:  Pursuant to regulatory guidance, buyouts of delinquent mortgages contained within Government National Mortgage Association (GNMA) loan servicing pools must be classified as loans on the balance sheet.  Accordingly, total home loan volume includes GNMA pool buy-out volume of $477 million, $563 million, $785 million, $898 million and $689 million for the quarters ended June 30, 2005, March 31, 2005, December 31, 2004, September 30, 2004 and June 30, 2004.

(1)	Represents purchased subprime loan portfolios and mortgages originated by Long Beach Mortgage Company.
(2)	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.
(3)	Includes loan refinancing entered into by both new and pre-existing loan customers.
(4)	Short-term is defined as adjustable-rate loans that reprice within one year or less.
(5)	Medium-term is defined as adjustable-rate loans that reprice after one year.

WM - 12

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Six Months Ended
	June 30,		June 30,
	2005		2004
Loan Volume
Home loans:
Adjustable rate	$	48,241	$	51,575
Fixed rate	36,502		47,640
Specialty mortgage finance(1)	16,408		14,436
Total home loan volume	101,151		113,651
Home equity loans and lines of credit	19,775		19,988
Home construction loans(2)	503		1,448
Multi-family	4,580		3,871
Other real estate	716		1,130
Total loans secured by real estate	126,725		140,088
Consumer	126		121
Commercial business	282		1,477
Total loan volume	$	127,133	$	141,686
Loan Volume by Channel
Retail	$	56,134	$	65,846
Wholesale	37,039		34,953
Purchased/correspondent	33,960		40,887
Total loan volume by channel	$	127,133	$	141,686
Refinancing Activity(3)
Home loan refinancing	$	56,224	$	73,434
Home equity loans and lines of credit and consumer	867		2,254
Home construction loans	23		25
Multi-family and other real estate	1,360		1,458
Total refinancing	$	58,474	$	77,171
Home Loan Volume
Short-term adjustable-rate loans(4):
Option ARMs	$	35,208	$	29,685
Other ARMs	1,341		1,529
Total short-term adjustable-rate loans	36,549		31,214
Medium-term adjustable-rate loans(5)	26,796		30,350
Fixed-rate loans	37,806		52,087
Total home loan volume	$	101,151	$	113,651

Note:  Pursuant to regulatory guidance, buyouts of delinquent mortgages contained within Government National Mortgage Association (GNMA) loan servicing pools must be classified as loans on the balance sheet.Accordingly, total home loan volume includes GNMA pool buy-out volume of $1.04 billion and $1.74 billion for the six months ended June 30, 2005 and June 30, 2004.

(1)	Represents purchased subprime loan portfolios and mortgages originated by Long Beach Mortgage Company.
(2)	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.
(3)	Includes loan refinancing entered into by both new and pre-existing loan customers.
(4)	Short term is defined as adjustable-rate loans that reprice within one year or less.
(5)	Medium term is defined as adjustable-rate loans that reprice after one year.

WM - 13

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	Mar. 31, 2005			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	to June 30, 2005			2005			2005			2004			2004			2004
Loans by Property Type
Loans held in portfolio:
Loans secured by real estate:
Home	$	(3,045	)	$	109,399		$	112,444		$	109,950		$	112,200		$	106,312
Specialty mortgage finance(1)	(1,365		)	20,174			21,539			19,184			17,335			16,217
Total home loans	(4,410		)	129,573			133,983			129,134			129,535			122,529
Home equity loans and lines of credit	2,600			48,449			45,849			43,650			40,505			36,077
Home construction(2)	(133		)	2,037			2,170			2,344			2,732			2,605
Multi-family	993			24,240			23,247			22,282			21,640			21,156
Other real estate	(396		)	4,915			5,311			5,664			6,268			6,513
Total loans secured by real estate	(1,346		)	209,214			210,560			203,074			200,680			188,880
Consumer	(44		)	703			747			792			831			892
Commercial business	13			2,820			2,807			3,205			4,647			4,771
Total loans held in portfolio	(1,377		)	212,737			214,114			207,071			206,158			194,543
Less: allowance for loan and lease losses	37			(1,243		)	(1,280		)	(1,301		)	(1,322		)	(1,293		)
Total net loans held in portfolio	(1,340		)	211,494			212,834			205,770			204,836			193,250
Loans held for sale(3)	9,925			51,122			41,197			42,743			29,184			27,795
Total net loans	$	8,585		$	262,616		$	254,031		$	248,513		$	234,020		$	221,045

⁽¹⁾Represents purchased subprime loan portfolios and certain mortgages originated by Long Beach Mortgage Company.

⁽²⁾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.

⁽³⁾Fair value of loans held for sale was $51.39 billion, $41.38 billion, $43.02 billion, $29.32 billion and $27.92 billion as of June 30, 2005, March 31, 2005, December 31, 2004, September 30, 2004 and June 30, 2004.

WM - 14

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

						Weighted				Weighted				Weighted
	Change from					Average				Average				Average
	Mar. 31, 2005			June 30,		Coupon		Mar. 31,		Coupon		June 30,		Coupon
	to June 30, 2005			2005		Rate		2005		Rate		2004		Rate
Loans Secured by Real Estate and MBS
Home loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs	$	(1,405	)	$	66,533	5.06	%	$	67,938	4.60	%	$	60,813	3.75	%
Other ARMs	441			10,903		6.37		10,462		6.34		9,076		6.59
Total short-term adjustable-rate loans	(964		)	77,436		5.24		78,400		4.83		69,889		4.12
Medium-term adjustable-rate loans(2)	(3,290		)	43,499		5.53		46,789		5.53		44,295		5.43
Fixed-rate loans	(156		)	8,638		6.60		8,794		6.67		8,345		6.92
Total home loans held in portfolio	(4,410		)	129,573		5.43		133,983		5.20		122,529		4.78
Home equity loans and lines of credit:
Short-term (Prime based or treasury based)(1)	1,456			36,815		6.16		35,359		5.69		26,565		4.25
Fixed-rate loans	1,144			11,634		6.37		10,490		6.34		9,512		6.34
Total home equity loans and lines of credit	2,600			48,449		6.21		45,849		5.84		36,077		4.80
Multi-family loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs	726			8,979		4.98		8,253		4.55		6,770		4.03
Other ARMs	250			6,312		5.13		6,062		4.82		5,096		4.13
Total short-term adjustable-rate loans	976			15,291		5.04		14,315		4.66		11,866		4.07
Medium-term adjustable-rate loans(2)	(3		)	7,365		5.26		7,368		5.28		7,396		5.34
Fixed-rate loans	20			1,584		6.75		1,564		6.80		1,894		7.00
Total multi-family loans held in portfolio	993			24,240		5.22		23,247		5.00		21,156		4.78
Total selected loans held in portfolio secured by real estate(3)	(817		)	202,262		5.59		203,079		5.32		179,762		4.79
Loans held for sale(4)	9,983			50,986		5.12		41,003		5.11		27,660		5.13
Total selected loans secured by real estate	9,166			253,248		5.50		244,082		5.28		207,422		4.84
MBS(5):
Short-term adjustable-rate MBS(1)	(1,871		)	9,687		4.15		11,558		3.95		9,123		3.23
Medium-term adjustable-rate MBS(2)	580			1,571		4.68		991		4.45		-		-
Fixed-rate MBS	(74		)	3,111		5.20		3,185		5.22		668		6.99
Total MBS(6)	(1,365		)	14,369		4.44		15,734		4.24		9,791		3.49
Total selected loans secured by real estate and MBS	$	7,801		$	267,617	5.44		$	259,816	5.22		$	217,213	4.77

⁽¹⁾Short-term is defined as adjustable-rate loans and MBS that reprice within one year or less.

⁽²⁾Medium-term is defined as adjustable-rate loans and MBS that reprice after one year.

⁽³⁾At June 30, 2005, March 31, 2005, and June 30, 2004, the adjustable-rate loans with lifetime caps were $177.53 billion, $179.59 billion and $156.12 billion with a lifetime weighted average cap rate of 12.35%, 12.31% and 12.24%.

⁽⁴⁾Excludes student loans.

⁽⁵⁾Excludes principal-only strips and interest-only strips.

⁽⁶⁾At June 30, 2005, March 31, 2005 and June 30, 2004, the adjustable-rate MBS with lifetime caps were $11.10 billion, $12.47 billion and $6.60 billion with a lifetime weighted average cap rate of  10.15%, 10.18% and 11.33%.

	Mar. 31, 2005			Dec. 31, 2004
	to June 30, 2005			to June 30, 2005
Rollforward of Loans Held for Sale
Balance, beginning of period	$	41,197		$	42,743
Loans originated, purchased and transferred from held in portfolio	47,892			83,153
Loans transferred to held in portfolio	(639		)	(2,669		)
Loans sold and other	(37,328		)	(72,105		)
Balance, end of period	$	51,122		$	51,122
Rollforward of Loans Held in Portfolio
Balance, beginning of period	$	214,114		$	207,071
Loans originated, purchased and transferred from held for sale	23,268			49,552
Loan payments, transferred to held for sale and other	(24,645		)	(43,886		)
Balance, end of period	$	212,737		$	212,737

WM - 15

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Detail of Revenue from Sales and Servicing of Home Mortgage Loans
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments:
Gain from home mortgage loans and originated mortgage-backed securities	$	250		$	181		$	157		$	210		$	113
Revaluation gain (loss) from derivatives	(79		)	80			25			(23		)	139
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments	171			261			182			187			252
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue, net(1)	527			512			479			485			472
Amortization of MSR	(564		)	(570		)	(636		)	(589		)	(546		)
Net MSR valuation adjustments(2)	(77		)	539			257			165			(51		)
Revaluation gain (loss) from derivatives	61			35			70			256			(127		)
Home mortgage loan servicing revenue (expense), net of hedging and derivative risk management instruments	(53		)	516			170			317			(252		)
Total revenue from sales and servicing of home mortgage loans	118			777			352			504			-
Impact of other MSR risk management instruments:
Revaluation gain (loss) from certain trading securities	259			(109		)	36			45			-
Gain (loss) from certain available-for-sale securities	26			(44		)	(4		)	-			-
Total impact of other MSR risk management instruments	285			(153		)	32			45			-
Total revenue from sales and servicing of home mortgage loans and all MSR risk management instruments	$	403		$	624		$	384		$	549		$	-

	Six Months Ended
	June 30,			June 30,
	2005			2004
Detail of Revenue from Sales and Servicing of Home Mortgage Loans
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments:
Gain from home mortgage loans and originated mortgage-backed securities	$	431		$	284
Revaluation gain from derivatives	1			80
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments	432			364
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue, net(1)	1,038			979
Amortization of MSR	(1,133		)	(1,296		)
Net MSR valuation adjustments(2)	462			(657		)
Revaluation gain from derivatives	96			1,141
Home mortgage loan servicing revenue (expense), net of hedging and derivative risk management instruments	463			167
Total revenue from sales and servicing of home mortgage loans	895			531
Impact of other MSR risk management instruments:
Revaluation gain from certain trading securities	151			-
Gain (loss) from certain available-for-sale securities	(18		)	5
Total impact of other MSR risk management instruments	133			5
Total revenue from sales and servicing of home mortgage loans and all MSR risk management instruments	$	1,028		$	536

⁽¹⁾Includes late charges, prepayment fees and loan pool expense, which represents the shortfall of what is remitted to investors compared to what is collected from the borrowers.

⁽²⁾Net of fair value hedge ineffectiveness as well as any impairment/reversal recognized on MSR that results from the application of the lower of cost or market value accounting methodology.

WM - 16

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
MSR Risk Management and Amortization:
Statement No. 133 MSR accounting valuation adjustments	$	(813	)	$	545		$	(123	)	$	(885	)	$	1,707
Amortization of MSR	(564		)	(570		)	(636		)	(589		)	(546		)
(Impairment) reversal	(250		)	427			179			(266		)	227
Net change in MSR valuation	(1,627		)	402			(580		)	(1,740		)	1,388
Gain (loss) on MSR hedging and risk management instruments:
Statement No. 133 fair value hedging adjustments	986			(433		)	201			1,316			(1,985		)
Revaluation gain (loss) from derivatives	61			35			70			256			(127		)
Revaluation gain (loss) from certain trading securities	259			(109		)	36			45			-
Gain (loss) from certain available-for-sale securities	26			(44		)	(4		)	-			-
Total gain (loss) on MSR hedging and risk management instruments	1,332			(551		)	303			1,617			(2,112		)
Total MSR risk management and amortization	$	(295	)	$	(149	)	$	(277	)	$	(123	)	$	(724	)

	Six Months Ended
	June 30,			June 30,
	2005			2004
MSR Risk Management and Amortization:
Statement No. 133 MSR accounting valuation adjustments	$	(268	)	$	1,707
Amortization of MSR	(1,133		)	(1,296		)
(Impairment) reversal	177			(379		)
Net change in MSR valuation	(1,224		)	32
Gain (loss) on MSR hedging and risk management instruments:
Statement No. 133 fair value hedging adjustments	553			(1,985		)
Revaluation gain from derivatives	96			1,141
Revaluation gain from certain trading securities	151			-
Gain (loss) from certain available-for-sale securities	(18		)	5
Total gain (loss) on MSR hedging and risk management instruments	782			(839		)
Total MSR risk management and amortization	$	(442	)	$	(807	)

WM - 17

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Rollforward of Mortgage Servicing Rights (“MSR”)(1)(2)
Balance, beginning of period	$	6,802		$	5,906		$	6,112		$	7,501		$	5,239
Home loans:
Additions	555			490			372			348			874
Amortization	(564		)	(570		)	(636		)	(589		)	(546		)
(Impairment) reversal	(250		)	427			179			(266		)	227
Statement No. 133 MSR accounting valuation adjustments	(813		)	545			(123		)	(885		)	1,707
Net change in commercial real estate MSR	-			4			2			3			-
Balance, end of period(3)	$	5,730		$	6,802		$	5,906		$	6,112		$	7,501
Rollforward of Valuation Allowance for MSR Impairment
Balance, beginning of period	$	1,513		$	1,981		$	2,653		$	2,417		$	3,035
Impairment (reversal)	250			(427		)	(179		)	266			(227		)
Other-than-temporary impairment	(11		)	(34		)	(486		)	(22		)	(388		)
Other	(6		)	(7		)	(7		)	(8		)	(3		)
Balance, end of period	$	1,746		$	1,513		$	1,981		$	2,653		$	2,417
Rollforward of Loans Serviced for Others
Balance, beginning of period	$	542,797		$	540,392		$	551,245		$	558,388		$	559,807
Home loans:
Additions	36,174			34,533			27,218			29,699			54,201
Loan payments and other	(35,689		)	(32,861		)	(38,529		)	(37,035		)	(56,388		)
Net change in commercial real estate loans serviced for others	42			733			458			193			768
Balance, end of period	$	543,324		$	542,797		$	540,392		$	551,245		$	558,388

	June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,
	2005		2005		2004		2004		2004
Total Servicing Portfolio
Loans serviced for others	$	543,324	$	542,797	$	540,392	$	551,245	$	558,388
Servicing on retained MBS without MSR	1,592		1,702		1,808		2,713		2,938
Servicing on owned loans	243,494		233,738		229,879		217,592		205,714
Subservicing portfolio	825		421		461		502		563
Total servicing portfolio	$	789,235	$	778,658	$	772,540	$	772,052	$	767,603

	June 30, 2005
	Unpaid		Weighted
	Principal		Average
	Balance		Servicing Fee
			(in basis points,
			annualized)
Loans Serviced for Others by Loan Type
Government	$	50,333	47
Agency	334,796		31
Private	135,703		39
Specialty home loans	22,492		50
Total loans serviced for others(4)	$	543,324	35

(1)	Net of valuation allowance.
(2)	MSR as a percentage of loans serviced for others was 1.05%, 1.25%, 1.09%, 1.11% and 1.34% at June 30, 2005, March 31, 2005, December 31, 2004, September 30, 2004 and June 30, 2004.
(3)	At June 30, 2005, the aggregate MSR fair value was $5.74 billion.
(4)	Weighted average coupon rate (annualized) was 5.85% at June 30, 2005.

WM - 18

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Allowance for Loan and Lease Losses
Balance, beginning of quarter	$	1,280		$	1,301		$	1,322		$	1,293		$	1,260
Other	(29		)	-			(20		)	-			(3		)
Provision for loan and lease losses	31			16			37			56			60
	1,282			1,317			1,339			1,349			1,317
Loans charged off:
Loans secured by real estate:
Home	(11		)	(11		)	(9		)	(6		)	(8		)
Specialty mortgage finance(1)	(11		)	(10		)	(10		)	(11		)	(9		)
Total home loans charged off	(22		)	(21		)	(19		)	(17		)	(17		)
Home equity loans and lines of credit	(8		)	(5		)	(3		)	(6		)	(5		)
Home construction(2)	(2		)	-			(1		)	-			-
Multi-family	(1		)	-			(2		)	-			-
Other real estate	(2		)	(1		)	(1		)	(1		)	(1		)
Total loans secured by real estate	(35		)	(27		)	(26		)	(24		)	(23		)
Consumer	(9		)	(13		)	(17		)	(11		)	(11		)
Commercial business	(8		)	(6		)	(8		)	(4		)	(4		)
Total loans charged off	(52		)	(46		)	(51		)	(39		)	(38		)
Recoveries of loans previously charged off:
Loans secured by real estate:
Specialty mortgage finance(1)	1			1			1			1			1
Home equity loans and lines of credit	1			-			2			-			1
Multi-family	-			-			-			1			-
Other real estate	3			1			2			2			4
Total loans secured by real estate	5			2			5			4			6
Consumer	6			5			4			5			5
Commercial business	2			2			4			3			3
Total recoveries of loans previously charged off	13			9			13			12			14
Net charge-offs	(39		)	(37		)	(38		)	(27		)	(24		)
Balance, end of quarter	$	1,243		$	1,280		$	1,301		$	1,322		$	1,293
Net charge-offs (annualized) as a percentage of average loans held in portfolio	0.07		%	0.07		%	0.07		%	0.05		%	0.05		%
Allowance as a percentage of total loans held in portfolio	0.58			0.60			0.63			0.64			0.66

(1)	Represents purchased subprime loan portfolios and certain mortgages originated by Long Beach Mortgage Company.
(2)	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 - 19

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	June 30,			Mar. 31,			Dec. 31,			Sept. 30,			June 30,
	2005			2005			2004			2004			2004
Nonperforming Assets and Restructured Loans
Nonaccrual loans(1):
Loans secured by real estate:
Home	$	495		$	495		$	534		$	529		$	535
Specialty mortgage finance(2)	692			734			682			617			585
Total home nonaccrual loans	1,187			1,229			1,216			1,146			1,120
Home equity loans and lines of credit	67			74			66			50			48
Home construction(3)	11			25			28			31			24
Multi-family	15			15			12			23			20
Other real estate	116			159			162			173			133
Total nonaccrual loans secured by real estate	1,396			1,502			1,484			1,423			1,345
Consumer	8			8			9			11			9
Commercial business	59			59			41			37			42
Total nonaccrual loans held in portfolio	1,463			1,569			1,534			1,471			1,396
Foreclosed assets	256			264			261			281			286
Total nonperforming assets	$	1,719		$	1,833		$	1,795		$	1,752		$	1,682
As a percentage of total assets	0.53		%	0.57		%	0.58		%	0.61		%	0.60		%
Restructured loans	$	25		$	27		$	34		$	38		$	79
Total nonperforming assets and restructured loans	$	1,744		$	1,860		$	1,829		$	1,790		$	1,761

(1)	Excludes nonaccrual loans held for sale of $108 million at June 30, 2005. Prior periods also reflect the exclusion of nonaccrual loans held for sale of $112 million, $76 million, $84 million and $99 million at March 31, 2005, December 31, 2004, September 30, 2004 and June 30, 2004. Loans held for sale are accounted for at lower of aggregate cost or market value, with valuation changes included as adjustments to gain from mortgage loans.
(2)	Represents purchased subprime loan portfolios and certain mortgages originated by Long Beach Mortgage Company.
(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.