EX-99.2 3 a5655033ex99_2.htm EXHIBIT 99.2 a5655033ex99_2.htm
Exhibit 99.2
WM - 1
 
 
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions, except per share data)
(unaudited)
                               
   
Quarter Ended
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
PROFITABILITY
                              
    Net income (loss)
  
$
 (1,138 )  
$
 (1,867 )  
$
 186    
$
 830    
$
 784  
    Net interest income
     2,175       2,047       2,014       2,034       2,081  
    Noninterest income
     1,569       1,365       1,379       1,758       1,541  
    Noninterest expense
     2,152       4,166       2,191       2,138       2,105  
    Diluted earnings per common share
  
$
 (1.40 )  
$
 (2.19 )  
$
 0.20    
$
 0.92    
$
 0.86  
Diluted weighted average number of common shares outstanding
                                  
        (in thousands)
     856,923       855,532       876,002       893,090       899,706  
    Net interest margin on a taxable-equivalent basis(1)
     3.05 %     2.86 %     2.86 %     2.91 %     2.80 %
    Dividends declared per common share
  
$
 0.15    
$
 0.56    
$
 0.56    
$
 0.55    
$
 0.54  
    Book value per common share (period end)(2)
     21.74       24.55       27.18       27.27       27.30  
    Return on average assets
     (1.42 ) %     (2.30 ) %     0.23 %     1.05 %     0.95 %
    Return on average common equity
     (23.27 )     (32.64 )     3.03       13.74       12.99  
    Efficiency ratio(3)
     57.49       122.13       64.55       56.38       58.13  
                                         
ASSET QUALITY
                                        
    Nonperforming assets(4) to total assets
     2.87 %     2.17 %     1.65 %     1.29 %     1.02 %
    Allowance as a percentage of loans held in portfolio
     1.94       1.05       0.80       0.73       0.71  
                                         
CREDIT PERFORMANCE
                                        
    Provision for loan losses
  
$
 3,511    
$
 1,534    
$
 967    
$
 372    
$
 234  
    Net charge-offs
     1,368       747       421       271       183  
                                         
CAPITAL ADEQUACY
                                        
    Capital Ratios for WMI:
                                        
        Tangible equity to total tangible assets(5)
     6.40 %     6.67 %     5.60 %     6.07 %     5.78 %
        Tier 1 capital to average total assets (leverage)(6)
     6.56       6.84       5.86       6.09       5.87  
        Total risk-based capital to total risk-weighted assets(6)
     12.24       12.34       10.67       11.04       11.17  
    Capital Ratios for WMB (well-capitalized minimum)(7):
                                        
        Tier 1 capital to adjusted total assets (leverage) (5.00%)
     6.94       7.05       6.41       7.52       7.04  
        Adjusted Tier 1 capital to total risk-weighted assets (6.00%)
     8.11       8.33       7.62       8.77       8.32  
        Total risk-based capital to total risk-weighted assets (10.00%)
     12.20       12.22       11.26       12.80       12.37  
                                         
SUPPLEMENTAL DATA
                                        
    Average balance sheet:
                                        
       Total loans held in portfolio
  
$
 244,186    
$
 241,690    
$
 227,348    
$
 216,004    
$
 222,617  
       Total interest-earning assets
     285,265       287,988       283,263       279,836       295,700  
       Total assets
     319,928       325,276       320,475       316,004       331,905  
       Total deposits
     184,304       185,636       198,649       206,765       210,764  
       Total stockholders' equity
     24,066       23,947       23,994       24,436       24,407  
    Period-end balance sheet:
                                        
       Total loans held in portfolio, net
     238,100       241,815       235,243       213,434       215,481  
       Total assets
     319,668       327,913       330,110       312,219       319,985  
       Total deposits
     188,049       181,926       194,280       201,380       210,209  
       Total stockholders' equity
     22,449       24,584       23,941       24,210       24,578  
       Common shares outstanding at the end of period (in thousands)(8)
     882,610       869,036       868,802       875,722       888,111  
       Employees at end of period
     45,883       49,403       49,748       49,989       49,693  
_______________________
                                        
(1)
Includes taxable-equivalent adjustments primarily related to tax-exempt income on U.S. states and political subdivisions securities and loans related to the Company's community lending and investment activities.  The federal statutory tax rate was 35% for the periods presented.
(2)
Excludes six million shares held in escrow.
(3)
The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).
(4)
Excludes nonaccrual loans held for sale.
(5)
Excludes unrealized net gain/loss on available-for-sale securities and cash flow hedging instruments, goodwill and intangible assets (except MSR) and the impact from the adoption and application of FASB Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans.  Minority interests of $3.91 billion, $3.92 billion, $2.94 billion, $2.94 billion and $2.45 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007 are included in the numerator.
(6)
The capital ratios are estimated as if Washington Mutual, Inc. were a bank holding company subject to Federal Reserve Board capital requirements.
(7)
Capital ratios for Washington Mutual Bank ("WMB") at March 31, 2008 are preliminary.
(8)
Includes six million shares held in escrow.
 
 
WM - 2
 
Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)
                               
   
Quarter Ended
  
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Interest Income
                              
      Loans held for sale
  
$
 87    
$
 160    
$
 248    
$
 421    
$
 562  
      Loans held in portfolio
     3,954       4,156       3,992       3,786       3,900  
      Available-for-sale securities
     357       380       392       351       332  
      Trading assets
     116       101       108       108       113  
      Other interest and dividend income
     77       79       116       82       101  
            Total interest income
     4,591       4,876       4,856       4,748       5,008  
Interest Expense
                                        
      Deposits
     1,329       1,464       1,650       1,723       1,772  
      Borrowings
     1,087       1,365       1,192       991       1,155  
            Total interest expense
     2,416       2,829       2,842       2,714       2,927  
                  Net interest income
     2,175       2,047       2,014       2,034       2,081  
      Provision for loan losses
     3,511       1,534       967       372       234  
                  Net interest income (expense) after provision for loan losses
     (1,336 )     513       1,047       1,662       1,847  
Noninterest Income
                                        
      Revenue from sales and servicing of home mortgage loans
     411       358       161       300       125  
      Revenue from sales and servicing of consumer loans
     248       375       418       403       443  
      Depositor and other retail banking fees
     704       769       740       720       665  
      Credit card fees
     181       214       209       183       172  
      Securities fees and commissions
     58       63       67       70       60  
      Insurance income
     30       29       29       29       29  
      Loss on trading assets
     (216 )     (267 )     (153 )     (145 )     (108 )
      Gain (loss) on other available-for-sale securities
     18       (261 )     (99 )     7       35  
      Other income
     135       85       7       191       120  
             Total noninterest income
     1,569       1,365       1,379       1,758       1,541  
Noninterest Expense
                                        
      Compensation and benefits
     914       877       910       977       1,002  
      Occupancy and equipment
     358       488       371       354       376  
      Telecommunications and outsourced information services
     130       134       135       132       129  
      Depositor and other retail banking losses
     63       72       71       58       61  
      Advertising and promotion
     105       108       125       113       98  
      Professional fees
     39       89       52       55       38  
      Foreclosed asset expense
     155       133       82       56       39  
      Goodwill impairment charge
     -       1,775       -       -       -  
      Other expense
     388       490       445       393       362  
             Total noninterest expense
     2,152       4,166       2,191       2,138       2,105  
      Minority interest expense
     75       65       53       42       43  
                         Income (loss) before income taxes
     (1,994 )     (2,353 )     182       1,240       1,240  
                         Income taxes
     (856 )     (486 )     (4 )     410       456  
Net Income (Loss)
  
$
 (1,138 )  
$
 (1,867 )  
$
 186    
$
 830    
$
 784  
Net Income (Loss) Applicable to Common Stockholders
  
$
 (1,203 )  
$
 (1,875 )  
$
 178    
$
 822    
$
 777  
                                         
Earnings Per Common Share:
                                        
       Basic
  
$
 (1.40 )  
$
 (2.19 )  
$
 0.21    
$
 0.95    
$
 0.89  
       Diluted
     (1.40 )     (2.19 )     0.20       0.92       0.86  
                                         
Dividends declared per common share
     0.15       0.56       0.56       0.55       0.54  
Basic weighted average number of common shares outstanding (in thousands)
     856,923       855,518       857,005       868,968       874,816  
Diluted weighted average number of common shares outstanding (in thousands)
     856,923       855,532       876,002       893,090       899,706  
 
 
WM - 3
 
Washington Mutual, Inc.
  
Consolidated Statements of Financial Condition
  
(dollars in millions)
  
(unaudited)
  
                               
                               
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Assets
                              
   Cash and cash equivalents
  
$
 10,089    
$
 9,560    
$
 11,370    
$
 4,167    
$
 4,047  
   Federal funds sold and securities purchased under agreements to resell
     2,527       1,877       4,042       3,267       8,279  
   Trading assets
     2,483       2,768       3,797       5,534       5,290  
   Available-for-sale securities, total amortized cost of $24,907, $27,789,
                                        
      $28,725, $28,934 and $22,921:
                                        
         Mortgage-backed securities
     18,140       19,249       20,562       20,393       16,543  
         Investment securities
     5,466       8,291       7,844       7,947       6,296  
            Total available-for-sale securities
     23,606       27,540       28,406       28,340       22,839  
   Loans held for sale
     4,941       5,403       7,586       19,327       26,874  
   Loans held in portfolio
     242,814       244,386       237,132       214,994       217,021  
   Allowance for loan losses
     (4,714 )     (2,571 )     (1,889 )     (1,560 )     (1,540 )
            Loans held in portfolio, net
     238,100       241,815       235,243       213,434       215,481  
   Investment in Federal Home Loan Banks
     3,514       3,351       2,808       1,596       2,230  
   Mortgage servicing rights
     5,726       6,278       6,794       7,231       6,507  
   Goodwill
     7,283       7,287       9,062       9,056       9,052  
   Other assets
     21,399       22,034       21,002       20,267       19,386  
            Total assets
  
$
 319,668    
$
 327,913    
$
 330,110    
$
 312,219    
$
 319,985  
Liabilities
                                        
   Deposits:
                                        
         Noninterest-bearing deposits
  
$
 31,911    
$
 30,389    
$
 31,341    
$
 33,557    
$
 34,367  
         Interest-bearing deposits
     156,138       151,537       162,939       167,823       175,842  
            Total deposits
     188,049       181,926       194,280       201,380       210,209  
   Federal funds purchased and commercial paper
     250       2,003       2,482       3,390       563  
   Securities sold under agreements to repurchase
     215       4,148       4,732       9,357       8,323  
   Advances from Federal Home Loan Banks
     64,009       63,852       52,530       21,412       24,735  
   Other borrowings
     32,710       38,958       40,887       40,313       39,430  
   Other liabilities
     8,072       8,523       8,313       9,212       9,694  
   Minority interests
     3,914       3,919       2,945       2,945       2,453  
            Total liabilities
     297,219       303,329       306,169       288,009       295,407  
Stockholders' Equity
                                        
   Preferred stock
     3,392       3,392       492       492       492  
   Capital surplus - common stock
     2,646       2,630       2,575       2,715       3,121  
   Accumulated other comprehensive loss
     (1,141 )     (359 )     (390 )     (568 )     (268 )
   Retained earnings
     17,552       18,921       21,264       21,571       21,233  
            Total stockholders' equity
     22,449       24,584       23,941       24,210       24,578  
            Total liabilities and stockholders' equity
  
$
 319,668    
$
 327,913    
$
 330,110    
$
 312,219    
$
 319,985  
 
 
WM - 4
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                               
   
Quarter Ended
  
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Stockholders' Equity Rollforward
                              
Balance, beginning of period
  
$
 24,584    
$
 23,941    
$
 24,210    
$
 24,578    
$
 26,969  
Net income (loss)
     (1,138 )     (1,867 )     186       830       784  
Cumulative effect from the adoption of new accounting pronouncements
     (36 )(1)     -       -       -       (6 )(2)
Other comprehensive income (loss), net of income taxes
     (782 )     31       177       (300 )     19  
Cash dividends declared on common stock
     (130 )     (482 )     (485 )     (484 )     (477 )
Cash dividends declared on preferred stock
     (65 )     (8 )     (8 )     (8 )     (7 )
Cash dividends returned(3)
     -       15       -       -       -  
Common stock repurchased and retired(4)
     -       -       (199 )     (500 )     (2,797 )
Common stock issued
     16       54       60       94       93  
Preferred stock issued
     -       2,900       -       -       -  
Balance, end of period
  
$
 22,449    
$
 24,584    
$
 23,941    
$
 24,210    
$
 24,578  
(1)
As of January 1, 2008, the Company adopted FASB Statement No. 157, Fair Value Measurements ("Statement No. 157"), EITF Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements ("Issue 06-4") and EITF Issue No. 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements ("Issue 06-10").  The cumulative effect from the adoption of Statement No. 157, Issue 06-4 and Issue 06-10 was $1 million, $(35) million and $(2) million.
(2)
As of January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.
(3)
Represents accumulated dividends on shares returned from escrow.
(4)
The Company repurchased zero shares of its common stock during the three months ended March 31, 2008 and December 31, 2007, and 7.2 million, 13.5 million and  61.4 million shares of its common stock during the three months ended September 30, 2007, June 30, 2007 and March 31, 2007.  At March 31, 2008, the total remaining common stock repurchase authority was 47.5 million shares.
 
 
WM - 5
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
   
     
Quarter Ended
  
     
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
     
2008
    
2007
    
2007
    
2007
    
2007
  
RETAIL BANKING GROUP
                              
    Condensed income statement:
                              
        Net interest income
  
$
 1,203     $ 1,262    
$
 1,306    
$
 1,291    
$
 1,284  
        Provision for loan losses
     2,300       663       318       91       62  
        Noninterest income
     775       850       833       820       751  
        Inter-segment revenue
     9       5       9       16       18  
        Noninterest expense
     1,221       1,212       1,149       1,131       1,069  
        Income before income taxes
     (1,534 )     242       681       905       922  
        Income taxes
     (491 )     (39 )     225       340       346  
                Net income
  
$
 (1,043 )   $ 281    
$
 456    
$
 565    
$
 576  
    Performance and other data:
                                        
        Efficiency ratio
     61.48 %     57.25 %     53.48 %     53.19 %     52.08 %
        Average loans
  
$
 142,720     $ 145,486    
$
 147,357    
$
 149,716    
$
 155,206  
        Average assets
     151,609       155,100       157,194       159,515       165,044  
        Average deposits:
                                        
           Checking deposits:
                                        
           Noninterest bearing
     23,425       22,748       22,860       23,107       22,331  
           Interest bearing
     24,306       26,328       28,406       30,282       31,739  
           Total checking deposits
     47,731       49,076       51,266       53,389       54,070  
           Savings and money market deposits
     47,904       44,623       43,524       43,814       43,103  
           Time deposits
     51,099       49,034       50,131       48,049       46,857  
              Average deposits
     146,734       142,733       144,921       145,252       144,030  
        Loan volume
     1,238       3,417       5,172       5,760       4,576  
        Employees at end of period
     28,736       29,147       28,636       28,523       28,229  
CARD SERVICES GROUP
                                        
  Managed basis(1)
                                        
    Condensed income statement:
                                        
 
Net interest income
  
$
 765    
$
 694    
$
 674    
$
 649    
$
 641  
 
Provision for loan losses
     626       591       611       523       388  
 
Noninterest income
     418       315       400       393       474  
 
Inter-segment expense
     5       -       -       -       -  
 
Noninterest expense
     260       338       364       306       329  
 
Income before income taxes
     292       80       99       213       398  
 
Income taxes
     93       (12 )     33       80       149  
                Net income
  
$
 199    
$
 92    
$
 66    
$
 133    
$
 249  
    Performance and other data:
                                        
 
Efficiency ratio
     22.04 %     33.51 %     33.91 %     29.33 %     29.51 %
 
Average loans
  
$
 26,889    
$
 26,665    
$
 25,718    
$
 24,234    
$
 23,604  
 
Average assets
     29,244       28,961       28,206       26,762       26,039  
 
Employees at end of period
     2,881       2,860       2,878       2,827       2,579  
                                           
  Securitization adjustments
                                        
    Condensed income statement:
                                        
 
Net interest income
  
$
 (503 )  
$
 (454 )  
$
 (456 )  
$
 (459 )  
$
 (414 )
 
Provision for loan losses
     (470 )     (335 )     (288 )     (294 )     (282 )
 
Noninterest income
     33       119       168       165       132  
    Performance and other data:
                                        
 
Average loans
     (17,391 )     (16,007 )     (14,488 )     (13,888 )     (12,507 )
 
Average assets
     (15,075 )     (14,180 )     (12,841 )     (12,287 )     (10,961 )
                                           
  Adjusted basis
                                        
    Condensed income statement:
                                        
 
Net interest income
  
$
 262    
$
 240    
$
 218    
$
 190    
$
 227  
 
Provision for loan losses
     156       256       323       229       106  
 
Noninterest income
     451       434       568       558       606  
 
Inter-segment expense
     5       -       -       -       -  
 
Noninterest expense
     260       338       364       306       329  
 
Income before income taxes
     292       80       99       213       398  
 
Income taxes
     93       (12 )     33       80       149  
                Net income
  
$
 199    
$
 92    
$
 66    
$
 133    
$
 249  
    Performance and other data:
                                        
 
Average loans
  
$
 9,498    
$
 10,658    
$
 11,230    
$
 10,346    
$
 11,097  
 
Average assets
     14,169       14,781       15,365       14,475       15,078  
                                           
(This table is continued on "WM-6.")
                                        
__________________________
                                        
(1)
The managed basis presentation treats securitized and sold credit card receivables as if they were still on the balance sheet. The Company uses this basis in assessing the overall performance of this operating segment. The managed basis presentation of the Card Services Group is derived by adjusting the GAAP financial information to add back securitized loan balances and the related interest, fee income and provision for credit losses. Such adjustments are eliminated as securitization adjustments when reporting GAAP results.
  
 
 
WM - 6
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
   
   
Quarter Ended
  
(This table is continued from "WM-5.")
  
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
COMMERCIAL GROUP
                              
    Condensed income statement:
                              
        Net interest income
  
$
 196    
$
 200    
$
 200    
$
 208    
$
 211  
        Provision for loan losses
     29       19       12       2       (10 )
        Noninterest income
     (8 )     (10 )     (34 )     63       15  
        Noninterest expense
     68       66       67       74       74  
        Income before income taxes
     91       105       87       195       162  
        Income taxes
     29       11       28       73       61  
                Net income
  
$
 62    
$
 94    
$
 59    
$
 122    
$
 101  
    Performance and other data:
                                        
        Efficiency ratio
     36.09 %     34.49 %     40.26 %     27.42 %     32.85 %
        Average loans
  
$
 40,934    
$
 40,129    
$
 38,333    
$
 38,789    
$
 38,641  
        Average assets
     43,004       42,336       40,663       41,184       41,005  
        Average deposits
     7,474       9,762       13,816       15,294       12,028  
        Loan volume
     2,835       4,800       4,054       4,348       3,671  
        Employees at end of period
     1,358       1,502       1,524       1,508       1,459  
HOME LOANS GROUP
                                        
    Condensed income statement:
                                        
       Net interest income
  
$
 250    
$
 229    
$
 191    
$
 211    
$
 244  
       Provision for loan losses
     907       511       323       101       49  
       Noninterest income
     319       329       183       389       161  
       Inter-segment expense
     4       5       9       16       18  
       Noninterest expense
     499       2,319       554       547       522  
       Loss before income taxes
     (841 )     (2,277 )     (512 )     (64 )     (184 )
       Income taxes
     (269 )     (312 )     (169 )     (24 )     (69 )
                Net loss
  
$
 (572 )  
$
 (1,965 )  
$
 (343 )  
$
 (40 )  
$
 (115 )
    Performance and other data:
                                        
       Efficiency ratio
     88.26 %     419.52 %     151.63 %     93.71 %     134.82 %
       Average loans
  
$
 55,672    
$
 52,278    
$
 43,737    
$
 43,312    
$
 53,254  
       Average assets
     66,841       66,172       61,106       60,342       71,382  
       Average deposits
     5,469       6,714       7,780       8,372       8,501  
       Loan volume
     13,774       19,089       26,434       35,938       33,780  
       Employees at end of period
     9,159       11,812       12,668       13,150       13,449  
CORPORATE SUPPORT/TREASURY AND OTHER
                                        
    Condensed income statement:
                                        
       Net interest income (expense)
  
$
 132    
$
 (18 )  
$
 (39 )  
$
 (4 )  
$
 (22 )
       Provision for loan losses
     119       85       (9 )     (51 )     27  
       Noninterest income
     86       (201 )     (91 )     60       94  
       Noninterest expense
     104       231       57       80       111  
       Minority interest expense
     75       65       53       42       43  
       Loss before income taxes
     (80 )     (600 )     (231 )     (15 )     (109 )
       Income taxes
     (68 )     (157 )     (46 )     (37 )     (69 )
                Net income (loss)
  
$
 (12 )  
$
 (443 )  
$
 (185 )  
$
 22    
$
 (40 )
    Performance and other data:
                                        
       Average loans
  
$
 1,556    
$
 1,482    
$
 1,420    
$
 1,367    
$
 1,345  
       Average assets
     45,525       48,173       47,532       41,789       40,875  
       Average deposits
     24,627       26,427       32,132       37,847       46,205  
       Loan volume
     143       171       113       72       107  
       Employees at end of period
     3,749       4,082       4,042       3,981       3,977  
                                         
(This table is continued on "WM-7.")
                                        
 
 
WM - 7
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
 
   
Quarter Ended
  
(This table is continued from "WM-6.")
  
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
RECONCILING ADJUSTMENTS
                              
    Condensed income statement:
                              
       Net interest income(1)
  
$
 132    
$
 134    
$
 138    
$
 138    
$
 137  
       Noninterest income (expense)(2)
     (54 )     (37 )     (80 )     (132 )     (86 )
       Income before income taxes
     78       97       58       6       51  
       Income taxes(3)
     (150 )     23       (75 )     (22 )     38  
                      Net income
  
$
 228    
$
 74    
$
 133    
$
 28    
$
 13  
    Performance and other data:
                                        
       Average loans(4)
  
$
 (1,220 )  
$
 (1,286 )  
$
 (1,385 )  
$
 (1,301 )  
$
 (1,479 )
       Average assets(4)
     (1,220 )     (1,286 )     (1,385 )     (1,301 )     (1,479 )
                                         
TOTAL CONSOLIDATED
                                        
    Condensed income statement:
                                        
       Net interest income
  
$
 2,175    
$
 2,047    
$
 2,014    
$
 2,034    
$
 2,081  
       Provision for loan losses
     3,511       1,534       967       372       234  
       Noninterest income
     1,569       1,365       1,379       1,758       1,541  
       Noninterest expense
     2,152       4,166       2,191       2,138       2,105  
       Minority interest expense
     75       65       53       42       43  
       Income (loss) before income taxes
     (1,994 )     (2,353 )     182       1,240       1,240  
       Income taxes
     (856 )     (486 )     (4 )     410       456  
                      Net income (loss)
  
$
 (1,138 )  
$
 (1,867 )  
$
 186    
$
 830    
$
 784  
    Performance and other data:
                                        
       Efficiency ratio
     57.49 %     122.13 %     64.55 %     56.38 %     58.13 %
       Average loans
  
$
 249,160    
$
 248,747    
$
 240,692    
$
 242,229    
$
 258,064  
       Average assets
     319,928       325,276       320,475       316,004       331,905  
       Average deposits
     184,304       185,636       198,649       206,765       210,764  
       Loan volume
     17,990       27,477       35,773       46,118       42,134  
       Employees at end of period
     45,883       49,403       49,748       49,989       49,693  
__________________________
                                        
(1)
Represents the difference between mortgage loan premium amortization recorded by the Retail Banking Group and the amount recognized in the Company's Consolidated Statements of Income. For management reporting purposes, certain mortgage loans that are held in portfolio by the Retail Banking Group are treated as if they are purchased from the Home Loans Group. Since the cost basis of these loans includes an assumed profit factor paid to the Home Loans Group, the amortization of loan premiums recorded by the Retail Banking Group reflects this assumed profit factor and must therefore be eliminated as a reconciling adjustment.
(2)
Represents the difference between gain from mortgage loans recorded by the Home Loans Group and gain from mortgage loans recognized in the Company's Consolidated Statements of Income.
(3)
Represents the tax effect of reconciling adjustments.
(4)
Represents the inter-segment offset for inter-segment loan premiums that the Retail Banking Group recognized upon transfer of portfolio loans from the Home Loans Group.
 
 
WM - 8
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
   
 
Quarter Ended
  
 
Mar. 31, 2008
  
Dec. 31, 2007
  
Mar. 31, 2007
  
       
Interest
          
Interest
          
Interest
  
       
Income/
          
Income/
          
Income/
  
 
Balance
Rate
  
Expense
  
Balance
  
Rate
  
Expense
  
Balance
  
Rate
  
Expense
  
Average Balances and Weighted Average Interest Rates
                              
Assets (Taxable-Equivalent Basis(1))
                                  
Interest-earning assets(2):
                                  
Federal funds sold and securities purchased under
                                
      agreements to resell
$
 2,118   3.48 %
$
 18  
$
 1,673     4.65 %
$
 20  
$
 3,930     5.39 %
$
 52  
   Trading assets
   2,726   17.10     116     3,114     12.89     101     5,594     8.10     113  
   Available-for-sale securities(3):
                                                    
       Mortgage-backed securities
   18,945   5.80     275     20,104     5.47     275     18,460     5.48     253  
       Investment securities
   6,316   5.39     85     8,029     5.35     107     6,180     5.23     81  
   Loans held for sale
   4,974   6.98     87     7,057     8.99     160     35,447     6.37     562  
   Loans held in portfolio:
                                                    
      Loans secured by real estate:
                                                    
         Home loans(4)(5)
   109,773   6.27     1,720     108,496     6.58     1,785     97,365     6.45     1,570  
         Home equity loans and lines of credit(5)
 61,196   6.28     956     60,135     7.15     1,083     53,014     7.56     989  
         Subprime mortgage channel(6)
   18,106   6.33     287     19,341     6.38     309     20,612     6.67     344  
         Home construction(7)
   2,142   7.65     41     2,136     6.99     37     2,061     6.55     34  
         Multi-family
   31,962   6.35     507     31,331     6.56     514     29,826     6.58     491  
         Other real estate
   9,797   6.49     158     8,969     6.89     155     6,763     7.03     117  
           Total loans secured by real estate
 232,976   6.31     3,669     230,408     6.73     3,883     209,641     6.79     3,545  
      Consumer:
                                                    
         Credit card
   9,024   10.75     241     9,134     9.76     225     10,904     11.57     311  
         Other
   195   17.47     8     213     15.77     8     267     12.96     9  
      Commercial
   1,991   7.36     37     1,935     8.47     41     1,805     7.96     36  
           Total loans held in portfolio
   244,186   6.49     3,955     241,690     6.86     4,157     222,617     7.04     3,901  
  Other
   6,000   3.94     59     6,321     3.74     59     3,472     5.77     49  
           Total interest-earning assets
   285,265   6.45     4,595     287,988     6.76     4,879     295,700     6.81     5,011  
Noninterest-earning assets:
                                                    
   Mortgage servicing rights
   5,882               6,472                 6,304              
   Goodwill
   7,286               8,907                 9,054              
   Other assets
   21,495               21,909                 20,847              
           Total assets
$
 319,928            
$
 325,276              
$
 331,905              
Liabilities
                                                    
Interest-bearing liabilities:
                                                    
   Deposits:
                                                    
      Interest-bearing checking deposits
$
 24,384   1.75     107  
$
 26,425     2.15     143  
$
 31,821     2.63     206  
      Savings and money market deposits
   55,951   2.73     379     54,622     3.14     432     54,862     3.27     443  
      Time deposits
   74,225   4.57     843     73,741     4.78     889     91,631     4.97     1,123  
           Total interest-bearing deposits
   154,560   3.46     1,329     154,788     3.75     1,464     178,314     4.03     1,772  
Federal funds purchased and commercial paper
   1,009   3.62     9     3,385     4.96     42     3,846     5.48     52  
Securities sold under agreements to repurchase
   885   3.78     8     4,273     4.80     52     12,098     5.48     164  
Advances from Federal Home Loan Banks
   62,799   4.29     670     56,146     5.13     726     36,051     5.38     478  
Other
   34,048   4.71     400     39,268     5.52     545     32,808     5.67     461  
           Total interest-bearing liabilities
   253,301   3.83     2,416     257,860     4.36     2,829     263,117     4.51     2,927  
Noninterest-bearing sources:
                                                    
   Noninterest-bearing deposits
   29,744               30,848                 32,450              
   Other liabilities
   8,902               8,956                 9,482              
   Minority interests
   3,915               3,665                 2,449              
   Stockholders' equity
   24,066               23,947                 24,407              
Total liabilities and stockholders' equity
$
 319,928            
$
 325,276              
$
 331,905              
Net interest spread and net interest income on a
 taxable-equivalent basis
   2.62  
$
 2,179           2.40  
$
 2,050           2.30  
$
 2,084  
   Impact of noninterest-bearing sources
       0.43                 0.46                 0.50        
Net interest margin on a taxable-equivalent basis
   3.05                 2.86                 2.80        
_______________________________
                                                    
(1)
Includes taxable-equivalent adjustments primarily related to tax-exempt income on U.S. states and political subdivisions securities and loans related to the Company’s community lending and investment activities.  The federal statutory tax rate was 35% for the periods presented.
(2)
Nonaccrual assets and related income, if any, are included in their respective categories.
(3)
The average balance and yield are based on average amortized cost balances.
(4)
Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $336 million, $367 million and $361 million for the three months ended March 31, 2008, December 31, 2007 and March 31, 2007.
(5)
Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
(6)
Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
(7)
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)
  
                                       
                                       
     
Change from
                                
     
Dec. 31, 2007
    
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
     
to Mar. 31, 2008
    
2008
    
2007
    
2007
    
2007
    
2007
  
Deposits
  
 
                                
Retail deposits:
                                    
Checking deposits:
                                    
Noninterest bearing
  
$
 1,655    
$
 25,131    
$
 23,476    
$
 23,721    
$
 24,142    
$
 24,400  
Interest bearing
     (2,082 )     23,631       25,713       27,277       29,592       31,523  
Total checking deposits
     (427 )     48,762       49,189       50,998       53,734       55,923  
Savings and money market deposits
     6,330       51,317       44,987       43,360       43,617       44,058  
Time deposits(1)
     2,164       51,574       49,410       50,740       48,140       47,262  
Total retail deposits
     8,067       151,653       143,586       145,098       145,491       147,243  
Commercial business and other deposits
     (862 )     10,405       11,267       16,536       19,186       17,741  
Brokered deposits:
                                                
Consumer
     (350 )     17,739       18,089       17,484       17,153       18,995  
Institutional
     (804 )     1,711       2,515       8,107       11,025       17,256  
Custodial and escrow deposits(2)
     72       6,541       6,469       7,055       8,525       8,974  
Total deposits
  
$
 6,123    
$
 188,049    
$
 181,926    
$
 194,280    
$
 201,380    
$
 210,209  
 (1)
Weighted average remaining maturity of time deposits was 6 months at March 31, 2008, 7 months at December 31, 2007 and September 30, 2007, 8 months at June 30, 2007 and 9 months at March 31, 2007.
 (2)
Substantially all custodial and escrow deposits reside in noninterest-bearing checking accounts.
               
Mar. 31,
    
Dec. 31,
    
Sept. 30,
  
June 30,
    
Mar. 31,
  
               
2008
    
2007
    
2007
    
2007
    
2007
  
Retail Deposit Accounts (number of accounts)
                                          
Noninterest-bearing checking
             11,271,406       10,960,270       10,824,548       10,449,887       9,983,313  
Interest-bearing checking
             1,218,606       1,273,673       1,334,902       1,399,203       1,459,534  
Savings and money market
             7,293,256       7,118,349       7,087,311       6,936,870       6,708,784  
Total transaction accounts, end of period(1)
       19,783,268       19,352,292       19,246,761       18,785,960       18,151,631  
                                                     
Net change in noninterest-bearing checking accounts
       311,136       135,722       374,661       466,574       371,607  
Net change in checking accounts
             256,069       74,493       310,360       406,243       327,776  
_______________________________
                                                
 (1)
Transaction accounts include retail checking, small business checking, retail savings and small business savings.
                                                     
                                                     
                                                     
               
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
               
2008
    
2007
    
2007
    
2007
    
2007
  
Retail Banking Stores
                                                
Stores, beginning of period
             2,257       2,212       2,235       2,228       2,225  
Stores opened during the quarter
             9       50       10       11       6  
Stores closed during the quarter
             (5 )     (5 )     (33 )     (4 )     (3 )
Stores, end of period
             2,261       2,257       2,212       2,235       2,228  
 
 
WM - 10
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                                 
     
Quarter Ended
  
     
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
     
2008
    
2007
    
2007
    
2007
    
2007
  
Loan Volume
                              
   Home loans:
                              
    Short-term adjustable-rate loans(1):
                              
      Option ARMs
  
$
 231    
$
 3,945    
$
 6,174    
$
 7,888    
$
 7,777  
      Other ARMs
     19       10       111       22       36  
         Total short-term adjustable-rate loans
     250       3,955       6,285       7,910       7,813  
    Medium-term adjustable-rate loans(2)
     3,810       5,972       9,868       14,953       13,567  
    Fixed-rate loans
     9,427       7,382       6,176       8,172       8,824  
         Total home loan volume
     13,487       17,309       22,329       31,035       30,204  
   Home equity loans and lines of credit
     1,297       4,619       8,544       9,988       7,600  
   Home construction(3)
     128       378       483       426       298  
   Multi-family
     2,250       3,412       2,856       3,067       2,663  
   Other real estate
     728       1,487       1,285       1,246       1,080  
         Total loans secured by real estate
     17,890       27,205       35,497       45,762       41,845  
   Commercial
     100       272       276       356       289  
         Total loan volume
  
$
 17,990    
$
 27,477    
$
 35,773    
$
 46,118    
$
 42,134  
Loan Volume by Channel
                          
 
            
   Retail
  
$
 10,585    
$
 17,341    
$
 21,223    
$
 24,707    
$
 21,171  
   Wholesale
     7,091       9,536       13,387       17,020       14,746  
   Purchased
     314       600       1,163       4,391       6,217  
         Total loan volume by channel
  
$
 17,990    
$
 27,477    
$
 35,773    
$
 46,118    
$
 42,134  
Refinancing Activity(4)
                                        
   Home loan refinancing
  
$
 10,779    
$
 12,297    
$
 14,722    
$
 22,637    
$
 22,552  
   Home equity loans and lines of credit
     22       46       143       157       550  
   Home construction loans
     1       30       30       20       12  
   Multi-family and other real estate
     1,033       1,436       1,225       1,378       1,131  
         Total refinancing
  
$
 11,835    
$
 13,809    
$
 16,120    
$
 24,192    
$
 24,245  
(1)
Short-term adjustable-rate loans reprice within one year.
(2)
Medium-term adjustable-rate loans reprice after one year.
(3)
Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
(4)
Includes loan refinancing entered into by both new and pre-existing loan customers.
 
 
WM - 11
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                                   
 
Change from
    
 
                          
 
Dec. 31, 2007
    
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
 
to Mar. 31, 2008
    
2008
    
2007
    
2007
    
2007
    
2007
  
Loans Held in Portfolio
                                  
      Loans secured by real estate:
                                  
         Home:
                                  
Short-term adjustable-rate loans(1):
                                
Option ARMs(2)
$
 (3,024 )  
$
 55,846    
$
 58,870    
$
 58,137    
$
 53,455    
$
 58,130  
Other ARMs
   (699 )     15,532       16,231       15,478       13,538       13,501  
Total short-term adjustable-rate loans
   (3,723 )     71,378       75,101       73,615       66,993       71,631  
Medium-term adjustable-rate loans(3)
   844       40,217       39,373       37,717       29,647       29,924  
Fixed-rate loans
   (148 )     11,857       12,005       11,813       9,505       9,506  
Total home loans
   (3,027 )     123,452       126,479       123,145       106,145       111,061  
         Home equity loans and lines of credit
   58       63,546       63,488       61,831       58,631       56,123  
         Home construction(4)
   (138 )     2,088       2,226       2,110       2,058       2,071  
         Multi-family
   774       32,528       31,754       30,831       29,290       29,515  
         Other real estate
   498       10,022       9,524       8,335       6,879       6,728  
               Total loans secured by real estate(5)
   (1,835 )     231,636       233,471       226,252       203,003       205,498  
      Consumer:
                                              
         Credit card
   158       8,989       8,831       8,791       9,913       9,490  
         Other
   (19 )     186       205       224       243       261  
      Commercial
   124       2,003       1,879       1,865       1,835       1,772  
               Total loans held in portfolio(6)
   (1,572 )     242,814       244,386       237,132       214,994       217,021  
   Less: allowance for loan losses
   (2,143 )     (4,714 )     (2,571 )     (1,889 )     (1,560 )     (1,540 )
               Total loans held in portfolio, net
$
 (3,715 )  
$
 238,100    
$
 241,815    
$
 235,243    
$
 213,434    
$
 215,481  
 
(1)
Short-term adjustable-rate loans reprice within one year.
(2)
The total amount by which the unpaid principal balance of Option ARM loans exceeded their original principal amount was $1.93 billion, $1.73 billion, $1.50 billion, $1.30 billion and $1.12 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.
(3)
Medium-term adjustable-rate loans reprice after one year.
(4)
Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
(5)
Includes subprime mortgage channel loans, comprising mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio as follows:
 
Subprime Mortgage Channel
      
Mar. 31,
  
Dec. 31,
  
Sept. 30,
  
June 30,
  
    Mar. 31,
         
2008
  
2007
  
2007
  
2007
  
2007
 
Home loans
      
 $        15,032
  
 $        16,092
  
 $        17,285
  
 $        17,602
  
 $        17,610
 
Home equity loans and lines of credit
      
             2,312
  
             2,525
  
             2,711
  
             2,855
  
2,749
 
         Total
      
 $        17,344
  
 $        18,617
  
 $        19,996
  
 $        20,457
  
 $        20,359
(6)
Includes net unamortized deferred loan costs of $1.42 billion, $1.45 billion, $1.44 billion, $1.58 billion and $1.71 billion at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.
 
 
WM - 12
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                                             
                 
Weighted
          
Weighted
          
Weighted
  
     
Change from
          
Average
          
Average
          
Average
  
     
Dec. 31, 2007
    
Mar. 31,
    
Coupon
    
Dec. 31,
    
Coupon
    
Mar. 31,
    
Coupon
  
 
  to Mar. 31, 2008
     2008    
Rate
    
2007
    
Rate
    
2007
 
  
Rate
  
Selected Loans Secured by Real Estate
                                          
   Home loans held in portfolio:
                                          
Short-term adjustable-rate loans(1):
                                      
           Option ARMs
  
$
 (3,024 )  
$
 55,846    
 7.30%
    
$
 58,870    
7.68%
   
$
 58,130    
7.74
  
           Other ARMs
     (699 )     15,532    
6.94
       16,231    
6.99
       13,501    
7.25
  
                Total short-term adjustable-rate loans
     (3,723 )     71,378    
7.22
       75,101    
7.53
       71,631    
7.65
  
       Medium-term adjustable-rate loans(2)
     844       40,217    
6.35
       39,373    
6.41
       29,924    
5.86
  
       Fixed-rate loans
     (148 )     11,857    
6.75
       12,005    
6.75
       9,506    
6.68
  
                Total home loans held in portfolio
     (3,027 )     123,452    
6.89
       126,479    
7.11
       111,061    
7.08
  
   Home equity loans and lines of credit:
                                                  
       Adjustable-rate
     751       53,850    
6.02
       53,099    
7.52
       45,288    
8.25
  
       Fixed-rate
     (693 )     9,696    
7.67
       10,389    
7.72
       10,835    
7.57
  
                Total home equity loans and lines of credit
     58       63,546    
6.27
       63,488    
7.55
       56,123    
8.12
  
   Multi-family loans held in portfolio:
                                                  
Short-term adjustable-rate loans(1):
                                            
           Option ARMs
     (136 )     6,158    
6.70
       6,294    
7.12
       8,373    
7.29
  
           Other ARMs
     (641 )     7,469    
6.03
       8,110    
6.40
       7,779    
7.01
  
                Total short-term adjustable-rate loans
     (777 )     13,627    
6.33
       14,404    
6.71
       16,152    
7.15
  
       Medium-term adjustable-rate loans(2)
     1,366       16,817    
6.12
       15,451    
6.14
       11,545    
5.78
  
       Fixed-rate loans
     185       2,084    
6.22
       1,899    
6.28
       1,818    
6.39
  
                Total multi-family loans held in portfolio
     774       32,528    
6.22
       31,754    
6.41
       29,515    
6.57
  
Total selected loans held in portfolio secured by real estate(3)
     (2,195 )     219,526    
6.61
       221,721    
7.13
       196,699    
7.30
  
   Loans held for sale(4)
     568       4,941    
5.73
       4,373    
6.12
       26,394    
6.44
  
                Total selected loans secured by real estate
  
$
 (1,627 )  
$
 224,467    
6.59
    
$
 226,094    
7.12
    
$
 223,093    
7.20
  
(1)
Short-term adjustable-rate loans reprice within one year.
(2)
Medium-term adjustable-rate loans reprice after one year.
(3)
At March 31, 2008, December 31, 2007 and March 31, 2007, adjustable-rate loans with lifetime caps were $182.93 billion, $182.12 billion and $162.24 billion with a lifetime weighted average cap rate of 12.60%, 12.49% and 12.31%.
(4)
Excludes credit card and student loans.
 
   
 
  
   
 
  
   
Dec. 31, 2007
  
   
to Mar. 31, 2008
  
Rollforward of Loans Held for Sale
      
    Balance, beginning of period
   $ 5,403  
       Mortgage loans originated, purchased and transferred from held in portfolio
     11,630  
       Mortgage loans transferred to held in portfolio
     (346 )
       Mortgage loans sold and other(1)
     (10,716 )
       Net change in consumer loans held for sale
     (1,030 )
    Balance, end of period
   $ 4,941  
         
Rollforward of Home Loans Held in Portfolio
        
    Balance, beginning of period
   $ 126,479  
       Loans originated, purchased and transferred from held for sale
     2,265  
       Loan payments, transferred to held for sale and other
     (5,292 )
    Balance, end of period
   $ 123,452  
(1)
The unpaid principal balance ("UPB") of home loans sold was $10.0 billion for the three months ended March 31, 2008.
 
 
WM - 13
 
Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)
 
 
Quarter Ended
Detail of Revenue from Sales and Servicing of Home Mortgage Loans
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Gain (loss) from home mortgage loans and originated mortgage-backed securities, net of hedging
and risk management instruments:
  
   Gain (loss) from home mortgage loans and originated mortgage-backed securities(1)
$
 143    
$
 7    
$
 (169 )  
$
 66    
$
 149  
   Revaluation gain (loss) from derivatives economically hedging loans held for sale
 (21 )     (12 )     (53 )     126       (54 )
        Gain (loss) from home mortgage loans and originated mortgage-backed securities, net of hedging
                                 
and risk management instruments
   122       (5 )     (222 )     192       95  
Home mortgage loan servicing revenue:
                                      
   Home mortgage loan servicing revenue(2)
   470       490       516       526       514  
   Change in MSR fair value due to payments on loans and other
   (230 )     (255 )     (351 )     (401 )     (356 )
        Net mortgage loan servicing revenue
   240       235       165       125       158  
   Change in MSR fair value due to valuation inputs or assumptions
   (499 )     (390 )     (201 )     530       (96 )
   Revaluation gain (loss) from derivatives economically hedging MSR
   548       518       419       (547 )     (32 )
        Home mortgage loan servicing revenue, net of  MSR valuation changes
                                  
and derivative risk management instruments
   289       363       383       108       30  
        Total revenue from sales and servicing of home mortgage loans
$
 411    
$
 358    
$
 161    
$
 300    
$
 125  
 (1)
Originated mortgage-backed securities represent available-for-sale securities retained on the balance sheet subsequent to the securitization of mortgage loans that were originated by the Company.
(2)
Includes contractually specified servicing fees (net of guarantee fees paid to housing government-sponsored enterprises, where applicable), late charges and loan pool expenses (the shortfall of the scheduled interest required to be remitted to investors and that which is collected from borrrowers upon payoff).
 
                               
                               
                               
                               
   
Quarter Ended
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
MSR Valuation and Risk Management:
                              
   Change in MSR fair value due to valuation inputs or assumptions
  
$
 (499 )  
$
 (390 )  
$
 (201 )  
$
 530    
$
 (96 )
Gain (loss) on MSR risk management instruments:
          
 
                            
   Revaluation gain (loss) from derivatives
     548       518       419       (547 )     (32 )
   Revaluation gain (loss) from certain trading securities
     -       -       4       (4 )     4  
        Total gain (loss) on MSR risk management instruments
     548       518       423       (551 )     (28 )
             Total changes in MSR valuation and risk management
  
$
 49    
$
 128    
$
 222    
$
 (21 )  
$
 (124 )
 
 
WM - 14
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                               
   
Quarter Ended 
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Rollforward of Mortgage Servicing Rights(1)
                              
   Balance, beginning of period
  
$
 6,278    
$
 6,794    
$
 7,231    
$
 6,507    
$
 6,193  
      Home loans:
                                        
         Additions
     181       127       116       592       760  
         Change in MSR fair value due to payments on loans and other
     (230 )     (255 )     (351 )     (401 )     (356 )
         Change in MSR fair value due to valuation inputs or
                                        
           assumptions
     (499 )     (390 )     (201 )     530       (96 )
         Sale of MSR
     (1 )     -       -       -       -  
      Net change in commercial real estate MSR
     (3 )     2       (1 )     3       6  
   Balance, end of period
  
$
 5,726    
$
 6,278    
$
 6,794    
$
 7,231    
$
 6,507  
Rollforward of Mortgage Loans Serviced for Others
                                        
   Balance, beginning of period
  
$
 456,484    
$
 463,436    
$
 474,867    
$
 467,782    
$
 444,696  
      Home loans:
                                        
         Additions
     9,862       7,814       8,700       29,949       44,550  
         Sale of servicing
     (109 )     -       -       -       -  
         Loan payments and other
     (17,177 )     (15,739 )     (20,716 )     (24,213 )     (22,469 )
      Net change in commercial real estate loans
     66       973       585       1,349       1,005  
   Balance, end of period
  
$
 449,126    
$
 456,484    
$
 463,436    
$
 474,867    
$
 467,782  
                                         
(1)
MSR as a percentage of mortgage loans serviced for others was 1.27%, 1.38%, 1.47%, 1.52% and 1.39% at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.
 
                               
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Total Servicing Portfolio
                              
      Mortgage loans serviced for others
  
$
 449,126    
$
 456,484    
$
 463,436    
$
 474,867    
$
 467,782  
      Consumer loans serviced for others
     17,390       17,379       16,078       14,745       13,645  
      Servicing on retained MBS without MSR
     904       942       980       1,023       1,082  
      Servicing on owned loans
     236,877       238,344       232,392       218,122       226,217  
      Subservicing portfolio
     285       399       418       439    
 
 465  
   Total servicing portfolio
  
$
 704,582    
$
 713,548    
$
 713,304    
$
 709,196    
$
 709,191  
                                         
                           
March 31, 2008
  
                           
Unpaid
    
Weighted
  
                           
Principal
    
Average
  
                           
Balance
    
 Servicing Fee
  
                                   
(in basis points,
  
Mortgage Loans Serviced for Others by Loan Type
                                  
annualized)
  
      Agency
                          
$
 249,621       32  
      Private
                             171,078       57  
      Subprime mortgage channel-home
                             28,427       51  
   Total mortgage loans serviced for others(1)
                          
$
 449,126       43  
(1)
Weighted average coupon rate was 6.24% at March 31, 2008.
 
 
WM - 15
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                               
   
Quarter Ended
  
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Allowance for Loan Losses
                              
   Balance, beginning of quarter
  
$
 2,571    
$
 1,889    
$
 1,560    
$
 1,540    
$
 1,630  
   Allowance transferred to loans held for sale
     -       (105 )     (217 )     (81 )     (148 )
   Other
     -       -       -       -       7  
   Provision for loan losses
     3,511       1,534       967       372       234  
      6,082       3,318       2,310       1,831       1,723  
   Loans charged off:
                                        
      Loans secured by real estate:
                                        
         Home loans(1)
     (331 )     (105 )     (52 )     (21 )     (35 )
         Home equity loans and lines of credit(1)
     (486 )     (249 )     (104 )     (55 )     (29 )
         Subprime mortgage channel(2)
     (388 )     (277 )     (146 )     (103 )     (40 )
         Home construction(3)
     (8 )     -       -       (1 )     -  
         Multi-family
     (4 )     (4 )     -       -       -  
         Other real estate
     (2 )     (1 )     (1 )     (1 )     -  
              Total loans secured by real estate
     (1,219 )     (636 )     (303 )     (181 )     (104 )
      Consumer:
                                        
        Credit card
     (135 )     (126 )     (120 )     (106 )     (96 )
        Other
     (2 )     (2 )     (2 )     (2 )     (3 )
      Commercial
     (39 )     (32 )     (20 )     (15 )     (9 )
              Total loans charged off
     (1,395 )     (796 )     (445 )     (304 )     (212 )
   Recoveries of loans previously charged off:
                                        
      Loans secured by real estate:
                                        
         Home loans(1)
     1       4       1       1       1  
         Home equity loans and lines of credit(1)
     9       4       3       3       3  
         Subprime mortgage channel(2)
     1       4       1       11       1  
         Home construction(3)
     -       2       -       -       -  
         Other real estate
     1       2       2       -       -  
              Total loans secured by real estate
     12       16       7       15       5  
      Consumer:
                                        
         Credit card
     12       31       14       15       16  
         Other
     -       -       -       -       6  
      Commercial
     3       2       3       3       2  
              Total recoveries of loans previously charged off
     27       49       24       33       29  
                  Net charge-offs
     (1,368 )     (747 )     (421 )     (271 )     (183 )
   Balance, end of quarter
  
$
 4,714    
$
 2,571    
$
 1,889    
$
 1,560    
$
 1,540  
                                         
   Net charge-offs (annualized) as a percentage
                                        
     of average loans held in portfolio
     2.24 %     1.24 %     0.74 %     0.50 %     0.33 %
   Allowance as a percentage of loans held in portfolio
     1.94       1.05       0.80       0.73       0.71  
______________________________
                                        
(1)
Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
(2)
Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio. Charge-offs in the second quarter of 2007 include $26 million of amounts primarily related to uncollected borrower expenses incurred in prior periods by and owed to a third party loan servicer.
(3)
Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
 
 
WM - 16
 
Washington Mutual, Inc.
  
Selected Financial Information
  
(dollars in millions)
  
(unaudited)
  
                               
   
Mar. 31,
    
Dec. 31,
    
Sept. 30,
    
June 30,
    
Mar. 31,
  
   
2008
    
2007
    
2007
    
2007
    
2007
  
Nonperforming Assets
                              
  Nonaccrual loans(1)(2):
                              
     Loans secured by real estate:
                              
        Home loans(3)
  
$
 3,504    
$
 2,302    
$
 1,452    
$
 991    
$
 690  
        Home equity loans and lines of credit(3)
     1,102       835       533       378       297  
        Subprime mortgage channel(4)
     2,882       2,721       2,356       1,707       1,503  
        Home construction(5)
     77       56       44       47       41  
        Multi-family
     142       131       120       69       60  
        Other real estate
     87       53       49       52       52  
              Total nonaccrual loans secured by real estate
     7,794       6,098       4,554       3,244       2,643  
     Consumer
     2       1       1       1       1  
     Commercial
     28       24       22       30       28  
              Total nonaccrual loans held in portfolio
     7,824       6,123       4,577       3,275       2,672  
  Foreclosed assets(6)
     1,357       979       874       750       587  
              Total nonperforming assets(7)
  
$
 9,181    
$
 7,102    
$
 5,451    
$
 4,025    
$
 3,259  
                                         
   Total nonperforming assets as a percentage of total assets
     2.87 %     2.17 %     1.65 %     1.29 %     1.02 %
______________________________
                                        
 
(1)
Nonaccrual loans held for sale, which are excluded from the nonaccrual balances presented above, were zero, $4 million, $7 million, $171 million and $195 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.  Loans held for sale are accounted for at the lower of cost or fair value, with valuation changes included as adjustments to noninterest income.
(2)
Credit card loans are exempt under regulatory rules from being classified as nonaccrual because they are charged off when they are determined to be uncollectible, or by the end of the month in which the account becomes 180 days past due.
(3)
Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel.
(4)
Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio.
(5)
Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.
(6)
Foreclosed real estate securing Government National Mortgage Association (“GNMA”) loans of $25 million, $37 million, $46 million, $49 million and $72 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007 have been excluded.  These assets are fully collectible as the corresponding GNMA loans are insured by the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veterans Affairs (“VA”).
(7)
Excludes accruing restructured loans of $372 million, $251 million, $269 million, $277 million and $340 million at March 31, 2008, December 31, 2007, September 30, 2007, June 30, 2007 and March 31, 2007.