Mr. Cooper (COOP) 8-K Washington Mutual Announces Fourth Quarter and Annual 2004 Earnings

Exhibit 99.2

WM - 1

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Quarter Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Interest Income
Loans held for sale	$	393		$	341		$	406		$	332		$	441
Loans held in portfolio	2,421			2,226			2,111			2,067			1,967
Available-for-sale securities	157			163			180			265			353
Other interest and dividend income	95			81			55			57			38
Total interest income	3,066			2,811			2,752			2,721			2,799
Interest Expense
Deposits	604			539			458			443			491
Borrowings	612			532			500			546			565
Total interest expense	1,216			1,071			958			989			1,056
Net interest income	1,850			1,740			1,794			1,732			1,743
Provision (reversal of reserve) for loan and lease losses	37			56			60			56			(202		)
Net interest income after provision (reversal of reserve) for loan and lease losses	1,813			1,684			1,734			1,676			1,945
Noninterest Income
Home loan mortgage banking income, net	352			504			-			531			592
Depositor and other retail banking fees	515			514			507			463			472
Securities fees and commissions	110			104			105			107			103
Insurance income	47			61			57			61			49
Portfolio loan related income	101			109			103			87			96
Gain (loss) from other available-for-sale securities	(23		)	11			41			21			(13		)
Loss on extinguishment of borrowings	-			(147		)	(1		)	(89		)	-
Other income	115			108			82			56			166
Total noninterest income	1,217			1,264			894			1,237			1,465
Noninterest Expense
Compensation and benefits	839			841			849			899			877
Occupancy and equipment	462			404			393			400			569
Telecommunications and outsourced information services	115			118			123			123			125
Depositor and other retail banking losses	61			54			40			40			40
Amortization of other intangible assets	13			14			14			15			15
Advertising and promotion	57			76			84			58			88
Professional fees	54			34			32			39			78
Other expense	337			328			313			306			309
Total noninterest expense	1,938			1,869			1,848			1,880			2,101
Income from continuing operations before income taxes	1,092			1,079			780			1,033			1,309
Income taxes	424			405			291			385			488
Income from continuing operations, net of taxes	668			674			489			648			821
Discontinued Operations
Income (loss) from discontinued operations before income taxes	-			-			-			(32		)	34
Gain on disposition of discontinued operations	-			-			-			676			-
Income taxes	-			-			-			245			13
Income from discontinued operations, net of taxes	-			-			-			399			21
Net Income	$	668		$	674		$	489		$	1,047		$	842
Basic Earnings Per Common Share:
Income from continuing operations	$	0.77		$	0.78		$	0.57		$	0.75		$	0.93
Income from discontinued operations, net	-			-			-			0.46			0.02
Net income	0.77			0.78			0.57			1.21			0.95
Diluted Earnings Per Common Share:
Income from continuing operations	$	0.76		$	0.76		$	0.55		$	0.73		$	0.91
Income from discontinued operations, net	-			-			-			0.45			0.02
Net income	0.76			0.76			0.55			1.18			0.93
Dividends declared per common share	0.45			0.44			0.43			0.42			0.41
Basic weighted average number of common shares outstanding (in thousands)	863,055			862,004			860,496			863,299			883,539
Diluted weighted average number of common shares outstanding (in thousands)	883,991			882,323			883,414			886,467			904,840

WM - 2

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Year Ended
	Dec. 31, 2004			Dec. 31, 2003
Interest Income
Loans held for sale	$	1,472		$	2,501
Loans held in portfolio	8,825			7,668
Available-for-sale securities	764			1,738
Other interest and dividend income	289			256
Total interest income	11,350			12,163
Interest Expense
Deposits	2,043			2,165
Borrowings	2,191			2,369
Total interest expense	4,234			4,534
Net interest income	7,116			7,629
Provision for loan and lease losses	209			42
Net interest income after provision for loan and lease losses	6,907			7,587
Noninterest Income
Home loan mortgage banking income, net	1,387			1,974
Depositor and other retail banking fees	1,999			1,818
Securities fees and commissions	426			395
Insurance income	226			188
Portfolio loan related income	401			439
Gain from other available-for-sale securities	50			676
Loss on extinguishment of borrowings	(237		)	(129		)
Other income	360			489
Total noninterest income	4,612			5,850
Noninterest Expense
Compensation and benefits	3,428			3,304
Occupancy and equipment	1,659			1,592
Telecommunications and outsourced information services	479			554
Depositor and other retail banking losses	195			154
Amortization of other intangible assets	56			61
Advertising and promotion	276			278
Professional fees	158			267
Other expense	1,284			1,198
Total noninterest expense	7,535			7,408
Income from continuing operations before income taxes	3,984			6,029
Income taxes	1,505			2,236
Income from continuing operations, net of taxes	2,479			3,793
Discontinued Operations
Income (loss) from discontinued operations before income taxes	(32		)	137
Gain on disposition of discontinued operations	676			-
Income taxes	245			50
Income from discontinued operations, net of taxes	399			87
Net Income	$	2,878		$	3,880
Basic Earnings Per Common Share:
Income from continuing operations	$	2.88		$	4.20
Income from discontinued operations, net	0.46			0.09
Net income	3.34			4.29
Diluted Earnings Per Common Share:
Income from continuing operations	$	2.81		$	4.12
Income from discontinued operations, net	0.45			0.09
Net income	3.26			4.21
Dividends declared per common share	1.74			1.40
Basic weighted average number of common shares outstanding (in thousands)	862,215			903,666
Diluted weighted average number of common shares outstanding (in thousands)	884,050			921,757

WM - 3

Washington Mutual, Inc.

Consolidated Statements of Financial Condition

(dollars in millions, except per share data)

(unaudited)

	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Assets
Cash and cash equivalents	$	4,455		$	4,689		$	5,133		$	6,045		$	7,018
Federal funds sold and securities purchased under agreements to resell	82			30			70			1,783			19
Available-for-sale securities, total amortized cost of $19,047, $16,312, $19,392, $22,843 and $36,858:
Mortgage-backed securities	14,923			10,168			10,042			10,766			10,695
Investment securities	4,296			6,319			9,337			12,565			26,012
Loans held for sale	42,743			29,184			27,795			34,207			20,837
Loans held in portfolio	207,071			206,158			194,543			186,380			175,150
Allowance for loan and lease losses	(1,301		)	(1,322		)	(1,293		)	(1,260		)	(1,250		)
Total loans held in portfolio, net of allowance for loan and lease losses	205,770			204,836			193,250			185,120			173,900
Investment in Federal Home Loan Banks	4,059			3,883			3,965			3,916			3,462
Mortgage servicing rights	5,906			6,112			7,501			5,239			6,354
Goodwill	6,196			6,196			6,196			6,196			6,196
Assets of discontinued operations	-			-			-			-			4,184
Other assets	19,488			17,411			15,255			14,931			16,501
Total assets	$	307,918		$	288,828		$	278,544		$	280,768		$	275,178
Liabilities
Deposits:
Noninterest-bearing deposits	$	32,780		$	32,250		$	33,343		$	35,714		$	29,968
Interest-bearing deposits	140,878			136,445			129,123			125,267			123,213
Total deposits	173,658			168,695			162,466			160,981			153,181
Federal funds purchased and commercial paper	4,045			7,025			2,293			4,501			2,011
Securities sold under agreements to repurchase	15,944			15,611			15,764			18,306			28,333
Advances from Federal Home Loan Banks	70,074			59,758			61,379			58,494			48,330
Other borrowings	18,498			12,747			12,113			13,692			15,483
Liabilities of discontinued operations	-			-			-			-			3,578
Other liabilities	4,473			4,172			4,160			4,411			4,520
Total liabilities	286,692			268,008			258,175			260,385			255,436
Stockholders’ equity	21,226			20,820			20,369			20,383			19,742
Total liabilities and stockholders’ equity	$	307,918		$	288,828		$	278,544		$	280,768		$	275,178
Common shares outstanding at end of period (in thousands)(1)	874,262			873,085			872,246			868,953			880,986
Book value per common share(2)	$	24.45		$	24.01		$	23.51		$	23.62		$	22.56
Tangible book value per common share(2)	17.45			16.99			16.47			16.53			15.58
Employees at end of period(3)	52,579			55,488			57,274			59,173			63,720

⁽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.

⁽³⁾Includes 2,346 employees reported as part of discontinued operations at December 31, 2003.

WM - 4

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Stockholders’ Equity Rollforward
Balance, beginning of period	$	20,820		$	20,369		$	20,383		$	19,742		$	20,441
Net income	668			674			489			1,047			842
Other comprehensive income (loss), net of tax	49			98			(210		)	512			(105		)
Cash dividends declared on common stock	(390		)	(381		)	(372		)	(367		)	(368		)
Cash dividends returned(1)	-			-			-			-			45
Common stock repurchased and retired	-			-			-			(712		)	(1,269		)
Common stock issued	79			60			79			161			156
Balance, end of period	$	21,226		$	20,820		$	20,369		$	20,383		$	19,742

⁽¹⁾Represents accumulated dividends on shares returned from escrow.

WM - 5

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Year Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003			Dec. 31, 2004			Dec. 31, 2003
RETAIL BANKING AND FINANCIAL SERVICES GROUP
Condensed income statement:
Net interest income	$	1,323		$	1,255		$	1,224		$	1,187		$	1,074		$	4,989		$	3,872
Provision for loan and lease losses	34			42			43			58			49			177			183
Noninterest income	717			715			703			623			647			2,758			2,500
Inter-segment revenue	8			3			7			6			20			24			179
Noninterest expense	1,132			1,116			1,115			1,071			1,072			4,434			3,939
Income before income taxes	882			815			776			687			620			3,160			2,429
Income taxes	317			309			294			260			246			1,180			931
Net income	$	565		$	506		$	482		$	427		$	374		$	1,980		$	1,498
Performance and other data:
Efficiency ratio(1)	48.95		%	49.97		%	50.97		%	51.86		%	54.14		%	50.39		%	52.24		%
Average loans	$	177,204		$	167,569		$	158,966		$	149,377		$	135,338		$	163,329		$	120,705
Average assets	189,872			180,003			171,343			161,359			147,281			175,696			132,427
Average deposits	132,771			131,850			128,680			128,000			128,651			130,337			125,440
Employees at end of period	30,107			30,069			29,640			29,077			29,364			30,107			29,364
MORTGAGE BANKING GROUP
Condensed income statement:
Net interest income	$	293		$	287		$	369		$	288		$	403		$	1,237		$	2,382
Provision for loan and lease losses	-			-			-			-			-			-			14
Noninterest income	566			769			208			761			867			2,304			2,986
Inter-segment expense	8			3			7			6			20			24			179
Noninterest expense	635			619			671			682			865			2,607			3,076
Income (expense) before income taxes	216			434			(101		)	361			385			910			2,099
Income taxes (benefit)	78			164			(38		)	136			153			340			801
Net income (loss)	$	138		$	270		$	(63	)	$	225		$	232		$	570		$	1,298
Performance and other data:
Efficiency ratio(1)	68.51		%	53.78		%	108.54		%	60.45		%	65.00		%	68.19		%	55.28		%
Average loans	$	24,880		$	22,611		$	26,999		$	19,871		$	24,677		$	23,591		$	42,990
Average assets	44,209			40,047			44,573			38,918			48,090			41,938			70,308
Average deposits	15,121			15,385			19,837			14,877			18,347			16,299			27,112
Employees at end of period	14,197			16,826			18,916			21,203			22,541			14,197			22,541
COMMERCIAL GROUP
Condensed income statement:
Net interest income	$	322		$	325		$	342		$	343		$	364		$	1,332		$	1,321
Provision for loan and lease losses	11			8			10			16			65			45			103
Noninterest income	61			65			102			86			53			314			472
Noninterest expense	184			160			144			151			174			639			602
Income from continuing operations before income taxes	188			222			290			262			178			962			1,088
Income taxes	59			76			102			92			66			329			392
Income from continuing operations	129			146			188			170			112			633			696
Income from discontinued operations, net of taxes	-			-			-			-			21			-			87
Net income	$	129		$	146		$	188		$	170		$	133		$	633		$	783
Performance and other data:
Efficiency ratio(1)	40.21		%	33.37		%	25.90		%	28.44		%	34.64		%	31.67		%	26.95		%
Average loans	$	40,917		$	38,799		$	38,496		$	36,984		$	37,801		$	38,804		$	35,490
Average assets	45,668			43,724			43,749			42,805			46,306			43,990			44,037
Average deposits	7,791			7,811			6,898			6,049			6,130			7,141			5,407
Employees at end of period(2)	3,100			3,248			3,207			3,130			5,627			3,100			5,627

⁽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).

⁽²⁾Includes 2,346 employees reported as part of discontinued operations at December 31, 2003.

WM - 6

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Year Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003			Dec. 31, 2004			Dec. 31, 2003
CORPORATE SUPPORT/TREASURY AND OTHER
Condensed income statement:
Net interest expense	$	(201	)	$	(237	)	$	(247	)	$	(189	)	$	(195	)	$	(874	)	$	(302	)
Provision for loan and lease losses	-			-			-			-			4			-			4
Noninterest income (expense)	12			(123		)	24			(69		)	138			(156		)	644
Noninterest expense	199			186			128			186			202			699			634
Income (expense) from continuing operations	(388		)	(546		)	(351		)	(444		)	(263		)	(1,729		)	(296		)
Income taxes (benefit)	(151		)	(205		)	(131		)	(165		)	(98		)	(652		)	(110		)
Income (expense) from continuing operations	(237		)	(341		)	(220		)	(279		)	(165		)	(1,077		)	(186		)
Income from discontinued operations, net of taxes	-			-			-			399			-			399			-
Net income (loss)	$	(237	)	$	(341	)	$	(220	)	$	120		$	(165	)	$	(678	)	$	(186	)
Performance and other data:
Average assets	$	19,275		$	21,717		$	26,020		$	29,992		$	37,675		$	24,230		$	38,168
Average deposits	18,190			13,820			9,391			5,028			5,558			11,631			5,626
Employees at end of period	5,175			5,345			5,511			5,763			6,188			5,175			6,188
RECONCILING ADJUSTMENTS
Condensed income statement:
Net interest income(3)	$	113		$	110		$	106		$	103		$	97		$	432		$	356
Provision (reversal of reserve) for loan and lease losses(4)	(8		)	6			7			(18		)	(320		)	(13		)	(262		)
Noninterest income (expense)(5)	(139		)	(162		)	(143		)	(164		)	(240		)	(608		)	(752		)
Noninterest (income) expense(6)	(212		)	(212		)	(210		)	(210		)	(212		)	(844		)	(843		)
Income before income taxes	194			154			166			167			389			681			709
Income taxes(7)	121			61			64			62			121			308			222
Net income	$	73		$	93		$	102		$	105		$	268		$	373		$	487
Performance and other data:
Average loans(8)	$	(1,622	)	$	(1,600	)	$	(1,553	)	$	(1,505	)	$	(1,421	)	$	(1,570	)	$	(1,260	)
Average assets(8)(9)	(1,866		)	(1,822		)	(1,745		)	(1,668		)	(1,912		)	(1,776		)	(1,821		)
TOTAL CONSOLIDATED
Condensed income statement:
Net interest income	$	1,850		$	1,740		$	1,794		$	1,732		$	1,743		$	7,116		$	7,629
Provision (reversal of reserve) for loan and lease losses	37			56			60			56			(202		)	209			42
Noninterest income	1,217			1,264			894			1,237			1,465			4,612			5,850
Noninterest expense	1,938			1,869			1,848			1,880			2,101			7,535			7,408
Income from continuing operations before income taxes	1,092			1,079			780			1,033			1,309			3,984			6,029
Income taxes	424			405			291			385			488			1,505			2,236
Income from continuing operations	668			674			489			648			821			2,479			3,793
Income from discontinued operations, net of taxes	-			-			-			399			21			399			87
Net income	$	668		$	674		$	489		$	1,047		$	842		$	2,878		$	3,880
Performance and other data:
Efficiency ratio(10)	63.18		%	62.19		%	68.77		%	63.34		%	65.51		%	64.25		%	54.96		%
Average loans	$	241,379		$	227,379		$	222,908		$	204,727		$	196,395		$	224,154		$	197,925
Average assets	297,158			283,669			283,940			271,406			277,440			284,078			283,119
Average deposits	173,873			168,866			164,806			153,954			158,686			165,408			163,585
Employees at end of period(2)	52,579			55,488			57,274			59,173			63,720			52,579			63,720

⁽²⁾Includes 2,346 employees reported as part of discontinued operations at December 31, 2003.

⁽³⁾Represents the difference between home loan premium amortization recorded by the Retail Banking and Financial Services segment 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 segment are treated as if they are purchased from the Mortgage Banking segment.  Since the cost basis of these loans includes an assumed profit factor paid to the Mortgage Banking segment, the amortization of loan premiums recorded by the Retail Banking and Financial Services segment includes this assumed profit factor and must therefore be eliminated as a reconciling adjustment.

⁽⁴⁾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.

⁽⁵⁾Represents the difference between gain from mortgage loans recorded by the Mortgage Banking segment and the gain from mortgage loans recognized in the Company’s Consolidated Statements of Income.  As the Mortgage Banking segment holds no loans in portfolio, all loans originated or purchased by this segment are considered to be salable for management reporting

purposes.

⁽⁶⁾Represents the corporate offset for the cost of capital related to goodwill that has been allocated to the segments.

⁽⁷⁾Represents the tax effect of reconciling adjustments.

⁽⁸⁾Includes the inter-segment offset for inter-segment loan premiums that the Retail Banking and Financial Services segment recognized from the transfer of portfolio loans from the Mortgage Banking segment.

⁽⁹⁾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															Year Ended
Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003			Dec. 31, 2004			Dec. 31, 2003
$	(244	)	$	(222	)	$	(192	)	$	(163	)	$	(491	)	$	(206	)	$	(561	)

⁽¹⁰⁾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
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
PROFITABILITY
Net interest income	$	1,850		$	1,740		$	1,794		$	1,732		$	1,743
Net interest margin	2.79		%	2.77		%	2.86		%	2.89		%	2.90		%
Noninterest income	$	1,217		$	1,264		$	894		$	1,237		$	1,465
Noninterest expense	1,938			1,869			1,848			1,880			2,101
Basic earnings per common share:
Income from continuing operations	$	0.77		$	0.78		$	0.57		$	0.75		$	0.93
Income from discontinued operations, net	-			-			-			0.46			0.02
Net income	0.77			0.78			0.57			1.21			0.95
Diluted earnings per common share:
Income from continuing operations	$	0.76		$	0.76		$	0.55		$	0.73		$	0.91
Income from discontinued operations, net	-			-			-			0.45			0.02
Net income	0.76			0.76			0.55			1.18			0.93
Dividends declared per common share	$	0.45		$	0.44		$	0.43		$	0.42		$	0.41
Return on average assets(1)	0.90		%	0.95		%	0.69		%	1.54		%	1.21		%
Return on average common equity(1)	12.71			13.03			9.63			20.85			16.83
Efficiency ratio(2)(3)	63.18			62.19			68.77			63.34			65.51
ASSET QUALITY
Nonaccrual loans(4)(5)	$	1,534		$	1,471		$	1,396		$	1,542		$	1,626
Foreclosed assets(5)	261			281			286			307			311
Total nonperforming assets(5)	1,795			1,752			1,682			1,849			1,937
Nonperforming assets/total assets(5)	0.58		%	0.61		%	0.60		%	0.66		%	0.70		%
Restructured loans(5)	$	34		$	38		$	79		$	107		$	111
Total nonperforming assets and restructured loans(5)	1,829			1,790			1,761			1,956			2,048
Allowance for loan and lease losses(5)	1,301			1,322			1,293			1,260			1,250
Allowance as a percentage of total loans held in portfolio(5)	0.63		%	0.64		%	0.66		%	0.68		%	0.71		%
Provision (reversal of reserve) for loan and lease losses	$	37		$	56		$	60		$	56		$	(202	)
Net charge-offs(5)	38			27			24			46			97
CAPITAL ADEQUACY(5)
Stockholders’ equity/total assets	6.89		%	7.21		%	7.31		%	7.26		%	7.17		%
Tangible common equity(6)/total tangible assets(6)	5.05			5.26			5.32			5.21			5.26
Estimated total risk-based capital/risk-weighted assets(7)	11.13			10.64			10.39			10.53			10.94
SUPPLEMENTAL DATA
Average balance sheet:
Total loans held for sale	$	33,083		$	28,220		$	33,096		$	24,464		$	29,606
Total loans held in portfolio	208,296			199,159			189,812			180,263			166,789
Total interest-earning assets	266,375			252,235			251,264			239,979			241,718
Total assets	297,158			283,669			283,940			271,406			277,440
Total interest-bearing deposits	139,938			135,600			127,670			123,336			125,201
Total noninterest-bearing deposits	33,935			33,266			37,136			30,618			33,485
Total stockholders’ equity	21,025			20,703			20,288			20,088			20,027
Period-end balance sheet:
Loans held for sale	42,743			29,184			27,795			34,207			20,837
Loans held in portfolio, net of allowance for loan and lease losses	205,770			204,836			193,250			185,120			173,900
Interest-earning assets(2)	273,174			255,742			245,752			249,617			236,175
Total assets	307,918			288,828			278,544			280,768			275,178
Interest-bearing deposits	140,878			136,445			129,123			125,267			123,213
Noninterest-bearing deposits	32,780			32,250			33,343			35,714			29,968
Total stockholders’ equity	21,226			20,820			20,369			20,383			19,742

⁽¹⁾Includes income from continuing and discontinued operations through the period ending March 31, 2004.

⁽²⁾Based on continuing operations.

⁽³⁾The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

⁽⁴⁾Excludes nonaccrual loans held for sale.

⁽⁵⁾As of quarter end.

⁽⁶⁾Excludes unrealized net gain/loss on available-for-sale securities and derivatives, goodwill and intangible assets, but includes MSR.

⁽⁷⁾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 Requirement.

WM - 8

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004						Sept. 30, 2004						Dec. 31, 2003
	Balance		Rate		Interest Income/ Expense		Balance		Rate		Interest Income/ Expense		Balance		Rate		Interest Income/ Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	560	1.92	%	$	3	$	922	1.44	%	$	3	$	414	2.26	%	$	2
Available-for-sale securities(1):
Mortgage-backed securities	11,398		3.85		110		9,726		3.85		94		12,584		4.14		130
Investment securities	4,387		4.27		47		7,597		3.62		69		27,386		3.24		223
Loans held for sale(2)	33,083		4.74		393		28,220		4.83		341		29,606		5.95		441
Loans held in portfolio(2):
Loans secured by real estate:
Home	113,352		4.30		1,218		108,594		4.19		1,137		94,713		4.41		1,045
Purchased subprime	17,389		4.87		212		16,279		4.57		186		11,799		5.05		149
Total home loans	130,741		4.37		1,430		124,873		4.24		1,323		106,512		4.48		1,194
Home equity loans and lines of credit	42,034		4.93		520		38,329		4.55		438		25,850		4.71		306
Home construction(3)	2,434		5.87		36		2,693		5.41		36		2,160		5.61		31
Multi-family	21,922		4.92		270		21,240		4.90		260		20,177		5.07		256
Other real estate	6,133		6.03		93		6,364		5.78		93		6,941		6.39		111
Total loans secured by real estate	203,264		4.62		2,349		193,499		4.44		2,150		161,640		4.69		1,898
Consumer	813		10.20		21		860		10.17		22		1,066		9.02		24
Commercial business	4,219		4.78		51		4,800		4.43		54		4,083		4.32		45
Total loans held in portfolio	208,296		4.64		2,421		199,159		4.46		2,226		166,789		4.71		1,967
Other	8,651		4.28		92		6,611		4.70		78		4,939		2.87		36
Total interest-earning assets	266,375		4.59		3,066		252,235		4.45		2,811		241,718		4.62		2,799
Noninterest-earning assets:
Mortgage servicing rights	5,928						6,698						6,408
Goodwill	6,196						6,196						6,196
Other(4)	18,659						18,540						23,118
Total assets	$	297,158					$	283,669					$	277,440
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	52,171	1.32		173		$	54,377	1.25		172		$	67,896	1.44		247
Savings and money market deposits	44,017		1.36		151		43,278		1.27		138		27,550		0.82		56
Time deposits	43,750		2.53		280		37,945		2.40		229		29,755		2.50		188
Total interest-bearing deposits	139,938		1.71		604		135,600		1.58		539		125,201		1.56		491
Federal funds purchased and commercial paper	4,828		1.98		24		2,733		1.54		10		3,872		1.08		11
Securities sold under agreements to repurchase	13,528		2.09		72		14,213		2.75		100		27,394		2.17		152
Advances from Federal Home Loan Banks	63,053		2.34		376		59,227		2.02		306		44,837		2.47		283
Other	15,164		3.70		140		12,922		3.62		116		13,675		3.51		119
Total interest-bearing liabilities	236,511		2.03		1,216		224,695		1.89		1,071		214,979		1.94		1,056
Noninterest-bearing sources:
Noninterest-bearing deposits	33,935						33,266						33,485
Other liabilities(5)	5,687						5,005						8,949
Stockholders’ equity	21,025						20,703						20,027
Total liabilities and stockholders’ equity	$	297,158					$	283,669					$	277,440
Net interest spread and net interest income			2.56		$	1,850			2.56		$	1,740			2.68		$	1,743
Impact of noninterest-bearing sources			0.23						0.21						0.22
Net interest margin			2.79						2.77						2.90

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

⁽²⁾Nonaccrual loans are included in the average loan amounts outstanding.

⁽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 assets of continuing and discontinued operations for the three months ended December 31, 2003.

⁽⁵⁾Includes liabilities of continuing and discontinued operations for the three months ended December 31, 2003.

WM - 9

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Year Ended
	Dec. 31, 2004						Dec. 31, 2003
	Balance		Rate		Interest Income/ Expense		Balance		Rate		Interest Income/ Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	884	1.42	%	$	13	$	2,570	1.45	%	$	37
Available-for-sale securities(1):
Mortgage-backed securities	10,255		3.99		409		20,977		4.91		1,030
Investment securities	10,732		3.30		355		18,742		3.77		708
Loans held for sale(2)	29,721		4.95		1,472		45,438		5.51		2,501
Loans held in portfolio(2):
Loans secured by real estate:
Home	107,518		4.21		4,529		86,443		4.77		4,124
Purchased subprime	15,767		4.84		763		10,794		5.43		586
Total home loans	123,285		4.29		5,292		97,237		4.84		4,710
Home equity loans and lines of credit	35,859		4.69		1,683		21,163		4.98		1,053
Home construction(3)	2,489		5.50		137		2,062		5.90		122
Multi-family	21,090		4.96		1,046		19,409		5.30		1,029
Other real estate	6,396		5.94		380		7,243		6.35		460
Total loans secured by real estate	189,119		4.51		8,538		147,114		5.01		7,374
Consumer	899		10.11		91		1,208		8.87		107
Commercial business	4,415		4.43		196		4,165		4.49		187
Total loans held in portfolio	194,433		4.54		8,825		152,487		5.03		7,668
Other	6,476		4.27		276		5,109		4.27		219
Total interest-earning assets	252,501		4.50		11,350		245,323		4.96		12,163
Noninterest-earning assets:
Mortgage servicing rights	6,406						5,721
Goodwill	6,196						6,198
Other(4)	18,975						25,877
Total assets	$	284,078					$	283,119
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	59,826	1.28		766		$	62,723	1.69		1,057
Savings and money market deposits	35,927		1.11		399		28,085		0.94		263
Time deposits	35,917		2.44		878		31,416		2.69		845
Total interest-bearing deposits	131,670		1.55		2,043		122,224		1.77		2,165
Federal funds purchased and commercial paper	3,522		1.50		53		3,158		1.18		37
Securities sold under agreements to repurchase	16,660		2.26		377		22,318		2.44		545
Advances from Federal Home Loan Banks	58,622		2.16		1,268		49,441		2.62		1,296
Other	13,724		3.59		493		13,315		3.68		491
Total interest-bearing liabilities	224,198		1.89		4,234		210,456		2.15		4,534
Noninterest-bearing sources:
Noninterest-bearing deposits	33,738						41,361
Other liabilities(5)	5,614						10,724
Stockholders’ equity	20,528						20,578
Total liabilities and stockholders’ equity	$	284,078					$	283,119
Net interest spread and net interest income			2.61		$	7,116			2.81		$	7,629
Impact of noninterest-bearing sources			0.21						0.30
Net interest margin			2.82						3.11

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

⁽²⁾Nonaccrual loans are included in the average loan amounts outstanding.

⁽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 assets of continuing and discontinued operations for the twelve months ended December 31, 2003.

⁽⁵⁾Includes liabilities of continuing and discontinued operations for the twelve months ended December 31, 2003.

WM - 10

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Dec. 31, 2004		Sept. 30, 2004		June 30, 2004		Mar. 31, 2004		Dec. 31, 2003
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing	$	17,463	$	16,178	$	15,666	$	15,107	$	13,724
Interest bearing	51,099		52,378		59,395		66,618		67,990
Total checking deposits	68,562		68,556		75,061		81,725		81,714
Savings and money market deposits	36,836		38,620		30,413		22,452		22,131
Time deposits(1)	27,268		24,825		23,990		24,128		24,605
Total retail deposits	132,666		132,001		129,464		128,305		128,450
Commercial business deposits	7,611		7,369		7,176		6,426		6,433
Wholesale deposits	18,448		14,052		8,874		6,219		2,579
Custodial and escrow deposits(2)	14,933		15,273		16,952		20,031		15,719
Total deposits	$	173,658	$	168,695	$	162,466	$	160,981	$	153,181

⁽¹⁾Weighted average remaining maturity of time deposits was 16 months at December 31, 2004, September 30, 2004, June 30, 2004 and March 31, 2004, and 14 months at December 31, 2003.

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

	Dec. 31, 2004	Sept. 30, 2004	June 30, 2004	Mar. 31, 2004	Dec. 31, 2003
Transaction Accounts(1)
Accounts, beginning of period	13,905,707	13,579,961	13,193,298	12,794,902	12,507,374
Net accounts opened during the quarter	186,027	325,746	386,663	398,396	287,528
Accounts, end of period	14,091,734	13,905,707	13,579,961	13,193,298	12,794,902

⁽¹⁾Transaction accounts include retail checking, small business checking, retail savings and small business savings.  The information provided refers to the number of accounts.

	Dec. 31, 2004	Sept. 30, 2004	June 30, 2004	Mar. 31, 2004		Dec. 31, 2003
Retail Banking Stores
Stores, beginning of period	1,872	1,816	1,755	1,776		1,677
Net stores opened during the quarter	67	56	61	(21	)(1)	99
Stores, end of period	1,939	1,872	1,816	1,755		1,776

⁽¹⁾The Company consolidated 79 grocery store locations into larger, existing, retail banking stores.

	Dec. 31, 2004		Sept. 30, 2004		June 30, 2004		Mar. 31, 2004		Dec. 31, 2003
Assets Under Management	$	22,196	$	20,617	$	20,106	$	19,438	$	17,868

WM - 11

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004		Sept. 30, 2004		June 30, 2004		Mar. 31, 2004		Dec. 31, 2003
Loan Volume
Home loans:
Adjustable rate	$	26,141	$	25,589	$	29,753	$	21,822	$	23,397
Fixed rate	15,448		14,635		26,076		21,564		28,105
Specialty mortgage finance(1)	9,362		7,536		7,323		7,113		6,031
Total home loan volume	50,951		47,760		63,152		50,499		57,533
Home equity loans and lines of credit	9,307		10,527		11,572		8,416		7,922
Home construction(2)	293		640		839		609		1,013
Multi-family	2,240		2,050		2,346		1,525		1,647
Other real estate	257		352		760		370		655
Total loans secured by real estate	63,048		61,329		78,669		61,419		68,770
Consumer	77		138		63		58		72
Commercial business	96		358		789		688		1,061
Total loan volume	$	63,221	$	61,825	$	79,521	$	62,165	$	69,903
Loan Volume by Channel
Retail	$	28,766	$	30,285	$	37,720	$	28,126	$	31,630
Wholesale	18,441		16,079		19,534		15,419		16,334
Purchased/correspondent	16,014		15,461		22,267		18,620		21,939
Total loan volume by channel	$	63,221	$	61,825	$	79,521	$	62,165	$	69,903
Refinancing Activity(3)
Home loan refinancing	$	30,752	$	23,834	$	40,201	$	33,233	$	36,817
Home equity loans and lines of credit and consumer	336		360		1,147		1,107		848
Home construction(2)	13		9		13		12		6
Multi-family and other real estate	565		621		883		575		690
Total refinancing	$	31,666	$	24,824	$	42,244	$	34,927	$	38,361
Home Loan Volume by Index
Short-term adjustable-rate loans(4):
Treasury indices	$	18,967	$	18,883	$	16,467	$	13,440	$	13,021
COFI	846		145		167		110		151
Other	57		45		812		218		628
Total short-term adjustable-rate loans	19,870		19,073		17,446		13,768		13,800
Medium-term adjustable-rate loans(5)	14,890		12,866		17,536		12,814		13,667
Fixed-rate loans	16,191		15,821		28,170		23,917		30,066
Total home loan volume	$	50,951	$	47,760	$	63,152	$	50,499	$	57,533

Note: Pursuant to regulatory guidance issued in December 2003, 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 $785 million, $898 million, $689 million, $1.05 billion and $1.30 billion for the quarters ended December 31, 2004, September 30, 2004, June 30, 2004, March 31, 2004 and December 31, 2003.

⁽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)

	Year Ended
	Dec. 31, 2004		Dec. 31, 2003
Loan Volume
Home loans:
Adjustable rate	$	103,305	$	99,899
Fixed rate	77,723		263,604
Specialty mortgage finance(1)	31,334		20,678
Total home loan volume	212,362		384,181
Home equity loans and lines of credit	39,822		29,639
Home construction(2)	2,382		3,682
Multi-family	8,161		8,065
Other real estate	1,740		1,969
Total loans secured by real estate	264,467		427,536
Consumer	336		339
Commercial business	1,930		4,370
Total loan volume	$	266,733	$	432,245
Loan Volume by Channel
Retail	$	124,897	$	169,546
Wholesale	69,474		95,671
Purchased/correspondent	72,362		167,028
Total loan volume by channel	$	266,733	$	432,245
Refinancing Activity(3)
Home loan refinancing	$	128,020	$	297,983
Home equity loans and lines of credit and consumer	2,950		4,775
Home construction(2)	47		47
Multi-family and other real estate	2,644		3,453
Total refinancing	$	133,661	$	306,258
Home Loan Volume by Index
Short-term adjustable-rate loans(4):
Treasury indices	$	67,756	$	30,147
COFI	1,268		722
Other	1,132		1,404
Total short-term adjustable-rate loans	70,156		32,273
Medium-term adjustable-rate loans(5)	58,107		81,404
Fixed-rate loans	84,099		270,504
Total home loan volume	$	212,362	$	384,181

Note:  Pursuant to regulatory guidance issued in December 2003,  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 $3.42 billion and $6.94 billion for the years ended December 31, 2004 and December 31, 2003.

⁽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 Sept. 30, 2004 to Dec. 31, 2004			Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Loans by Property Type
Loans held in portfolio:
Loans secured by real estate:
Home	$	(2,239	)	$	109,991		$	112,230		$	106,312		$	104,946		$	100,043
Purchased subprime	1,838			19,143			17,305			16,217			15,437			12,973
Total home loans	(401		)	129,134			129,535			122,529			120,383			113,016
Home equity loans and lines of credit	3,145			43,650			40,505			36,077			31,264			27,647
Home construction(1)	(388		)	2,344			2,732			2,605			2,370			2,220
Multi-family	642			22,282			21,640			21,156			20,579			20,324
Other real estate	(604		)	5,664			6,268			6,513			6,508			6,649
Total loans secured by real estate	2,394			203,074			200,680			188,880			181,104			169,856
Consumer	(39		)	792			831			892			954			1,028
Commercial business	(1,442		)	3,205			4,647			4,771			4,322			4,266
Total loans held in portfolio	913			207,071			206,158			194,543			186,380			175,150
Less: allowance for loan and lease losses	21			(1,301		)	(1,322		)	(1,293		)	(1,260		)	(1,250		)
Total net loans held in portfolio	934			205,770			204,836			193,250			185,120			173,900
Loans held for sale(2)	13,559			42,743			29,184			27,795			34,207			20,837
Total net loans	$	14,493		$	248,513		$	234,020		$	221,045		$	219,327		$	194,737

⁽¹⁾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.

⁽²⁾Fair value of loans held for sale was $43.02 billion, $29.32 billion, $27.92 billion, $34.36 billion and $20.84 billion as of December 31, 2004, September 30, 2004, June 30, 2004, March 31, 2004 and December 31, 2003.

WM - 14

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from Sept. 30, 2004 to Dec. 31, 2004			Dec. 31, 2004		Weighted Average Coupon Rate		Sept. 30, 2004		Weighted Average Coupon Rate		Dec. 31, 2003		Weighted Average Coupon Rate
Loans Secured by Real Estate and MBS
Selected loans held in portfolio secured by real estate(1):
Short-term adjustable-rate loans(2):
COFI	$	(668	)	$	7,636	4.91	%	$	8,304	4.81	%	$	10,766	4.93	%
Treasury indices	1,075			73,140		4.25		72,065		3.97		51,494		3.66
Other	3,104			41,686		5.42		38,582		4.97		26,867		4.81
Total short-term adjustable-rate loans	3,511			122,462		4.69		118,951		4.35		89,127		4.16
Medium-term adjustable-rate loans(3)	182			52,578		5.40		52,396		5.39		53,576		5.56
Fixed-rate loans	(307		)	20,026		6.56		20,333		6.61		18,284		6.91
Total loans held in portfolio secured by real estate(4)	3,386			195,066		5.07		191,680		4.87		160,987		4.94
Loans held for sale(5)	13,538			42,599		4.70		29,061		4.87		20,705		6.41
Total loans secured by real estate	16,924			237,665		5.01		220,741		4.87		181,692		5.10
MBS(6):
Short-term adjustable-rate MBS(2):
COFI	(444		)	3,673		3.72		4,117		3.74		5,270		3.87
Treasury indices	1,033			5,583		3.15		4,550		2.89		3,401		2.94
Other	660			668		5.04		8		3.42		9		3.15
Total short-term adjustable-rate MBS	1,249			9,924		3.49		8,675		3.30		8,680		3.50
Medium-term adjustable-rate MBS(3)	453			702		4.25		249		3.22		-		-
Fixed-rate MBS	3,148			3,928		5.32		780		6.47		1,496		6.35
Total MBS(7)	4,850			14,554		4.02		9,704		3.55		10,176		3.92
Total loans secured by real estate and MBS	$	21,774		$	252,219	4.95		$	230,445	4.82		$	191,868	5.04

⁽¹⁾Includes total home loans, home equity loans and lines of credit and multi-family loans.

⁽²⁾Short-term is defined as adjustable-rate loans and MBS that reprice within one year or less.

⁽³⁾Medium-term is defined as adjustable-rate loans and MBS that reprice after one year.

⁽⁴⁾At December 31, 2004, September 30, 2004 and December 31, 2003, the adjustable-rate loans with lifetime caps were $171.4 billion, $167.6 billion and $138.58 billion with a lifetime weighted average cap rate of 12.31%, 12.24% and 12.21%.

⁽⁵⁾Excludes student loans.

⁽⁶⁾Excludes principal-only strips and interest-only strips.

⁽⁷⁾At December 31, 2004, September 30, 2004 and December 31, 2003, the adjustable-rate MBS with lifetime caps were $10.58 billion, $8.87 billion and $8.12 billion with a lifetime weighted average cap rate of 10.23%, 10.55% and 11.32%.

	Sept. 30, 2004 to Dec. 31, 2004			Dec. 31, 2003 to Dec. 31, 2004
Rollforward of Loans Held for Sale
Balance, beginning of period	$	29,184		$	20,837
Loans originated, purchased and transferred from held in portfolio	40,892			153,635
Loans sold, transferred to held in portfolio and other	(27,333		)	(131,729		)
Balance, end of period	$	42,743		$	42,743
Rollforward of Loans Held in Portfolio
Balance, beginning of period	$	206,158		$	175,150
Loans originated, purchased and transferred from held for sale	28,282			120,961
Loan payments, transferred to held for sale and other	(27,369		)	(89,040		)
Balance, end of period	$	207,071		$	207,071

WM - 15

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Home Loan Mortgage Banking Income (Expense)
Loan servicing fees	$	481		$	482		$	485		$	502		$	524
Amortization of mortgage servicing rights	(636		)	(589		)	(546		)	(750		)	(604		)
Net mortgage servicing rights valuation adjustments(1)	257			165			(51		)	(606		)	615
Other, net	(62		)	(62		)	(89		)	(66		)	(75		)
Net home loan servicing income (expense)	40			(4		)	(201		)	(920		)	460
Revaluation gain (loss) from derivatives:
Mortgage servicing rights risk management(2)	14			130			(322		)	1,108			(314		)
Loans held for sale risk management	28			(23		)	142			(66		)	8
Total revaluation gain (loss) from derivatives	42			107			(180		)	1,042			(306		)
Net settlement income from certain interest-rate swaps	53			126			192			167			190
Gain from mortgage loans(3)	155			210			113			171			63
Loan related income	60			65			76			71			124
Gain from sale of originated mortgage-backed securities	2			-			-			-			61
Total home loan mortgage banking income	352			504			-			531			592
Impact of other mortgage servicing rights risk management instruments(4):
Gain (loss) from certain available-for-sale securities	(4		)	-			-			5			(11		)
Revaluation gain from principal-only mortgage-backed trading securities	36			45			-			-			-
Total home loan mortgage banking income, net of other mortgage servicing rights risk management instruments	$	384		$	549		$	-		$	536		$	581

	Year Ended
	Dec. 31, 2004			Dec. 31, 2003
Home Loan Mortgage Banking Income (Expense)
Loan servicing fees	$	1,950		$	2,273
Amortization of mortgage servicing rights	(2,521		)	(3,269		)
Net mortgage servicing rights valuation adjustments(1)	(235		)	712
Other, net	(279		)	(592		)
Net home loan servicing expense	(1,085		)	(876		)
Revaluation gain (loss) from derivatives:
Mortgage servicing rights risk management(2)	931			526
Loans held for sale risk management	80			(188		)
Total revaluation gain from derivatives	1,011			338
Net settlement income from certain interest-rate swaps	538			543
Gain from mortgage loans(3)	649			1,250
Loan related income	272			399
Gain from sale of originated mortgage-backed securities	2			320
Total home loan mortgage banking income	1,387			1,974
Impact of other mortgage servicing rights risk management instruments(4):
Gain from certain available-for-sale securities	1			305
Revaluation gain from principal-only mortgage-backed trading securities	81			-
Total home loan mortgage banking income, net of other mortgage servicing rights risk management instruments	$	1,469		$	2,279

⁽¹⁾Represents fair value hedge ineffectiveness as well as any impairment/reversal recognized on MSR accounted for under the lower of cost or market value methodology.  The Company prospectively applied fair value hedge accounting treatment, as prescribed by Statement of Financial Accounting Standards No. 133, to most of its MSR on April 1, 2004.

⁽²⁾Represents the change in fair value from certain derivatives that economically hedge the MSR.

⁽³⁾Gain from mortgage loans net of loans held for sale hedging and risk management instruments was a net gain of $180 million for the quarter ended December 31, 2004, compared with a net gain of $187 million for the quarter ended September 30, 2004, a net gain of $252 million for the quarter ended June 30, 2004, a net gain of $112 million for the quarter ended March 31, 2004, and a net gain of $91 million for the quarter ended December 31, 2003.  Gain from mortgage loans net of loans held for sale hedging and risk management instruments was a net gain of $729 million for the year ended December 31, 2004, compared with a net gain of $1.09 billion for the year ended December 31, 2003.

⁽⁴⁾Includes only instruments designated for mortgage servicing rights risk management and does not include the effects of instruments held for asset/liability risk management.

WM - 16

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended												Year Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2004
Mortgage Servicing Rights (“MSR”) Performance
Statement No. 133 MSR accounting valuation adjustments	$	(123	)	$	(885	)	$	1,707		$	-		$	699
Statement No. 133 fair value hedging adjustments	201			1,316			(1,985		)	-			(468		)
Statement No. 133 ineffectiveness	78			431			(278		)	-		��	231
Change in value of MSR accounted for under lower of aggregate cost or market value methodology	179			(266		)	227			(606		)	(466		)
Net mortgage servicing rights valuation adjustments(1)	257			165			(51		)	(606		)	(235		)
Amortization of mortgage servicing rights	(636		)	(589		)	(546		)	(750		)	(2,521		)
MSR risk management:
Revaluation gain (loss) from derivatives	14			130			(322		)	1,108			931
Net settlement income from certain interest-rate swaps	56			126			195			160			538
Gain (loss) from certain available-for-sale securities	(4		)	-			-			5			1
Revaluation gain from principal-only mortgage-backed trading securities	36			45			-			-			81
Net MSR valuation less hedging expense	$	(277	)	$	(123	)	$	(724	)	$	(83	)	$	(1,205	)

⁽¹⁾Represents fair value hedge ineffectiveness as well as any impairment/reversal recognized on MSR accounted for under the lower of cost or market value methodology. The Company began applying fair value hedge accounting treatment, as prescribed by Statement No. 133, to most of its MSR on a prospective basis as of April 1, 2004.

WM - 17

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Rollforward of Mortgage Servicing Rights (“MSR”)(1)
Balance, beginning of period	$	6,112		$	7,501		$	5,239		$	6,354		$	5,870
Home loans:
Additions	372			348			874			241			701
Amortization	(636		)	(589		)	(546		)	(750		)	(604		)
(Impairment) reversal	179			(266		)	227			(606		)	615
Statement No. 133 MSR accounting valuation adjustments	(123		)	(885		)	1,707			-			-
Sales	-			-			-			-			(231		)
Net change in commercial real estate MSR	2			3			-			-			3
Balance, end of period(2)	$	5,906		$	6,112		$	7,501		$	5,239		$	6,354
Rollforward of Valuation Allowance for MSR Impairment
Balance, beginning of period	$	2,653		$	2,417		$	3,035		$	2,435		$	3,075
Impairment (reversal)	(179		)	266			(227		)	606			(615		)
Other-than-temporary impairment	(486		)	(22		)	(388		)	-			-
Sales	-			-			-			-			(25		)
Other	(7		)	(8		)	(3		)	(6		)	-
Balance, end of period	$	1,981		$	2,653		$	2,417		$	3,035		$	2,435
Rollforward of Loans Serviced for Others
Balance, beginning of period	$	551,245		$	558,388		$	559,807		$	582,669		$	577,822
Home loans:
Additions	27,218			29,699			54,201			22,009			51,480
Sales	-			-			-			-			(195		)
Loan payments and other	(38,529		)	(37,035		)	(56,388		)	(46,058		)	(47,062		)
Net change in commercial real estate loans serviced for others	458			193			768			1,187			624
Balance, end of period	$	540,392		$	551,245		$	558,388		$	559,807		$	582,669

	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Total Servicing Portfolio
Loans serviced for others	$	540,392		$	551,245		$	558,388		$	559,807		$	582,669
Servicing on retained MBS without MSR	1,808			2,713			2,938			3,208			3,455
Servicing on owned loans	229,879			217,592			205,714			204,449			182,604
Subservicing portfolio	461			502			563			1,528			1,852
Total servicing portfolio	$		772,540	$		772,052	$		767,603	$		768,992	$		770,580

	December 31, 2004
	Unpaid Principal Balance		Weighted Average Servicing Fee
			(in basis points,
			annualized)
Loans Serviced for Others by Loan Type
Government	$	54,009	48
Agency	347,605		30
Private	120,868		36
Specialty home loans	17,910		50
Total loans serviced for others(3)	$	540,392	34

⁽¹⁾Net of valuation allowance.

⁽²⁾At December 31, 2004, the aggregate MSR fair value was $5.91 billion.

⁽³⁾Weighted average coupon rate (annualized) was 5.86% at December 31, 2004.

WM - 18

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Allowance for Loan and Lease Losses
Balance, beginning of quarter	$	1,322		$	1,293		$	1,260		$	1,250		$	1,549
Other	(20		)	-			(3		)	-			-
Provision (reversal of reserve) for loan and lease losses	37			56			60			56			(202		)
	1,339			1,349			1,317			1,306			1,347
Loans charged off:
Loans secured by real estate:
Home	(9		)	(6		)	(8		)	(16		)	(18		)
Purchased subprime	(10		)	(11		)	(9		)	(9		)	(11		)
Total home loan charge-offs	(19		)	(17		)	(17		)	(25		)	(29		)
Home equity loans and lines of credit	(3		)	(6		)	(5		)	(7		)	(2		)
Home construction(1)	(1		)	-			-			(1		)	(1		)
Multi-family	(2		)	-			-			-			(1		)
Other real estate	(1		)	(1		)	(1		)	(8		)	(52		)
Total loans secured by real estate	(26		)	(24		)	(23		)	(41		)	(85		)
Consumer	(17		)	(11		)	(11		)	(14		)	(14		)
Commercial business	(8		)	(4		)	(4		)	(6		)	(15		)
Total loans charged off	(51		)	(39		)	(38		)	(61		)	(114		)
Recoveries of loans previously charged off:
Loans secured by real estate:
Home	-			-			-			-			1
Purchased subprime	1			1			1			1			1
Total home loan recoveries	1			1			1			1			2
Home equity loans and lines of credit	2			-			1			1			-
Multi-family	-			1			-			2			-
Other real estate	2			2			4			2			5
Total loans secured by real estate	5			4			6			6			7
Consumer	4			5			5			5			5
Commercial business	4			3			3			4			5
Total recoveries of loans previously charged off	13			12			14			15			17
Net charge-offs	(38		)	(27		)	(24		)	(46		)	(97		)
Balance, end of quarter	$	1,301		$	1,322		$	1,293		$	1,260		$	1,250
Net charge-offs (annualized) as a percentage of average loans held in portfolio	0.07		%	0.05		%	0.05		%	0.10		%	0.23		%
Allowance as a percentage of total loans held in portfolio	0.63			0.64			0.66			0.68			0.71

⁽¹⁾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)

	Dec. 31, 2004			Sept. 30, 2004			June 30, 2004			Mar. 31, 2004			Dec. 31, 2003
Nonperforming Assets and Restructured Loans
Nonaccrual loans(1):
Loans secured by real estate:
Home	$	542		$	538		$	535		$	622		$	736
Purchased subprime	674			608			585			615			597
Total home nonaccrual loans	1,216			1,146			1,120			1,237			1,333
Home equity loans and lines of credit	66			50			48			45			47
Home construction(2)	28			31			24			31			35
Multi-family	12			23			20			23			19
Other real estate	162			173			133			153			153
Total nonaccrual loans secured by real estate	1,484			1,423			1,345			1,489			1,587
Consumer	9			11			9			7			8
Commercial business	41			37			42			46			31
Total nonaccrual loans held in portfolio	1,534			1,471			1,396			1,542			1,626
Foreclosed assets	261			281			286			307			311
Total nonperforming assets	$	1,795		$	1,752		$	1,682		$	1,849		$	1,937
As a percentage of total assets	0.58		%	0.61		%	0.60		%	0.66		%	0.70		%
Restructured loans	$	34		$	38		$	79		$	107		$	111
Total nonperforming assets and restructured loans	$	1,829		$	1,790		$	1,761		$	1,956		$	2,048

⁽¹⁾Excludes nonaccrual loans held for sale of $76 million at December 31, 2004.  Prior periods also reflect the exclusion of nonaccrual loans held for sale of $84 million, $99 million, $135 million and $66 million at September 30, 2004, June 30, 2004, March 31, 2004 and December 31, 2003.  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 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.