Mr. Cooper (COOP) 8-K Washington Mutual Announces Third Quarter 2005 Earnings

Exhibit 99.2

WM - 1

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,		Mar. 31,			Dec. 31,			Sept. 30,
	2005			2005		2005			2004			2004
Interest Income
Loans held for sale	$	661		$	576	$	470		$	393		$	341
Loans held in portfolio	2,862			2,754		2,544			2,421			2,226
Available-for-sale securities	238			234		224			157			163
Trading securities	114			91		79			66			40
Other interest and dividend income	65			51		43			29			41
Total interest income	3,940			3,706		3,360			3,066			2,811
Interest Expense
Deposits	996			852		696			604			539
Borrowings	1,028			928		774			612			532
Total interest expense	2,024			1,780		1,470			1,216			1,071
Net interest income	1,916			1,926		1,890			1,850			1,740
Provision for loan and lease losses	52			31		16			37			56
Net interest income after provision for loan and lease losses	1,864			1,895		1,874			1,813			1,684
Noninterest Income
Revenue from sales and servicing of home mortgage loans	714			118		777			352			504
Depositor and other retail banking fees	578			540		490			515			514
Securities fees and commissions	111			112		110			110			104
Insurance income	42			47		46			47			61
Portfolio loan related income	103			96		85			101			109
Trading securities income (loss)	(171		)	285		(98		)	26			51
Gain (loss) from other available-for-sale securities	(32		)	25		(122		)	(23		)	11
Loss on extinguishment of borrowings	–			–		–			–			(147		)
Other income	29			44		120			89			57
Total noninterest income	1,374			1,267		1,408			1,217			1,264
Noninterest Expense
Compensation and benefits	939			886		876			839			841
Occupancy and equipment	372			350		402			462			404
Telecommunications and outsourced information services	108			100		104			115			118
Depositor and other retail banking losses	61			49		55			61			54
Advertising and promotion	81			77		55			57			76
Professional fees	48			38		34			54			34
Other expense	316			328		313			350			342
Total noninterest expense	1,925			1,828		1,839			1,938			1,869
Income before income taxes	1,313			1,334		1,443			1,092			1,079
Income taxes	492			490		541			424			405
Net Income	$	821		$	844	$	902		$	668		$	674
Earnings Per Common Share:
Basic	$	0.95		$	0.98	$	1.04		$	0.77		$	0.78
Diluted	0.92			0.95		1.01			0.76			0.76
Dividends declared per common share	0.48			0.47		0.46			0.45			0.44
Basic weighted average number of common shares outstanding (in thousands)	866,541			865,221		864,933			863,055			862,004
Diluted weighted average number of common shares outstanding (in thousands)	888,495			887,250		888,789			883,991			882,323

WM - 2

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Nine Months Ended
	Sept. 30,			Sept. 30,
	2005			2004
Interest Income
Loans held for sale	$	1,708		$	1,079
Loans held in portfolio	8,160			6,404
Available-for-sale securities	695			607
Trading securities	284			85
Other interest and dividend income	160			109
Total interest income	11,007			8,284
Interest Expense
Deposits	2,544			1,440
Borrowings	2,731			1,578
Total interest expense	5,275			3,018
Net interest income	5,732			5,266
Provision for loan and lease losses	99			172
Net interest income after provision for loan and lease losses	5,633			5,094
Noninterest Income
Revenue from sales and servicing of home mortgage loans	1,609			1,035
Depositor and other retail banking fees	1,608			1,484
Securities fees and commissions	334			315
Insurance income	135			179
Portfolio loan related income	284			299
Trading securities income	15			64
Gain (loss) from other available-for-sale securities	(129		)	73
Loss on extinguishment of borrowings	–			(237		)
Other income	192			183
Total noninterest income	4,048			3,395
Noninterest Expense
Compensation and benefits	2,701			2,589
Occupancy and equipment	1,124			1,197
Telecommunications and outsourced information services	311			364
Depositor and other retail banking losses	165			134
Advertising and promotion	213			219
Professional fees	119			105
Other expense	958			989
Total noninterest expense	5,591			5,597
Income from continuing operations before income taxes	4,090			2,892
Income taxes	1,523			1,081
Income from continuing operations, net of taxes	2,567			1,811
Discontinued Operations
Loss from discontinued operations before income taxes	–			(32		)
Gain on disposition of discontinued operations	–			676
Income taxes	–			245
Income from discontinued operations, net of taxes	–			399
Net Income	$	2,567		$	2,210
Basic Earnings Per Common Share:
Income from continuing operations	$	2.97		$	2.10
Income from discontinued operations, net	–			0.46
Net income	2.97			2.56
Diluted Earnings Per Common Share:
Income from continuing operations	2.89			2.05
Income from discontinued operations, net	–			0.45
Net income	2.89			2.50
Dividends declared per common share	1.41			1.29
Basic weighted average number of common shares outstanding (in thousands)	865,571			861,933
Diluted weighted average number of common shares outstanding (in thousands)	888,184			884,068

WM - 3

Washington Mutual, Inc.

Consolidated Statements of Financial Condition

(dollars in millions, except per share data)

(unaudited)

	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2005			2005			2005			2004			2004
Assets
Cash and cash equivalents	$	4,924		$	4,614		$	4,811		$	4,455		$	4,689
Federal funds sold and securities purchased under agreements to resell	3,194			625			1,152			82			30
Trading securities	7,351			5,687			6,066			5,588			3,113
Available-for-sale securities, total amortized cost of $20,757, $18,999, $20,569, $19,047 and $16,312:
Mortgage-backed securities	17,161			14,396			15,947			14,923			10,168
Investment securities	3,603			4,852			4,756			4,296			6,319
Loans held for sale	48,018			51,122			41,197			42,743			29,184
Loans held in portfolio	218,194			212,737			214,114			207,071			206,158
Allowance for loan and lease losses	(1,264		)	(1,243		)	(1,280		)	(1,301		)	(1,322		)
Total loans held in portfolio, net of allowance for loan and lease losses	216,930			211,494			212,834			205,770			204,836
Investment in Federal Home Loan Banks	4,228			4,194			3,973			4,059			3,883
Mortgage servicing rights	7,042			5,730			6,802			5,906			6,112
Goodwill	6,196			6,196			6,196			6,196			6,196
Other assets	14,975			14,623			15,962			13,900			14,298
Total assets	$	333,622		$	323,533		$	319,696		$	307,918		$	288,828
Liabilities
Deposits:
Noninterest-bearing deposits	$	36,850		$	35,518		$	34,941		$	32,780		$	32,250
Interest-bearing deposits	153,562			148,799			148,690			140,878			136,445
Total deposits	190,412			184,317			183,631			173,658			168,695
Federal funds purchased and commercial paper	7,229			5,864			2,053			4,045			7,025
Securities sold under agreements to repurchase	14,508			14,089			16,716			15,944			15,611
Advances from Federal Home Loan Banks	69,405			71,534			66,730			70,074			59,758
Other borrowings	23,994			20,752			21,938			18,498			12,747
Other liabilities	5,478			4,627			6,861			4,473			4,172
Total liabilities	311,026			301,183			297,929			286,692			268,008
Stockholders’ equity	22,596			22,350			21,767			21,226			20,820
Total liabilities and stockholders’ equity	$	333,622		$	323,533		$	319,696		$	307,918		$	288,828
Common shares outstanding at end of period (in thousands)(1)	877,651			878,384			877,287			874,262			873,085
Book value per common share(2)	$	25.92		$	25.62		$	24.98		$	24.45		$	24.01
Tangible book value per common share(2)	18.97			18.66			18.01			17.45			16.99
Employees at end of period	56,214			54,377			52,488			52,579			55,488

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

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

WM - 4

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2005			2005			2005			2004			2004
Stockholders’ Equity Rollforward
Balance, beginning of period	$	22,350		$	21,767		$	21,226		$	20,820		$	20,369
Net income	821			844			902			668			674
Other comprehensive (loss) income, net of tax	(158		)	98			(8		)	49			98
Cash dividends declared on common stock	(419		)	(409		)	(402		)	(390		)	(381		)
Common stock repurchased and retired	(98		)	–			(100		)	–			–
Common stock issued	100			50			149			79			60
Balance, end of period	$	22,596		$	22,350		$	21,767		$	21,226		$	20,820

WM - 5

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Nine Months Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2005			2005			2005			2004			2004			2005			2004
RETAIL BANKING AND FINANCIAL SERVICES GROUP
Condensed income statement:
Net interest income	$	1,346		$	1,384		$	1,343		$	1,323		$	1,255		$	4,074		$	3,666
Provision for loan and lease losses	51			42			37			34			42			130			144
Noninterest income	786			751			695			717			715			2,232			2,041
Inter-segment revenue	12			11			12			8			3			34			15
Noninterest expense	1,211			1,173			1,146			1,129			1,113			3,530			3,293
Income before income taxes	882			931			867			885			818			2,680			2,285
Income taxes	334			352			328			318			310			1,013			866
Net income	$	548		$	579		$	539		$	567		$	508		$	1,667		$	1,419
Performance and other data:
Efficiency ratio(1)	50.41		%	48.61		%	49.74		%	48.83		%	49.83		%	49.59		%	50.79		%
Average loans	$	179,361		$	181,396		$	177,635		$	177,204		$	167,569		$	179,468		$	158,670
Average assets	191,909			194,008			190,478			189,873			180,003			192,135			170,935
Average deposits	138,741			135,539			132,982			132,773			131,850			135,775			129,518
Loan volume	11,191			11,704			12,493			13,337			14,178			35,389			41,944
Employees at end of period	30,030			28,950			27,609			27,336			27,104			30,030			27,104
HOME LOANS GROUP
Condensed income statement:
Net interest income	$	327		$	303		$	286		$	293		$	287		$	916		$	945
Noninterest income	530			617			682			566			769			1,830			1,738
Inter-segment expense	12			11			12			8			3			34			15
Noninterest expense	580			574			567			629			614			1,720			1,957
Income before income taxes	265			335			389			222			439			992			711
Income taxes	100			127			147			80			166			374			268
Net income	$	165		$	208		$	242		$	142		$	273		$	618		$	443
Performance and other data:
Efficiency ratio(1)	62.41		%	57.43		%	53.85		%	67.71		%	53.31		%	57.72		%	67.52		%
Average loans	$	33,415		$	31,434		$	27,765		$	24,880		$	22,611		$	30,892		$	23,158
Average assets	54,062			51,542			49,019			44,195			40,037			51,559			41,168
Average deposits	15,402			13,940			13,107			15,121			15,385			14,158			16,695
Loan volume	48,082			44,855			38,498			41,782			40,491			131,435			140,430
Employees at end of period	12,958			12,534			12,565			13,843			16,524			12,958			16,524
COMMERCIAL GROUP
Condensed income statement:
Net interest income	$	356		$	346		$	320		$	318		$	320		$	1,022		$	996
Provision for loan and lease losses	4			2			2			9			7			7			31
Noninterest income	156			70			156			57			64			381			246
Noninterest expense	185			179			161			182			154			525			438
Income before income taxes	323			235			313			184			223			871			773
Income taxes	122			88			118			65			84			328			292
Net income	$	201		$	147		$	195		$	119		$	139		$	543		$	481
Performance and other data:
Efficiency ratio(1)	30.34		%	35.90		%	27.65		%	40.40		%	32.26		%	31.08		%	28.12		%
Average loans	$	50,441		$	46,180		$	40,734		$	39,956		$	37,871		$	45,823		$	37,232
Average assets	54,970			50,514			44,793			44,003			42,125			50,132			41,963
Average deposits	8,646			7,641			7,298			7,744			7,775			7,867			6,894
Loan volume	11,392			11,039			8,430			7,997			7,102			30,860			20,981
Employees at end of period	3,923			3,747			3,484			3,385			3,490			3,923			3,490

(This table is continued on “WM-6”.)

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

WM - 6

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Nine Months Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			Sept. 30,				Sept. 30,
(This table is continued from “WM-5”.)	2005			2005			2005			2004			2004			2005				2004
CORPORATE SUPPORT/TREASURY AND OTHER
Condensed income statement:
Net interest expense	$	(228	)	$	(222	)	$	(172	)	$	(197	)	$	(232	)	$		(623	)	$	(660	)
Provision for loan and lease losses	–			–			–			2			1			1				2
Noninterest income (expense)	(48		)	(36		)	(63		)	16			(122		)	(147			)	(161		)
Noninterest expense	161			112			173			210			200			446				541
Loss from continuing operations before income taxes	(437		)	(370		)	(408		)	(393		)	(555		)	(1,217			)	(1,364		)
Income tax benefit	(176		)	(148		)	(164		)	(160		)	(216		)	(488			)	(532		)
Loss from continuing operations	(261		)	(222		)	(244		)	(233		)	(339		)	(729			)	(832		)
Income from discontinued operations, net of taxes	–			–			–			–			–			–				399
Net loss	$	(261	)	$	(222	)	$	(244	)	$	(233	)	$	(339	)	$		(729	)	$	(433	)
Performance and other data:
Average loans	$	1,096		$	1,053		$	1,049		$	961		$	928		$	1,066			$	864
Average assets	28,051			26,525			25,664			20,953			23,326			26,756				27,365
Average deposits	25,531			26,401			21,798			18,235			13,856			24,590				9,457
Loan volume	67			20			94			105			54			181				156
Employees at end of period	9,303			9,146			8,830			8,015			8,370			9,303				8,370
RECONCILING ADJUSTMENTS
Condensed income statement:
Net interest income(2)	$	115		$	115		$	113		$	113		$	110		$	343			$	319
Provision (reversal of reserve) for loan and lease losses(3)	(3		)	(13		)	(23		)	(8		)	6			(39			)	(5		)
Noninterest income (expense)(4)	(50		)	(135		)	(62		)	(139		)	(162		)	(248			)	(469		)
Noninterest (income) expense(5)	(212		)	(210		)	(208		)	(212		)	(212		)	(630			)	(632		)
Income before income taxes	280			203			282			194			154			764				487
Income taxes(6)	112			71			112			121			61			296				187
Net income	$	168		$	132		$	170		$	73		$	93		$	468			$	300
Performance and other data:
Average loans(7)	$	(1,550	)	$	(1,541	)	$	(1,556	)	$	(1,622	)	$	(1,600	)	$		(1,549	)	$	(1,553	)
Average assets(7)(8)	(1,700		)	(1,744		)	(1,782		)	(1,866		)	(1,822		)	(1,742			)	(1,745		)
TOTAL CONSOLIDATED
Condensed income statement:
Net interest income	$	1,916		$	1,926		$	1,890		$	1,850		$	1,740		$		5,732		$	5,266
Provision for loan and lease losses	52			31			16			37			56			99				172
Noninterest income	1,374			1,267			1,408			1,217			1,264			4,048				3,395
Noninterest expense	1,925			1,828			1,839			1,938			1,869			5,591				5,597
Income from continuing operations before income taxes	1,313			1,334			1,443			1,092			1,079			4,090				2,892
Income taxes	492			490			541			424			405			1,523				1,081
Income from continuing operations	821			844			902			668			674			2,567				1,811
Income from discontinued operations, net of taxes	–			–			–			–			–			–				399
Net income	$	821		$	844		$	902		$	668		$	674		$	2,567			$	2,210
Performance and other data:
Efficiency ratio(9)	58.52		%	57.24		%	55.77		%	63.18		%	62.19		%	57.17			%	64.63		%
Average loans	$	262,763		$	258,522		$	245,627		$	241,379		$	227,379		$		255,700		$	218,371
Average assets	327,292			320,845			308,172			297,158			283,669			318,840				279,686
Average deposits	188,320			183,521			175,185			173,873			168,866			182,390				162,564
Loan volume	70,732			67,618			59,515			63,221			61,825			197,865				203,511
Employees at end of period	56,214			54,377			52,488			52,579			55,488			56,214				55,488

⁽²⁾Represents the difference between home loan premium amortization recorded by the Retail Banking and Financial Services Group and the amount recognized in the Company’s Consolidated Statements of Income. For management reporting purposes, loans that are held in portfolio by the Retail Banking and Financial Services Group are treated as if they are purchased from the Home Loans Group. Since the cost basis of these loans includes an assumed profit factor paid to the Home Loans Group, the amortization of loan premiums recorded by the Retail Banking and Financial Services Group includes this assumed profit factor and must therefore be eliminated as a reconciling adjustment.

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

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

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

⁽⁶⁾Represents the tax effect of reconciling adjustments.

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

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

Quarter Ended															Nine Months Ended
Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
2005			2005			2005			2004			2004			2005			2004
$	(150	)	$	(203	)	$	(226	)	$	(244	)	$	(222	)	$	(193	)	$	(192	)

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

WM - 7

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2005			2005			2005			2004			2004
PROFITABILITY
Net interest income	$	1,916		$	1,926		$	1,890		$	1,850		$	1,740
Net interest margin	2.61		%	2.66		%	2.73		%	2.79		%	2.77		%
Noninterest income	$	1,374		$	1,267		$	1,408		$	1,217		$	1,264
Noninterest expense	1,925			1,828			1,839			1,938			1,869
Basic earnings per common share	$	0.95		$	0.98		$	1.04		$	0.77		$	0.78
Diluted earnings per common share	0.92			0.95			1.01			0.76			0.76
Dividends declared per common share	0.48			0.47			0.46			0.45			0.44
Return on average assets	1.00		%	1.05		%	1.17		%	0.90		%	0.95		%
Return on average common equity	14.66			15.33			16.63			12.71			13.03
Efficiency ratio(1)	58.52			57.24			55.77			63.18			62.19
ASSET QUALITY
Nonaccrual loans(2)(3)	$	1,465		$	1,463		$	1,569		$	1,534		$	1,471
Foreclosed assets(3)	256			256			264			261			281
Total nonperforming assets(2)(3)	1,721			1,719			1,833			1,795			1,752
Nonperforming assets/total assets(2)(3)	0.52		%	0.53		%	0.57		%	0.58		%	0.61		%
Restructured loans(3)	$	25		$	25		$	27		$	34		$	38
Total nonperforming assets and restructured loans(2)(3)	1,746			1,744			1,860			1,829			1,790
Allowance for loan and lease losses(3)	1,264			1,243			1,280			1,301			1,322
Allowance as a percentage of total loans held in portfolio(3)	0.58		%	0.58		%	0.60		%	0.63		%	0.64		%
Provision for loan and lease losses	$	52		$	31		$	16		$	37		$	56
Net charge-offs	31			39			37			38			27
CAPITAL ADEQUACY(3)
Capital Ratios at WMI-consolidated level:
Stockholders’ equity/total assets	6.77		%	6.91		%	6.81		%	6.89		%	7.21		%
Tangible common equity(4)/total tangible assets(4)	5.09			5.13			5.03			5.05			5.26
Estimated total risk-based capital/total risk-weighted assets(5)	10.77			11.10			11.21			11.34			10.64
Capital Ratios at WMB-bank only level (well-capitalized minimum)(6):
Tier 1 capital to adjusted total assets (5.00%)	5.85			5.74			5.69			5.46			5.85
Adjusted tier 1 capital to total risk-weighted assets (6.00%)	8.50			8.38			8.40			8.12			8.24
Total risk-based capital to total risk-weighted assets (10.00%)	11.49			11.51			11.68			11.68			10.94
SUPPLEMENTAL DATA
Average balance sheet:
Total loans held for sale	$	49,747		$	44,884		$	38,307		$	33,083		$	28,220
Total loans held in portfolio	213,016			213,638			207,320			208,296			199,159
Total interest-earning assets	296,568			290,876			277,080			266,375			252,235
Total assets	327,292			320,845			308,172			297,158			283,669
Total interest-bearing deposits	151,587			149,144			142,639			139,938			135,600
Total noninterest-bearing deposits	36,733			34,377			32,546			33,935			33,266
Total stockholders’ equity	22,412			22,014			21,680			21,025			20,703
Period-end balance sheet:
Loans held for sale	48,018			51,122			41,197			42,743			29,184
Loans held in portfolio, net of allowance for loan and lease losses	216,930			211,494			212,834			205,770			204,836
Interest-earning assets	301,749			293,613			287,205			278,762			258,855
Total assets	333,622			323,533			319,696			307,918			288,828
Interest-bearing deposits	153,562			148,799			148,690			140,878			136,445
Noninterest-bearing deposits	36,850			35,518			34,941			32,780			32,250
Total stockholders’ equity	22,596			22,350			21,767			21,226			20,820

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

⁽²⁾Excludes nonaccrual loans held for sale.

⁽³⁾As of quarter end.

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

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

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

WM - 8

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30, 2005						June 30, 2005						Sept. 30, 2004
					Interest						Interest						Interest
					Income/						Income/						Income/
	Balance		Rate		Expense		Balance		Rate		Expense		Balance		Rate		Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	2,891	3.52	%	$	26	$	1,972	2.96	%	$	15	$	922	1.44	%	$	3
Trading securities	6,532		6.97		114		6,252		5.85		91		2,396		6.61		40
Available-for-sale securities(1):
Mortgage-backed securities	15,666		4.72		185		15,065		4.67		176		9,726		3.85		94
Investment securities	4,321		4.94		53		4,764		4.84		58		7,597		3.62		69
Loans held for sale(2)	49,747		5.30		661		44,884		5.13		576		28,220		4.83		341
Loans held in portfolio(2):
Loans secured by real estate:
Home	108,783		4.97		1,353		111,272		4.80		1,336		108,594		4.19		1,137
Specialty mortgage finance(3)	20,298		5.07		257		20,913		5.20		272		16,279		4.57		186
Total home loans	129,081		4.99		1,610		132,185		4.87		1,608		124,873		4.24		1,323
Home equity loans and lines of credit	49,237		6.08		753		47,200		5.71		672		38,329		4.55		438
Home construction(4)	2,001		6.31		32		2,047		6.43		33		2,693		5.41		36
Multi-family	24,550		5.38		330		23,715		5.17		307		21,240		4.90		260
Other real estate	4,904		7.12		88		5,092		6.50		83		6,364		5.78		93
Total loans secured by real estate	209,773		5.35		2,813		210,239		5.14		2,703		193,499		4.44		2,150
Consumer	686		10.67		18		722		10.75		19		860		10.17		22
Commercial business	2,557		4.74		31		2,677		4.69		32		4,800		4.43		54
Total loans held in portfolio	213,016		5.36		2,862		213,638		5.16		2,754		199,159		4.46		2,226
Other	4,395		3.51		39		4,301		3.45		36		4,215		3.62		38
Total interest-earning assets	296,568		5.30		3,940		290,876		5.10		3,706		252,235		4.45		2,811
Noninterest-earning assets:
Mortgage servicing rights	6,408						6,195						6,698
Goodwill	6,196						6,196						6,196
Other assets	18,120						17,578						18,540
Total assets	$	327,292					$	320,845					$	283,669
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	45,305	2.12		242		$	47,654	1.86		221		$	54,377	1.25		172
Savings and money market deposits	42,944		1.92		208		41,424		1.60		165		43,278		1.27		138
Time deposits	63,338		3.41		546		60,066		3.10		466		37,945		2.40		229
Total interest-bearing deposits	151,587		2.60		996		149,144		2.28		852		135,600		1.58		539
Federal funds purchased and commercial paper	6,719		3.60		61		2,749		3.09		21		2,733		1.54		10
Securities sold under agreements to repurchase	13,159		3.65		123		16,390		3.13		130		14,213		2.75		100
Advances from Federal Home Loan Banks	68,597		3.54		620		69,512		3.21		563		59,227		2.02		306
Other	21,734		4.12		224		21,491		4.00		214		12,922		3.62		116
Total interest-bearing liabilities	261,796		3.05		2,024		259,286		2.74		1,780		224,695		1.89		1,071
Noninterest-bearing sources:
Noninterest-bearing deposits	36,733						34,377						33,266
Other liabilities	6,351						5,168						5,005
Stockholders’ equity	22,412						22,014						20,703
Total liabilities and stockholders’ equity	$	327,292					$	320,845					$	283,669
Net interest spread and net interest income			2.25		$	1,916			2.36		$	1,926			2.56		$	1,740
Impact of noninterest-bearing sources			0.36						0.30						0.21
Net interest margin			2.61						2.66						2.77

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

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

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

⁽⁴⁾Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM - 9

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Nine Months Ended
	Sept. 30, 2005						Sept. 30, 2004
					Interest						Interest
					Income/						Income/
	Balance		Rate		Expense		Balance		Rate		Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
Federal funds sold and securities purchased under agreements to resell	$	2,078	3.13	%	$	50	$	993	1.30	%	$	10
Trading securities	6,169		6.15		284		1,638		6.95		85
Available-for-sale securities(1):
Mortgage-backed securities	15,407		4.61		533		9,870		4.04		299
Investment securities	4,569		4.74		162		12,862		3.19		308
Loans held for sale(2)	44,354		5.13		1,708		28,592		5.03		1,079
Loans held in portfolio(2):
Loans secured by real estate:
Home	110,057		4.79		3,952		105,559		4.18		3,311
Specialty mortgage finance(3)	19,928		5.11		763		15,223		4.83		552
Total home loans	129,985		4.84		4,715		120,782		4.26		3,863
Home equity loans and lines of credit	47,056		5.73		2,019		33,786		4.59		1,162
Home construction(4)	2,096		6.16		97		2,507		5.34		101
Multi-family	23,651		5.19		920		20,810		4.98		777
Other real estate	5,138		6.53		252		6,484		5.87		287
Total loans secured by real estate	207,926		5.13		8,003		184,369		4.48		6,190
Consumer	726		10.64		58		928		10.08		70
Commercial business	2,694		4.88		99		4,482		4.24		144
Total loans held in portfolio	211,346		5.15		8,160		189,779		4.50		6,404
Other	4,323		3.39		110		4,108		3.20		99
Total interest-earning assets	288,246		5.09		11,007		247,842		4.46		8,284
Noninterest-earning assets:
Mortgage servicing rights	6,232						6,566
Goodwill	6,196						6,196
Other assets	18,166						19,082
Total assets	$	318,840					$	279,686
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	47,609	1.86		663		$	62,396	1.27		593
Savings and money market deposits	42,125		1.65		520		33,211		1.00		249
Time deposits	58,089		3.12		1,361		33,286		2.39		598
Total interest-bearing deposits	147,823		2.29		2,544		128,893		1.49		1,440
Federal funds purchased and commercial paper	4,330		3.19		104		3,084		1.21		28
Securities sold under agreements to repurchase	15,377		3.11		363		17,711		2.26		304
Advances from Federal Home Loan Banks	68,241		3.20		1,652		57,135		2.05		892
Other	20,554		3.98		612		13,241		3.58		354
Total interest-bearing liabilities	256,325		2.73		5,275		220,064		1.82		3,018
Noninterest-bearing sources:
Noninterest-bearing deposits	34,567						33,671
Other liabilities	5,910						5,590
Stockholders’ equity	22,038						20,361
Total liabilities and stockholders’ equity	$	318,840					$	279,686
Net interest spread and net interest income			2.36		$	5,732			2.64		$	5,266
Impact of noninterest-bearing sources			0.30						0.20
Net interest margin			2.66						2.84

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

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

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

⁽⁴⁾Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM - 10

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	June 30, 2005			Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	to Sept. 30, 2005			2005		2005		2005		2004		2004
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing	$	1,529		$	20,622	$	19,093	$	18,599	$	17,463	$	16,178
Interest bearing	(1,737		)	44,294		46,031		48,988		51,099		52,378
Total checking deposits	(208		)	64,916		65,124		67,587		68,562		68,556
Savings and money market deposits	1,065			35,579		34,514		35,184		36,836		38,620
Time deposits(1)	4,314			40,476		36,162		31,819		27,268		24,825
Total retail deposits	5,171			140,971		135,800		134,590		132,666		132,001
Commercial business deposits	110			9,758		9,648		8,447		7,611		7,369
Wholesale deposits	896			24,534		23,638		24,969		18,448		14,052
Custodial and escrow deposits(2)	(82		)	15,149		15,231		15,625		14,933		15,273
Total deposits	$	6,095		$	190,412	$	184,317	$	183,631	$	173,658	$	168,695

(1)	Weighted average remaining maturity of time deposits was 12 months at September 30, 2005, 13 months at June 30, 2005, 14 months at March 31, 2005, and 16 months at December 31, 2004, and September 30, 2004.
(2)	Substantially all custodial and escrow deposits reside in noninterest-bearing checking accounts.

	Sept. 30,	June 30,	Mar. 31,	Dec. 31,	Sept. 30,
	2005	2005	2005	2004	2004
Retail Deposit Accounts(1)
Checking	9,680,317	9,427,222	9,183,194	8,981,060	8,874,823
Money market and savings	5,560,060	5,395,091	5,250,907	5,110,674	5,030,884
Total transaction accounts(2)	15,240,377	14,822,313	14,434,101	14,091,734	13,905,707
Time deposits	1,486,582	1,416,689	1,300,580	1,208,870	1,171,127
Total accounts, end of period	16,726,959	16,239,002	15,734,681	15,300,604	15,076,834
Net transaction account changes	418,064	388,212	342,367	186,027	325,746
Net total account changes	487,957	504,321	434,077	223,770	331,871

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

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

	Sept. 30,	June 30,	Mar. 31,	Dec. 31,	Sept. 30,
	2005	2005	2005	2004	2004
Retail Banking Stores
Stores, beginning of period	1,997	1,968	1,939	1,872	1,816
Net stores opened during the quarter	54	29	29	67	56
Stores, end of period	2,051	1,997	1,968	1,939	1,872

	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	2005		2005		2005		2004		2004
Assets Under Management	$	24,546	$	23,348	$	22,454	$	22,196	$	20,617

WM - 11

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	2005		2005		2005		2004		2004
Loan Volume
Home loans:
Adjustable rate	$	26,607	$	25,293	$	22,947	$	26,141	$	25,589
Fixed rate	21,122		19,355		17,147		15,448		14,635
Specialty mortgage finance(1)	8,413		8,753		7,656		9,362		7,536
Total home loan volume	56,142		53,401		47,750		50,951		47,760
Home equity loans and lines of credit	10,828		10,888		8,887		9,307		10,527
Home construction loans(2)	370		258		245		293		640
Multi-family	2,580		2,459		2,121		2,240		2,050
Other real estate	465		371		345		257		352
Total loans secured by real estate	70,385		67,377		59,348		63,048		61,329
Consumer	182		82		43		77		138
Commercial business	165		159		124		96		358
Total loan volume	$	70,732	$	67,618	$	59,515	$	63,221	$	61,825
Loan Volume by Channel
Retail	$	32,614	$	30,565	$	25,569	$	28,766	$	30,285
Wholesale	20,000		20,323		16,716		18,441		16,079
Purchased/correspondent	18,118		16,730		17,230		16,014		15,461
Total loan volume by channel	$	70,732	$	67,618	$	59,515	$	63,221	$	61,825
Refinancing Activity(3)
Home loan refinancing	$	29,084	$	27,583	$	28,641	$	30,752	$	23,834
Home equity loans and lines of credit and consumer	245		475		392		336		360
Home construction loans	17		13		10		13		9
Multi-family and other real estate	738		700		660		565		621
Total refinancing	$	30,084	$	28,771	$	29,703	$	31,666	$	24,824
Home Loan Volume
Short-term adjustable-rate loans(4):
Option ARMs	$	16,353	$	19,564	$	15,644	$	18,898	$	18,902
Other ARMs	1,237		367		974		972		171
Total short-term adjustable-rate loans	17,590		19,931		16,618		19,870		19,073
Medium-term adjustable-rate loans(5)	16,454		13,388		13,409		14,890		12,866
Fixed-rate loans	22,098		20,082		17,723		16,191		15,821
Total home loan volume	$	56,142	$	53,401	$	47,750	$	50,951	$	47,760

Note:  Pursuant to regulatory guidance, buyouts of delinquent mortgages contained within Government National Mortgage Association (GNMA) loan servicing pools must be classified as loans on the balance sheet.  Accordingly, total home loan volume includes GNMA pool buy-out volume of $466 million, $477 million, $563 million, $785 million and $898 million for the quarters ended September 30, 2005, June 30, 2005, March 31, 2005, December 31, 2004, and September 30, 2004.

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

⁽²⁾Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

⁽³⁾Includes loan refinancing entered into by both new and pre-existing loan customers.

⁽⁴⁾Short-term is defined as adjustable-rate loans that reprice within one year or less.

⁽⁵⁾Medium-term is defined as adjustable-rate loans that reprice after one year.

WM - 12

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Nine Months Ended
	Sept. 30,		Sept. 30,
	2005		2004
Loan Volume
Home loans:
Adjustable rate	$	74,848	$	77,164
Fixed rate	57,624		62,275
Specialty mortgage finance(1)	24,821		21,972
Total home loan volume	157,293		161,411
Home equity loans and lines of credit	30,603		30,515
Home construction loans(2)	873		2,088
Multi-family	7,160		5,921
Other real estate	1,180		1,482
Total loans secured by real estate	197,109		201,417
Consumer	308		259
Commercial business	448		1,835
Total loan volume	$	197,865	$	203,511
Loan Volume by Channel
Retail	$	88,749	$	96,131
Wholesale	57,039		51,032
Purchased/correspondent	52,077		56,348
Total loan volume by channel	$	197,865	$	203,511
Refinancing Activity(3)
Home loan refinancing	$	85,307	$	97,268
Home equity loans and lines of credit and consumer	1,112		2,614
Home construction loans	41		34
Multi-family and other real estate	2,097		2,079
Total refinancing	$	88,557	$	101,995
Home Loan Volume
Short-term adjustable-rate loans(4):
Option ARMs	$	51,561	$	48,587
Other ARMs	2,578		1,700
Total short-term adjustable-rate loans	54,139		50,287
Medium-term adjustable-rate loans(5)	43,250		43,216
Fixed-rate loans	59,904		67,908
Total home loan volume	$	157,293	$	161,411

Note:  Pursuant to regulatory guidance, buyouts of delinquent mortgages contained within Government National Mortgage Association (GNMA) loan servicing pools must be classified as loans on the balance sheet. Accordingly, total home loan volume includes GNMA pool buy-out volume of $1.51 billion and $2.64 billion for the nine months ended September 30, 2005 and September 30, 2004.

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

⁽²⁾Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

⁽³⁾Includes loan refinancing entered into by both new and pre-existing loan customers.

⁽⁴⁾Short term is defined as adjustable-rate loans that reprice within one year or less.

⁽⁵⁾Medium term is defined as adjustable-rate loans that reprice after one year.

WM - 13

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	June 30, 2005			Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	to Sept. 30, 2005			2005			2005			2005			2004			2004
Loans by Property Type
Loans held in portfolio:
Loans secured by real estate:
Home:
Short-term adjustable-rate loans(1):
Option ARMs	$	1,330		$	67,863	(2)	$	66,533		$	67,938		$	66,310		$	66,530
Other ARMs	2,053			12,956			10,903			10,462			9,065			8,812
Total short-term adjustable-rate loans	3,383			80,819			77,436			78,400			75,375			75,342
Medium-term adjustable-rate loans(3)	111			43,610			43,499			46,789			45,197			45,060
Fixed-rate loans	(22		)	8,616			8,638			8,794			8,562			9,133
Total home loans(4)	3,472			133,045			129,573			133,983			129,134			129,535
Home equity loans and lines of credit	1,617			50,066			48,449			45,849			43,650			40,505
Home construction(5)	(18		)	2,019			2,037			2,170			2,344			2,732
Multi-family	774			25,014			24,240			23,247			22,282			21,640
Other real estate	14			4,929			4,915			5,311			5,664			6,268
Total loans secured by real estate	5,859			215,073			209,214			210,560			203,074			200,680
Consumer	(34		)	669			703			747			792			831
Commercial business	(368		)	2,452			2,820			2,807			3,205			4,647
Total loans held in portfolio	5,457			218,194			212,737			214,114			207,071			206,158
Less: allowance for loan and lease losses	(21		)	(1,264		)	(1,243		)	(1,280		)	(1,301		)	(1,322		)
Total net loans held in portfolio	5,436			216,930			211,494			212,834			205,770			204,836
Loans held for sale(6)	(3,104		)	48,018			51,122			41,197			42,743			29,184
Total net loans	$	2,332		$	264,948		$	262,616		$	254,031		$	248,513		$	234,020

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

⁽²⁾At September 30, 2005, the total amount by which the unpaid principal balance (“UPB”) of Option ARM loans exceeded their original principal amount was $76 million.

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

⁽⁴⁾Includes specialty mortgage finance loans, which are composed of purchased subprime loans and certain mortgages originated by Long Beach Mortgage Company.  Specialty mortgage finance loans were $21.16 billion, $20.17 billion, $21.54 billion, $19.18 billion and $17.34 billion at September 30, 2005, June 30, 2005, March 31, 2005, December 31, 2004, and September 30, 2004.

⁽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⁾Fair value of loans held for sale was $48.14 billion, $51.39 billion, $41.38 billion, $43.02 billion and $29.32 billion as of September 30, 2005, June 30, 2005, March 31, 2005, December 31, 2004, and September 30, 2004.

WM - 14

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

						Weighted				Weighted				Weighted
	Change from					Average				Average				Average
	June 30, 2005			Sept. 30,		Coupon		June 30,		Coupon		Sept. 30,		Coupon
	to Sept. 30, 2005			2005		Rate		2005		Rate		2004		Rate
Selected Loans Secured by Real Estate and MBS
Home loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs	$	1,330		$	67,863	5.44	%	$	66,533	5.06	%	$	66,530	3.96	%
Other ARMs	2,053			12,956		6.27		10,903		6.37		8,812		6.56
Total short-term adjustable-rate loans	3,383			80,819		5.57		77,436		5.24		75,342		4.26
Medium-term adjustable-rate loans(2)	111			43,610		5.58		43,499		5.53		45,060		5.40
Fixed-rate loans	(22		)	8,616		6.60		8,638		6.60		9,133		6.80
Total home loans held in portfolio	3,472			133,045		5.64		129,573		5.43		129,535		4.84
Home equity loans and lines of credit:
Short-term (Prime based or treasury based)(1)	513			37,328		6.76		36,815		6.16		30,875		4.66
Fixed-rate loans	1,104			12,738		6.45		11,634		6.37		9,630		6.35
Total home equity loans and lines of credit	1,617			50,066		6.68		48,449		6.21		40,505		5.06
Multi-family loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs	470			9,449		5.30		8,979		4.98		7,131		4.12
Other ARMs	139			6,451		5.49		6,312		5.13		5,356		4.24
Total short-term adjustable-rate loans	609			15,900		5.38		15,291		5.04		12,487		4.17
Medium-term adjustable-rate loans(2)	160			7,525		5.26		7,365		5.26		7,365		5.33
Fixed-rate loans	5			1,589		6.68		1,584		6.75		1,788		6.92
Total multi-family loans held in portfolio	774			25,014		5.42		24,240		5.22		21,640		4.79
Total selected loans held in portfolio secured by real estate(3)	5,863			208,125		5.87		202,262		5.59		191,680		4.88
Loans held for sale(4)	(3,098		)	47,888		5.34		50,986		5.12		29,061		4.87
Total selected loans secured by real estate	2,765			256,013		5.77		253,248		5.50		220,741		4.87
MBS(5):
Short-term adjustable-rate MBS(1)	602			10,289		4.58		9,687		4.15		8,675		3.30
Medium-term adjustable-rate MBS(2)	1,085			2,656		5.02		1,571		4.68		249		3.22
Fixed-rate MBS	1,105			4,216		5.25		3,111		5.20		780		6.47
Total MBS(6)	2,792			17,161		4.81		14,369		4.44		9,704		3.55
Total selected loans secured by real estate and MBS	$	5,557		$	273,174	5.71		$	267,617	5.44		$	230,445	4.82

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

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

⁽³⁾At September 30, 2005, June 30, 2005, and September 30, 2004, the adjustable-rate loans with lifetime caps were $182.35 billion, $177.53 billion, and $167.62 billion with a lifetime weighted average cap rate of 12.30%, 12.35% and 12.24%.

⁽⁴⁾Excludes student loans.

⁽⁵⁾Includes only those securities designated as available-for-sale.  Excludes principal-only strips and interest-only strips.

⁽⁶⁾At September 30, 2005, June 30, 2005 and September 30, 2004, the adjustable-rate MBS with lifetime caps were $12.74 billion, $11.10 billion and $8.87 billion with a lifetime weighted average cap rate of  10.19%, 10.15% and 10.55%.

	June 30, 2005			Dec. 31, 2004
	to Sept. 30, 2005			to Sept. 30, 2005
Rollforward of Loans Held for Sale
Balance, beginning of period	$	51,122		$	42,743
Loans originated, purchased and transferred from held in portfolio	45,049			128,186
Loans transferred to held in portfolio	(3,685		)	(6,366		)
Loans sold and other	(44,468		)	(116,545		)
Balance, end of period	$	48,018		$	48,018
Rollforward of Loans Held in Portfolio
Balance, beginning of period	$	212,737		$	207,071
Loans originated, purchased and transferred from held for sale	29,374			78,955
Loan payments, transferred to held for sale and other	(23,917		)	(67,832		)
Balance, end of period	$	218,194		$	218,194

WM - 15

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
Detail of Revenue from Sales and Servicing of Home Mortgage Loans	Sept. 30, 2005			June 30, 2005			Mar. 31, 2005			Dec. 31, 2004			Sept. 30, 2004
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments:
Gain from home mortgage loans and originated mortgage-backed securities	$	206		$	250		$	181		$	157		$	210
Revaluation gain (loss) from derivatives	73			(79		)	80			25			(23		)
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments	279			171			261			182			187
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue, net(1)	538			527			512			479			485
Amortization of MSR	(555		)	(564		)	(570		)	(636		)	(589		)
MSR valuation adjustments(2)	412			(77		)	539			257			165
Revaluation gain from derivatives	40			61			35			70			256
Home mortgage loan servicing revenue (expense), net of hedging and derivative risk management instruments	435			(53		)	516			170			317
Total revenue from sales and servicing of home mortgage loans	714			118			777			352			504
Impact of other MSR risk management instruments:
Revaluation gain (loss) from certain trading securities	(217		)	259			(109		)	36			45
Gain (loss) from certain available-for-sale securities	–			26			(44		)	(4		)	–
Total impact of other MSR risk management instruments	(217		)	285			(153		)	32			45
Total revenue from sales and servicing of home mortgage loans and all MSR risk management instruments	$	497		$	403		$	624		$	384		$	549

	Nine Months Ended
Detail of Revenue from Sales and Servicing of Home Mortgage Loans	Sept. 30, 2005			Sept. 30, 2004
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments:
Gain from home mortgage loans and originated mortgage-backed securities	$	637		$	494
Revaluation gain from derivatives	74			56
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments	711			550
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue, net(1)	1,576			1,464
Amortization of MSR	(1,689		)	(1,884		)
MSR valuation adjustments(2)	874			(493		)
Revaluation gain from derivatives	137			1,398
Home mortgage loan servicing revenue, net of hedging and derivative risk management instruments	898			485
Total revenue from sales and servicing of home mortgage loans	1,609			1,035
Impact of other MSR risk management instruments:
Revaluation gain (loss) from certain trading securities	(66		)	45
Gain (loss) from certain available-for-sale securities	(18		)	5
Total impact of other MSR risk management instruments	(84		)	50
Total revenue from sales and servicing of home mortgage loans and all MSR risk management instruments	$	1,525		$	1,085

⁽¹⁾Includes late charges, prepayment fees and loan pool expenses, which represent the shortfall of the scheduled interest required to be remitted to investors compared to what is collected from the borrowers upon payoff.

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

WM - 16

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30, 2005			June 30, 2005			Mar. 31, 2005			Dec. 31, 2004			Sept. 30, 2004
MSR Risk Management and Amortization:
Statement No. 133 MSR accounting valuation adjustments	$	849		$	(813	)	$	545		$	(123	)	$	(885	)
Amortization of MSR	(555		)	(564		)	(570		)	(636		)	(589		)
(Impairment) reversal	413			(250		)	427			179			(266		)
Net change in MSR valuation	707			(1,627		)	402			(580		)	(1,740		)
Gain (loss) on MSR hedging and risk management instruments:
Statement No. 133 fair value hedging adjustments	(850		)	986			(433		)	201			1,316
Revaluation gain from derivatives	40			61			35			70			256
Revaluation gain (loss) from certain trading securities	(217		)	259			(109		)	36			45
Gain (loss) from certain available-for-sale securities	–			26			(44		)	(4		)	–
Total gain (loss) on MSR hedging and risk management instruments	(1,027		)	1,332			(551		)	303			1,617
Total MSR risk management and amortization	$	(320	)	$	(295	)	$	(149	)	$	(277	)	$	(123	)

	Nine Months Ended
	Sept. 30, 2005			Sept. 30, 2004
MSR Risk Management and Amortization:
Statement No. 133 MSR accounting valuation adjustments	$	580		$	822
Amortization of MSR	(1,689		)	(1,884		)
(Impairment) reversal	590			(646		)
Net change in MSR valuation	(519		)	(1,708		)
Gain (loss) on MSR hedging and risk management instruments:
Statement No. 133 fair value hedging adjustments	(296		)	(669		)
Revaluation gain from derivatives	137			1,398
Revaluation gain (loss) from certain trading securities	(66		)	45
Gain (loss) from certain available-for-sale securities	(18		)	5
Total gain (loss) on MSR hedging and risk management instruments	(243		)	779
Total MSR risk management and amortization	$	(762	)	$	(929	)

WM - 17

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30, 2005			June 30, 2005			Mar. 31, 2005			Dec. 31, 2004			Sept. 30, 2004
Rollforward of Mortgage Servicing Rights(1)(2)
Balance, beginning of period	$	5,730		$	6,802		$	5,906		$	6,112		$	7,501
Home loans:
Additions	605			555			490			372			348
Amortization	(555		)	(564		)	(570		)	(636		)	(589		)
(Impairment) reversal	413			(250		)	427			179			(266		)
Statement No. 133 MSR accounting valuation adjustments	849			(813		)	545			(123		)	(885		)
Net change in commercial real estate MSR	–			–			4			2			3
Balance, end of period(3)	$	7,042		$	5,730		$	6,802		$	5,906		$	6,112
Rollforward of Valuation Allowance for MSR Impairment
Balance, beginning of period	$	1,746		$	1,513		$	1,981		$	2,653		$	2,417
Impairment (reversal)	(413		)	250			(427		)	(179		)	266
Other-than-temporary impairment	(18		)	(11		)	(34		)	(486		)	(22		)
Other	(3		)	(6		)	(7		)	(7		)	(8		)
Balance, end of period	$	1,312		$	1,746		$	1,513		$	1,981		$	2,653
Rollforward of Loans Serviced for Others
Balance, beginning of period	$	543,324		$	542,797		$	540,392		$	551,245		$	558,388
Home loans:
Additions	43,418			36,174			34,533			27,218			29,699
Loan payments and other	(39,005		)	(35,689		)	(32,861		)	(38,529		)	(37,035		)
Net change in commercial real estate loans serviced for others	(159		)	42			733			458			193
Balance, end of period	$	547,578		$	543,324		$	542,797		$	540,392		$	551,245

	Sept. 30, 2005		June 30, 2005		Mar. 31, 2005		Dec. 31, 2004		Sept. 30, 2004
Total Servicing Portfolio
Loans serviced for others	$	547,578	$	543,324	$	542,797	$	540,392	$	551,245
Servicing on retained MBS without MSR	1,487		1,592		1,702		1,808		2,713
Servicing on owned loans	245,165		243,494		233,738		229,879		217,592
Subservicing portfolio	749		825		421		461		502
Total servicing portfolio	$	794,979	$	789,235	$	778,658	$	772,540	$	772,052

	September 30, 2005
	Unpaid Principal Balance		Weighted Average Servicing Fee
			(in basis points, annualized)
Loans Serviced for Others by Loan Type
Government	$	47,920	46
Agency	328,101		31
Private	147,030		40
Specialty home loans	24,527		52
Total loans serviced for others(4)	$	547,578	36

⁽¹⁾Net of valuation allowance.

⁽²⁾MSR as a percentage of loans serviced for others was 1.29%, 1.05%, 1.25%, 1.09% and 1.11% at September 30, 2005, June 30, 2005, March 31, 2005, December 31, 2004, and September 30, 2004.

⁽³⁾At September 30, 2005, the aggregate MSR fair value was $7.06 billion.

⁽⁴⁾Weighted average coupon rate (annualized) was 5.86% at September 30, 2005.

WM - 18

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,			Mar. 31,				Dec. 31,			Sept. 30,
	2005			2005			2005				2004			2004
Allowance for Loan and Lease Losses
Balance, beginning of quarter	$	1,243		$	1,280		$		1,301		$	1,322		$		1,293
Other	–			(29		)	–				(20		)	–
Provision for loan and lease losses	52			31			16				37			56
	1,295			1,282			1,317				1,339			1,349
Loans charged off:
Loans secured by real estate:
Home	(9		)	(11		)	(11			)	(9		)	(6			)
Specialty mortgage finance(1)	(15		)	(11		)	(10			)	(10		)	(11			)
Total home loans charged off	(24		)	(22		)	(21			)	(19		)	(17			)
Home equity loans and lines of credit	(10		)	(8		)	(5			)	(3		)	(6			)
Home construction(2)	–			(2		)	–				(1		)	–
Multi-family	–			(1		)	–				(2		)	–
Other real estate	(4		)	(2		)	(1			)	(1		)	(1			)
Total loans secured by real estate	(38		)	(35		)	(27			)	(26		)	(24			)
Consumer	(8		)	(9		)	(13			)	(17		)	(11			)
Commercial business	(4		)	(8		)	(6			)	(8		)	(4			)
Total loans charged off	(50		)	(52		)	(46			)	(51		)	(39			)
Recoveries of loans previously charged off:
Loans secured by real estate:
Specialty mortgage finance(1)	1			1			1				1			1
Home equity loans and lines of credit	1			1			–				2			–
Multi-family	2			–			–				–			1
Other real estate	8			3			1				2			2
Total loans secured by real estate	12			5			2				5			4
Consumer	5			6			5				4			5
Commercial business	2			2			2				4			3
Total recoveries of loans previously charged off	19			13			9				13			12
Net charge-offs	(31		)	(39		)	(37			)	(38		)	(27			)
Balance, end of quarter	$	1,264		$	1,243		$	1,280			$	1,301		$	1,322
Net charge-offs (annualized) as a percentage of average loans held in portfolio	0.06		%	0.07		%	0.07			%	0.07		%	0.05			%
Allowance as a percentage of total loans held in portfolio	0.58			0.58			0.60				0.63			0.64

⁽¹⁾Represents purchased subprime loan portfolios and mortgages originated by Long Beach Mortgage Company that are designated as held for investment.

⁽²⁾Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

WM - 19

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2005			2005			2005			2004			2004
Nonperforming Assets and Restructured Loans
Nonaccrual loans(1):
Loans secured by real estate:
Home	$	472		$	495		$	495		$	534		$	529
Specialty mortgage finance(2)	755			692			734			682			617
Total home nonaccrual loans	1,227			1,187			1,229			1,216			1,146
Home equity loans and lines of credit	68			67			74			66			50
Home construction(3)	10			11			25			28			31
Multi-family	18			15			15			12			23
Other real estate	69			116			159			162			173
Total nonaccrual loans secured by real estate	1,392			1,396			1,502			1,484			1,423
Consumer	8			8			8			9			11
Commercial business	65			59			59			41			37
Total nonaccrual loans held in portfolio	1,465			1,463			1,569			1,534			1,471
Foreclosed assets	256			256			264			261			281
Total nonperforming assets	$	1,721		$	1,719		$	1,833		$	1,795		$	1,752
As a percentage of total assets	0.52		%	0.53		%	0.57		%	0.58		%	0.61		%
Restructured loans	$	25		$	25		$	27		$	34		$	38
Total nonperforming assets and restructured loans	$	1,746		$	1,744		$	1,860		$	1,829		$	1,790

⁽¹⁾Excludes nonaccrual loans held for sale of $152 million at September 30, 2005. Prior periods also reflect the exclusion of nonaccrual loans held for sale of $108 million, $112 million, $76 million and $84 million at June 30, 2005, March 31, 2005, December 31, 2004 and September 30, 2004. Loans held for sale are accounted for at lower of aggregate cost or market value, with valuation changes included as adjustments to gain from mortgage loans.

⁽²⁾Represents purchased subprime loan portfolios and mortgages originated by Long Beach Mortgage Company that are designated as held for investment.

⁽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.