Mr. Cooper (COOP) 8-K Results Included Charges Associated with the Sale of Mortgage Servicing Rights

Exhibit 99.2

WM-1

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions, except per share data)

(unaudited)

	Quarter Ended															Nine Months Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2006			2006			2006			2005			2005			2006			2005
PROFITABILITY
Net income	$	748		$	767		$	985		$	865		$	821		$	2,501		$	2,567
Net interest income		1,947			2,060			2,117			2,241			2,005			6,123			5,977
Noninterest income		1,570			1,578			1,638			1,526			1,208			4,786			3,572
Noninterest expense		2,184			2,229			2,138			2,214			1,860			6,551			5,407
Diluted earnings per common share:
Income from continuing operations	$	0.76		$	0.78		$	0.97		$	0.84		$	0.91		$	2.51		$	2.86
Income from discontinued operations		0.01			0.01			0.01			0.01			0.01			0.03			0.03
Net income		0.77			0.79			0.98			0.85			0.92			2.54			2.89
Diluted weighted average number of common shares outstanding(1)		967,376			975,504			1,003,460			1,011,395			888,495			981,997			888,184
Net interest margin		2.53	%		2.65	%		2.75	%		2.88	%		2.73	%		2.64	%		2.77	%
Dividends declared per common share		0.52			0.51			0.50			0.49			0.48			1.53			1.41
Book value per common share(2)(3)		28.17			27.31			27.10			27.61			25.54			28.17			25.54
Return on average assets(4)		0.86	%		0.88	%		1.15	%		0.99	%		1.00	%		0.96	%		1.07	%
Return on average common equity(4)		11.47			11.82			14.69			12.85			14.88			12.68			15.77
Efficiency ratio(5)(6)		62.09			61.27			56.95			58.75			57.88			60.05			56.62
ASSET QUALITY
Nonperforming assets(7) to total assets(3)		0.69	%		0.62	%		0.59	%		0.57	%		0.52	%		0.69	%		0.52	%
Allowance as a percentage of total loans held in portfolio(3)		0.64			0.68			0.68			0.74			0.58			0.64			0.58
Provision for loan and lease losses	$	166		$	224		$	82		$	217		$	52		$	472		$	99
Net charge-offs		154			116			105			137			31			375			107
CAPITAL ADEQUACY(3)
Capital Ratios at WMI-consolidated level:
Tangible equity(8) to total tangible assets(8)		5.86	%		5.84	%		5.75	%		5.62	%		4.99	%		5.86	%		4.99	%
Estimated total risk-based capital to total risk-weighted assets(9)		11.16			11.26			10.77			10.80			10.56			11.16			10.56
Capital Ratios at WMB-bank only level
(well-capitalized minimum)(10):
Tier 1 capital to adjusted total assets (5.00%)		6.46			6.33			6.76			6.47			5.76			6.46			5.76
Adjusted tier 1 capital to total risk-weighted assets (6.00%)		8.17			8.13			8.92			8.49			8.34			8.17			8.34
Total risk-based capital to total risk-weighted assets (10.00%)		11.37			11.39			11.82			11.50			11.35			11.37			11.35
SUPPLEMENTAL DATA
Average balance sheet:
Total loans held in portfolio	$	242,165		$	242,334		$	232,505		$	227,568		$	213,016		$	239,037		$	211,346
Total interest-earning assets(5)		312,827			313,239			307,777			314,490			296,529			311,300			288,203
Total assets		349,542			348,664			343,660			349,172			326,955			347,310			318,503
Total deposits		208,912			200,252			191,034			196,799			188,320			200,131			182,390
Total stockholders' equity		26,147			25,958			26,825			26,949			22,075			26,308			21,701
Period-end balance sheet:
Total loans held in portfolio, net of allowance for loan and lease losses		240,215			241,840			238,362			227,937			216,930			240,215			216,930
Total assets		348,877			350,884			348,401			343,573			333,285			348,877			333,285
Total deposits		210,882			204,558			200,002			193,167			190,412			210,882			190,412
Total stockholders' equity		26,458			26,131			25,819			27,279			22,259			26,458			22,259
Common shares outstanding at the end of period(1)(11)		945,098			962,880			958,819			993,914			877,651			945,098			877,651
Employees at end of period		51,056			56,247			60,381			60,798			56,214			51,056			56,214

______________________________________

⁽¹⁾ Number of shares in thousands.

⁽²⁾ Excludes six million shares held in escrow for all periods reported.

⁽³⁾ As of period end.

⁽⁴⁾ Includes income from continuing and discontinued operations.

⁽⁵⁾ Based on continuing operations.

⁽⁶⁾ The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income).

⁽⁷⁾ Excludes nonaccrual loans held for sale.

⁽⁸⁾ Excludes unrealized net gain/loss on available-for-sale securities and derivatives, goodwill and intangible assets (except MSR). Minority interests of $1.96 billion for September 30, 2006 and June 30, 2006 and $1.97 billion for March 31, 2006 are included in the numerator.

⁽⁹⁾ The total risk-based capital ratio is estimated as if Washington Mutual, Inc. were a bank holding company subject to Federal Reserve Board capital requirements.

⁽¹⁰⁾ Capital ratios for Washington Mutual Bank ("WMB") at September 30, 2006 are preliminary.

⁽¹¹⁾ Includes six million shares held in escrow for all periods reported.

WM-2

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,
	2006			2006			2006			2005			2005
Interest Income
Loans held for sale	$	439		$	398		$	466		$	676		$	665
Loans held in portfolio		4,008			3,884			3,576			3,431			2,947
Available-for-sale securities		379			368			322			303			238
Trading assets		140			165			198			185			114
Other interest and dividend income		139			120			95			73			65
Total interest income		5,105			4,935			4,657			4,668			4,029
Interest Expense
Deposits		1,739			1,461			1,221			1,184			996
Borrowings		1,419			1,414			1,319			1,243			1,028
Total interest expense		3,158			2,875			2,540			2,427			2,024
Net interest income		1,947			2,060			2,117			2,241			2,005
Provision for loan and lease losses		166			224			82			217			52
Net interest income after provision for loan and lease losses		1,781			1,836			2,035			2,024			1,953
Noninterest Income
Revenue from sales and servicing of home mortgage loans		118			222			263			418			710
Revenue from sales and servicing of consumer loans		355			424			376			409			2
Depositor and other retail banking fees		655			641			578			586			578
Credit card fees		165			152			138			139			-
Securities fees and commissions		52			56			52			47			48
Insurance income		31			33			33			37			42
Trading assets income (loss)		68			(129	)		(13	)		(273	)		(171	)
Gain (loss) from sales of other available-for-sale securities		(1	)		-			(7	)		46			(32	)
Other income		127			179			218			117			31
Total noninterest income		1,570			1,578			1,638			1,526			1,208
Noninterest Expense
Compensation and benefits(1)		939			1,021			1,032			1,028			930
Occupancy and equipment		408			435			391			399			372
Telecommunications and outsourced information services		142			145			134			139			107
Depositor and other retail banking losses		57			51			56			60			61
Advertising and promotion		124			117			95			109			78
Professional fees		57			45			36			62			47
Other expense		457			415			394			417			265
Total noninterest expense		2,184			2,229			2,138			2,214			1,860
Minority interest expense		34			37			-			-			-
Income from continuing operations before income taxes		1,133			1,148			1,535			1,336			1,301
Income taxes		394			389			559			479			488
Income from continuing operations, net of taxes		739			759			976			857			813
Discontinued Operations(2)
Income from discontinued operations before income taxes		14			12			15			12			12
Income taxes		5			4			6			4			4
Income from discontinued operations, net of taxes		9			8			9			8			8
Net Income	$	748		$	767		$	985		$	865		$	821
Basic Earnings Per Common Share:
Income from continuing operations	$	0.78		$	0.80		$	1.00		$	0.87		$	0.94
Income from discontinued operations		0.01			0.01			0.01			0.01			0.01
Net income		0.79			0.81			1.01			0.88			0.95
Diluted Earnings Per Common Share:
Income from continuing operations	$	0.76		$	0.78		$	0.97		$	0.84		$	0.91
Income from discontinued operations		0.01			0.01			0.01			0.01			0.01
Net income		0.77			0.79			0.98			0.85			0.92
Dividends declared per common share		0.52			0.51			0.50			0.49			0.48
Basic weighted average number of common shares outstanding (in thousands)		941,898			947,023			973,614			980,084			866,541
Diluted weighted average number of common shares outstanding (in thousands)		967,376			975,504			1,003,460			1,011,395			888,495

________________________________

⁽¹⁾ As of January 1, 2006, the Company applied Statement of Financial Accounting Standards ("Statement") No. 123R, Share-Based Payment. Statement No. 123R requires an entity that previously had a policy of recognizing the effect of forfeitures as they occurred to estimate the number of outstanding instruments for which the requisite service is not expected to be rendered. The effect of this change in accounting principle amounted to $25 million and has been reflected as a decrease to compensation and benefits expense in the first quarter of 2006.

⁽²⁾  Represents the operations of the Company's asset management unit, WM Advisors, Inc.

WM-3

Washington Mutual, Inc.

Consolidated Statements of Income

(dollars in millions, except per share data)

(unaudited)

	Nine Months Ended
	Sept. 30,			Sept. 30,
	2006			2005
Interest Income
Loans held for sale	$	1,304		$	1,719
Loans held in portfolio		11,468			8,395
Available-for-sale securities		1,068			695
Trading assets		503			284
Other interest and dividend income		354			159
Total interest income		14,697			11,252
Interest Expense
Deposits		4,420			2,544
Borrowings		4,154			2,731
Total interest expense		8,574			5,275
Net interest income		6,123			5,977
Provision for loan and lease losses		472			99
Net interest income after provision for loan and lease losses		5,651			5,878
Noninterest Income
Revenue from sales and servicing of home mortgage loans		603			1,600
Revenue from sales and servicing of consumer loans		1,155			4
Depositor and other retail banking fees		1,875			1,608
Credit card fees		456			-
Securities fees and commissions		161			142
Insurance income		97			135
Trading assets income (loss)		(74	)		15
Loss from sales of other available-for-sale securities		(8	)		(129	)
Other income		521			197
Total noninterest income		4,786			3,572
Noninterest Expense
Compensation and benefits(1)		2,992			2,673
Occupancy and equipment		1,235			1,122
Telecommunications and outsourced information services		421			310
Depositor and other retail banking losses		165			165
Advertising and promotion		335			206
Professional fees		138			119
Other expense		1,265			812
Total noninterest expense		6,551			5,407
Minority interest expense		71			-
Income from continuing operations before income taxes		3,815			4,043
Income taxes		1,341			1,507
Income from continuing operations, net of taxes		2,474			2,536
Discontinued Operations(2)
Income from discontinued operations before income taxes		42			47
Income taxes		15			16
Income from discontinued operations, net of taxes		27			31
Net Income	$	2,501		$	2,567
Basic Earnings Per Common Share:
Income from continuing operations	$	2.59		$	2.93
Income from discontinued operations		0.03			0.04
Net income		2.62			2.97
Diluted Earnings Per Common Share:
Income from continuing operations	$	2.51		$	2.86
Income from discontinued operations		0.03			0.03
Net income		2.54			2.89
Dividends declared per common share		1.53			1.41
Basic weighted average number of common shares outstanding (in thousands)		954,062			865,571
Diluted weighted average number of common shares outstanding (in thousands)		981,997			888,184

________________________________ 

⁽¹⁾ As of January 1, 2006, the Company applied Statement of Financial Accounting Standards ("Statement") No. 123R, Share-Based Payment. Statement No. 123R requires an entity that previously had a policy of recognizing the effect of forfeitures as they occurred to estimate the number of outstanding instruments for which the requisite service is not expected to be rendered. The effect of this change in accounting principle amounted to $25 million and has been reflected as a decrease to compensation and benefits expense in the first quarter of 2006.

⁽²⁾ Represents the operations of the Company's asset management unit, WM Advisors, Inc.

WM-4

Washington Mutual, Inc.

Consolidated Statements of Financial Condition

(dollars in millions)

(unaudited)

	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2006			2006			2006			2005			2005
Assets
Cash and cash equivalents	$	6,649		$	6,675		$	5,868		$	6,214		$	4,924
Federal funds sold and securities purchased under agreements to resell		5,102			4,112			3,995			2,137			3,194
Trading assets		5,391			7,445			9,958			10,999			7,351
Available-for-sale securities, total amortized cost of $29,136, $28,504,
$27,424, $24,810, and $20,757:
Mortgage-backed securities		22,353			21,438			21,388			20,648			17,161
Investment securities		6,664			6,358			5,586			4,011			3,603
Total available-for-sale securities		29,017			27,796			26,974			24,659			20,764
Loans held for sale		23,720			23,342			25,020			33,582			48,018
Loans held in portfolio		241,765			243,503			240,004			229,632			218,194
Allowance for loan and lease losses		(1,550	)		(1,663	)		(1,642	)		(1,695	)		(1,264	)
Total loans held in portfolio, net of allowance for loan and lease losses		240,215			241,840			238,362			227,937			216,930
Investment in Federal Home Loan Banks		3,013			3,500			4,200			4,257			4,228
Mortgage servicing rights		6,288			9,162			8,736			8,041			7,042
Goodwill		8,368			8,339			8,298			8,298			6,196
Other assets		21,114			18,673			16,990			17,449			14,638
Total assets	$	348,877		$	350,884		$	348,401		$	343,573		$	333,285
Liabilities
Deposits:
Noninterest-bearing deposits	$	34,667		$	35,457		$	36,531		$	34,014		$	36,850
Interest-bearing deposits		176,215			169,101			163,471			159,153			153,562
Total deposits		210,882			204,558			200,002			193,167			190,412
Federal funds purchased and commercial paper		5,282			6,138			6,841			7,081			7,229
Securities sold under agreements to repurchase		13,665			19,866			15,471			15,532			14,508
Advances from Federal Home Loan Banks		47,247			55,311			65,283			68,771			69,405
Other borrowings		33,883			27,995			24,872			23,777			23,994
Other liabilities		9,501			8,926			8,140			7,951			5,463
Minority interests(1)		1,959			1,959			1,973			15			15
Total liabilities		322,419			324,753			322,582			316,294			311,026
Stockholders' equity		26,458			26,131			25,819			27,279			22,259
Total liabilities and stockholders' equity	$	348,877		$	350,884		$	348,401		$	343,573		$	333,285

⁽¹⁾  Primarily comprises perpetual non-cumulative preferred securities issued in March 2006 by Washington Mutual Preferred Funding, LLC, an indirect subsidiary of Washington Mutual, Inc.

WM-5

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2006			2006			2006			2005			2005
Stockholders' Equity Rollforward
Balance, beginning of period	$	26,131		$	25,819		$	27,279		$	22,259		$	22,013
Net income		748			767			985			865			821
Cumulative effect from the adoption of Statement No. 156, net of income taxes(1)		-			-			35			-			-
Other comprehensive income (loss), net of income taxes		419			(151	)		(219	)		(91	)		(158	)
Cash dividends declared on common stock		(497	)		(486	)		(499	)		(480	)		(419	)
Common stock repurchased and retired		(930	)		-			(2,108	)		(723	)		(98	)
Common stock issued for acquisition		-			-			-			5,030			-
Common stock issued		95			182			346			419			100
Preferred stock issued		492			-			-			-			-
Balance, end of period	$	26,458		$	26,131		$	25,819		$	27,279		$	22,259

⁽¹⁾ As of January 1, 2006, the Company prospectively applied Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets ("Statement"). This Statement amends Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and permits an entity to choose either to continue the practice of amortizing servicing assets and assess such assets for impairment, or to report servicing assets at fair value. The Company has elected to report all classes of servicing assets at fair value. This Statement also permits the one-time transfer of available-for-sale securities being utilized as MSR risk management instruments to trading securities. The cumulative effects, net of income taxes, resulted in a $29 million increase to January 1, 2006 retained earnings from the MSR fair value election and a $6 million increase to January 1, 2006 accumulated other comprehensive income from the transfer of AFS securities, designated as MSR risk management instruments, to the trading portfolio.

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,
	2006			2006			2006			2005			2005			2006			2005
RETAIL BANKING GROUP
Condensed income statement:
Net interest income	$	1,444		$	1,509		$	1,523		$	1,457		$	1,417		$	4,475		$	4,275
Provision for loan and lease losses		58			37			50			42			47			146			123
Noninterest income		756			732			674			689			653			2,162			1,845
Inter-segment revenue		16			19			14			8			12			50			34
Noninterest expense		1,105			1,141			1,113			1,124			1,080			3,360			3,136
Income from continuing operations before income taxes		1,053			1,082			1,048			988			955			3,181			2,895
Income taxes		402			414			401			372			363			1,215			1,097
Income from continuing operations		651			668			647			616			592			1,966			1,798
Income from discontinued operations, net of taxes		9			8			9			8			8			27			31
Net income	$	660		$	676		$	656		$	624		$	600		$	1,993		$	1,829
Performance and other data:
Efficiency ratio(1)		49.89	%		50.48	%		50.36	%		52.14	%		51.90	%		50.24	%		50.95	%
Average loans	$	192,445		$	195,994		$	189,142		$	183,780		$	179,361		$	192,539		$	179,447
Average assets		205,063			208,870			202,224			196,824			191,865			205,396			192,190
Average deposits:
Checking deposits:
Noninterest bearing		21,440			21,418			20,346			19,953			19,350			21,072			18,609
Interest bearing		34,792			37,518			40,343			43,192			45,186			37,531			47,481
Total checking deposits		56,232			58,936			60,689			63,145			64,536			58,603			66,090
Savings and money market deposits		38,317			38,143			37,433			36,594			35,517			37,967			35,495
Time deposits		45,405			41,724			40,940			40,473			38,688			42,706			34,190
Average total deposits		139,954			138,803			139,062			140,212			138,741			139,276			135,775
Loan volume		9,006			10,488			7,255			11,563			11,191			26,749			35,388
Employees at end of period		29,624			33,211			34,649			34,637			33,754			29,624			33,754
CARD SERVICES GROUP
Managed basis(2)
Condensed income statement:
Net interest income	$	627		$	610		$	614		$	637					$	1,850
Provision for loan and lease losses		345			417			330			454						1,092
Noninterest income		343			387			345			352						1,076
Inter-segment expense		1			1			-			-						3
Noninterest expense		284			283			289			268						855
Income before income taxes		340			296			340			267						976
Income taxes		130			113			130			101						373
Net income	$	210		$	183		$	210		$	166					$	603
Performance and other data:
Efficiency ratio (1)		29.30	%		28.33	%		30.16	%		27.08	%					29.25	%
Average loans	$	21,706		$	20,474		$	20,086		$	19,472					$	20,762
Average assets		24,236			23,044			22,764			22,198						23,354
Employees at end of period		2,755			2,620			2,871			3,124						2,755
Securitization adjustments
Condensed income statement:
Net interest income	$	(411	)	$	(405	)	$	(432	)	$	(409	)				$	(1,249	)
Provision for loan and lease losses		(220	)		(217	)		(225	)		(259	)					(662	)
Noninterest income		191			188			207			150						587
Performance and other data:
Average loans		(12,169	)		(11,565	)		(12,107	)		(11,011	)					(11,947	)
Average assets		(10,330	)		(9,753	)		(10,219	)		(9,267	)					(10,101	)
Adjusted basis
Condensed income statement:
Net interest income	$	216		$	205		$	182		$	228					$	601
Provision for loan and lease losses		125			200			105			195						430
Noninterest income		534			575			552			502						1,663
Inter-segment expense		1			1			-			-						3
Noninterest expense		284			283			289			268						855
Income before income taxes		340			296			340			267						976
Income taxes		130			113			130			101						373
Net income	$	210		$	183		$	210		$	166					$	603
Performance and other data:
Average loans	$	9,537		$	8,909		$	7,979		$	8,461					$	8,815
Average assets		13,906			13,291			12,545			12,931						13,253
COMMERCIAL GROUP(3)
Condensed income statement:
Net interest income	$	198		$	203		$	199		$	222		$	222		$	600		$	668
Provision for loan and lease losses		1			1			1			1			1			3			3
Noninterest income		25			17			13			109			8			54			86
Noninterest expense		59			57			68			66			63			184			174
Income before income taxes		163			162			143			264			166			467			577
Income taxes		62			62			54			100			62			178			218
Net income	$	101		$	100		$	89		$	164		$	104		$	289		$	359
Performance and other data:
Efficiency ratio(1)		26.57	%		25.99	%		32.24	%		19.82	%		27.45	%		28.20	%		23.12	%
Average loans	$	32,414		$	31,505		$	31,011		$	30,928		$	30,433		$	31,648		$	29,894
Average assets		34,794			34,188			34,093			34,638			34,001			34,361			33,374
Average deposits		2,323			2,243			2,263			2,428			2,485			2,276			2,646
Loan volume		3,104			2,961			2,769			2,932			3,003			8,835			8,300
Employees at end of period		1,246			1,256			1,332			1,319			1,259			1,246			1,259
(This table is continued on "WM-7".)

______________________________________

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

⁽²⁾ The managed basis presentation treats securitized and sold credit card receivables as if they were still on the balance sheet. The Company uses this basis in assessing the overall performance of this operating segment. Under this presentation, loans securitized and  sold are added back to the balance sheet and the related interest, fee income and credit losses are added back to the income statement. These securitization adjustments are eliminated in the reconciliation of management accounting methodologies to the Company's GAAP financial results.

⁽³⁾ Effective January 1, 2006, the Company reorganized its single family residential mortgage lending operations. This reorganization combined the Company's subprime mortgage origination business, Long Beach Mortgage, as well as its Mortgage Banker Finance lending operations with the Home Loans Group. Previously, these operations were reported within the Commercial Group. This change in organization was retrospectively applied to prior periods.

 

WM-7

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended															Nine Months Ended
(This table is continued from "WM-6".)	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2006			2006			2006			2005			2005			2006			2005
HOME LOANS GROUP(1)
Condensed income statement:
Net interest income	$	206		$	206		$	269		$	415		$	480		$	682		$	1,330
Provision for loan and lease losses		3			1			1			1			1			5			3
Noninterest income		263			453			408			324			659			1,123			2,074
Inter-segment expense		15			18			14			8			12			47			34
Noninterest expense		504			589			599			656			641			1,692			1,888
Income (loss) before income taxes		(53	)		51			63			74			485			61			1,479
Income taxes (benefit)		(20	)		20			24			29			183			24			558
Net income (loss)	$	(33	)	$	31		$	39		$	45		$	302		$	37		$	921
Performance and other data:
Efficiency ratio(2)		110.99	%		91.93	%		90.26	%		89.50	%		56.68	%		96.22	%		56.04	%
Average loans	$	33,718		$	30,742		$	34,586		$	51,073		$	53,424		$	33,012		$	46,842
Average assets		59,110			58,439			64,171			78,365			75,138			60,555			68,419
Average deposits		20,659			20,124			16,530			19,134			21,563			19,120			19,379
Loan volume		37,200			41,364			44,998			48,701			56,471			123,562			153,996
Employees at end of period		12,598			14,028			16,091			16,193			15,685			12,598			15,685
CORPORATE SUPPORT/TREASURY AND OTHER
Condensed income statement:
Net interest expense	$	(244	)	$	(182	)	$	(175	)	$	(196	)	$	(229	)	$	(602	)	$	(639	)
Noninterest income (expense)		79			(81	)		153			20			(62	)		152			(151	)
Noninterest expense		232			159			69			100			76			460			209
Minority interest expense		34			37			-			-			-			71			-
Loss before income taxes		(431	)		(459	)		(91	)		(276	)		(367	)		(981	)		(999	)
Income tax benefit		(172	)		(175	)		(51	)		(111	)		(150	)		(397	)		(408	)
Net income (loss)	$	(259	)	$	(284	)	$	(40	)	$	(165	)	$	(217	)	$	(584	)	$	(591	)
Performance and other data:
Average loans	$	1,245		$	1,178		$	1,142		$	1,148		$	1,095		$	1,188		$	1,066
Average assets		38,245			35,428			32,328			28,130			27,678			35,354			26,284
Average deposits		45,976			39,082			33,179			35,025			25,531			39,459			24,590
Loan volume		58			82			24			96			67			163			181
Employees at end of period		4,833			5,132			5,438			5,525			5,516			4,833			5,516
RECONCILING ADJUSTMENTS
Condensed income statement:
Net interest income(3)	$	127		$	119		$	119		$	115		$	115		$	367		$	343
Provision (reversal of reserve) for loan and lease losses(4)		(21	)		(15	)		(75	)		(22	)		3			(112	)		(30	)
Noninterest income (expense)(5)		(87	)		(118	)		(162	)		(118	)		(50	)		(368	)		(282	)
Income before income taxes		61			16			32			19			62			111			91
Income taxes (benefit)(6)		(8	)		(45	)		1			(12	)		30			(52	)		42
Net income	$	69		$	61		$	31		$	31		$	32		$	163		$	49
Performance and other data:
Average loans(7)	$	(1,527	)	$	(1,458	)	$	(1,534	)	$	(1,516	)	$	(1,550	)	$	(1,506	)	$	(1,549	)
Average assets(7)(8)		(1,576	)		(1,552	)		(1,701	)		(1,716	)		(1,727	)		(1,609	)		(1,764	)
TOTAL CONSOLIDATED
Condensed income statement:
Net interest income	$	1,947		$	2,060		$	2,117		$	2,241		$	2,005		$	6,123		$	5,977
Provision for loan and lease losses		166			224			82			217			52			472			99
Noninterest income		1,570			1,578			1,638			1,526			1,208			4,786			3,572
Noninterest expense		2,184			2,229			2,138			2,214			1,860			6,551			5,407
Minority interest expense		34			37			-			-			-			71			-
Income from continuing operations before income taxes		1,133			1,148			1,535			1,336			1,301			3,815			4,043
Income taxes		394			389			559			479			488			1,341			1,507
Income from continuing operations		739			759			976			857			813			2,474			2,536
Income from discontinued operations, net of taxes		9			8			9			8			8			27			31
Net income	$	748		$	767		$	985		$	865		$	821		$	2,501		$	2,567
Performance and other data:
Efficiency ratio(2)		62.09	%		61.27	%		56.95	%		58.75	%		57.88	%		60.05	%		56.62	%
Average loans	$	267,832		$	266,870		$	262,326		$	273,874		$	262,763		$	265,696		$	255,700
Average assets		349,542			348,664			343,660			349,172			326,955			347,310			318,503
Average deposits		208,912			200,252			191,034			196,799			188,320			200,131			182,390
Loan volume		49,368			54,895			55,046			63,292			70,732			159,309			197,865
Employees at end of period		51,056			56,247			60,381			60,798			56,214			51,056			56,214

______________________________________

⁽¹⁾ See note 3 on preceding table.

⁽²⁾ See note 1 on preceding table.

⁽³⁾ Represents the difference between home loan premium amortization recorded by the Retail Banking Group and the amount recognized in the Company's Consolidated Statements of Income. For management reporting purposes, loans that are held in portfolio by the Retail Banking Group are treated as if they are purchased from the Home Loans Group. Since the cost basis of these loans includes an assumed profit factor paid to the Home Loans Group, the amortization of loan premiums recorded by the Retail Banking Group reflects this assumed profit factor and must therefore be eliminated as a reconciling adjustment.

⁽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 financial accounting methodology that is used to estimate incurred credit losses inherent in the Company's loan portfolio.

⁽⁵⁾ Represents the difference between gain from mortgage loans primarily recorded by the Home Loans Group and the gain from mortgage loans recognized in the Company's Consolidated Statements of Income. A substantial amount of loans originated or purchased by this segment are considered to be salable for management reporting purposes.

⁽⁶⁾ Represents the tax effect of reconciling adjustments.

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

⁽⁸⁾ Includes the impact to the allowance for 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 financial accounting methodology that is used to estimate incurred credit losses inherent in the Company's loan portfolio.

Quarter Ended					Nine Months Ended
Sept. 30,	June 30,	Mar. 31,	Dec. 31,	Sept. 30,	Sept. 30,	Sept. 30,
2006	2006	2006	2005	2005	2006	2005
$(49)	$(94)	$(167)	$(200)	$(177)	$(103)	$(215)

WM-8

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30, 2006							June 30, 2006							Sept. 30, 2005
						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	$	5,085		5.38	%	$	70	$	4,413		4.99	%	$	56	$	2,891		3.52	%	$	26
Trading assets		6,264		8.92			140		8,595		7.69			165		6,532		6.97			114
Available-for-sale securities(1):
Mortgage-backed securities		21,488		5.41			291		21,840		5.34			292		15,666		4.72			185
Investment securities		6,910		5.06			88		6,215		4.91			76		4,321		4.94			53
Loans held for sale(2)		25,667		6.82			439		24,536		6.48			398		49,747		5.33			665
Loans held in portfolio(2):
Loans secured by real estate:
Home(3)		123,355		5.92			1,826		125,559		5.77			1,809		108,783		5.05			1,374
Specialty mortgage finance(4)		19,600		6.14			301		19,603		6.19			304		20,298		5.89			299
Total home loans		142,955		5.95			2,127		145,162		5.82			2,113		129,081		5.18			1,673
Home equity loans and lines of credit		53,253		7.59			1,017		52,262		7.29			950		49,237		6.17			765
Home construction(5)		2,059		6.41			33		2,068		6.47			33		2,001		6.31			32
Multi-family		27,100		6.42			435		26,291		6.23			410		24,550		5.49			337
Other real estate		5,696		6.76			98		5,585		6.97			98		4,904		7.32			91
Total loans secured by real estate		231,063		6.41			3,710		231,368		6.23			3,604		209,773		5.51			2,898
Consumer:
Credit card		9,058		11.39			260		8,448		11.28			238		-		-			-
Other		284		12.57			9		594		9.74			14		686		10.67			18
Commercial		1,760		6.41			29		1,924		5.87			28		2,557		4.78			31
Total loans held in portfolio		242,165		6.60			4,008		242,334		6.42			3,884		213,016		5.52			2,947
Other(6)		5,248		5.21			69		5,306		4.80			64		4,356		3.52			39
Total interest-earning assets		312,827		6.51			5,105		313,239		6.30			4,935		296,529		5.42			4,029
Noninterest-earning assets:
Mortgage servicing rights		7,201							9,003							6,408
Goodwill		8,339							8,302							6,196
Other assets(7)		21,175							18,120							17,822
Total assets	$	349,542						$	348,664						$	326,955
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	34,866		2.90			255	$	37,603		2.61			245	$	45,305		2.12			242
Savings and money market deposits		49,144		3.19			396		48,095		2.82			339		42,944		1.92			208
Time deposits		90,001		4.77			1,088		79,541		4.39			877		63,338		3.41			546
Total interest-bearing deposits		174,011		3.95			1,739		165,239		3.53			1,461		151,587		2.60			996
Federal funds purchased and commercial paper		7,382		5.31			99		7,767		4.97			97		6,719		3.60			61
Securities sold under agreements to repurchase		15,676		5.39			216		17,923		4.97			225		13,159		3.65			123
Advances from Federal Home Loan Banks		52,886		5.28			711		60,862		4.85			745		68,597		3.54			620
Other		27,815		5.59			393		26,239		5.27			347		21,734		4.12			224
Total interest-bearing liabilities		277,770		4.48			3,158		278,030		4.12			2,875		261,796		3.05			2,024
Noninterest-bearing sources:
Noninterest-bearing deposits		34,901							35,013							36,733
Other liabilities(8)		8,765							7,698							6,337
Minority interests		1,959							1,965							14
Stockholders' equity		26,147							25,958							22,075
Total liabilities and stockholders' equity	$	349,542						$	348,664						$	326,955
Net interest spread and net interest income				2.03		$	1,947				2.18		$	2,060				2.37		$	2,005
Impact of noninterest-bearing sources				0.50							0.47							0.36
Net interest margin				2.53							2.65							2.73

^{_____________________________________________}

⁽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⁾ Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $278 million, $239 million and $86 million for the three months ended September 30, 2006, June 30, 2006 and September 30, 2005.

⁽⁴⁾ Represents purchased subprime home loan portfolios and subprime home loans originated by Long Beach Mortgage held in portfolio.

⁽⁵⁾ Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

⁽⁶⁾ Interest-earning assets in nonaccrual status (other than loans) and related income, if any, are included within this category.

⁽⁷⁾ Includes assets of discontinued operations.

⁽⁸⁾ Includes liabilities of discontinued operations.

WM-9

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Nine Months Ended
	Sept. 30, 2006							Sept. 30, 2005
						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	$	4,422		5.04	%	$	169	$	2,078		3.13	%	$	50
Trading assets		8,831		7.60			503		6,169		6.15			284
Available-for-sale securities(1):
Mortgage-backed securities		21,163		5.35			848		15,407		4.61			533
Investment securities		5,997		4.88			220		4,569		4.74			162
Loans held for sale(2)		26,659		6.51			1,304		44,354		5.16			1,719
Loans held in portfolio(2):
Loans secured by real estate:
Home(3)		122,232		5.76			5,278		110,057		4.86			4,013
Specialty mortgage finance(4)		19,718		6.09			900		19,928		5.84			873
Total home loans		141,950		5.80			6,178		129,985		5.01			4,886
Home equity loans and lines of credit		52,289		7.29			2,852		47,056		5.81			2,048
Home construction(5)		2,062		6.41			99		2,096		6.16			97
Multi-family		26,388		6.19			1,226		23,651		5.28			937
Other real estate		5,482		6.85			284		5,138		6.94			269
Total loans secured by real estate		228,171		6.22			10,639		207,926		5.28			8,237
Consumer:
Credit card		8,442		11.16			704		-		-			-
Other		499		10.84			40		726		10.64			58
Commercial		1,925		5.87			85		2,694		4.93			100
Total loans held in portfolio		239,037		6.40			11,468		211,346		5.30			8,395
Other(6)		5,191		4.74			185		4,280		3.42			109
Total interest-earning assets		311,300		6.30			14,697		288,203		5.20			11,252
Noninterest-earning assets:
Mortgage servicing rights		8,151							6,232
Goodwill		8,313							6,196
Other assets(7)		19,546							17,872
Total assets	$	347,310						$	318,503
Liabilities
Interest-bearing liabilities:
Deposits:
Interest-bearing checking deposits	$	37,615		2.59			728	$	47,609		1.86			663
Savings and money market deposits		47,367		2.81			997		42,125		1.65			520
Time deposits		80,970		4.42			2,695		58,089		3.12			1,361
Total interest-bearing deposits		165,952		3.55			4,420		147,823		2.29			2,544
Federal funds purchased and commercial paper		7,537		4.92			279		4,330		3.19			104
Securities sold under agreements to repurchase		16,294		4.95			612		15,377		3.11			363
Advances from Federal Home Loan Banks		60,197		4.84			2,203		68,241		3.20			1,652
Other		26,901		5.23			1,060		20,554		3.98			612
Total interest-bearing liabilities		276,881		4.11			8,574		256,325		2.73			5,275
Noninterest-bearing sources:
Noninterest-bearing deposits		34,179							34,567
Other liabilities(8)		8,445							5,897
Minority interests		1,497							13
Stockholders' equity		26,308							21,701
Total liabilities and stockholders' equity	$	347,310						$	318,503
Net interest spread and net interest income				2.19		$	6,123				2.47		$	5,977
Impact of noninterest-bearing sources				0.45							0.30
Net interest margin				2.64							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⁾ Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $706 million and $159 million for the nine months ended September 30, 2006 and September 30, 2005.

⁽⁴⁾ Represents purchased subprime home loan portfolios and subprime home loans originated by Long Beach Mortgage held in portfolio.

⁽⁵⁾ Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence.

⁽⁶⁾ Interest-earning assets in nonaccrual status (other than loans) and related income, if any, are included within this category.

⁽⁷⁾ Includes assets of discontinued operations.

⁽⁸⁾ Includes liabilities of discontinued operations.

WM-10

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	June 30, 2006			Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	to Sept. 30, 2006			2006		2006		2006		2005		2005
Deposits
Retail deposits:
Checking deposits:
Noninterest bearing	$	16		$	22,466	$	22,450	$	22,378	$	20,752	$	20,622
Interest bearing		(2,197	)		33,761		35,958		39,289		42,253		44,294
Total checking deposits		(2,181	)		56,227		58,408		61,667		63,005		64,916
Savings and money market deposits		1,817			39,481		37,664		38,197		36,664		35,579
Time deposits(1)		3,676			47,361		43,685		41,534		40,359		40,476
Total retail deposits		3,312			143,069		139,757		141,398		140,028		140,971
Commercial business deposits		206			15,831		15,625		14,559		11,459		9,758
Wholesale deposits		3,642			40,666		37,024		31,277		29,917		24,534
Custodial and escrow deposits(2)		(836	)		11,316		12,152		12,768		11,763		15,149
Total deposits	$	6,324		$	210,882	$	204,558	$	200,002	$	193,167	$	190,412

⁽¹⁾    Weighted average remaining maturity of time deposits was 10 months at September 30, 2006, June 30, 2006 and March 31, 2006, 11 months at December 31, 2005 and 12 months at September 30, 2005.

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

	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	2006		2006		2006		2005		2005
Retail Deposit Accounts (number of accounts)
Checking		10,935,287		10,627,854		10,223,664		9,883,507		9,680,317
Money market and savings		6,379,068		6,161,187		5,929,653		5,694,102		5,560,060
Total transaction accounts, end of period(1)		17,314,355		16,789,041		16,153,317		15,577,609		15,240,377
Net change in checking accounts		307,433		404,190		340,157		203,190		253,095
Net change in total transaction accounts		525,314		635,724		575,708		337,232		418,064

⁽¹⁾ Transaction accounts include retail checking, small business checking, retail savings and small business savings.

	Sept. 30,			June 30,				Mar. 31,			Dec. 31,				Sept. 30,
	2006			2006				2006			2005				2005
Retail Banking Stores
Stores, beginning of period		2,201			2,168				2,140			2,051				1,997
Stores opened during the quarter		25			35				29			97		(1)		56
Stores closed during the quarter		(1	)		(2	)	(1)		(1	)		(8	)			(2	)
Stores, end of period		2,225			2,201				2,168			2,140				2,051

⁽¹⁾ Includes two retail stores acquired through the merger with Providian Financial Corporation. These stores were not considered to be an integral component of Washington Mutual's retail banking franchise and were subsequently sold in April of 2006.

WM-11

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
	2006		2006		2006		2005		2005
Loan Volume
Home loans:
Short-term adjustable-rate loans(1):
Option ARMs	$11,601		$11,256		$8,777		$12,565		$16,353
Other ARMs		42		1,859		2,943		1,222		1,237
Total short-term adjustable-rate loans		11,643		13,115		11,720		13,787		17,590
Medium-term adjustable-rate loans(2)		16,788		16,041		14,865		14,581		16,454
Fixed-rate loans		9,816		13,695		17,605		22,061		22,098
Total home loan volume(3)		38,247		42,851		44,190		50,429		56,142
Home equity loans and lines of credit		7,419		8,251		7,306		9,118		10,828
Home construction(4)		269		421		493		479		370
Multi-family		2,186		2,230		2,034		2,595		2,580
Other real estate		983		787		716		419		465
Total loans secured by real estate		49,104		54,540		54,739		63,040		70,385
Consumer(5)		26		36		49		79		182
Commercial		238		319		258		173		165
Total loan volume	$	49,368	$	54,895	$	55,046	$	63,292	$	70,732
Loan Volume by Channel
Retail	$	22,239	$	23,709	$	22,580	$	27,676	$	32,614
Wholesale		14,964		14,798		16,722		17,190		20,000
Purchased		11,560		12,033		7,318		10,092		8,271
Correspondent		605		4,355		8,426		8,334		9,847
Total loan volume by channel	$	49,368	$	54,895	$	55,046	$	63,292	$	70,732
Refinancing Activity(6)
Home loan refinancing	$	20,571	$	26,667	$	26,871	$	30,727	$	30,556
Home equity loans and lines of credit and consumer		222		161		215		219		245
Home construction loans		90		17		17		12		17
Multi-family and other real estate		763		799		774		831		738
Total refinancing	$	21,646	$	27,644	$	27,877	$	31,789	$	31,556

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 zero, $104 million, $266 million, $304 million and $466 million for the quarters ended September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005 and September 30, 2005.

______________________________________

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

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

⁽³⁾ Includes specialty mortgage finance loans, which are comprised of purchased subprime home loans and subprime home loans originated by Long Beach Mortgage. Specialty mortgage finance loan volumes were $7.79 billion, $7.28 billion, $6.42 billion, $9.67 billion, and $8.41 billion for the three months ended September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005, and September 30, 2005.

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

⁽⁵⁾ Excludes credit card loan volume.

⁽⁶⁾ Includes loan refinancing entered into by both new and pre-existing loan customers.

WM-12

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Nine Months Ended
	Sept. 30,		Sept. 30,
	2006		2005
Loan Volume
Home loans:
Short-term adjustable-rate loans(1):
Option ARMs	$	31,635	$	51,561
Other ARMs		4,843		2,578
Total short-term adjustable-rate loans		36,478		54,139
Medium-term adjustable-rate loans(2)		47,694		43,250
Fixed-rate loans		41,116		59,904
Total home loan volume(3)		125,288		157,293
Home equity loans and lines of credit		22,977		30,603
Home construction(4)		1,183		873
Multi-family		6,450		7,160
Other real estate		2,486		1,180
Total loans secured by real estate		158,384		197,109
Consumer(5)		111		308
Commercial		814		448
Total loan volume	$	159,309	$	197,865
Loan Volume by Channel
Retail	$	68,528	$	88,749
Wholesale		46,484		57,039
Purchased		30,911		21,763
Correspondent		13,386		30,314
Total loan volume by channel	$	159,309	$	197,865
Refinancing Activity(6)
Home loan refinancing	$	74,108	$	89,191
Home equity loans and lines of credit and consumer		599		1,112
Home construction loans		124		41
Multi-family and other real estate		2,336		2,097
Total refinancing	$	77,167	$	92,441

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 $371 million and $1.51 billion for the nine months ended September 30, 2006 and September 30, 2005.

______________________________________

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

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

⁽³⁾ Includes specialty mortgage finance loans, which are comprised of purchased subprime home loans and subprime home loans originated by Long Beach Mortgage. Specialty mortgage finance loan volumes were $21.49 billion and $24.82 billion for the nine months ended September 30, 2006 and September 30, 2005.

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

⁽⁵⁾ Excludes credit card loan volume.

⁽⁶⁾ Includes loan refinancing entered into by both new and pre-existing loan customers.

WM-13

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Change from
	June 30, 2006			Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	to Sept. 30, 2006			2006			2006			2006			2005			2005
Loans by Product Type
Loans held in portfolio:
Loans secured by real estate:
Home:
Short-term adjustable-rate loans(1):
Option ARMs(2)	$	(1,968	)	$	64,822		$	66,790		$	70,169		$	70,191		$	67,863
Other ARMs		1,958			18,695			16,737			15,781			14,666			12,956
Total short-term adjustable-rate loans		(10	)		83,517			83,527			85,950			84,857			80,819
Medium-term adjustable-rate loans(3)		(4,292	)		47,740			52,032			49,391			41,511			43,610
Fixed-rate loans		(214	)		9,928			10,142			8,660			8,922			8,616
Total home loans(4)		(4,516	)		141,185			145,701			144,001			135,290			133,045
Home equity loans and lines of credit		1,383			54,364			52,981			51,872			50,851			50,066
Home construction(5)		(5	)		2,077			2,082			2,095			2,037			2,019
Multi-family		658			27,407			26,749			26,151			25,601			25,014
Other real estate		332			5,869			5,537			5,353			5,035			4,929
Total loans secured by real estate		(2,148	)		230,902			233,050			229,472			218,814			215,073
Consumer:
Credit card		356			8,807			8,451			7,906			8,043			-
Other		(6	)		281			287			602			638			669
Commercial		60			1,775			1,715			2,024			2,137			2,452
Total loans held in portfolio(6)		(1,738	)		241,765			243,503			240,004			229,632			218,194
Less: allowance for loan and lease losses		113			(1,550	)		(1,663	)		(1,642	)		(1,695	)		(1,264	)
Total net loans held in portfolio		(1,625	)		240,215			241,840			238,362			227,937			216,930
Loans held for sale(7)		378			23,720			23,342			25,020			33,582			48,018
Total net loans	$	(1,247	)	$	263,935		$	265,182		$	263,382		$	261,519		$	264,948

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

⁽²⁾ The total amount by which the unpaid principal balance of Option ARM loans exceeded their original principal amount was $654 million at September 30, 2006, $461 million at June 30, 2006, $291 million at March 31, 2006, $157 million at December 31, 2005, and $76 million at September 30, 2005.

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

⁽⁴⁾ Includes specialty mortgage finance loans, which are comprised of purchased subprime home loans and subprime home loans originated by Long Beach Mortgage held in portfolio. Specialty mortgage finance loans were $20.08 billion, $20.50 billion, $20.24 billion, $21.15 billion, and $21.16 billion at September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005, and September 30, 2005.

⁽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⁾ Includes net unamortized deferred loan origination costs of $1.61 billion, $1.62 billion, $1.61 billion, $1.53 billion, and $1.47 billion at September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005, and September 30, 2005.

⁽⁷⁾ Fair value of loans held for sale was $23.80 billion, $23.35 billion, $25.03 billion, $33.70 billion, and $48.14 billion as of September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005 and September 30, 2005.

WM-14

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

						Weighted					Weighted					Weighted
	Change from					Average					Average					Average
	June 30, 2006			Sept. 30,		Coupon			June 30,		Coupon			Sept. 30,		Coupon
	to Sept. 30, 2006			2006		Rate			2006		Rate			2005		Rate
Selected Loans Secured by Real Estate and MBS
Home loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs	$	(1,968	)	$	64,822		7.11	%	$	66,790		6.73	%	$	67,863		5.44
Other ARMs		1,958			18,695		7.05			16,737		6.81			12,956		6.27
Total short-term adjustable-rate loans		(10	)		83,517		7.10			83,527		6.75			80,819		5.57
Medium-term adjustable-rate loans(2)		(4,292	)		47,740		5.71			52,032		5.68			43,610		5.58
Fixed-rate loans		(214	)		9,928		6.59			10,142		6.28			8,616		6.60
Total home loans held in portfolio		(4,516	)		141,185		6.59			145,701		6.34			133,045		5.64
Home equity loans and lines of credit:
Short-term (Prime-based or treasury-based)(1)		(809	)		35,831		8.40			36,640		8.33			37,328		6.76
Fixed-rate loans		2,192			18,533		7.16			16,341		6.88			12,738		6.45
Total home equity loans and lines of credit		1,383			54,364		7.98			52,981		7.88			50,066		6.68
Multi-family loans held in portfolio:
Short-term adjustable-rate loans(1):
Option ARMs		(288	)		8,967		6.95			9,255		6.54			9,449		5.30
Other ARMs		(237	)		5,858		6.94			6,095		6.66			6,451		5.49
Total short-term adjustable-rate loans		(525	)		14,825		6.95			15,350		6.59			15,900		5.38
Medium-term adjustable-rate loans(2)		1,125			10,906		5.59			9,781		5.46			7,525		5.26
Fixed-rate loans		58			1,676		6.45			1,618		6.48			1,589		6.68
Total multi-family loans held in portfolio		658			27,407		6.38			26,749		6.17			25,014		5.42
Total selected loans held in portfolio secured by real estate(3)		(2,475	)		222,956		6.90			225,431		6.68			208,125		5.87
Loans held for sale(4)		356			23,387		6.64			23,031		6.43			47,888		5.34
Total selected loans secured by real estate		(2,119	)		246,343		6.88			248,462		6.66			256,013		5.77
MBS(5):
Short-term adjustable-rate MBS(1)		(976	)		8,082		5.55			9,058		5.42			10,289		4.58
Medium-term adjustable-rate MBS(2)		1,450			5,303		5.09			3,853		4.97			2,656		5.02
Fixed-rate MBS		441			8,968		5.31			8,527		5.27			4,216		5.25
Total MBS(6)		915			22,353		5.35			21,438		5.28			17,161		4.81
Total selected loans secured by real estate and MBS	$	(1,204	)	$	268,696		6.75		$	269,900		6.55		$	273,174		5.71

⁽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, 2006, June 30, 2006, and September 30, 2005, the adjustable-rate loans with lifetime caps were $190.36 billion, $193.17 billion, and $182.35 billion with a lifetime weighted average cap rate of 12.13%, 12.13% and 12.30%.

⁽⁴⁾ Excludes credit card and student loans.

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

⁽⁶⁾ At September 30, 2006, June 30, 2006 and September 30, 2005, the par value of adjustable-rate MBS with lifetime caps were $13.20 billion, $12.81 billion and $12.74 billion with a lifetime weighted average cap rate of 10.41%, 10.42% and 10.19%.

	June 30, 2006			Dec. 31, 2005
	to Sept. 30, 2006			to Sept. 30, 2006
Rollforward of Loans Held for Sale
Balance, beginning of period	$	23,342		$	33,582
Mortgage loans originated, purchased and transferred from held in portfolio		31,391			91,529
Mortgage loans transferred to held in portfolio		(262	)		(2,762	)
Mortgage loans sold and other(1)		(30,772	)		(98,307	)
Net change in consumer loans held for sale		21			(322	)
Balance, end of period	$	23,720		$	23,720
Rollforward of Home Loans Held in Portfolio
Balance, beginning of period	$	145,701		$	135,290
Loans originated, purchased and transferred from held for sale		8,013			39,291
Loan payments, transferred to held for sale and other		(12,529	)		(33,396	)
Balance, end of period	$	141,185		$	141,185

⁽¹⁾ The unpaid principal balance ("UPB") of home loans sold was $30.24 billion for the three months ended September 30, 2006 and $96.57 billion for the
     nine months ended September 30, 2006.

 

WM-15

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
										Pro Forma Results Assuming Retrospective Application of SFAS No. 156
Detail of Revenue from Sales and Servicing of Home Mortgage Loans(1)	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2006			2006			2006			2005			2005
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments(2):
Gain from home mortgage loans and originated mortgage-backed securities	$	217		$	184		$	157		$	213		$	206
Revaluation gain (loss) from derivatives economically hedging loans held for sale		(98	)		67			52			25			73
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments		119			251			209			238			279
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue(3)		525			586			572			544			534
Change in MSR fair value due to payments on loans and other(1)		(410	)		(460	)		(409	)		(483	)		(480	)
Net mortgage loan servicing revenue		115			126			163			61			54
Change in MSR fair value due to valuation inputs or assumptions(1)		(469	)		435			413			805			1,193
Revaluation gain (loss) from derivatives economically hedging MSR(1)		353			(433	)		(522	)		(654	)		(810	)
Adjustment to MSR fair value for MSR sale		-			(157	)		-			-			-
Home mortgage loan servicing revenue (expense), net of MSR valuation changes and derivative risk management instruments		(1	)		(29	)		54			212			437
Total revenue from sales and servicing of home mortgage loans	$	118		$	222		$	263			450			716
Reconciliation from pro forma to GAAP results(1):
Deduct: Increase in MSR fair value not recorded due to lower of cost or fair value accounting											(39	)		(10	)
Other											7			4
Total GAAP revenue from sales and servicing of home mortgage loans										$	418		$	710

	Nine Months Ended
					Pro Forma Results Assuming Retrospective Application of SFAS No. 156
Detail of Revenue from Sales and Servicing of Home Mortgage Loans(1)		Sept. 30,			Sept. 30,
		2006			2005
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments(2):
Gain from home mortgage loans and originated mortgage-backed securities		$	558			$	637
Revaluation gain from derivatives economically hedging loans held for sale			22				74
Gain from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments			580				711
Home mortgage loan servicing revenue (expense):
Home mortgage loan servicing revenue(3)			1,683				1,567
Change in MSR fair value due to payments on loans and other(1)			(1,279	)			(1,246	)
Net mortgage loan servicing revenue			404				321
Change in MSR fair value due to valuation inputs or assumptions(1)			379				733
Revaluation loss from derivatives economically hedging MSR(1)			(603	)			(159	)
Adjustment to MSR fair value for MSR sale			(157	)			-
Home mortgage loan servicing revenue, net of MSR valuation changes and derivative risk management instruments			23				895
Total revenue from sales and servicing of home mortgage loans		$	603				1,606
Reconciliation from pro forma to GAAP results(1):
Deduct: Increase in MSR fair value not recorded due to lower of cost or fair value accounting							(18	)
Other							12
Total GAAP revenue from sales and servicing of home mortgage loans						$	1,600

⁽¹⁾ The results for the quarters ended September 30, 2006, June 30, 2006, March 31, 2006 and the nine months ended September 30, 2006 reflect the adoption of the fair value measurement method of accounting for mortgage servicing rights ("MSR") permitted by Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets, an amendment to FASB Statement No. 140. The Company adopted Statement No. 156 effective January 1, 2006, and the retrospective application of this Statement to prior periods is not permitted. Management believes that due to the significant differences between the fair value measurement method and the amortization method of accounting for MSR, comparative information prepared on a similar basis of accounting is valuable to users of this financial information. The information for 2005 is a non-GAAP measure, and incorporates the following assumptions: 1) the fair value measurement method of accounting for MSR was in effect during 2005, 2) MSR are initially capitalized at fair value instead of allocated book value, and 3) the change in value of available-for-sale securities that were on the balance sheet at December 31, 2005 and designated as MSR risk management instruments are reported as revaluation gain (loss) on trading securities. A reconciliation of the non-GAAP amounts to the previously disclosed GAAP results has been provided.

⁽²⁾ Originated mortgage-backed securities represent available-for-sale securities retained on the balance sheet subsequent to the securitization of mortgage loans that were originated by the Company.

⁽³⁾ Includes late charges and loan pool expenses (the shortfall of the scheduled interest required to be remitted to investors compared to what is collected from the borrowers upon payoff).

WM-16

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
										Pro Forma Results Assuming Retrospective Application of SFAS No. 156
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2006			2006			2006			2005			2005
MSR Risk Management(1):
Change in MSR fair value due to valuation inputs or assumptions(2)	$	(469	)	$	435		$	413		$	805		$	1,193
Gain (loss) on MSR risk management instruments:
Revaluation gain (loss) from derivatives		353			(433	)		(522	)		(654	)		(810	)
Revaluation gain (loss) from certain trading securities(2)		39			(47	)		(42	)		(165	)		(219	)
Loss from certain available-for-sale securities		(1	)		-			-			-			-
Total gain (loss) on MSR risk management instruments		391			(480	)		(564	)		(819	)		(1,029	)
Total MSR risk management	$	(78	)	$	(45	)	$	(151	)	$	(14	)	$	164
Reconciliation from pro forma to GAAP results(2):
Revaluation loss from certain trading securities										$	(165	)	$	(219	)
Add back: Decrease in value of trading securities assumed transferred
from the available-for-sale securities portfolio											8			2
Total GAAP impact of MSR risk management trading securities										$	(157	)	$	(217	)

	Nine Months Ended
					Pro Forma Results Assuming Retrospective Application of SFAS No. 156
		Sept. 30,				Sept. 30,
		2006				2005
MSR Risk Management(1):
Change in MSR fair value due to valuation inputs or assumptions(2)		$	379			$	733
Gain (loss) on MSR risk management instruments:
Revaluation loss from derivatives			(603	)			(159	)
Revaluation loss from certain trading securities(2)			(50	)			(68	)
Loss from certain available-for-sale securities			(1	)			(18	)
Total loss on MSR risk management instruments			(654	)			(245	)
Total MSR risk management		$	(275	)		$	488
Reconciliation from pro forma to GAAP results(2):
Revaluation loss from certain trading securities						$	(68	)
Add back: Decrease in value of trading securities assumed transferred
from the available-for-sale securities portfolio							2
Total GAAP impact of MSR risk management trading securities						$	(66	)

⁽¹⁾  Excludes $157 million downward adjustment to MSR fair value recognized in the quarter ended June 30, 2006.

⁽²⁾  Refer to footnote (1) on table WM-15.

 

WM-17

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
		Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
		2006			2006			2006			2005			2005
Rollforward of Mortgage Servicing Rights(1)(2)
Balance, beginning of period		$	9,162		$	8,736		$	8,041		$	7,042		$	5,730
Home loans:
Additions			533			607			633			703			605
Changes in MSR fair value due to valuation inputs or assumptions			(469	)		435			413			-			-
Payments on loans and other			(410	)		(460	)		(409	)		-			-
Adjustment to MSR fair value for MSR sale			-			(157	)		-			-			-
Fair value basis adjustment(3)			-			-			57			-			-
Amortization			-			-			-			(482	)		(555	)
Impairment reversal			-			-			-			353			413
Statement No. 133 MSR accounting valuation adjustments			-			-			-			419			849
Sale of MSR			(2,527	)		-			-			-			-
Net change in commercial real estate MSR			(1	)		1			1			6			-
Balance, end of period		$	6,288		$	9,162		$	8,736		$	8,041		$	7,042
Rollforward of Valuation Allowance for MSR Impairment
Balance, beginning of period		$	-		$	-		$	914		$	1,312		$	1,746
Impairment reversal			-			-			-			(353	)		(413	)
Other-than-temporary impairment			-			-			-			(43	)		(18	)
Other			-			-			(914)	(3)		(2	)		(3	)
Balance, end of period		$	-		$	-		$	-		$	914		$	1,312
Rollforward of Mortgage Loans Serviced for Others
Balance, beginning of period		$	570,352		$	569,501		$	563,208		$	547,578		$	543,324
Home loans:
Additions			29,899			30,949			35,026			51,642			43,418
Sale of servicing			(141,842	)		(9	)		-			-			-
Loan payments and other			(19,288	)		(30,368	)		(29,063	)		(37,245	)		(39,005	)
Net change in commercial real estate loans			87			279			330			1,233			(159	)
Balance, end of period		$	439,208		$	570,352		$	569,501		$	563,208		$	547,578
			Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
			2006			2006			2006			2005			2005
Total Servicing Portfolio
Mortgage loans serviced for others		$	439,208		$	570,352		$	569,501		$	563,208		$	547,578
Consumer loans serviced for others			12,654			12,205			11,822			11,014			-
Servicing on retained MBS without MSR			1,199			1,262			1,334			1,404			1,487
Servicing on owned loans			245,925			247,489			245,469			242,114			245,165
Subservicing portfolio			137,089			552			588			629			749
Total servicing portfolio		$	836,075		$	831,860		$	828,714		$	818,369		$	794,979

	September 30, 2006
	Unpaid		Weighted
	Principal		Average
	Balance		Servicing Fee
			(in basis points,
Mortgage Loans Serviced for Others by Loan Type			annualized)
Government	$	28		43
Agency		240,855		31
Private		163,851		51
Specialty home loans		34,474		50
Total mortgage loans serviced for others(4)	$	439,208		40

⁽¹⁾  Net of valuation allowance for all periods in 2005.

⁽²⁾  MSR as a percentage of mortgage loans serviced for others was 1.43%, 1.61%, 1.53%, 1.43% and 1.29% at September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005 and September 30, 2005.

⁽³⁾  The Company adopted Statement No. 156, Accounting for Servicing of Financial Assets, on January 1, 2006, and elected to measure mortgage servicing assets at fair value. In accordance with this Statement, this new accounting principle has been applied prospectively to all new and existing mortgage servicing assets. Upon adoption of the fair value election, the valuation allowance was written off against the recorded value of the MSR, and the $57 million difference between the net carrying value and fair value was recorded as an increase to the basis of the Company's mortgage servicing rights.

⁽⁴⁾  Weighted average coupon rate (annualized) was 6.21% at September 30, 2006.

  

WM-18

Washington Mutual, Inc.

Selected Financial Information

(dollars in millions)

(unaudited)

	Quarter Ended
	Sept. 30,			June 30,			Mar. 31,			Dec. 31,			Sept. 30,
	2006			2006			2006			2005			2005
Allowance for Loan and Lease Losses
Balance, beginning of quarter	$	1,663		$	1,642		$	1,695		$	1,264		$	1,243
Allowance transferred to loans held for sale		(125	)		(87	)		(30	)		(241	)		-
Allowance acquired through business combinations		-			-			-			592			-
Provision for loan and lease losses		166			224			82			217			52
		1,704			1,779			1,747			1,832			1,295
Loans charged off:
Loans secured by real estate:
Home		(12	)		(11	)		(11	)		(7	)		(9	)
Specialty mortgage finance(1)		(41	)		(20	)		(20	)		(14	)		(15	)
Total home loans charged off		(53	)		(31	)		(31	)		(21	)		(24	)
Home equity loans and lines of credit		(14	)		(7	)		(5	)		(6	)		(10	)
Home construction(2)		(3	)		-			-			-			-
Other real estate		(2	)		-			(3	)		(1	)		(4	)
Total loans secured by real estate		(72	)		(38	)		(39	)		(28	)		(38	)
Consumer:
Credit card		(98	)		(94	)		(63	)		(138	)		-
Other		(3	)		(6	)		(7	)		(8	)		(8	)
Commercial		(6	)		(4	)		(8	)		(16	)		(4	)
Total loans charged off		(179	)		(142	)		(117	)		(190	)		(50	)
Recoveries of loans previously charged off:
Loans secured by real estate:
Home		-			1			-			-			-
Specialty mortgage finance(1)		-			1			1			1			1
Total home loan recoveries		-			2			1			1			1
Home equity loans and lines of credit		2			3			1			7			1
Multi-family		-			1			-			-			2
Other real estate		-			1			1			-			8
Total loans secured by real estate		2			7			3			8			12
Consumer:
Credit card		16			15			4			40			-
Other		4			3			4			3			5
Commercial		3			1			1			2			2
Total recoveries of loans previously charged off		25			26			12			53			19
Net charge-offs		(154	)		(116	)		(105	)		(137	)		(31	)
Balance, end of quarter	$	1,550		$	1,663		$	1,642		$	1,695		$	1,264
Net charge-offs (annualized) as a percentage
of average loans held in portfolio		0.26	%		0.19	%		0.18	%		0.24	%		0.06	%
Allowance as a percentage of total loans held in portfolio		0.64			0.68			0.68			0.74			0.58

______________________________________

⁽¹⁾ Represents purchased subprime loan portfolios and subprime loans originated by Long Beach Mortgage 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,
	2006			2006			2006			2005			2005
Nonperforming Assets and Restructured Loans
Nonaccrual loans(1)(2):
Loans secured by real estate:
Home	$	568		$	512		$	490		$	565		$	472
Specialty mortgage finance(3)		1,114			1,085			1,012			872			755
Total home nonaccrual loans		1,682			1,597			1,502			1,437			1,227
Home equity loans and lines of credit		169			110			92			88			68
Home construction(4)		35			31			15			10			10
Multi-family		31			19			21			25			18
Other real estate		53			56			69			70			69
Total nonaccrual loans secured by real estate		1,970			1,813			1,699			1,630			1,392
Consumer		1			1			6			8			8
Commercial		16			16			26			48			65
Total nonaccrual loans held in portfolio		1,987			1,830			1,731			1,686			1,465
Foreclosed assets(5)		405			330			309			276			256
Total nonperforming assets	$	2,392		$	2,160		$	2,040		$	1,962		$	1,721
As a percentage of total assets		0.69	%		0.62	%		0.59	%		0.57	%		0.52	%
Restructured loans	$	19		$	20		$	21		$	22		$	25
Total nonperforming assets and restructured loans	$	2,411		$	2,180		$	2,061		$	1,984		$	1,746

⁽¹⁾ Nonaccrual loans held for sale, which are excluded from the nonaccrual balances presented above, were $129 million, $122 million, $201 million, $245 million and $152 million at September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005 and September 30, 2005. Loans held for sale are accounted for at lower of aggregate cost or fair value, with valuation changes included as adjustments to noninterest income.

⁽²⁾ Credit card loans are exempt under regulatory rules from being classified as nonaccrual because they are charged off when they are determined to be uncollectible, or by the end of the month in which the account becomes 180 days past due.

⁽³⁾ Represents purchased subprime home loan portfolios and subprime home loans originated by Long Beach Mortgage and held in its investment portfolio.

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

⁽⁵⁾ Foreclosed real estate securing Government National Mortgage Association (“GNMA”) loans of $129 million, $142 million, $167 million, $79 million and $80 million at September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005 and September 30, 2005 have been excluded. These assets are fully collectible as the corresponding GNMA loans are insured by the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veteran’s Affairs (“VA”).