Exhibit 99.2
WM - - 1
Washington Mutual, Inc. | |||||||||||||||||||||
Selected Financial Information | |||||||||||||||||||||
(dollars in millions, except per share data) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | |||||||||||||||
PROFITABILITY | |||||||||||||||||||||
Net income (loss) | $ | (3,328 | ) | $ | (1,138 | ) | $ | (1,867 | ) | $ | 186 | $ | 830 | $ | (4,466 | ) | $ | 1,614 | |||
Net interest income | 2,296 | 2,175 | 2,047 | 2,014 | 2,034 | 4,471 | 4,115 | ||||||||||||||
Noninterest income | 561 | 1,569 | 1,365 | 1,379 | 1,758 | 2,129 | 3,299 | ||||||||||||||
Noninterest expense | 2,403 | 2,152 | 4,166 | 2,191 | 2,138 | 4,555 | 4,244 | ||||||||||||||
Diluted earnings per common share: | |||||||||||||||||||||
Diluted earnings per common share | $ | (6.58 | ) | $ | (1.40 | ) | $ | (2.19 | ) | $ | 0.20 | $ | 0.92 | $ | (8.43 | ) | $ | 1.78 | |||
Less: Effect of conversion feature(1) | (3.24 | ) | - | - | - | - | (3.51 | ) | - | ||||||||||||
Diluted earnings per common share excluding | |||||||||||||||||||||
effect of conversion feature | (3.34 | ) | (1.40 | ) | (2.19 | ) | 0.20 | 0.92 | (4.92 | ) | 1.78 | ||||||||||
Diluted weighted average number of common shares outstanding | |||||||||||||||||||||
(in thousands) | 1,016,081 | 856,923 | 855,532 | 876,002 | 893,090 | 936,502 | 896,304 | ||||||||||||||
Net interest margin on a taxable-equivalent basis(2) | 3.22 | % | 3.05 | % | 2.86 | % | 2.86 | % | 2.91 | % | 3.14 | % | 2.85 | % | |||||||
Dividends declared per common share | $ | 0.01 | $ | 0.15 | $ | 0.56 | $ | 0.56 | $ | 0.55 | $ | 0.16 | $ | 1.09 | |||||||
Book value per common share (period end)(3) | 13.35 | 21.74 | 24.55 | 27.18 | 27.27 | 13.35 | 27.27 | ||||||||||||||
Tangible common equity per common share (period end)(4) | 9.01 | 13.26 | 15.89 | 16.43 | 16.59 | 9.01 | 16.59 | ||||||||||||||
Return on average assets | (4.23 | ) % | (1.42 | ) % | (2.30 | ) % | 0.23 | % | 1.05 | % | (2.81 | ) % | 1.00 | % | |||||||
Return on average common equity | (69.25 | ) | (23.27 | ) | (32.64 | ) | 3.03 | 13.74 | (45.67 | ) | 13.36 | ||||||||||
Efficiency ratio(5) | 84.11 | 57.49 | 122.13 | 64.55 | 56.38 | 69.01 | 57.24 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||||
Nonperforming assets(6) to total assets | 3.62 | % | 2.87 | % | 2.17 | % | 1.65 | % | 1.29 | % | 3.62 | % | 1.29 | % | |||||||
Allowance as a percentage of loans held in portfolio | 3.53 | 1.94 | 1.05 | 0.80 | 0.73 | 3.53 | 0.73 | ||||||||||||||
CREDIT PERFORMANCE | |||||||||||||||||||||
Provision for loan losses | $ | 5,913 | $ | 3,511 | $ | 1,534 | $ | 967 | $ | 372 | $ | 9,423 | $ | 606 | |||||||
Net charge-offs | 2,171 | 1,368 | 747 | 421 | 271 | 3,538 | 454 | ||||||||||||||
CAPITAL ADEQUACY | |||||||||||||||||||||
Capital Ratios for WMI: | |||||||||||||||||||||
Tangible equity to total tangible assets(7) | 7.79 | % | 6.40 | % | 6.67 | % | 5.60 | % | 6.07 | % | 7.79 | % | 6.07 | % | |||||||
Tier 1 capital to average total assets (leverage)(8) | 7.80 | 6.56 | 6.84 | 5.86 | 6.09 | 7.80 | 6.09 | ||||||||||||||
Total risk-based capital to total risk-weighted assets(8) | 13.98 | 12.25 | 12.34 | 10.67 | 11.04 | 13.98 | 11.04 | ||||||||||||||
Capital Ratios for WMB (well-capitalized minimum)(9): | |||||||||||||||||||||
Tier 1 capital to adjusted total assets (leverage) (5.00%) | 7.10 | 6.94 | 7.05 | 6.41 | 7.52 | 7.10 | 7.52 | ||||||||||||||
Adjusted Tier 1 capital to total risk-weighted assets (6.00%) | 8.44 | 8.13 | 8.33 | 7.62 | 8.77 | 8.44 | 8.77 | ||||||||||||||
Total risk-based capital to total risk-weighted assets (10.00%) | 12.49 | 12.21 | 12.22 | 11.26 | 12.80 | 12.49 | 12.80 | ||||||||||||||
SUPPLEMENTAL DATA | |||||||||||||||||||||
Average balance sheet: | |||||||||||||||||||||
Total loans held in portfolio | $ | 241,737 | $ | 244,186 | $ | 241,690 | $ | 227,348 | $ | 216,004 | $ | 242,961 | $ | 219,292 | |||||||
Total interest-earning assets | 285,503 | 285,265 | 287,988 | 283,263 | 279,836 | 285,384 | 287,724 | ||||||||||||||
Total assets | 314,882 | 319,928 | 325,276 | 320,475 | 316,004 | 317,405 | 323,911 | ||||||||||||||
Total deposits | 184,610 | 184,304 | 185,636 | 198,649 | 206,765 | 184,457 | 208,753 | ||||||||||||||
Total stockholders' equity | 27,558 | 24,066 | 23,947 | 23,994 | 24,436 | 25,812 | 24,422 | ||||||||||||||
Period-end balance sheet: | |||||||||||||||||||||
Total loans held in portfolio, net | 231,171 | 238,100 | 241,815 | 235,243 | 213,434 | 231,171 | 213,434 | ||||||||||||||
Total assets | 309,731 | 319,668 | 327,913 | 330,110 | 312,219 | 309,731 | 312,219 | ||||||||||||||
Total deposits | 181,923 | 188,049 | 181,926 | 194,280 | 201,380 | 181,923 | 201,380 | ||||||||||||||
Total stockholders' equity | 26,086 | 22,449 | 24,584 | 23,941 | 24,210 | 26,086 | 24,210 | ||||||||||||||
Common shares outstanding at the end of period (in thousands)(10) | 1,705,344 | 882,610 | 869,036 | 868,802 | 875,722 | 1,705,344 | 875,722 | ||||||||||||||
Employees at end of period | 43,198 | 45,883 | 49,403 | 49,748 | 49,989 | 43,198 | 49,989 |
_______________________ | |
(1) | This one-time earnings per share reduction represents a beneficial conversion feature that was recorded upon the June 2008 conversion of the preferred shares issued in connection with the April 2008 capital transaction. This non-cash adjustment, which had no effect on the Company's capital ratios or the net loss recorded in the second quarter, was provided to facilitate the comparison of earnings per share to the prior reporting periods presented on this schedule. |
(2) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on U.S. states and political subdivisions securities and loans related to the Company's community lending and investment activities. The federal statutory tax rate was 35% for the periods presented. |
(3) | Excludes six million shares held in escrow. |
(4) | Excludes goodwill and intangible assets (except MSR). |
(5) | The efficiency ratio is defined as noninterest expense divided by total revenue (net interest income and noninterest income). |
(6) | Excludes nonaccrual loans held for sale. |
(7) | Excludes unrealized net gain/loss on available-for-sale securities and cash flow hedging instruments, goodwill and intangible assets (except MSR) and the impact from the adoption and application of FASB Statement No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans. Minority interests of $3.91 billion, $3.91 billion, $3.92 billion, $2.94 billion and $2.94 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007 are included in the numerator. |
(8) | The capital ratios are estimated as if Washington Mutual, Inc. were a bank holding company subject to Federal Reserve Board capital requirements. |
(9) | Capital ratios for Washington Mutual Bank ("WMB") at June 30, 2008 are preliminary. |
(10) | Includes six million shares held in escrow. |
WM - - 2
Washington Mutual, Inc. | ||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||
(dollars in millions, except per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Interest Income | ||||||||||||||||||||
Loans held for sale | $ | 52 | $ | 87 | $ | 160 | $ | 248 | $ | 421 | ||||||||||
Loans held in portfolio | 3,604 | 3,954 | 4,156 | 3,992 | 3,786 | |||||||||||||||
Available-for-sale securities | 335 | 357 | 380 | 392 | 351 | |||||||||||||||
Trading assets | 117 | 116 | 101 | 108 | 108 | |||||||||||||||
Other interest and dividend income | 94 | 77 | 79 | 116 | 82 | |||||||||||||||
Total interest income | 4,202 | 4,591 | 4,876 | 4,856 | 4,748 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 1,115 | 1,329 | 1,464 | 1,650 | 1,723 | |||||||||||||||
Borrowings | 791 | 1,087 | 1,365 | 1,192 | 991 | |||||||||||||||
Total interest expense | 1,906 | 2,416 | 2,829 | 2,842 | 2,714 | |||||||||||||||
Net interest income | 2,296 | 2,175 | 2,047 | 2,014 | 2,034 | |||||||||||||||
Provision for loan losses | 5,913 | 3,511 | 1,534 | 967 | 372 | |||||||||||||||
Net interest income (expense) after provision for loan losses | (3,617 | ) | (1,336 | ) | 513 | 1,047 | 1,662 | |||||||||||||
Noninterest Income | ||||||||||||||||||||
Revenue (expense) from sales and servicing of home mortgage loans | (109 | ) | 411 | 358 | 161 | 300 | ||||||||||||||
Revenue from sales and servicing of consumer loans | 159 | 248 | 375 | 418 | 403 | |||||||||||||||
Depositor and other retail banking fees | 767 | 704 | 769 | 740 | 720 | |||||||||||||||
Credit card fees | 177 | 181 | 214 | 209 | 183 | |||||||||||||||
Securities fees and commissions | 64 | 58 | 63 | 67 | 70 | |||||||||||||||
Insurance income | 32 | 30 | 29 | 29 | 29 | |||||||||||||||
Loss on trading assets | (305 | ) | (216 | ) | (267 | ) | (153 | ) | (145 | ) | ||||||||||
Gain (loss) on other available-for-sale securities | (402 | ) | 18 | (261 | ) | (99 | ) | 7 | ||||||||||||
Gain (loss) on extinguishment of borrowings | 100 | 13 | - | 1 | (14 | ) | ||||||||||||||
Other income | 78 | 122 | 85 | 6 | 205 | |||||||||||||||
Total noninterest income | 561 | 1,569 | 1,365 | 1,379 | 1,758 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Compensation and benefits | 939 | 914 | 877 | 910 | 977 | |||||||||||||||
Occupancy and equipment | 460 | 358 | 488 | 371 | 354 | |||||||||||||||
Telecommunications and outsourced information services | 123 | 130 | 134 | 135 | 132 | |||||||||||||||
Depositor and other retail banking losses | 61 | 63 | 72 | 71 | 58 | |||||||||||||||
Advertising and promotion | 103 | 105 | 108 | 125 | 113 | |||||||||||||||
Professional fees | 57 | 39 | 89 | 52 | 55 | |||||||||||||||
Foreclosed asset expense | 217 | 155 | 133 | 82 | 56 | |||||||||||||||
Goodwill impairment charge | - | - | 1,775 | - | - | |||||||||||||||
Other expense | 443 | 388 | 490 | 445 | 393 | |||||||||||||||
Total noninterest expense | 2,403 | 2,152 | 4,166 | 2,191 | 2,138 | |||||||||||||||
Minority interest expense | 75 | 75 | 65 | 53 | 42 | |||||||||||||||
Income (loss) before income taxes | (5,534 | ) | (1,994 | ) | (2,353 | ) | 182 | 1,240 | ||||||||||||
Income taxes | (2,206 | ) | (856 | ) | (486 | ) | (4 | ) | 410 | |||||||||||
Net Income (Loss) | $ | (3,328 | ) | $ | (1,138 | ) | $ | (1,867 | ) | $ | 186 | $ | 830 | |||||||
Preferred dividends declared | (71 | ) | (65 | ) | (8 | ) | (8 | ) | (8 | ) | ||||||||||
Beneficial conversion feature | (3,290 | ) | - | - | - | - | ||||||||||||||
Net Income (Loss) Applicable to Common Stockholders | $ | (6,689 | ) | $ | (1,203 | ) | $ | (1,875 | ) | $ | 178 | $ | 822 | |||||||
Earnings Per Common Share: | ||||||||||||||||||||
Basic | $ | (6.58 | ) | $ | (1.40 | ) | $ | (2.19 | ) | $ | 0.21 | $ | 0.95 | |||||||
Diluted | (6.58 | ) | (1.40 | ) | (2.19 | ) | 0.20 | 0.92 | ||||||||||||
Dividends declared per common share | 0.01 | 0.15 | 0.56 | 0.56 | 0.55 | |||||||||||||||
Basic weighted average number of common shares outstanding (in thousands) | 1,016,081 | 856,923 | 855,518 | 857,005 | 868,968 | |||||||||||||||
Diluted weighted average number of common shares outstanding (in thousands) | 1,016,081 | 856,923 | 855,532 | 876,002 | 893,090 |
WM - - 3
Washington Mutual, Inc. | |||||||||
Consolidated Statements of Income | |||||||||
(dollars in millions, except per share data) | |||||||||
(unaudited) | |||||||||
Six Months Ended | |||||||||
June 30, | June 30, | ||||||||
2008 | 2007 | ||||||||
Interest Income | |||||||||
Loans held for sale | $ | 138 | $ | 984 | |||||
Loans held in portfolio | 7,559 | 7,686 | |||||||
Available-for-sale securities | 691 | 682 | |||||||
Trading assets | 233 | 221 | |||||||
Other interest and dividend income | 171 | 183 | |||||||
Total interest income | 8,792 | 9,756 | |||||||
Interest Expense | |||||||||
Deposits | 2,443 | 3,495 | |||||||
Borrowings | 1,878 | 2,146 | |||||||
Total interest expense | 4,321 | 5,641 | |||||||
Net interest income | 4,471 | 4,115 | |||||||
Provision for loan losses | 9,423 | 606 | |||||||
Net interest income (expense) after provision for loan losses | (4,952 | ) | 3,509 | ||||||
Noninterest Income | |||||||||
Revenue from sales and servicing of home mortgage loans | 302 | 425 | |||||||
Revenue from sales and servicing of consumer loans | 407 | 846 | |||||||
Depositor and other retail banking fees | 1,470 | 1,385 | |||||||
Credit card fees | 358 | 355 | |||||||
Securities fees and commissions | 122 | 131 | |||||||
Insurance income | 63 | 58 | |||||||
Loss on trading assets | (521 | ) | (253 | ) | |||||
Gain (loss) on other available-for-sale securities | (384 | ) | 41 | ||||||
Gain (loss) on extinguishment of borrowings | 113 | (7 | ) | ||||||
Other income | 199 | 318 | |||||||
Total noninterest income | 2,129 | 3,299 | |||||||
Noninterest Expense | |||||||||
Compensation and benefits | 1,853 | 1,979 | |||||||
Occupancy and equipment | 818 | 731 | |||||||
Telecommunications and outsourced information services | 253 | 261 | |||||||
Depositor and other retail banking losses | 124 | 119 | |||||||
Advertising and promotion | 208 | 211 | |||||||
Professional fees | 96 | 93 | |||||||
Foreclosed asset expense | 372 | 95 | |||||||
Other expense | 831 | 755 | |||||||
Total noninterest expense | 4,555 | 4,244 | |||||||
Minority interest expense | 151 | 85 | |||||||
Income (loss) before income taxes | (7,529 | ) | 2,479 | ||||||
Income taxes | (3,063 | ) | 865 | ||||||
Net Income (Loss) | $ | (4,466 | ) | $ | 1,614 | ||||
Preferred dividends declared | (136 | ) | (15 | ) | |||||
Beneficial conversion feature | . | (3,290 | ) | - | |||||
Net Income (Loss) Applicable to Common Stockholders | $ | (7,892 | ) | $ | 1,599 | ||||
Earnings Per Common Share: | |||||||||
Basic | $ | (8.43 | ) | $ | 1.83 | ||||
Diluted | (8.43 | ) | 1.78 | ||||||
Dividends declared per common share | 0.16 | 1.09 | |||||||
Basic weighted average number of common shares outstanding (in thousands) | 936,502 | 871,876 | |||||||
Diluted weighted average number of common shares outstanding (in thousands) | 936,502 | 896,304 |
WM - - 4
Washington Mutual, Inc. |
Consolidated Statements of Financial Condition |
(dollars in millions) |
(unaudited) |
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 7,235 | $ | 10,089 | $ | 9,560 | $ | 11,370 | $ | 4,167 | ||||||||||
Federal funds sold and securities purchased under agreements to resell | 2,750 | 2,527 | 1,877 | 4,042 | 3,267 | |||||||||||||||
Trading assets | 2,308 | 2,483 | 2,768 | 3,797 | 5,534 | |||||||||||||||
Available-for-sale securities, total amortized cost of $25,756, $24,907, | ||||||||||||||||||||
$27,789, $28,725 and $28,934: | ||||||||||||||||||||
Mortgage-backed securities | 18,241 | 18,140 | 19,249 | 20,562 | 20,393 | |||||||||||||||
Investment securities | 6,134 | 5,466 | 8,291 | 7,844 | 7,947 | |||||||||||||||
Total available-for-sale securities | 24,375 | 23,606 | 27,540 | 28,406 | 28,340 | |||||||||||||||
Loans held for sale | 1,877 | 4,941 | 5,403 | 7,586 | 19,327 | |||||||||||||||
Loans held in portfolio | 239,627 | 242,814 | 244,386 | 237,132 | 214,994 | |||||||||||||||
Allowance for loan losses | (8,456 | ) | (4,714 | ) | (2,571 | ) | (1,889 | ) | (1,560 | ) | ||||||||||
Loans held in portfolio, net | 231,171 | 238,100 | 241,815 | 235,243 | 213,434 | |||||||||||||||
Investment in Federal Home Loan Banks | 3,498 | 3,514 | 3,351 | 2,808 | 1,596 | |||||||||||||||
Mortgage servicing rights | 6,175 | 5,726 | 6,278 | 6,794 | 7,231 | |||||||||||||||
Goodwill | 7,284 | 7,283 | 7,287 | 9,062 | 9,056 | |||||||||||||||
Other assets | 23,058 | 21,399 | 22,034 | 21,002 | 20,267 | |||||||||||||||
Total assets | $ | 309,731 | $ | 319,668 | $ | 327,913 | $ | 330,110 | $ | 312,219 | ||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing deposits | $ | 31,112 | $ | 31,911 | $ | 30,389 | $ | 31,341 | $ | 33,557 | ||||||||||
Interest-bearing deposits | 150,811 | 156,138 | 151,537 | 162,939 | 167,823 | |||||||||||||||
Total deposits | 181,923 | 188,049 | 181,926 | 194,280 | 201,380 | |||||||||||||||
Federal funds purchased and commercial paper | 75 | 250 | 2,003 | 2,482 | 3,390 | |||||||||||||||
Securities sold under agreements to repurchase | 214 | 215 | 4,148 | 4,732 | 9,357 | |||||||||||||||
Advances from Federal Home Loan Banks | 58,363 | 64,009 | 63,852 | 52,530 | 21,412 | |||||||||||||||
Other borrowings | 30,590 | 32,710 | 38,958 | 40,887 | 40,313 | |||||||||||||||
Other liabilities | 8,566 | 8,072 | 8,523 | 8,313 | 9,212 | |||||||||||||||
Minority interests | 3,914 | 3,914 | 3,919 | 2,945 | 2,945 | |||||||||||||||
Total liabilities | 283,645 | 297,219 | 303,329 | 306,169 | 288,009 | |||||||||||||||
Stockholders' Equity | ||||||||||||||||||||
Preferred stock | 3,392 | 3,392 | 3,392 | 492 | 492 | |||||||||||||||
Capital surplus - common stock | 12,916 | 2,646 | 2,630 | 2,575 | 2,715 | |||||||||||||||
Accumulated other comprehensive loss | (1,079 | ) | (1,141 | ) | (359 | ) | (390 | ) | (568 | ) | ||||||||||
Retained earnings | 10,857 | 17,552 | 18,921 | 21,264 | 21,571 | |||||||||||||||
Total stockholders' equity | 26,086 | 22,449 | 24,584 | 23,941 | 24,210 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 309,731 | $ | 319,668 | $ | 327,913 | $ | 330,110 | $ | 312,219 |
WM - - 5
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Stockholders' Equity Rollforward | ||||||||||||||||||||
Balance, beginning of period | $ | 22,449 | $ | 24,584 | $ | 23,941 | $ | 24,210 | $ | 24,578 | ||||||||||
Net income (loss) | (3,328 | ) | (1,138 | ) | (1,867 | ) | 186 | 830 | ||||||||||||
Cumulative effect from the adoption of new accounting pronouncements | - | (36 | )(1) | - | - | - | ||||||||||||||
Other comprehensive income (loss), net of income taxes | 62 | (782 | ) | 31 | 177 | (300 | ) | |||||||||||||
Cash dividends declared on common stock | (10 | ) | (130 | ) | (482 | ) | (485 | ) | (484 | ) | ||||||||||
Preferred stock activity: | ||||||||||||||||||||
Preferred share conversion(2) | (3,290 | ) | - | - | - | - | ||||||||||||||
Cash dividends declared | (71 | ) | (65 | ) | (8 | ) | (8 | ) | (8 | ) | ||||||||||
Total preferred stock activity | (3,361 | ) | (65 | ) | (8 | ) | (8 | ) | (8 | ) | ||||||||||
Cash dividends returned(3) | 4 | - | 15 | - | - | |||||||||||||||
Common stock activity: | ||||||||||||||||||||
Capital surplus-common stock attributable to preferred share conversion(2) | 3,290 | - | - | - | - | |||||||||||||||
Common stock issued(4) | 6,980 | 16 | 54 | 60 | 94 | |||||||||||||||
Common stock repurchased and retired(5) | - | - | - | (199 | ) | (500 | ) | |||||||||||||
Total common stock activity | 10,270 | 16 | 54 | (139 | ) | (406 | ) | |||||||||||||
Preferred stock issued | - | - | 2,900 | - | - | |||||||||||||||
Balance, end of period | $ | 26,086 | $ | 22,449 | $ | 24,584 | $ | 23,941 | $ | 24,210 |
(1) | As of January 1, 2008, the Company adopted FASB Statement No. 157, Fair Value Measurements ("Statement No. 157"), EITF Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements ("Issue No. 06-4") and EITF Issue No. 06-10, Accounting for Collateral Assignment Split-Dollar Life Insurance Arrangements ("Issue No. 06-10"). The cumulative effect, net of income taxes, from the adoption of Statement No. 157, Issue No. 06-4 and Issue No. 06-10 was $1 million, $(35) million and $(2) million. |
(2) | The preferred share conversion adjustment represents a beneficial conversion feature that was recorded upon the June 2008 conversion of the preferred shares issued in connection with the April 2008 capital transaction. This non-cash conversion adjustment, which did not affect the net loss recorded in the second quarter of 2008, reduced retained earnings and correspondingly increased capital surplus-common stock. |
(3) | Represents accumulated dividends on shares returned from escrow. |
(4) | Includes 647 million shares of common stock converted on June 30, 2008 at $8.75 per share from 56,570 preferred shares issued in April 2008. |
(5) | The Company repurchased zero shares of its common stock during the three months ended June 30, 2008, March 31, 2008 and December 31, 2007, and 7.2 million and 13.5 million shares of its common stock during the three months ended September 30, 2007 and June 30, 2007. At June 30, 2008, the total remaining common stock repurchase authority was 47.5 million shares. |
WM - 6
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | |||||||||||||||||||||||
RETAIL BANKING GROUP | |||||||||||||||||||||||||||||
Condensed income statement: | |||||||||||||||||||||||||||||
Net interest income | $ | 1,210 | $ | 1,203 | $ | 1,262 | $ | 1,306 | $ | 1,291 | $ | 2,413 | $ | 2,575 | |||||||||||||||
Provision for loan losses | 3,823 | 2,300 | 663 | 318 | 91 | 6,122 | 153 | ||||||||||||||||||||||
Noninterest income | 842 | 775 | 850 | 833 | 820 | 1,617 | 1,571 | ||||||||||||||||||||||
Inter-segment revenue | 7 | 9 | 5 | 9 | 16 | 15 | 34 | ||||||||||||||||||||||
Noninterest expense | 1,232 | 1,221 | 1,212 | 1,149 | 1,131 | 2,453 | 2,201 | ||||||||||||||||||||||
Income (loss) before income taxes | (2,996 | ) | (1,534 | ) | 242 | 681 | 905 | (4,530 | ) | 1,826 | |||||||||||||||||||
Income taxes | (959 | ) | (491 | ) | (39 | ) | 225 | 340 | (1,450 | ) | 685 | ||||||||||||||||||
Net income (loss) | $ | (2,037 | ) | $ | (1,043 | ) | $ | 281 | $ | 456 | $ | 565 | $ | (3,080 | ) | $ | 1,141 | ||||||||||||
Performance and other data: | |||||||||||||||||||||||||||||
Efficiency ratio | 59.82 | % | 61.48 | % | 57.25 | % | 53.48 | % | 53.19 | % | 60.63 | % | 52.65 | % | |||||||||||||||
Average loans | $ | 138,671 | $ | 142,720 | $ | 145,486 | $ | 147,357 | $ | 149,716 | $ | 140,695 | $ | 152,445 | |||||||||||||||
Average assets | 145,800 | 151,609 | 155,100 | 157,194 | 159,515 | 148,704 | 162,264 | ||||||||||||||||||||||
Average deposits: | |||||||||||||||||||||||||||||
Checking deposits: | |||||||||||||||||||||||||||||
Noninterest bearing | 24,753 | 23,425 | 22,748 | 22,860 | 23,107 | 24,089 | 22,722 | ||||||||||||||||||||||
Interest bearing | 22,557 | 24,306 | 26,328 | 28,406 | 30,282 | 23,431 | 31,006 | ||||||||||||||||||||||
Total checking deposits | 47,310 | 47,731 | 49,076 | 51,266 | 53,389 | 47,520 | 53,728 | ||||||||||||||||||||||
Savings and money market deposits | 54,928 | 47,904 | 44,623 | 43,524 | 43,814 | 51,417 | 43,460 | ||||||||||||||||||||||
Time deposits | 47,271 | 51,099 | 49,034 | 50,131 | 48,049 | 49,185 | 47,456 | ||||||||||||||||||||||
Average deposits | 149,509 | 146,734 | 142,733 | 144,921 | 145,252 | 148,122 | 144,644 | ||||||||||||||||||||||
Loan volume | 655 | 1,238 | 3,417 | 5,172 | 5,760 | 1,893 | 10,338 | ||||||||||||||||||||||
Employees at end of period | 27,857 | 28,736 | 29,147 | 28,636 | 28,523 | 27,857 | 28,523 | ||||||||||||||||||||||
CARD SERVICES GROUP | |||||||||||||||||||||||||||||
Managed basis(1) | |||||||||||||||||||||||||||||
Condensed income statement: | |||||||||||||||||||||||||||||
Net interest income | $ | 769 | $ | 765 | $ | 694 | $ | 674 | $ | 649 | $ | 1,534 | $ | 1,290 | |||||||||||||||
Provision for loan losses | 911 | 626 | 591 | 611 | 523 | 1,537 | 912 | ||||||||||||||||||||||
Noninterest income | 187 | 418 | 315 | 400 | 393 | 604 | 867 | ||||||||||||||||||||||
Inter-segment expense | 5 | 5 | - | - | - | 9 | - | ||||||||||||||||||||||
Noninterest expense | 297 | 260 | 338 | 364 | 306 | 557 | 635 | ||||||||||||||||||||||
Income (loss) before income taxes | (257 | ) | 292 | 80 | 99 | 213 | 35 | 610 | |||||||||||||||||||||
Income taxes | (82 | ) | 93 | (12 | ) | 33 | 80 | 11 | 229 | ||||||||||||||||||||
Net income (loss) | $ | (175 | ) | $ | 199 | $ | 92 | $ | 66 | $ | 133 | $ | 24 | $ | 381 | ||||||||||||||
Performance and other data: | |||||||||||||||||||||||||||||
Efficiency ratio | 31.25 | % | 22.04 | % | 33.51 | % | 33.91 | % | 29.33 | % | 26.16 | % | 29.42 | % | |||||||||||||||
Average loans | $ | 26,314 | $ | 26,889 | $ | 26,665 | $ | 25,718 | $ | 24,234 | $ | 26,601 | $ | 23,921 | |||||||||||||||
Average assets | 28,844 | 29,244 | 28,961 | 28,206 | 26,762 | 29,044 | 26,403 | ||||||||||||||||||||||
Employees at end of period | 2,940 | 2,881 | 2,860 | 2,878 | 2,827 | 2,940 | 2,827 | ||||||||||||||||||||||
Securitization adjustments | |||||||||||||||||||||||||||||
Condensed income statement: | |||||||||||||||||||||||||||||
Net interest income | $ | (506 | ) | $ | (503 | ) | $ | (454 | ) | $ | (456 | ) | $ | (459 | ) | $ | (1,010 | ) | $ | (874 | ) | ||||||||
Provision for loan losses | (530 | ) | (470 | ) | (335 | ) | (288 | ) | (294 | ) | (1,000 | ) | (577 | ) | |||||||||||||||
Noninterest income | (24 | ) | 33 | 119 | 168 | 165 | 10 | 297 | |||||||||||||||||||||
Performance and other data: | |||||||||||||||||||||||||||||
Average loans | (16,872 | ) | (17,391 | ) | (16,007 | ) | (14,488 | ) | (13,888 | ) | (17,131 | ) | (13,201 | ) | |||||||||||||||
Average assets | (14,739 | ) | (15,075 | ) | (14,180 | ) | (12,841 | ) | (12,287 | ) | (14,907 | ) | (11,627 | ) | |||||||||||||||
Adjusted basis | |||||||||||||||||||||||||||||
Condensed income statement: | |||||||||||||||||||||||||||||
Net interest income | $ | 263 | $ | 262 | $ | 240 | $ | 218 | $ | 190 | $ | 524 | $ | 416 | |||||||||||||||
Provision for loan losses | 381 | 156 | 256 | 323 | 229 | 537 | 335 | ||||||||||||||||||||||
Noninterest income | 163 | 451 | 434 | 568 | 558 | 614 | 1,164 | ||||||||||||||||||||||
Inter-segment expense | 5 | 5 | - | - | - | 9 | - | ||||||||||||||||||||||
Noninterest expense | 297 | 260 | 338 | 364 | 306 | 557 | 635 | ||||||||||||||||||||||
Income (loss) before income taxes | (257 | ) | 292 | 80 | 99 | 213 | 35 | 610 | |||||||||||||||||||||
Income taxes | (82 | ) | 93 | (12 | ) | 33 | 80 | 11 | 229 | ||||||||||||||||||||
Net income (loss) | $ | (175 | ) | $ | 199 | $ | 92 | $ | 66 | $ | 133 | $ | 24 | $ | 381 | ||||||||||||||
Performance and other data: | |||||||||||||||||||||||||||||
Average loans | $ | 9,442 | $ | 9,498 | $ | 10,658 | $ | 11,230 | $ | 10,346 | $ | 9,470 | $ | 10,720 | |||||||||||||||
Average assets | 14,105 | 14,169 | 14,781 | 15,365 | 14,475 | 14,137 | 14,776 |
(This table is continued on "WM-7.") | |
__________________________ | |
(1) | The managed basis presentation treats securitized and sold credit card receivables as if they were still on the balance sheet. The Company uses this basis in assessing the overall performance of this operating segment. The managed basis presentation of the Card Services Group is derived by adjusting the GAAP financial information to add back securitized loan balances and the related interest, fee income and provision for credit losses. Such adjustments are eliminated as securitization adjustments when reporting GAAP results. |
WM - 7
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
(This table is continued from "WM-6.") | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||
COMMERCIAL GROUP | ||||||||||||||||||||||||||||
Condensed income statement: | ||||||||||||||||||||||||||||
Net interest income | $ | 203 | $ | 196 | $ | 200 | $ | 200 | $ | 208 | $ | 400 | $ | 420 | ||||||||||||||
Provision for loan losses | 17 | 29 | 19 | 12 | 2 | 47 | (7 | ) | ||||||||||||||||||||
Noninterest income | 5 | (8 | ) | (10 | ) | (34 | ) | 63 | (3 | ) | 78 | |||||||||||||||||
Noninterest expense | 63 | 68 | 66 | 67 | 74 | 131 | 148 | |||||||||||||||||||||
Income before income taxes | 128 | 91 | 105 | 87 | 195 | 219 | 357 | |||||||||||||||||||||
Income taxes | 41 | 29 | 11 | 28 | 73 | 70 | 134 | |||||||||||||||||||||
Net income | $ | 87 | $ | 62 | $ | 94 | $ | 59 | $ | 122 | $ | 149 | $ | 223 | ||||||||||||||
Performance and other data: | ||||||||||||||||||||||||||||
Efficiency ratio | 30.34 | % | 36.09 | % | 34.39 | % | 40.26 | % | 27.42 | % | 33.07 | % | 29.89 | % | ||||||||||||||
Average loans | $ | 41,891 | $ | 40,934 | $ | 40,129 | $ | 38,333 | $ | 38,789 | $ | 41,413 | $ | 38,715 | ||||||||||||||
Average assets | 43,875 | 43,004 | 42,336 | 40,663 | 41,184 | 43,439 | 41,094 | |||||||||||||||||||||
Average deposits | 6,632 | 7,474 | 9,762 | 13,816 | 15,294 | 7,053 | 13,671 | |||||||||||||||||||||
Loan volume | 3,768 | 2,835 | 4,800 | 4,054 | 4,348 | 6,603 | 8,018 | |||||||||||||||||||||
Employees at end of period | 1,342 | 1,358 | 1,502 | 1,524 | 1,508 | 1,342 | 1,508 | |||||||||||||||||||||
HOME LOANS GROUP | ||||||||||||||||||||||||||||
Condensed income statement: | ||||||||||||||||||||||||||||
Net interest income | $ | 240 | $ | 250 | $ | 229 | $ | 191 | $ | 211 | $ | 490 | $ | 455 | ||||||||||||||
Provision for loan losses | 1,637 | 907 | 511 | 323 | 101 | 2,544 | 150 | |||||||||||||||||||||
Noninterest income | (97 | ) | 319 | 329 | 183 | 389 | 221 | 550 | ||||||||||||||||||||
Inter-segment expense | 2 | 4 | 5 | 9 | 16 | 6 | 34 | |||||||||||||||||||||
Noninterest expense | 484 | 499 | 2,319 | 554 | 547 | 983 | 1,069 | |||||||||||||||||||||
Loss before income taxes | (1,980 | ) | (841 | ) | (2,277 | ) | (512 | ) | (64 | ) | (2,822 | ) | (248 | ) | ||||||||||||||
Income taxes | (635 | ) | (269 | ) | (312 | ) | (169 | ) | (24 | ) | (904 | ) | (93 | ) | ||||||||||||||
Net loss | $ | (1,345 | ) | $ | (572 | ) | $ | (1,965 | ) | $ | (343 | ) | $ | (40 | ) | $ | (1,918 | ) | $ | (155 | ) | |||||||
Performance and other data: | ||||||||||||||||||||||||||||
Efficiency ratio | 344.70 | % | 88.26 | % | 419.52 | % | 151.63 | % | 93.71 | % | 139.26 | % | 110.07 | % | ||||||||||||||
Average loans | $ | 54,880 | $ | 55,672 | $ | 52,278 | $ | 43,737 | $ | 43,312 | $ | 55,275 | $ | 48,255 | ||||||||||||||
Average assets | 65,074 | 66,841 | 66,172 | 61,106 | 60,342 | 65,958 | 65,831 | |||||||||||||||||||||
Average deposits | 5,202 | 5,469 | 6,714 | 7,780 | 8,372 | 5,335 | 8,436 | |||||||||||||||||||||
Loan volume | 8,462 | 13,774 | 19,089 | 26,434 | 35,938 | 22,236 | 69,718 | |||||||||||||||||||||
Employees at end of period | 7,338 | 9,135 | 11,812 | 12,668 | 13,150 | 7,338 | 13,150 | |||||||||||||||||||||
CORPORATE SUPPORT/TREASURY AND OTHER | ||||||||||||||||||||||||||||
Condensed income statement: | ||||||||||||||||||||||||||||
Net interest income (expense) | $ | 254 | $ | 132 | $ | (18 | ) | $ | (39 | ) | $ | (4 | ) | $ | 386 | $ | (26 | ) | ||||||||||
Provision for loan losses | 55 | 119 | 85 | (9 | ) | (51 | ) | 173 | (25 | ) | ||||||||||||||||||
Noninterest income | (327 | ) | 86 | (201 | ) | (91 | ) | 60 | (241 | ) | 154 | |||||||||||||||||
Noninterest expense | 327 | 104 | 231 | 57 | 80 | 431 | 191 | |||||||||||||||||||||
Minority interest expense | 75 | 75 | 65 | 53 | 42 | 151 | 85 | |||||||||||||||||||||
Loss before income taxes | (530 | ) | (80 | ) | (600 | ) | (231 | ) | (15 | ) | (610 | ) | (123 | ) | ||||||||||||||
Income taxes | (247 | ) | (68 | ) | (157 | ) | (46 | ) | (37 | ) | (316 | ) | (106 | ) | ||||||||||||||
Net income (loss) | $ | (283 | ) | $ | (12 | ) | $ | (443 | ) | $ | (185 | ) | $ | 22 | $ | (294 | ) | $ | (17 | ) | ||||||||
Performance and other data: | ||||||||||||||||||||||||||||
Average loans | $ | 1,648 | $ | 1,556 | $ | 1,482 | $ | 1,420 | $ | 1,367 | $ | 1,602 | $ | 1,356 | ||||||||||||||
Average assets | 47,151 | 45,525 | 48,173 | 47,532 | 41,789 | 46,338 | 41,335 | |||||||||||||||||||||
Average deposits | 23,267 | 24,627 | 26,427 | 32,132 | 37,847 | 23,947 | 42,002 | |||||||||||||||||||||
Loan volume | 84 | 143 | 171 | 113 | 72 | 226 | 179 | |||||||||||||||||||||
Employees at end of period | 3,721 | 3,773 | 4,082 | 4,042 | 3,981 | 3,721 | 3,981 |
(This table is continued on "WM-8.") |
WM - 8
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | Six Months Ended | |||||||||||||||||||||||||||
(This table is continued from "WM-7.") | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2008 | 2007 | ||||||||||||||||||||||
RECONCILING ADJUSTMENTS | ||||||||||||||||||||||||||||
Condensed income statement: | ||||||||||||||||||||||||||||
Net interest income(1) | $ | 126 | $ | 132 | $ | 134 | $ | 138 | $ | 138 | $ | 258 | $ | 275 | ||||||||||||||
Noninterest income (expense)(2) | (25 | ) | (54 | ) | (37 | ) | (80 | ) | (132 | ) | (79 | ) | (218 | ) | ||||||||||||||
Income before income taxes | 101 | 78 | 97 | 58 | 6 | 179 | 57 | |||||||||||||||||||||
Income taxes(3) | (324 | ) | (150 | ) | 23 | (75 | ) | (22 | ) | (474 | ) | 16 | ||||||||||||||||
Net income | $ | 425 | $ | 228 | $ | 74 | $ | 133 | $ | 28 | $ | 653 | $ | 41 | ||||||||||||||
Performance and other data: | ||||||||||||||||||||||||||||
Average loans(4) | $ | (1,123 | ) | $ | (1,220 | ) | $ | (1,286 | ) | $ | (1,385 | ) | $ | (1,301 | ) | $ | (1,171 | ) | $ | (1,389 | ) | |||||||
Average assets(4) | (1,123 | ) | (1,220 | ) | (1,286 | ) | (1,385 | ) | (1,301 | ) | (1,171 | ) | (1,389 | ) | ||||||||||||||
TOTAL CONSOLIDATED | ||||||||||||||||||||||||||||
Condensed income statement: | ||||||||||||||||||||||||||||
Net interest income | $ | 2,296 | $ | 2,175 | $ | 2,047 | $ | 2,014 | $ | 2,034 | $ | 4,471 | $ | 4,115 | ||||||||||||||
Provision for loan losses | 5,913 | 3,511 | 1,534 | 967 | 372 | 9,423 | 606 | |||||||||||||||||||||
Noninterest income | 561 | 1,569 | 1,365 | 1,379 | 1,758 | 2,129 | 3,299 | |||||||||||||||||||||
Noninterest expense | 2,403 | 2,152 | 4,166 | 2,191 | 2,138 | 4,555 | 4,244 | |||||||||||||||||||||
Minority interest expense | 75 | 75 | 65 | 53 | 42 | 151 | 85 | |||||||||||||||||||||
Income (loss) before income taxes | (5,534 | ) | (1,994 | ) | (2,353 | ) | 182 | 1,240 | (7,529 | ) | 2,479 | |||||||||||||||||
Income taxes | (2,206 | ) | (856 | ) | (486 | ) | (4 | ) | 410 | (3,063 | ) | 865 | ||||||||||||||||
Net income (loss) | $ | (3,328 | ) | $ | (1,138 | ) | $ | (1,867 | ) | $ | 186 | $ | 830 | $ | (4,466 | ) | $ | 1,614 | ||||||||||
Performance and other data: | ||||||||||||||||||||||||||||
Efficiency ratio | 84.11 | % | 57.49 | % | 122.13 | % | 64.55 | % | 56.38 | % | 69.01 | % | 57.24 | % | ||||||||||||||
Average loans | $ | 245,409 | $ | 249,160 | $ | 248,747 | $ | 240,692 | $ | 242,229 | $ | 247,284 | $ | 250,102 | ||||||||||||||
Average assets | 314,882 | 319,928 | 325,276 | 320,475 | 316,004 | 317,405 | 323,911 | |||||||||||||||||||||
Average deposits | 184,610 | 184,304 | 185,636 | 198,649 | 206,765 | 184,457 | 208,753 | |||||||||||||||||||||
Loan volume | 12,969 | 17,990 | 27,477 | 35,773 | 46,118 | 30,958 | 88,253 | |||||||||||||||||||||
Employees at end of period | 43,198 | 45,883 | 49,403 | 49,748 | 49,989 | 43,198 | 49,989 | |||||||||||||||||||||
__________________________ |
(1) | Represents the difference between mortgage loan premium amortization recorded by the Retail Banking Group and the amount recognized in the Company's Consolidated Statements of Income. For management reporting purposes, certain mortgage loans that are held in portfolio by the Retail Banking Group are treated as if they are purchased from the Home Loans Group. Since the cost basis of these loans includes an assumed profit factor paid to the Home Loans Group, the amortization of loan premiums recorded by the Retail Banking Group reflects this assumed profit factor and must therefore be eliminated as a reconciling adjustment. |
(2) | Represents the difference between gain from mortgage loans recorded by the Home Loans Group and gain from mortgage loans recognized in the Company's Consolidated Statements of Income. |
(3) | Represents the tax effect of reconciling adjustments. |
(4) | Represents the inter-segment offset for inter-segment loan premiums that the Retail Banking Group recognized upon transfer of portfolio loans from the Home Loans Group. |
WM - 9
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||||||||||||||||||
June 30, 2008 | Mar. 31, 2008 | June 30, 2007 | ||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||
Income/ | Income/ | Income/ | ||||||||||||||||||||||||||||||||||
Balance | Rate | Expense | Balance | Rate | Expense | Balance | Rate | Expense | ||||||||||||||||||||||||||||
Average Balances and Weighted Average Interest Rates | ||||||||||||||||||||||||||||||||||||
Assets (Taxable-Equivalent Basis(1)) | ||||||||||||||||||||||||||||||||||||
Interest-earning assets(2): | ||||||||||||||||||||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||||||||||||
agreements to resell | $ | 2,161 | 2.15 | % | $ | 11 | $ | 2,118 | 3.48 | % | $ | 18 | $ | 3,964 | 5.39 | % | $ | 53 | ||||||||||||||||||
Trading assets | 2,404 | 19.50 | 117 | 2,726 | 17.10 | 116 | 4,995 | 8.67 | 108 | |||||||||||||||||||||||||||
Available-for-sale securities(3): | ||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 19,190 | 5.67 | 271 | 18,945 | 5.80 | 275 | 19,177 | 5.39 | 259 | |||||||||||||||||||||||||||
Investment securities | 5,287 | 5.06 | 67 | 6,316 | 5.39 | 85 | 7,382 | 5.15 | 95 | |||||||||||||||||||||||||||
Loans held for sale | 3,672 | 5.62 | 52 | 4,974 | 6.98 | 87 | 26,225 | 6.43 | 421 | |||||||||||||||||||||||||||
Loans held in portfolio: | ||||||||||||||||||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||||||||||||||||||
Home loans(4)(5) | 107,299 | 5.83 | 1,563 | 109,773 | 6.27 | 1,720 | 90,818 | 6.44 | 1,462 | |||||||||||||||||||||||||||
Home equity loans and lines of credit(5) | 60,964 | 5.12 | 777 | 61,196 | 6.28 | 956 | 54,431 | 7.59 | 1,031 | |||||||||||||||||||||||||||
Subprime mortgage channel(6) | 16,933 | 6.05 | 256 | 18,106 | 6.33 | 287 | 20,152 | 6.80 | 343 | |||||||||||||||||||||||||||
Home construction(7) | 1,973 | 7.41 | 37 | 2,142 | 7.65 | 41 | 2,043 | 6.72 | 34 | |||||||||||||||||||||||||||
Multi-family | 32,786 | 6.13 | 502 | 31,962 | 6.35 | 507 | 29,419 | 6.65 | 488 | |||||||||||||||||||||||||||
Other real estate | 10,205 | 6.26 | 159 | 9,797 | 6.49 | 158 | 6,843 | 7.03 | 120 | |||||||||||||||||||||||||||
Total loans secured by real estate | 230,160 | 5.73 | 3,294 | 232,976 | 6.31 | 3,669 | 203,706 | 6.84 | 3,478 | |||||||||||||||||||||||||||
Consumer: | ||||||||||||||||||||||||||||||||||||
Credit card | 9,443 | 11.56 | 271 | 9,024 | 10.75 | 241 | 10,101 | 10.44 | 263 | |||||||||||||||||||||||||||
Other | 180 | 16.85 | 8 | 195 | 17.47 | 8 | 254 | 12.44 | 8 | |||||||||||||||||||||||||||
Commercial | 1,954 | 6.76 | 33 | 1,991 | 7.36 | 37 | 1,943 | 7.73 | 38 | |||||||||||||||||||||||||||
Total loans held in portfolio | 241,737 | 5.98 | 3,606 | 244,186 | 6.49 | 3,955 | 216,004 | 7.02 | 3,787 | |||||||||||||||||||||||||||
Other | 11,052 | 3.01 | 83 | 6,000 | 3.94 | 59 | 2,089 | 5.47 | 29 | |||||||||||||||||||||||||||
Total interest-earning assets | 285,503 | 5.90 | 4,207 | 285,265 | 6.45 | 4,595 | 279,836 | 6.80 | 4,752 | |||||||||||||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||||||||||||||||
Mortgage servicing rights | 6,115 | 5,882 | 6,782 | |||||||||||||||||||||||||||||||||
Goodwill | 7,283 | 7,286 | 9,054 | |||||||||||||||||||||||||||||||||
Other assets | 15,981 | 21,495 | 20,332 | |||||||||||||||||||||||||||||||||
Total assets | $ | 314,882 | $ | 319,928 | $ | 316,004 | ||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||
Interest-bearing checking deposits | $ | 22,619 | 1.39 | 78 | $ | 24,384 | 1.75 | 107 | $ | 30,373 | 2.51 | 190 | ||||||||||||||||||||||||
Savings and money market deposits | 62,078 | 2.17 | 335 | 55,951 | 2.73 | 379 | 58,969 | 3.33 | 490 | |||||||||||||||||||||||||||
Time deposits | 69,161 | 4.08 | 702 | 74,225 | 4.57 | 843 | 84,330 | 4.96 | 1,043 | |||||||||||||||||||||||||||
Total interest-bearing deposits | 153,858 | 2.91 | 1,115 | 154,560 | 3.46 | 1,329 | 173,672 | 3.98 | 1,723 | |||||||||||||||||||||||||||
Federal funds purchased and commercial paper | 79 | 3.05 | 1 | 1,009 | 3.62 | 9 | 2,169 | 5.36 | 29 | |||||||||||||||||||||||||||
Securities sold under agreements to repurchase | 406 | 2.20 | 2 | 885 | 3.78 | 8 | 8,416 | 5.35 | 112 | |||||||||||||||||||||||||||
Advances from Federal Home Loan Banks | 60,402 | 3.36 | 505 | 62,799 | 4.29 | 670 | 22,063 | 5.36 | 295 | |||||||||||||||||||||||||||
Other | 30,839 | 3.69 | 283 | 34,048 | 4.71 | 400 | 39,886 | 5.57 | 555 | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 245,584 | 3.12 | 1,906 | 253,301 | 3.83 | 2,416 | 246,206 | 4.42 | 2,714 | |||||||||||||||||||||||||||
Noninterest-bearing sources: | ||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 30,752 | 29,744 | 33,093 | |||||||||||||||||||||||||||||||||
Other liabilities | 7,075 | 8,902 | 9,610 | |||||||||||||||||||||||||||||||||
Minority interests | 3,913 | 3,915 | 2,659 | |||||||||||||||||||||||||||||||||
Stockholders' equity | 27,558 | 24,066 | 24,436 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 314,882 | $ | 319,928 | $ | 316,004 | ||||||||||||||||||||||||||||||
Net interest spread and net interest income on a taxable-equivalent basis | 2.78 | $ | 2,301 | 2.62 | $ | 2,179 | 2.38 | $ | 2,038 | |||||||||||||||||||||||||||
Impact of noninterest-bearing sources | 0.44 | 0.43 | 0.53 | |||||||||||||||||||||||||||||||||
Net interest margin on a taxable-equivalent basis | 3.22 | 3.05 | 2.91 |
_______________________________ | |
(1) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on U.S. states and political subdivisions securities and loans related to the Company’s community lending and investment activities. The federal statutory tax rate was 35% for the periods presented. |
(2) | Nonaccrual assets and related income, if any, are included in their respective categories. |
(3) | The average balance and yield are based on average amortized cost balances. |
(4) | Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $255 million, $336 million and $344 million for the three months ended June 30, 2008, March 31, 2008 and June 30, 2007. |
(5) | Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel. |
(6) | Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio. |
(7) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
WM - 10
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Six Months Ended | ||||||||||||||||||||||||
June 30, 2008 | June 30, 2007 | |||||||||||||||||||||||
Interest | Interest | |||||||||||||||||||||||
Income/ | Income/ | |||||||||||||||||||||||
Balance | Rate | Expense | Balance | Rate | Expense | |||||||||||||||||||
Average Balances and Weighted Average Interest Rates | ||||||||||||||||||||||||
Assets (Taxable-Equivalent Basis(1)) | ||||||||||||||||||||||||
Interest-earning assets(2): | ||||||||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||
agreements to resell | $ | 2,139 | 2.81 | % | $ | 30 | $ | 3,947 | 5.39 | % | $ | 105 | ||||||||||||
Trading assets | 2,565 | 18.22 | 233 | 5,293 | 8.37 | 221 | ||||||||||||||||||
Available-for-sale securities(3): | ||||||||||||||||||||||||
Mortgage-backed securities | 19,068 | 5.74 | 546 | 18,821 | 5.44 | 511 | ||||||||||||||||||
Investment securities | 5,802 | 5.24 | 152 | 6,785 | 5.18 | 176 | ||||||||||||||||||
Loans held for sale | 4,323 | 6.40 | 138 | 30,810 | 6.40 | 984 | ||||||||||||||||||
Loans held in portfolio: | ||||||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||||||
Home loans(4)(5) | 108,536 | 6.05 | 3,283 | 94,074 | 6.45 | 3,033 | ||||||||||||||||||
Home equity loans and lines of credit(5) | 61,080 | 5.70 | 1,733 | 53,726 | 7.57 | 2,020 | ||||||||||||||||||
Subprime mortgage channel(6) | 17,519 | 6.19 | 543 | 20,381 | 6.74 | 686 | ||||||||||||||||||
Home construction(7) | 2,058 | 7.54 | 78 | 2,052 | 6.63 | 68 | ||||||||||||||||||
Multi-family | 32,374 | 6.23 | 1,009 | 29,621 | 6.61 | 979 | ||||||||||||||||||
Other real estate | 10,001 | 6.37 | 317 | 6,803 | 7.03 | 238 | ||||||||||||||||||
Total loans secured by real estate | 231,568 | 6.02 | 6,963 | 206,657 | 6.81 | 7,024 | ||||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Credit card | 9,233 | 11.16 | 513 | 10,500 | 11.03 | 574 | ||||||||||||||||||
Other | 188 | 17.17 | 16 | 261 | 12.70 | 17 | ||||||||||||||||||
Commercial | 1,972 | 7.06 | 69 | 1,874 | 7.84 | 73 | ||||||||||||||||||
Total loans held in portfolio | 242,961 | 6.23 | 7,561 | 219,292 | 7.03 | 7,688 | ||||||||||||||||||
Other | 8,526 | 3.34 | 141 | 2,776 | 5.65 | 78 | ||||||||||||||||||
Total interest-earning assets | 285,384 | 6.18 | 8,801 | 287,724 | 6.80 | 9,763 | ||||||||||||||||||
Noninterest-earning assets: | ||||||||||||||||||||||||
Mortgage servicing rights | 5,998 | 6,545 | ||||||||||||||||||||||
Goodwill | 7,285 | 9,054 | ||||||||||||||||||||||
Other assets | 18,738 | 20,588 | ||||||||||||||||||||||
Total assets | $ | 317,405 | $ | 323,911 | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Interest-bearing checking deposits | $ | 23,502 | 1.58 | 184 | $ | 31,093 | 2.57 | 397 | ||||||||||||||||
Savings and money market deposits | 59,014 | 2.43 | 714 | 56,927 | 3.31 | 933 | ||||||||||||||||||
Time deposits | 71,693 | 4.33 | 1,545 | 87,960 | 4.96 | 2,165 | ||||||||||||||||||
Total interest-bearing deposits | 154,209 | 3.19 | 2,443 | 175,980 | 4.00 | 3,495 | ||||||||||||||||||
Federal funds purchased and commercial paper | 544 | 3.58 | 10 | 3,003 | 5.44 | 81 | ||||||||||||||||||
Securities sold under agreements to repurchase | 646 | 3.28 | 10 | 10,247 | 5.43 | 276 | ||||||||||||||||||
Advances from Federal Home Loan Banks | 61,600 | 3.83 | 1,175 | 29,019 | 5.37 | 773 | ||||||||||||||||||
Other | 32,443 | 4.23 | 683 | 36,366 | 5.62 | 1,016 | ||||||||||||||||||
Total interest-bearing liabilities | 249,442 | 3.48 | 4,321 | 254,615 | 4.46 | 5,641 | ||||||||||||||||||
Noninterest-bearing sources: | ||||||||||||||||||||||||
Noninterest-bearing deposits | 30,248 | 32,773 | ||||||||||||||||||||||
Other liabilities | 7,989 | 9,547 | ||||||||||||||||||||||
Minority interests | 3,914 | 2,554 | ||||||||||||||||||||||
Stockholders' equity | 25,812 | 24,422 | ||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 317,405 | $ | 323,911 | ||||||||||||||||||||
Net interest spread and net interest income on a taxable-equivalent basis | 2.70 | $ | 4,480 | 2.34 | $ | 4,122 | ||||||||||||||||||
Impact of noninterest-bearing sources | 0.44 | 0.51 | ||||||||||||||||||||||
Net interest margin on a taxable-equivalent basis | 3.14 | 2.85 |
_______________________________ | |
(1) | Includes taxable-equivalent adjustments primarily related to tax-exempt income on U.S. states and political subdivisions securities and loans related to the Company’s community lending and investment activities. The federal statutory tax rate was 35% for the periods presented. |
(2) | Nonaccrual assets and related income, if any, are included in their respective categories. |
(3) | The average balance and yield are based on average amortized cost balances. |
(4) | Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $591 million and $706 million for the six months ended June 30, 2008 and June 30, 2007. |
(5) | Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel. |
(6) | Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio. |
(7) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
WM - 11
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Change from | ||||||||||||||||||||||||
Mar. 31, 2008 | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | |||||||||||||||||||
to June 30, 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Retail deposits: | ||||||||||||||||||||||||
Checking deposits: | ||||||||||||||||||||||||
Noninterest bearing | $ | 304 | $ | 25,435 | $ | 25,131 | $ | 23,476 | $ | 23,721 | $ | 24,142 | ||||||||||||
Interest bearing | (1,916 | ) | 21,715 | 23,631 | 25,713 | 27,277 | 29,592 | |||||||||||||||||
Total checking deposits | (1,612 | ) | 47,150 | 48,762 | 49,189 | 50,998 | 53,734 | |||||||||||||||||
Savings and money market deposits | 6,699 | 58,016 | 51,317 | 44,987 | 43,360 | 43,617 | ||||||||||||||||||
Time deposits(1) | (8,488 | ) | 43,086 | 51,574 | 49,410 | 50,740 | 48,140 | |||||||||||||||||
Total retail deposits | (3,401 | ) | 148,252 | 151,653 | 143,586 | 145,098 | 145,491 | |||||||||||||||||
Commercial business and other deposits | (1,513 | ) | 8,892 | 10,405 | 11,267 | 16,536 | 19,186 | |||||||||||||||||
Brokered deposits: | ||||||||||||||||||||||||
Consumer | 1,509 | 19,248 | 17,739 | 18,089 | 17,484 | 17,153 | ||||||||||||||||||
Institutional | (1,611 | ) | 100 | 1,711 | 2,515 | 8,107 | 11,025 | |||||||||||||||||
Custodial and escrow deposits(2) | (1,110 | ) | 5,431 | 6,541 | 6,469 | 7,055 | 8,525 | |||||||||||||||||
Total deposits | $ | (6,126 | ) | $ | 181,923 | $ | 188,049 | $ | 181,926 | $ | 194,280 | $ | 201,380 |
(1) | Weighted average remaining maturity of time deposits was 6 months at June 30, 2008 and March 31, 2008, 7 months at December 31, 2007 and September 30, 2007 and 8 months at June 30, 2007. |
(2) | Substantially all custodial and escrow deposits reside in noninterest-bearing checking accounts. |
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Retail Deposit Accounts (number of accounts) | ||||||||||||||||||||
Noninterest-bearing checking | 11,577,907 | 11,271,406 | 10,960,270 | 10,824,548 | 10,449,887 | |||||||||||||||
Interest-bearing checking | 1,167,062 | 1,218,606 | 1,273,673 | 1,334,902 | 1,399,203 | |||||||||||||||
Savings and money market | 7,474,547 | 7,293,256 | 7,118,349 | 7,087,311 | 6,936,870 | |||||||||||||||
Total transaction accounts, end of period(1) | 20,219,516 | 19,783,268 | 19,352,292 | 19,246,761 | 18,785,960 | |||||||||||||||
Net change in noninterest-bearing checking accounts | 306,501 | 311,136 | 135,722 | 374,661 | 466,574 | |||||||||||||||
Net change in checking accounts | 254,957 | 256,069 | 74,493 | 310,360 | 406,243 | |||||||||||||||
_______________________________ |
(1) | Transaction accounts include retail checking, small business checking, retail savings and small business savings. |
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Retail Banking Stores | ||||||||||||||||||||
Stores, beginning of period | 2,261 | 2,257 | 2,212 | 2,235 | 2,228 | |||||||||||||||
Stores opened during the quarter | 14 | 9 | 50 | 10 | 11 | |||||||||||||||
Stores closed during the quarter | (36 | ) | (5 | ) | (5 | ) | (33 | ) | (4 | ) | ||||||||||
Stores, end of period | 2,239 | 2,261 | 2,257 | 2,212 | 2,235 |
WM - 12
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Loan Volume | ||||||||||||||||||||
Home loans: | ||||||||||||||||||||
Short-term adjustable-rate loans(1): | ||||||||||||||||||||
Option ARMs | $ | 11 | $ | 231 | $ | 3,945 | $ | 6,174 | $ | 7,888 | ||||||||||
Other ARMs | 14 | 19 | 10 | 111 | 22 | |||||||||||||||
Total short-term adjustable-rate loans | 25 | 250 | 3,955 | 6,285 | 7,910 | |||||||||||||||
Medium-term adjustable-rate loans(2) | 2,338 | 3,810 | 5,972 | 9,868 | 14,953 | |||||||||||||||
Fixed-rate loans | 6,131 | 9,427 | 7,382 | 6,176 | 8,172 | |||||||||||||||
Total home loan volume | 8,494 | 13,487 | 17,309 | 22,329 | 31,035 | |||||||||||||||
Home equity loans and lines of credit | 541 | 1,297 | 4,619 | 8,544 | 9,988 | |||||||||||||||
Home construction(3) | 8 | 128 | 378 | 483 | 426 | |||||||||||||||
Multi-family | 2,686 | 2,250 | 3,412 | 2,856 | 3,067 | |||||||||||||||
Other real estate | 1,106 | 728 | 1,487 | 1,285 | 1,246 | |||||||||||||||
Total loans secured by real estate | 12,835 | 17,890 | 27,205 | 35,497 | 45,762 | |||||||||||||||
Commercial | 134 | 100 | 272 | 276 | 356 | |||||||||||||||
Total loan volume | $ | 12,969 | $ | 17,990 | $ | 27,477 | $ | 35,773 | $ | 46,118 | ||||||||||
Loan Volume by Channel | ||||||||||||||||||||
Retail | $ | 9,081 | $ | 10,585 | $ | 17,341 | $ | 21,223 | $ | 24,707 | ||||||||||
Wholesale | 3,732 | 7,091 | 9,536 | 13,387 | 17,020 | |||||||||||||||
Purchased | 156 | 314 | 600 | 1,163 | 4,391 | |||||||||||||||
Total loan volume by channel | $ | 12,969 | $ | 17,990 | $ | 27,477 | $ | 35,773 | $ | 46,118 | ||||||||||
Refinancing Activity(4) | ||||||||||||||||||||
Home loan refinancing | $ | 6,665 | $ | 10,779 | $ | 12,297 | $ | 14,722 | $ | 22,637 | ||||||||||
Home equity loans and lines of credit | 8 | 22 | 46 | 143 | 157 | |||||||||||||||
Home construction loans | - | 1 | 30 | 30 | 20 | |||||||||||||||
Multi-family and other real estate | 1,301 | 1,033 | 1,436 | 1,225 | 1,378 | |||||||||||||||
Total refinancing | $ | 7,974 | $ | 11,835 | $ | 13,809 | $ | 16,120 | $ | 24,192 |
(1) | Short-term adjustable-rate loans reprice within one year. |
(2) | Medium-term adjustable-rate loans reprice after one year. |
(3) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
(4) | Includes loan refinancing entered into by both new and pre-existing loan customers. |
WM - 13
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Six Months Ended | ||||||||
June 30, | June 30, | |||||||
2008 | 2007 | |||||||
Loan Volume | ||||||||
Home loans: | ||||||||
Short-term adjustable-rate loans(1): | ||||||||
Option ARMs | $ | 241 | $ | 15,666 | ||||
Other ARMs | 34 | 58 | ||||||
Total short-term adjustable-rate loans | 275 | 15,724 | ||||||
Medium-term adjustable-rate loans(2) | 6,148 | 28,519 | ||||||
Fixed-rate loans | 15,557 | 16,996 | ||||||
Total home loan volume | 21,980 | 61,239 | ||||||
Home equity loans and lines of credit | 1,839 | 17,590 | ||||||
Home construction(3) | 136 | 724 | ||||||
Multi-family | 4,936 | 5,729 | ||||||
Other real estate | 1,833 | 2,326 | ||||||
Total loans secured by real estate | 30,724 | 87,608 | ||||||
Commercial | 234 | 645 | ||||||
Total loan volume | $ | 30,958 | $ | 88,253 | ||||
Loan Volume by Channel | ||||||||
Retail | $ | 19,665 | $ | 45,878 | ||||
Wholesale | 10,824 | 31,767 | ||||||
Purchased | 469 | 10,608 | ||||||
Total loan volume by channel | $ | 30,958 | $ | 88,253 | ||||
Refinancing Activity(4) | ||||||||
Home loan refinancing | $ | 17,444 | $ | 45,190 | ||||
Home equity loans and lines of credit | 30 | 707 | ||||||
Home construction loans | 1 | 31 | ||||||
Multi-family and other real estate | 2,334 | 2,509 | ||||||
Total refinancing | $ | 19,809 | $ | 48,437 |
(1) | Short-term adjustable-rate loans reprice within one year. |
(2) | Medium-term adjustable-rate loans reprice after one year. |
(3) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
(4) | Includes loan refinancing entered into by both new and pre-existing loan customers. |
WM - 14
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Change from | ||||||||||||||||||||||||
Mar. 31, 2008 | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | |||||||||||||||||||
to June 30, 2008 | 2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||||||
Loans Held in Portfolio | ||||||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||||||
Home: | ||||||||||||||||||||||||
Short-term adjustable-rate loans(1): | ||||||||||||||||||||||||
Option ARMs(2) | $ | (2,960 | ) | $ | 52,886 | $ | 55,846 | $ | 58,870 | $ | 58,137 | $ | 53,455 | |||||||||||
Other ARMs | (404 | ) | 15,128 | 15,532 | 16,231 | 15,478 | 13,538 | |||||||||||||||||
Total short-term adjustable-rate loans | (3,364 | ) | 68,014 | 71,378 | 75,101 | 73,615 | 66,993 | |||||||||||||||||
Medium-term adjustable-rate loans(3) | (1,014 | ) | 39,203 | 40,217 | 39,373 | 37,717 | 29,647 | |||||||||||||||||
Fixed-rate loans | (96 | ) | 11,761 | 11,857 | 12,005 | 11,813 | 9,505 | |||||||||||||||||
Total home loans | (4,474 | ) | 118,978 | 123,452 | 126,479 | 123,145 | 106,145 | |||||||||||||||||
Home equity loans and lines of credit | (1,059 | ) | 62,487 | 63,546 | 63,488 | 61,831 | 58,631 | |||||||||||||||||
Home construction(4) | (186 | ) | 1,902 | 2,088 | 2,226 | 2,110 | 2,058 | |||||||||||||||||
Multi-family | 616 | 33,144 | 32,528 | 31,754 | 30,831 | 29,290 | ||||||||||||||||||
Other real estate | 456 | 10,478 | 10,022 | 9,524 | 8,335 | 6,879 | ||||||||||||||||||
Total loans secured by real estate(5) | (4,647 | ) | 226,989 | 231,636 | 233,471 | 226,252 | 203,003 | |||||||||||||||||
Consumer: | ||||||||||||||||||||||||
Credit card | 1,600 | 10,589 | 8,989 | 8,831 | 8,791 | 9,913 | ||||||||||||||||||
Other | (9 | ) | 177 | 186 | 205 | 224 | 243 | |||||||||||||||||
Commercial | (131 | ) | 1,872 | 2,003 | 1,879 | 1,865 | 1,835 | |||||||||||||||||
Total loans held in portfolio(6) | (3,187 | ) | 239,627 | 242,814 | 244,386 | 237,132 | 214,994 | |||||||||||||||||
Less: allowance for loan losses | (3,742 | ) | (8,456 | ) | (4,714 | ) | (2,571 | ) | (1,889 | ) | (1,560 | ) | ||||||||||||
Total loans held in portfolio, net | $ | (6,929 | ) | $ | 231,171 | $ | 238,100 | $ | 241,815 | $ | 235,243 | $ | 213,434 |
(1) | Short-term adjustable-rate loans reprice within one year. |
(2) | The total amount by which the unpaid principal balance of Option ARM loans exceeded their original principal amount was $2.05 billion, $1.93 billion, $1.73 billion, $1.50 billion and $1.30 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. |
(3) | Medium-term adjustable-rate loans reprice after one year. |
(4) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
(5) | Includes subprime mortgage channel loans, comprising mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio as follows: |
Subprime Mortgage Channel | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||||
Home loans | $ | 13,951 | $ | 15,032 | $ | 16,092 | $ | 17,285 | $ | 17,602 | |||||||||||
Home equity loans and lines of credit | 2,101 | 2,312 | 2,525 | 2,711 | 2,855 | ||||||||||||||||
Total | $ | 16,052 | $ | 17,344 | $ | 18,617 | $ | 19,996 | $ | 20,457 |
(6) | Includes net unamortized deferred loan costs of $1.31 billion, $1.42 billion, $1.45 billion, $1.44 billion and $1.58 billion at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. |
WM - 15
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Weighted | Weighted | Weighted | ||||||||||||||||||||||||||
Change from | Average | Average | Average | |||||||||||||||||||||||||
Mar. 31, 2008 | June 30, | Coupon | Mar. 31, | Coupon | June 30, | Coupon | ||||||||||||||||||||||
to June 30, 2008 | 2008 | Rate | 2008 | Rate | 2007 | Rate | ||||||||||||||||||||||
Selected Loans Secured by Real Estate | ||||||||||||||||||||||||||||
Home loans held in portfolio: | ||||||||||||||||||||||||||||
Short-term adjustable-rate loans(1): | ||||||||||||||||||||||||||||
Option ARMs | $ | (2,960 | ) | $ | 52,886 | 6.61 | % | $ | 55,846 | 7.30 | % | $ | 53,455 | 7.74 | % | |||||||||||||
Other ARMs | (404 | ) | 15,128 | 6.70 | 15,532 | 6.94 | 13,538 | 7.28 | ||||||||||||||||||||
Total short-term adjustable-rate loans | (3,364 | ) | 68,014 | 6.63 | 71,378 | 7.22 | 66,993 | 7.65 | ||||||||||||||||||||
Medium-term adjustable-rate loans(2) | (1,014 | ) | 39,203 | 6.36 | 40,217 | 6.35 | 29,647 | 5.99 | ||||||||||||||||||||
Fixed-rate loans | (96 | ) | 11,761 | 6.70 | 11,857 | 6.75 | 9,505 | 6.71 | ||||||||||||||||||||
Total home loans held in portfolio | (4,474 | ) | 118,978 | 6.55 | 123,452 | 6.89 | 106,145 | 7.10 | ||||||||||||||||||||
Home equity loans and lines of credit: | ||||||||||||||||||||||||||||
Adjustable-rate | (410 | ) | 53,440 | 5.65 | 53,850 | 6.02 | 47,699 | 8.25 | ||||||||||||||||||||
Fixed-rate | (649 | ) | 9,047 | 7.61 | 9,696 | 7.67 | 10,932 | 7.70 | ||||||||||||||||||||
Total home equity loans and lines of credit | (1,059 | ) | 62,487 | 5.93 | 63,546 | 6.27 | 58,631 | 8.15 | ||||||||||||||||||||
Multi-family loans held in portfolio: | ||||||||||||||||||||||||||||
Short-term adjustable-rate loans(1): | ||||||||||||||||||||||||||||
Option ARMs | (634 | ) | 5,524 | 5.90 | 6,158 | 6.70 | 7,650 | 7.28 | ||||||||||||||||||||
Other ARMs | (353 | ) | 7,116 | 5.72 | 7,469 | 6.03 | 7,910 | 6.77 | ||||||||||||||||||||
Total short-term adjustable-rate loans | (987 | ) | 12,640 | 5.79 | 13,627 | 6.33 | 15,560 | 7.02 | ||||||||||||||||||||
Medium-term adjustable-rate loans(2) | 1,576 | 18,393 | 6.10 | 16,817 | 6.12 | 11,890 | 5.93 | |||||||||||||||||||||
Fixed-rate loans | 27 | 2,111 | 6.19 | 2,084 | 6.22 | 1,840 | 6.35 | |||||||||||||||||||||
Total multi-family loans held in portfolio | 616 | 33,144 | 5.99 | 32,528 | 6.22 | 29,290 | 6.53 | |||||||||||||||||||||
Total selected loans held in portfolio secured by real estate(3) | (4,917 | ) | 214,609 | 6.28 | 219,526 | 6.61 | 194,066 | 7.33 | ||||||||||||||||||||
Loans held for sale(4) | (3,064 | ) | 1,877 | 5.72 | 4,941 | 5.73 | 18,999 | 6.39 | ||||||||||||||||||||
Total selected loans secured by real estate | $ | (7,981 | ) | $ | 216,486 | 6.28 | $ | 224,467 | 6.59 | $ | 213,065 | 7.25 |
(1) | Short-term adjustable-rate loans reprice within one year. |
(2) | Medium-term adjustable-rate loans reprice after one year. |
(3) | At June 30, 2008, March 31, 2008 and June 30, 2007, adjustable-rate loans with lifetime caps were $180.93 billion, $182.93 billion and $158.24 billion with a lifetime weighted average cap rate of 12.67%, 12.60% and 12.96%. |
(4) | Excludes credit card and student loans. |
Mar. 31, 2008 | Dec. 31, 2007 | |||||||
to June 30, 2008 | to June 30, 2008 | |||||||
Rollforward of Loans Held for Sale | ||||||||
Balance, beginning of period | $ | 4,941 | $ | 5,403 | ||||
Mortgage loans originated, purchased and transferred from held in portfolio | 7,339 | 18,969 | ||||||
Mortgage loans transferred to held in portfolio | (27 | ) | (373 | ) | ||||
Mortgage loans sold and other(1) | (10,376 | ) | (21,092 | ) | ||||
Net change in consumer loans held for sale | - | (1,030 | ) | |||||
Balance, end of period | $ | 1,877 | $ | 1,877 | ||||
Rollforward of Home Loans Held in Portfolio | ||||||||
Balance, beginning of period | $ | 123,452 | $ | 126,479 | ||||
Loans originated, purchased and transferred from held for sale | 1,525 | 3,790 | ||||||
Loan payments, transferred to held for sale and other | (5,999 | ) | (11,291 | ) | ||||
Balance, end of period | $ | 118,978 | $ | 118,978 |
(1) | The unpaid principal balance ("UPB") of home loans sold was $9.85 billion and $19.85 billion for the three and six months ended June 30, 2008. |
WM - 16
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
Detail of Revenue (Expense) from Sales and Servicing of Home Mortgage Loans | June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | |||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments: | ||||||||||||||||||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities(1) | $ | (162 | ) | $ | 143 | $ | 7 | $ | (169 | ) | $ | 66 | ||||||||
Revaluation gain (loss) from derivatives economically hedging loans held for sale | 11 | (21 | ) | (12 | ) | (53 | ) | 126 | ||||||||||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities, | ||||||||||||||||||||
net of hedging and risk management instruments | (151 | ) | 122 | (5 | ) | (222 | ) | 192 | ||||||||||||
Home mortgage loan servicing revenue: | ||||||||||||||||||||
Home mortgage loan servicing revenue(2) | 438 | 470 | 490 | 516 | 526 | |||||||||||||||
Change in MSR fair value due to payments on loans and other | (301 | ) | (230 | ) | (255 | ) | (351 | ) | (401 | ) | ||||||||||
Net home mortgage loan servicing revenue | 137 | 240 | 235 | 165 | 125 | |||||||||||||||
Change in MSR fair value due to valuation inputs or assumptions | 542 | (499 | ) | (390 | ) | (201 | ) | 530 | ||||||||||||
Revaluation gain (loss) from derivatives economically hedging MSR | (637 | ) | 548 | 518 | 419 | (547 | ) | |||||||||||||
Home mortgage loan servicing revenue, net of MSR valuation | ||||||||||||||||||||
changes and derivative risk management instruments | 42 | 289 | 363 | 383 | 108 | |||||||||||||||
Total revenue (expense) from sales and servicing of home mortgage loans | $ | (109 | ) | $ | 411 | $ | 358 | $ | 161 | $ | 300 |
Six Months Ended | ||||||||
Detail of Revenue from Sales and Servicing of Home Mortgage Loans | June 30, | June 30, | ||||||
2008 | 2007 | |||||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities, net of hedging and risk management instruments: | ||||||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities(1) | $ | (19 | ) | $ | 214 | |||
Revaluation gain (loss) from derivatives economically hedging loans held for sale | (9 | ) | 72 | |||||
Gain (loss) from home mortgage loans and originated mortgage-backed securities, | ||||||||
net of hedging and risk management instruments | (28 | ) | 286 | |||||
Home mortgage loan servicing revenue: | ||||||||
Home mortgage loan servicing revenue(2) | 908 | 1,041 | ||||||
Change in MSR fair value due to payments on loans and other | (531 | ) | (757 | ) | ||||
Net home mortgage loan servicing revenue | 377 | 284 | ||||||
Change in MSR fair value due to valuation inputs or assumptions | 42 | 434 | ||||||
Revaluation loss from derivatives economically hedging MSR | (89 | ) | (579 | ) | ||||
Home mortgage loan servicing revenue, net of MSR valuation | ||||||||
changes and derivative risk management instruments | 330 | 139 | ||||||
Total revenue from sales and servicing of home mortgage loans | $ | 302 | $ | 425 |
(1) | Originated mortgage-backed securities represent available-for-sale securities retained on the balance sheet subsequent to the securitization of mortgage loans that were originated by the Company. |
(2) | Includes contractually specified servicing fees (net of guarantee fees paid to housing government-sponsored enterprises, where applicable), late charges and loan pool expenses (the shortfall of the scheduled interest required to be remitted to investors and that which is collected from borrowers upon payoff). |
WM - 17
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
MSR Valuation and Risk Management: | ||||||||||||||||||||
Change in MSR fair value due to valuation inputs or assumptions | $ | 542 | $ | (499 | ) | $ | (390 | ) | $ | (201 | ) | $ | 530 | |||||||
Gain (loss) on MSR risk management instruments: | ||||||||||||||||||||
Revaluation gain (loss) from derivatives economically hedging MSR | (637 | ) | 548 | 518 | 419 | (547 | ) | |||||||||||||
Revaluation gain (loss) from certain trading securities | (2 | ) | - | - | 4 | (4 | ) | |||||||||||||
Total gain (loss) on MSR risk management instruments | (639 | ) | 548 | 518 | 423 | (551 | ) | |||||||||||||
Total changes in MSR valuation and risk management | $ | (97 | ) | $ | 49 | $ | 128 | $ | 222 | $ | (21 | ) |
Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2008 | 2007 | |||||||||||||||||||
MSR Valuation and Risk Management: | ||||||||||||||||||||
Change in MSR fair value due to valuation inputs or assumptions | $ | 42 | $ | 434 | ||||||||||||||||
Loss on MSR risk management instruments: | ||||||||||||||||||||
Revaluation loss from derivatives economically hedging MSR | (89 | ) | (579 | ) | ||||||||||||||||
Revaluation loss from certain trading securities | (2 | ) | - | |||||||||||||||||
Total loss on MSR risk management instruments | (91 | ) | (579 | ) | ||||||||||||||||
Total changes in MSR valuation and risk management | $ | (49 | ) | $ | (145 | ) |
WM - 18
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Rollforward of Mortgage Servicing Rights(1) | ||||||||||||||||||||
Fair value, beginning of period | $ | 5,726 | $ | 6,278 | $ | 6,794 | $ | 7,231 | $ | 6,507 | ||||||||||
Home loans: | ||||||||||||||||||||
Additions | 205 | 181 | 127 | 116 | 592 | |||||||||||||||
Change in MSR fair value due to payments on loans and other | (301 | ) | (230 | ) | (255 | ) | (351 | ) | (401 | ) | ||||||||||
Change in MSR fair value due to valuation inputs or | ||||||||||||||||||||
assumptions | 542 | (499 | ) | (390 | ) | (201 | ) | 530 | ||||||||||||
Sale of MSR | - | (1 | ) | - | - | - | ||||||||||||||
Net change in commercial real estate MSR | 3 | (3 | ) | 2 | (1 | ) | 3 | |||||||||||||
Fair value, end of period | $ | 6,175 | $ | 5,726 | $ | 6,278 | $ | 6,794 | $ | 7,231 | ||||||||||
Rollforward of Mortgage Loans Serviced for Others | ||||||||||||||||||||
Balance, beginning of period | $ | 449,126 | $ | 456,484 | $ | 463,436 | $ | 474,867 | $ | 467,782 | ||||||||||
Home loans: | ||||||||||||||||||||
Additions | 9,828 | 9,862 | 7,814 | 8,700 | 29,949 | |||||||||||||||
Sale of servicing | - | (109 | ) | - | - | - | ||||||||||||||
Loan payments and other | (17,534 | ) | (17,177 | ) | (15,739 | ) | (20,716 | ) | (24,213 | ) | ||||||||||
Net change in commercial real estate loans | 181 | 66 | 973 | 585 | 1,349 | |||||||||||||||
Balance, end of period | $ | 441,601 | $ | 449,126 | $ | 456,484 | $ | 463,436 | $ | 474,867 |
(1) | MSR as a percentage of mortgage loans serviced for others was 1.40%, 1.27%, 1.38%, 1.47% and 1.52% at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. |
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Total Servicing Portfolio | ||||||||||||||||||||
Mortgage loans serviced for others | $ | 441,601 | $ | 449,126 | $ | 456,484 | $ | 463,436 | $ | 474,867 | ||||||||||
Consumer loans serviced for others | 15,842 | 17,390 | 17,379 | 16,078 | 14,745 | |||||||||||||||
Servicing on retained MBS without MSR | 865 | 904 | 942 | 980 | 1,023 | |||||||||||||||
Servicing on owned loans | 231,188 | 236,877 | 238,344 | 232,392 | 218,122 | |||||||||||||||
Subservicing portfolio | 274 | 285 | 399 | 418 | 439 | |||||||||||||||
Total servicing portfolio | $ | 689,770 | $ | 704,582 | $ | 713,548 | $ | 713,304 | $ | 709,196 |
June 30, 2008 | ||||||||
Unpaid | Weighted | |||||||
Principal | Average | |||||||
Balance | Servicing Fee | |||||||
(in basis points, | ||||||||
Mortgage Loans Serviced for Others by Loan Type | annualized) | |||||||
Agency | $ | 252,358 | 32 | |||||
Private | 162,924 | 58 | ||||||
Subprime mortgage channel-home | 26,319 | 51 | ||||||
Total mortgage loans serviced for others(1) | $ | 441,601 | 42 |
(1) | Weighted average coupon rate was 6.13% at June 30, 2008. |
WM - 19
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
Quarter Ended | ||||||||||||||||||||
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||
Balance, beginning of quarter | $ | 4,714 | $ | 2,571 | $ | 1,889 | $ | 1,560 | $ | 1,540 | ||||||||||
Allowance transferred to loans held for sale | - | - | (105 | ) | (217 | ) | (81 | ) | ||||||||||||
Provision for loan losses | 5,913 | 3,511 | 1,534 | 967 | 372 | |||||||||||||||
10,627 | 6,082 | 3,318 | 2,310 | 1,831 | ||||||||||||||||
Loans charged off: | ||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Home loans(1) | (687 | ) | (331 | ) | (105 | ) | (52 | ) | (21 | ) | ||||||||||
Home equity loans and lines of credit(1) | (726 | ) | (486 | ) | (249 | ) | (104 | ) | (55 | ) | ||||||||||
Subprime mortgage channel(2) | (572 | ) | (388 | ) | (277 | ) | (146 | ) | (103 | ) | ||||||||||
Home construction(3) | (3 | ) | (8 | ) | - | - | (1 | ) | ||||||||||||
Multi-family | (3 | ) | (4 | ) | (4 | ) | - | - | ||||||||||||
Other real estate | (1 | ) | (2 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||||
Total loans secured by real estate | (1,992 | ) | (1,219 | ) | (636 | ) | (303 | ) | (181 | ) | ||||||||||
Consumer: | ||||||||||||||||||||
Credit card | (169 | ) | (135 | ) | (126 | ) | (120 | ) | (106 | ) | ||||||||||
Other | (2 | ) | (2 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||||
Commercial | (51 | ) | (39 | ) | (32 | ) | (20 | ) | (15 | ) | ||||||||||
Total loans charged off | (2,214 | ) | (1,395 | ) | (796 | ) | (445 | ) | (304 | ) | ||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Home loans(1) | - | 1 | 4 | 1 | 1 | |||||||||||||||
Home equity loans and lines of credit(1) | 17 | 9 | 4 | 3 | 3 | |||||||||||||||
Subprime mortgage channel(2) | 3 | 1 | 4 | 1 | 11 | |||||||||||||||
Home construction(3) | - | - | 2 | - | - | |||||||||||||||
Other real estate | 1 | 1 | 2 | 2 | - | |||||||||||||||
Total loans secured by real estate | 21 | 12 | 16 | 7 | 15 | |||||||||||||||
Credit card | 16 | 12 | 31 | 14 | 15 | |||||||||||||||
Commercial | 6 | 3 | 2 | 3 | 3 | |||||||||||||||
Total recoveries of loans previously charged off | 43 | 27 | 49 | 24 | 33 | |||||||||||||||
Net charge-offs | (2,171 | ) | (1,368 | ) | (747 | ) | (421 | ) | (271 | ) | ||||||||||
Balance, end of quarter | $ | 8,456 | $ | 4,714 | $ | 2,571 | $ | 1,889 | $ | 1,560 | ||||||||||
Net charge-offs (annualized) as a percentage | ||||||||||||||||||||
of average loans held in portfolio | 3.59 | % | 2.24 | % | 1.24 | % | 0.74 | % | 0.50 | % | ||||||||||
Allowance as a percentage of loans held in portfolio | 3.53 | 1.94 | 1.05 | 0.80 | 0.73 | |||||||||||||||
______________________________ |
(1) | Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel. |
(2) | Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio. Charge-offs in the second quarter of 2007 include $26 million of amounts primarily related to uncollected borrower expenses incurred in prior periods by and owed to a third party loan servicer. |
(3) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
WM - 20
Washington Mutual, Inc. |
Selected Financial Information |
(dollars in millions) |
(unaudited) |
June 30, | Mar. 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Nonperforming Assets | ||||||||||||||||||||
Nonaccrual loans(1)(2)(3): | ||||||||||||||||||||
Loans secured by real estate: | ||||||||||||||||||||
Home loans(4)(5) | $ | 4,757 | $ | 3,504 | $ | 2,302 | $ | 1,452 | $ | 991 | ||||||||||
Home equity loans and lines of credit(4) | 1,521 | 1,102 | 835 | 533 | 378 | |||||||||||||||
Subprime mortgage channel(6) | 3,008 | 2,882 | 2,721 | 2,356 | 1,707 | |||||||||||||||
Home construction(7) | 79 | 77 | 56 | 44 | 47 | |||||||||||||||
Multi-family | 181 | 142 | 131 | 120 | 69 | |||||||||||||||
Other real estate | 87 | 87 | 53 | 49 | 52 | |||||||||||||||
Total nonaccrual loans secured by real estate | 9,633 | 7,794 | 6,098 | 4,554 | 3,244 | |||||||||||||||
Consumer | 1 | 2 | 1 | 1 | 1 | |||||||||||||||
Commercial | 57 | 28 | 24 | 22 | 30 | |||||||||||||||
Total nonaccrual loans held in portfolio | 9,691 | 7,824 | 6,123 | 4,577 | 3,275 | |||||||||||||||
Foreclosed assets(8) | 1,512 | 1,357 | 979 | 874 | 750 | |||||||||||||||
Total nonperforming assets | $ | 11,203 | $ | 9,181 | $ | 7,102 | $ | 5,451 | $ | 4,025 | ||||||||||
Total nonperforming assets as a percentage of total assets | 3.62 | % | 2.87 | % | 2.17 | % | 1.65 | % | 1.29 | % | ||||||||||
______________________________ |
(1) | Nonaccrual loans held for sale, which are excluded from the nonaccrual balances presented above, were $2 million, zero, $4 million, $7 million and $171 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. Loans held for sale are accounted for at the lower of cost or fair value, with valuation changes included as adjustments to noninterest income. |
(2) | Credit card loans are exempt under regulatory rules from being classified as nonaccrual because they are charged off when they are determined to be uncollectible, or by the end of the month in which the account becomes 180 days past due. |
(3) | Includes nonaccrual restructured loans of $1.43 billion, $669 million, $633 million, $512 million and $152 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. Excludes accruing restructured loans of $465 million, $372 million, $251 million, $269 million and $277 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. |
(4) | Excludes home loans and home equity loans and lines of credit in the subprime mortgage channel. |
(5) | Includes nonaccrual Option ARM loans of $3.23 billion, $2.51 billion, $1.63 billion, $1.00 billion and $680 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007. |
(6) | Represents mortgage loans purchased from recognized subprime lenders and mortgage loans originated under the Long Beach Mortgage name and held in the investment portfolio. |
(7) | Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale and construction loans made directly to the intended occupant of a single-family residence. |
(8) | Foreclosed real estate securing Government National Mortgage Association (“GNMA”) loans of $21 million, $25 million, $37 million, $46 million and $49 million at June 30, 2008, March 31, 2008, December 31, 2007, September 30, 2007 and June 30, 2007 have been excluded. These assets are fully collectible as the corresponding GNMA loans are insured by the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veterans Affairs (“VA”). |