Exhibit 46
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[Washington Mutual Logo] [Great Western Logo]
Washington Mutual, Inc.
Merger With
Great Western Financial Corporation
The Executive Summary*
ISS Meeting
May 22, 1997
Updated May 30, 1997
* The following is an executive summary of certain more detailed
information contained in Great Western Financial Corporation's Current
Report on Form 8-K (the "Form 8-K") filed with the Securities and Exchange
Commission on May 22, 1997. For further information concerning certain
matters described herein see the Form 8-K.
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Why We Believe the WAMU Transaction Is Best For GWF Shareholders
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We believe:
o The WAMU transaction creates immediate as well as ongoing value for
GWF shareholders (Page 2)
o The WAMU transaction creates a premier consumer banking franchise
(Page 3)
o The WAMU transaction represents the low risk execution alternative
for GWF shareholders (Page 4)
o The Ahmanson Proposal utilizes questionable assumptions and relies
on imprudent leverage (Page 5)
o That WAMU, compared to Ahmanson, has a proven track record of
delivering shareholder value (Page 6)
o The pro forma combined GWF/WAMU is financially superior to a
combined GWF/Ahmanson (Page 7)
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[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Creates Immediate As Well As Ongoing Value
for GWF Shareholders
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o Highly accretive to earnings per share -- 56% projected 1999E
accretion per GWF share
o Earnings growth improved above what GWF shareholders could expect
on a stand-alone basis -- 32% 1997E-1999E pro forma EPS growth
versus 11% standalone EPS growth (a)
o Capital ratios remain strong as excessive leverage is not required
to produce attractive financial returns -- pro forma tangible
common ratio is projected to be in excess of 5%
o Significant growth in net interest income driven by high projected
loan originations at reasonable margins -- projected net loan
growth of $11.0 and $11.4 billion for 1998E and 1999E at net
interest margins of 1.66% and 1.72%, respectively
o WAMU has a consistent record of regular dividend increases -- 29%
average annual increase since 1991 (b)
(a) Standalone EPS growth based on First Call mean estimates as
of May 6, 1997.
(b) The historical pro forma dividend for GWF stockholders would
be higher in a merger with Ahmanson ($1.06 per share) than
in a merger with WAMU ($0.94 per share).
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[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Creates a Premier Consumer Banking Franchise
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o Will rank in top three in consumer deposit market share in
California, Washington and Oregon and 5th in Florida
o Number one-ranked originator of single family mortgage loans in
Washington and Oregon, and number two-ranked in California
o WAMU's proven consumer banking capabilities have produced cumula-
tive average growth rates since 1993 of 7% in consumer loans, 52%
in depositor fee income, 23% in retail checking accounts and 10% in
total households served. These capabilities will be applied to
GWF's customer base
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[Washington Mutual Logo] [Great Western Logo]
We Believe the WAMU Transaction Represents the Low Risk Execution
Alternative For GWF Shareholders
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o The WAMU management team has worked together for a significant
number of years (more than 14 years average tenure vs. less than 4
for Ahmanson management) and has considerably greater experience
integrating large acquisitions as compared to Ahmanson's
management team (Since 1990, WAMU has completed 6 acquisitions with
consideration greater than 10% of its standalone market
capitalization prior to each purchase compared to only 1 such
acquisition for Ahmanson)
o GWF's systems are compatible with WAMU's, not with Ahmanson's. WAMU
and GWF both use the Hogan system for deposit operations and Alltel
for loan servicing
o WAMU will continue to use the GWF name in California, benefiting
customer retention
o WAMU is a friendly transaction which we believe will result in
faster and smother integration. Ahmanson is a hostile offer that
has antagonized employees
o We believe a faster solution to the situation is better for
shareholders, employees and customers. WAMU is on track for a
closing in early July
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[Washington Mutual Logo] [Great Western Logo]
We Believe the Ahmanson Proposal Utilizes Questionable Assumptions and
Relies On Imprudent Leverage
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o Ahmanson's projected cost savings are $114 million or 34% greater
than WAMU's, a difference that we do not believe can be supported
by Ahmanson's proposed 100 additional branch closures
o Ahmanson's earnings are significantly more sensitive to achieving
the stated cost savings target than are WAMU's. Based on the
achievement of 50% of projected synergies, Ahmanson's 1999E EPS
accretion/(dilution) would be 17 percentage points less than its
pro forma base case versus 10 percentage points for WAMU
o Ahmanson's EPS forecasts depend on massive share repurchases that
leave little room for error -- share repurchases plus dividends are
projected to equal 178% of net income through 1999E
o Massive share repurchases will result in Ahmanson continuing to
have one of the lowest consolidated tangible common equity ratios
in the industry -- pro forma ranking of 92 out of 93 savings and
loan holding companies (a)
o Ahmanson's intangibles will total 58% of total equity and the
amortization expense will be in excess of 25% of net income
available to common stock in 1998E
(a) This ratio relates to Ahmanson, which is a savings and loan holding
company, and does not relate to its depository institution
subsidiary. Such subsidiary is "well-capitalized" within the
meaning of Office of Thrift Supervision rules and regulations,
which are not applicable to savings and loan holding companies.
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[Washington Mutual Logo] [Great Western Logo]
We Believe that WAMU, Compared To Ahmanson, Has a Proven Track Record
of Delivering Shareholder Value
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o WAMU has consistently produced greater returns to shareholders --
ten year total return: 24% vs. 9%
o WAMU has consistently maintained stronger asset quality and reserve
coverage ratios -- NPA-to-assets: 0.93% vs. 2.06; Reserves-to-NPLs:
110% vs. 50%
o WAMU has delivered superior growth in earnings per share and divi-
dends per share -- annual dividend growth: 29% vs. 0% (a)
o WAMU has a more attractive mix of loans and deposits and is
geographically more diversified -- consumer loans: 10% vs 3%;
transaction + money market + savings accounts: 42% vs. 32%
o WAMU's loan originations have been growing while Ahmanson's have
been declining -- 1994 to 1996 originations: 46% increase vs. 47%
decrease
(a) The historical pro forma dividend for GWF stockholders would
be higher in a merger with Ahmanson ($1.06 per share) than
in a merger with WAMU ($0.94 per share).
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[Washington Mutual Logo] [Great Western Logo]
We Believe the Pro Forma Combined GWF/WAMU Is Superior To a Combined
GWF/Ahmanson
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o GWF shareholders, for each GWF share, will receive greater earnings
and book value in a WAMU transaction than in an Ahmanson
transaction (see page 8)
o A combination with WAMU will produce higher growth rates in EPS and
book value than a combination with Ahmanson which should result in
higher valuation multiples for WAMU (see page 8)
o Return on assets and equity are materially higher in a combination
with WAMU (see page 8)
o Capital, asset quality and reserve coverage ratios are
significantly stronger in a combination with WAMU (see page 8)
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[Washington Mutual Logo] [Great Western Logo]
We Believe the Pro Forma Combined GWF/WAMU Is Superior To a Combined
GWF/Ahmanson
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WAMU Ahmanson
Transaction Proposal
EPS
1999E Accretion to GWF Shareholder (a) 56% 39%
1997E-1999E Growth 32% 22% (b)
Capital
12/31/97E Tangible Common Equity Ratio 4.91% (c) 3.46% (b)
and projected to and projected
increase to be flat
12/31/97E Tangible Book Value per GWF $19.28 $12.22 (b)
Share
1997E-1999E Growth in Tangible Book 20% 3%(b)
Value per Share
Returns
1999E Return on Assets 1.35% (c) 0.98% (b)
1999E Return on Common Equity 23.1% (c) 11.7% (b)
Asset Quality
NPAs/Assets @ 3/31/97 0.94% (d) 1.35% (d)
Reserves/NPLs @ 3/31/97 119% (d) (e) 83% (d) (e)
(a) Relative to First Call mean estimates for 1998E. 1999E assumes 10%
EPS growth over 1998E First Call mean estimate.
(b) Based on Ahmanson's March 25, 1997 Press Release.
(c) Based on data presented in or underlying WAMU's S-4 Registration
Statement dated March 13, 1997 and recent transaction-related
analyst presentations. Assumes 10% annual growth rate of tangible
assets, for illustrative purposes.
(d) NPL and NPA ratios exclude restructured loans.
(e) Reflects $100 million increase in loan loss reserves.
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[Washington Mutual Logo] [Great Western Logo]
GWF Per Share Deal Value -- WAMU & Ahmanson
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[Graph with two lines, one solid line for WAMU Transaction and one dotted
line for Ahmanson Proposal]
[Horizontal line: date hash-marks at two-week intervals (2/18/97 - 5/29/97);
Vertical line: Per GWF Share Deal Value (40.00 - 52.00)]
Ahmanson WAMU
Date Proposal Transaction
2/18 $ 47.12
2/19 45.28
2/20 44.10
2/21 43.18
2/24 44.36
2/25 43.58
2/26 44.10
2/27 44.10
2/28 43.18
3/03 43.71
3/04 43.44
3/05 44.10
3/06 42.79 $ 47.70
3/07 44.23 47.59
3/10 44.49 48.94
3/11 43.84 49.05
3/12 43.31 47.93
3/13 42.39 46.46
3/14 42.26 45.34
3/17 47.70 46.01
3/18 46.80 45.45
3/19 47.55 45.45
3/20 47.40 45.45
3/21 47.25 45.11
3/24 46.95 45.23
3/25 46.50 46.07
3/26 46.65 45.45
3/27 44.85 44.61
3/31 43.65 43.48
4/01 44.40 43.31
4/02 43.65 42.53
4/03 43.80 43.59
4/04 42.45 42.92
4/07 42.60 43.14
4/08 44.55 44.44
4/09 44.25 43.26
4/10 44.70 42.98
4/11 42.30 40.95
4/14 42.30 41.74
4/15 44.40 42.86
4/16 43.95 42.08
4/17 43.95 42.53
4/18 43.20 41.96
4/21 42.90 41.85
4/22 43.20 41.63
4/23 43.95 42.08
4/24 43.65 41.40
4/25 42.60 40.84
4/28 43.65 40.95
4/29 44.40 42.08
4/30 45.75 44.44
5/01 45.45 43.43
5/02 47.40 45.45
5/05 47.85 46.46
5/06 48.90 47.42
5/07 47.25 46.69
5/08 47.70 47.19
5/09 47.25 46.97
5/12 48.00 47.42
5/13 48.00 47.08
5/14 49.20 48.71
5/15 49.05 48.88
5/16 49.65 49.95
5/19 49.80 50.29
5/20 50.00 50.40
5/21 49.05 50.01
5/22 49.50 49.56
5/23 48.60 49.39
5/27 47.55 48.49
5/28 47.40 48.66
5/29 47.40 48.49
[Graphics: arrow pointing to Ahmanson Proposal line at coordinate
(02/18/97, 47.12) with text box: 02/18/97 Ahmanson launches a hostile bid
for GWF at an exchange ratio of 1.05x; arrow pointing to WAMU Transaction
line at coordinate (03/06/97, 47.70) with text box: 03/06/97 WAMU announces
merger agreement with GWF at an exchange ratio of 0.9x; arrow pointing to
Ahmanson Proposal line at coordinate (03/17/97, 47.70) with text box:
03/17/97 Ahmanson moves to floating exchange ratio with collar (1.2x -
1.1x)]
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[Washington Mutual Logo] [Great Western Logo]
Exchange Ratio Analysis -- Ahmanson Proposal
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[Graph appears here. Horizontal line: Ahmanson Stock Price ($37.00 -
$50.00); Vertical line: Offer Value Per GWF Share ($44.00 - 56.00); To the
right of vertical line appears a subtitle: 1.20x Exchange Ratio; followed
by a vertical line: $41.67; followed by a subtitle: 1.20 to 1.10x Exchange
Ratio $50 Offer; followed by a vertical line: $45.45; followed by a
subtitle: 1.10x Exchange Ratio; Diagonal line from coordinates (37.00,
44.40) to (41.67, 50.00) becoming a horizontal line from coordinates
(41.67, 50.00) to (45.45, 50.00) becoming a diagonal line from coordinates
(45.45, 50.00) to (50.00, 55.00); graphic: arrow with text: Current
Ahmanson Price pointing to coordinate (39.50, 47.40) with dashed vertical
and horizontal lines from that coordinate to the horizontal and vertical
axes of the graph.]
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[Washington Mutual Logo] [Great Western Logo]
Comparison of Upside Potential (a)
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WAMU Transaction Ahmanson Proposal
Change In Exchange Implied Value Exchange Implied Value WAMU
Stock Price Price Ratio Per GWF Share Price (c) Ratio Per GWF Share Superiority
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Current (b) $53.88 0.90x $48.49 $39.50 1.20x $47.40 $1.09
5% Appreciation 56.57 0.90 50.91 41.48 1.20 49.77 1.14
10% Appreciation 59.26 0.90 53.34 43.45 1.15 50.00 3.34
15% Appreciation 61.96 0.90 55.76 45.43 1.10 50.00 5.76
(a) Reflects pre-merger values only.
(b) As of May 29, 1997.
(c) Ahmanson's exchange offer ratio would be fixed based upon the average
closing price of Ahmanson stock for the 20 trading days prior to the
third trading day prior to the expiration of its exchange offer, or
in the event of a merger with Great Western, the 20 trading days
prior to the receipt of OTS approval. Shown figures assume the
average closing price for the 20 day period was equal to the closing
price on that date.
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[Washington Mutual Logo] [Great Western Logo]