Edgar Filing: WASHINGTON MUTUAL INC

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: April 15, 2003

Washington Mutual, Inc.
(Exact name of registrant as specified in its charter)

Washington	1-14667	91-1653725
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
1201 Third Avenue, Seattle, Washington		98101
(Address of principal executive offices)		(Zip Code)
(206) 461-2000 (Registrant's telephone number, including area code)

ITEM 9. Regulation FD Disclosure.

This information, furnished under Item 9. Regulation FD Disclosure, is also intended to be furnished under Item 12. Results of Operations and Financial Condition, in accordance with SEC Release No. 33-8216.

On April 15, 2003, Washington Mutual, Inc. issued a press release reporting its results of operations for the first quarter ended March 31, 2003.

April 15, 2003

FOR IMMEDIATE RELEASE

Washington Mutual Announces Record Earnings;
Company Delivers $1 Billion Quarter
Board of Directors Increases Cash Dividend

SEATTLE—Washington Mutual, Inc. (NYSE: WM) today announced record earnings of $1 billion, or $1.07 per diluted share, for the quarter ended March 31, 2003, up 8 percent on a per share basis from $956 million, or 99 cents per diluted share for the same period a year ago.

Highlights of the recently completed quarter included:

•: Loan volume of $106.62 billion, up 62 percent from the first quarter of 2002;
•: Depositor and other retail banking fees of $420 million, up 16 percent from the same period a year ago;
•: Continued growth in checking accounts, one of the company's key relationship-building products, which increased by more than 200,000 during the quarter;
•: The opening of 33 new financial center stores and three new home loan stores throughout the country. The company is on schedule to open approximately 250 financial center stores and 70 home loans stores in 2003 as the company continues to expand its national franchise;
•: The company recorded a strong 19.44 percent return on average common equity;
•: The repurchase of 10.2 million shares of the company's common stock in the quarter at an average price of $34.41, reflecting the company's strategy to effectively manage its capital; and
•: The 31^st consecutive quarter of an increased cash dividend.

"Washington Mutual entered 2003 in an excellent position and we're poised to continue the momentum as the year progresses," said Kerry Killinger, the company's chairman, president and CEO. "Our record-breaking first quarter results reflect the strength of our underlying strategy of serving the broad middle market by providing the combination of great value and efficient, friendly service. We are extremely proud of the first quarter results that our talented employees produced."

BOARD OF DIRECTORS INCREASES DIVIDEND FOR 31^st CONSECUTIVE QUARTER

Based on the company's continued strong operating fundamentals and financial performance, Washington Mutual's Board of Directors declared a cash dividend of 30 cents per share on the company's common stock, up from 29 cents per share in the previous quarter. Dividends on the common stock are payable May 15, 2003 to shareholders of record as of April 30, 2003.

FIRST QUARTER RESULTS

Net Interest Income

For the first quarter of 2003, net interest income was $2.02 billion, an increase of $91 million, or 5 percent, from the fourth quarter of 2002. Most of this increase was due to the expansion of the net interest margin, which increased by 7 basis points to 3.32 percent during the first quarter, largely because of lower rates paid on interest-bearing deposits.

As compared with the first quarter of 2002, net interest income for the first quarter of 2003 declined by $379 million, or 16 percent. Most of this decrease resulted from contraction of the margin, which declined by 42 basis points as yields on loans and debt securities continued to reprice downward from the higher interest rate levels in effect during the early part of 2002.

—more—

The net interest spread for the quarter was 3.04 percent, compared with 3.58 percent for the same period last year.

Noninterest Income

As the company experienced exceptional quarterly loan volumes, the gain from mortgage loans was $587 million, an increase of $195 million versus the fourth quarter of 2002 and $336 million from the first quarter of 2002.

In addition, consumers continued to choose Washington Mutual to serve their financial needs, leading to an increase of more than 200,000 net retail checking accounts during the first quarter. Strong growth in net retail checking accounts, which increased by more than 900,000 since the end of first quarter 2002, contributed to the increase of $59 million in depositor and other retail banking fees to $420 million, up 16 percent from $361 million a year earlier.

The company's expansion into the New York/New Jersey retail banking market continues to produce strong results. From May 2002, when the company's retail banking unit began doing business under the Washington Mutual name in New York, through the end of the first quarter of 2003, the number of checking accounts increased 37 percent at an annualized rate in the branches acquired from Dime Bancorp.

Lending

Boosted by the continued low interest rate environment and the demand for refinancing of home loan mortgages, Washington Mutual produced loan volume of $106.62 billion for the quarter, up 62 percent from $65.69 billion in the first quarter of 2002. Of the total loan volume in the first quarter, home loan volume totaled $97.47 billion, versus $58.97 billion in the same period a year ago. Home equity loans and lines of credit and multi-family loans increased by $6.73 billion from the first quarter of 2002 to $38.72 billion at March 31, 2003, up 21 percent.

Efficiency Ratio

For the quarter, noninterest expense totaled $1.71 billion, which was up from $1.52 billion during the first quarter of 2002. The increase was primarily due to investment in the expansion of the company's store network and increased loan expenses resulting from significantly higher lending volumes. The efficiency ratio was 49.91 percent during the quarter compared with 49.94 percent in the fourth quarter of 2002 and 47.48 percent in the first quarter of 2002.

Risk Management

Credit performance, a key focus for Washington Mutual, remained well in line with the company's expectations. Consistent with the fourth quarter of 2002, the company continued to actively manage its portfolio of nonperforming assets (NPAs) during the quarter.

Total NPAs decreased $93 million during the quarter to $2.50 billion at March 31, 2003. At the end of the quarter, NPAs as a percentage of total assets were 0.90 percent versus 0.97 percent at the end of the fourth quarter.

The provision for loan and lease losses was $125 million, as compared with $125 million in the fourth quarter of 2002 and $175 million for the same period of the previous year. Net loan charge-offs for the first quarter were $95 million, compared with $108 million for the fourth quarter of 2002. The allowance for loan and lease losses was $1.68 billion at March 31, 2003. The net MSR asset was $5.21 billion at March 31, 2003, as compared with $5.34 billion at December 31, 2002.

—more—

Balance Sheet and Capital Management

Consolidated assets at March 31, 2003 were $276.97 billion, compared with $268.30 billion at December 31, 2002. The growth in assets during the quarter was the result of an increase in loans held for sale and loans held in portfolio. The company continues to expect asset growth of 5% to 10% in 2003.

At March 31, 2003, balances of transaction deposits, including checking, savings and money market deposits, represented 80 percent of total deposits, compared with 78 percent at the end of 2002. Total deposits were $159.87 billion at the end of the first quarter, up from $155.52 billion at December 31, 2002, reflecting the company's organic growth in retail deposits and in custodial/escrow deposits related to loan servicing activities.

Washington Mutual continues to manage its capital position by repurchasing its common stock. During the first quarter, the company repurchased 10.2 million shares of its common stock at an average price of $34.41. The company's tangible common equity was 5.29 percent of total tangible assets at March 31, 2003.

In addition, the capital ratios of the company's banking subsidiaries continued to exceed federal regulatory requirements for classification as "well-capitalized" institutions, the highest regulatory standard.

Outlook

"Despite the current challenges both domestically and internationally, our management team fully expects 2003 will be another record year for Washington Mutual," Killinger said. "Our business fundamentals remain strong and credit quality continues to perform in line with management's expectations."

"Our primary focus for the foreseeable future will be successfully executing our key business strategies, which are focused on internal growth and increased productivity, and continuing to make progress toward our long-term goal of building the nation's leading retailer of financial services to the broad middle market."

Company Updates

•: Business Week magazine rated Washington Mutual No. 13 among all S&P 500 companies based on its one- and three-year shareholder returns, sales growth and profit growth, and the company's net margin and return on equity, including a weighting for sales volume and long-term debt-to-capital ratio. The company was the No. 1-rated performer in the banking category.
•: Washington Mutual was also named "One of the Best Companies to Work For" by Fortune magazine, making it part of an exclusive group to be recognized by the magazine in three areas: "Best to Work For," "Best for Minorities" and "Most Admired."
•: WaMu Capital Corp., a fixed-income institutional broker-dealer and subsidiary of Washington Mutual, Inc., announced plans to expand its existing sales office in New York to include trading, compliance and support functions. WaMu Capital Corp., headquartered in Seattle, is focused on building additional relationships with asset managers, banks and other institutional investors nationwide.
•: The company and Fannie Mae announced an affordable lending alliance designed to increase lending by $85 billion over five years to low- and moderate-income borrowers, minorities, immigrant families, residents of low- to moderate-income underserved areas and first-time homebuyers.

—more—

•: WM Group of Funds, the company's mutual fund complex, was ranked by Barron's magazine as the No. 1 fund family for five-year performance.
•: The company's ongoing effort to further broaden its corporate finance team resulted in the hiring of two new members. Steve Lobo, a former American Express and U.S. Bancorp executive, joined the company as Senior Vice President and Treasurer. On April 4, the company announced 20-year General Electric veteran David Beck as its Chief Investment Officer, a newly created position that will play an important role in continuing to broaden the company's asset portfolio management.

With a history dating back to 1889, Washington Mutual is a retailer of consumer financial services that provides a diversified line of products and services to consumers and small- to mid-sized businesses. At March 31, 2003, Washington Mutual and its subsidiaries had assets of $276.97 billion. Washington Mutual currently operates more than 2,500 consumer banking, mortgage lending, commercial banking, consumer finance and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamu.com.

A live webcast of the company's quarterly earnings conference call will be held on Wednesday, April 16, 2003, at 7:30 a.m. Pacific Daylight Time at www.wamu.com or via telephone at 1-888-282-0170. Participants calling from outside the United States may dial 1-712-257-2272. The passcode "WaMu" is required to access the call.

Via the Internet, the conference call is available on the Investor Relations portion of the company's web site at www.wamu.com/ir. A transcript of the prepared remarks will be on the company's web site for 30 days following the call.

A recording of the conference call will be available after 10 a.m. PDT on Wednesday, April 16, 2003 through 8:59 p.m. PDT on Friday, April 25, 2003. The recorded message will be available at 1-800-406-7495. Callers from outside the United States may dial 1-402-220-1206.

Forward Looking Statement

"This press release contains forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this document that are not historical facts. When used in this presentation, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed under the heading "Factors That May Affect Future Results" in Washington Mutual's 2002 Annual Report on Form 10-K which include: general business and economic conditions may significantly affect our earnings; if we are unable to effectively manage the volatility of our mortgage banking business, our earnings could be adversely affected; a failure to effectively implement our business operations technology solutions could adversely affect our earnings and financial condition; the financial services industry is highly competitive; changes in the regulation of financial services companies could adversely affect our business."

—more—

Media Contact:		Alan Gulick (206) 377-3637 alan.gulick@wamu.net
Investor Contacts:		JoAnn DeGrande (206) 461-3186 joann.degrande@wamu.net
		Ruthanne King (206) 461-6421 ruthanne.king@wamu.net

WM-1

Washington Mutual, Inc.
Consolidated Statements of Income
(dollars in millions, except per share data)
(unaudited)

				Quarter Ended
				Mar. 31, 2003			Dec. 31, 2002			Mar. 31, 2002
Interest Income
	Loans held for sale			$	589		$	532		$	443
	Loans held in portfolio				2,106			2,219			2,411
	Available-for-sale securities				517			547			947
	Other interest and dividend income				80			68			82

		Total interest income			3,292			3,366			3,883
Interest Expense
	Deposits				587			672			651
	Borrowings				688			768			836

		Total interest expense			1,275			1,440			1,487

			Net interest income		2,017			1,926			2,396
	Provision for loan and lease losses				125			125			175

			Net interest income after provision for loan and lease losses		1,892			1,801			2,221
Noninterest Income
	Home loan mortgage banking income (expense):
		Loan servicing fees			613			628			540
		Amortization of mortgage servicing rights			(969	)		(920	)		(479	)
		Mortgage servicing rights recovery (impairment)			37			(308	)		45
		Revaluation gain (loss) from derivatives			217			(19	)		(15	)
		Net settlement income from certain interest-rate swaps			140			158			6
		Gain from mortgage loans			587			392			251
		Other home loan mortgage banking income, net			98			90			39

			Total home loan mortgage banking income		723			21			387
	Depositor and other retail banking fees				420			449			361
	Securities fees and commissions				89			90			82
	Insurance income				52			45			47
	Portfolio loan related income				117			123			65
	Gain (loss) from other available-for-sale securities				(5	)		574			(298	)
	Gain (loss) on extinguishment of securities sold under agreements to repurchase				(87	)		(11	)		74
	Other income				97			103			90

		Total noninterest income			1,406			1,394			808
Noninterest Expense
	Compensation and benefits				771			757			690
	Occupancy and equipment				304			294			288
	Telecommunications and outsourced information services				144			115			139
	Depositor and other retail banking losses				52			51			50
	Amortization of other intangible assets				16			16			17
	Professional fees				56			47			55
	Advertising and promotion				63			58			44
	Other expense				303			320			238

		Total noninterest expense			1,709			1,658			1,521

		Income before income taxes			1,589			1,537			1,508
			Income taxes		586			568			552

Net Income				$	1,003		$	969		$	956

Net Income Attributable to Common Stock				$	1,003		$	969		$	954

Net income per common share:
	Basic			$	1.09		$	1.05		$	1.01
	Diluted				1.07			1.03			0.99
Dividends declared per common share					0.29			0.28			0.25
Basic weighted average number of common shares outstanding (in thousands)					921,084			926,210			947,653
Diluted weighted average number of common shares outstanding (in thousands)					934,889			939,991			963,242

WM-2

Washington Mutual, Inc.
Consolidated Statements of Financial Condition
(dollars in millions, except per share data)
(unaudited)

				Mar. 31, 2003			Dec. 31, 2002			Mar. 31, 2002
Assets
	Cash and cash equivalents			$	6,295		$	7,208		$	5,740
	Federal funds sold and securities purchased under resale agreements				1,606			2,015			2,312
	Available-for-sale securities:
		Mortgage-backed securities			26,768			28,375			24,347
		Investment securities			15,635			15,597			42,951
	Loans held for sale				44,014			33,996			24,751
	Loans held in portfolio				150,557			147,528			144,930
	Allowance for loan and lease losses				(1,680	)		(1,653	)		(1,621	)

			Total loans held in portfolio, net of allowance for loan and lease losses		148,877			145,875			143,309
	Investment in Federal Home Loan Banks				3,871			3,703			4,317
	Mortgage servicing rights				5,210			5,341			7,955
	Goodwill				6,253			6,270			6,163
	Other assets				18,441			19,918			13,386

			Total assets	$	276,970		$	268,298		$	275,231

Liabilities
	Deposits:
		Noninterest-bearing deposits		$	40,478		$	37,515		$	22,553
		Interest-bearing deposits			119,394			118,001			106,457

			Total deposits		159,872			155,516			129,010
	Federal funds purchased and commercial paper				2,214			1,247			4,018
	Securities sold under agreements to repurchase				20,502			16,717			44,789
	Advances from Federal Home Loan Banks				52,221			51,265			61,734
	Other borrowings				15,725			15,264			14,238
	Other liabilities				5,749			8,155			3,207

			Total liabilities		256,283			248,164			256,996
	Redeemable preferred stock				—			—			102
Stockholders' equity					20,687			20,134			18,133

			Total liabilities, redeemable preferred stock, and stockholders' equity	$	276,970		$	268,298		$	275,231

Common shares outstanding at end of period (in thousands)⁽¹⁾					934,983			944,047			973,590
Book value per common share⁽²⁾				$	22.55		$	21.74		$	18.98
Tangible book value per common share⁽²⁾					15.84			15.06			12.55
Full-time equivalent employees at end of period					53,918			52,459			49,039

⁽¹⁾: Includes 17,550,000 shares at March 31, 2003, and 18,000,000 shares at December 31, 2002 and March 31, 2002, held in escrow pending resolution of the Company's asserted right to the return of such shares.
⁽²⁾: Excludes 17,550,000 shares at March 31, 2003, and 18,000,000 shares at December 31, 2002 and March 31, 2002, held in escrow pending resolution of the Company's asserted right to the return of such shares.

WM-3

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions, except per share data)
(unaudited)

	Quarter Ended
	Mar. 31, 2003			Mar. 31, 2002
Stockholders' Equity Rollforward
Balance, beginning of period	$	20,134		$	14,063
Net income		1,003			956
Other comprehensive income (loss), net of tax		119			(412	)
Cash dividends declared on common stock		(267	)		(243	)
Cash dividends declared on redeemable preferred stock		—			(2	)
Common stock repurchased and retired		(351	)		—
Common stock issued for acquisitions		—			3,685
Common stock issued		49			86

Balance, end of period	$	20,687		$	18,133

WM-4

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions, except per share amounts)
(unaudited)

			Quarter Ended
			Mar. 31, 2003			Dec. 31, 2002			Sept. 30, 2002			June 30, 2002			Mar. 31, 2002
PROFITABILITY
	Net interest income		$	2,017		$	1,926		$	1,919		$	2,100		$	2,396
	Net interest margin			3.32	%		3.25	%		3.36	%		3.54	%		3.74	%
	Noninterest income		$	1,406		$	1,394		$	1,380		$	1,208		$	808
	Noninterest expense			1,709			1,658			1,616			1,586			1,521
	Net income			1,003			969			981			990			956
	Net income per common share:
		Basic	$	1.09		$	1.05		$	1.04		$	1.04		$	1.01
		Diluted		1.07			1.03			1.02			1.01			0.99
	Dividends declared per common share		$	0.29		$	0.28		$	0.27		$	0.26		$	0.25
	Return on average assets			1.43	%		1.42	%		1.50	%		1.48	%		1.34	%
	Return on average common equity			19.44			18.34			18.79			20.37			20.64
	Efficiency ratio⁽¹⁾			49.91			49.94			48.99			47.95			47.48
ASSET QUALITY
	Nonaccrual loans⁽²⁾		$	2,166		$	2,257		$	2,188		$	2,232		$	2,391
	Foreclosed assets			334			336			309			274			267
	Total nonperforming assets			2,500			2,593			2,497			2,506			2,658
	Nonperforming assets/total assets			0.90	%		0.97	%		0.95	%		0.96	%		0.97	%
	Restructured loans		$	99		$	98		$	112		$	119		$	130
		Total nonperforming assets and restructured loans		2,599			2,691			2,609			2,625			2,788
	Allowance for loan and lease losses			1,680			1,653			1,705			1,665			1,621
		Allowance as a percentage of total loans held in portfolio		1.12	%		1.12	%		1.15	%		1.14	%		1.12	%
	Provision for loan and lease losses		$	125		$	125		$	135		$	160		$	175
	Net charge-offs			95			108			88			116			99
CAPITAL ADEQUACY
	Stockholders' equity/total assets			7.47	%		7.50	%		7.68	%		7.50	%		6.59	%
	Tangible common equity⁽³⁾/total tangible assets⁽³⁾			5.29			5.29			5.27			5.28			4.69
	Estimated total risk-based capital/risk-weighted assets⁽⁴⁾			11.41			11.57			11.16			12.32			11.69
SUPPLEMENTAL DATA
	Average balance sheet:
		Loans held for sale	$	42,327		$	37,322		$	25,740		$	22,211		$	27,241
		Loans held in portfolio		148,382			149,173			146,160			146,667			147,531
		Interest-earning assets		241,690			237,842			229,364			236,504			255,177
		Total assets		280,850			273,729			261,170			266,849			284,350
		Interest-bearing deposits		119,056			116,177			111,408			108,231			101,217
		Noninterest-bearing deposits		38,851			32,375			24,065			22,417			22,635
		Stockholders' equity		20,633			21,121			20,872			19,401			18,487
	Period-end balance sheet:
		Loans held for sale		44,014			33,996			29,508			21,940			24,751
		Loans held in portfolio, net of allowance for loan and lease losses		148,877			145,875			146,157			144,208			143,309
		Interest-earning assets		242,451			231,214			230,167			230,852			243,608
		Assets		276,970			268,298			262,631			261,298			275,231
		Interest-bearing deposits		119,394			118,001			112,969			108,441			106,457
		Noninterest-bearing deposits		40,478			37,515			27,639			20,628			22,553
		Stockholders' equity		20,687			20,134			20,178			19,598			18,133

⁽¹⁾: The efficiency ratio is defined as noninterest expense, divided by total revenue (net interest income and noninterest income).
⁽²⁾: Excludes nonaccrual loans held for sale.
⁽³⁾: Excludes unrealized net gain/loss on available-for-sale securities and derivatives, goodwill and intangible assets but includes MSR.
⁽⁴⁾: Estimate of what the total risk-based capital ratio would be if Washington Mutual, Inc. was a bank holding company that complies with Federal Reserve Board capital requirements.

WM-5

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

						Quarter Ended
						Mar. 31, 2003						Dec. 31, 2002						Mar. 31, 2002
						Balance		Rate		Interest Income/ Expense		Balance		Rate		Interest Income/ Expense		Balance		Rate		Interest Income/ Expense
Average Balances and Weighted Average Interest Rates
Assets
Interest-earning assets:
	Federal funds sold and securities purchased under resale agreements					$	5,132	1.25	%	$	16	$	2,536	1.43	%	$	9	$	1,139	1.63	%	$	5
	Available-for-sale securities⁽¹⁾:
		Mortgage-backed securities					26,209	5.30			347		26,010	5.01			325		25,248	5.39			340
		Investment securities					14,989	4.55			170		18,286	4.84			222		49,267	4.96			607
	Loans held for sale⁽²⁾						42,327	5.57			589		37,322	5.70			532		27,241	6.51			443
	Loans held in portfolio⁽²⁾:
		Loans secured by real estate:
			Home loans				83,105	5.21			1,083		85,317	5.55			1,184		88,206	6.18			1,362
			Purchased specialty mortgage finance				10,075	5.95			150		9,405	5.54			130		8,538	6.91			148

				Total home loans			93,180	5.29			1,233		94,722	5.55			1,314		96,744	6.24			1,510
			Home construction loans:
				Builder⁽³⁾			1,056	5.03			13		1,109	5.68			16		1,568	6.04			24
				Custom⁽⁴⁾			920	7.75			18		914	8.34			19		929	7.72			18
			Home equity loans and lines of credit:
				Banking subsidiaries			17,247	5.43			234		15,380	5.69			219		11,103	6.02			167
				Washington Mutual Finance			1,958	11.94			58		2,010	11.88			60		2,097	11.94			62
			Multi-family				18,476	5.66			262		18,815	5.82			274		17,541	6.34			278
			Other real estate				7,747	6.34			122		8,230	6.67			138		8,424	7.03			148

					Total loans secured by real estate		140,584	5.52			1,940		141,180	5.77			2,040		138,406	6.38			2,207
		Consumer:
			Banking subsidiaries				1,343	8.90			30		1,691	9.30			40		2,851	9.71			66
			Washington Mutual Finance				1,720	19.30			83		1,710	19.25			83		1,729	18.50			80
		Commercial business					4,735	4.47			53		4,592	4.83			56		4,545	5.14			58

				Total loans held in portfolio			148,382	5.68			2,106		149,173	5.94			2,219		147,531	6.55			2,411
	Other						4,651	5.56			64		4,515	5.16			59		4,751	6.69			77

					Total interest-earning assets		241,690	5.45			3,292		237,842	5.65			3,366		255,177	6.10			3,883
Noninterest-earning assets:
	Mortgage servicing rights						5,456						5,855						7,006
	Goodwill						6,267						6,229						5,595
	Other						27,437						23,803						16,572

			Total assets			$	280,850					$	273,729					$	284,350

Liabilities
Interest-bearing liabilities:
	Deposits:
		Interest-bearing checking				$	58,222	1.92			276	$	53,588	2.35			317	$	23,873	2.76			163
		Savings accounts and money market deposit accounts					27,968	1.07			74		28,745	1.30			94		35,311	1.61			140
		Time deposit accounts					32,866	2.93			237		33,844	3.06			261		42,033	3.36			348

			Total interest-bearing deposits				119,056	2.00			587		116,177	2.30			672		101,217	2.61			651
	Federal funds purchased and commercial paper						2,385	1.42			9		2,848	1.71			12		5,565	1.96			27
	Securities sold under agreements to repurchase						20,371	2.76			140		23,659	2.77			165		53,450	1.62			213
	Advances from Federal Home Loan Banks						55,844	2.72			378		56,047	2.94			416		65,302	2.63			424
	Other						15,487	4.16			161		14,376	4.83			175		14,156	4.94			172

			Total interest-bearing liabilities				213,143	2.41			1,275		213,107	2.68			1,440		239,690	2.52			1,487

Noninterest-bearing sources:
	Noninterest-bearing deposits						38,851						32,375						22,635
	Other liabilities						8,223						7,126						3,538
	Stockholders' equity						20,633						21,121						18,487

					Total liabilities and stockholders' equity	$	280,850					$	273,729					$	284,350

	Net interest spread and net interest income							3.04		$	2,017			2.97		$	1,926			3.58		$	2,396

	Impact of noninterest-bearing sources							0.28						0.28						0.16
	Net interest margin							3.32						3.25						3.74

⁽¹⁾: The average balance and yield are based on average amortized cost balances.
⁽²⁾: Nonaccrual loans were included in the average loan amounts outstanding.
⁽³⁾: Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale.
⁽⁴⁾: Represents construction loans made directly to the intended occupant of a single-family residence.

WM-6

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

				Quarter Ended
				Mar. 31, 2003		Dec. 31, 2002		Mar. 31, 2002
Loan Volume
	Home loans:
		Adjustable rate		$	23,431	$	25,998	$	16,608
		Fixed rate			69,510		67,487		39,231
		Specialty mortgage finance⁽¹⁾			4,529		4,689		3,127

			Total home loan volume		97,470		98,174		58,966
	Home construction loans:
		Builder⁽²⁾			477		389		366
		Custom⁽³⁾			163		194		148
	Home equity loans and lines of credit:
		Banking subsidiaries			5,196		4,721		3,480
		Washington Mutual Finance			287		216		242
	Multi-family				1,797		1,864		864
	Other real estate				281		513		344

			Total loans secured by real estate		105,671		106,071		64,410
	Consumer:
		Banking subsidiaries			59		114		238
		Washington Mutual Finance			424		481		402
	Commercial business				466		438		637

			Total loan volume	$	106,620	$	107,104	$	65,687

Loan Volume by Channel
	Originated			$	61,288	$	64,881	$	43,538
	Purchased/Correspondent				45,332		42,223		22,149

			Total loan volume by channel	$	106,620	$	107,104	$	65,687

Refinancing Activity⁽⁴⁾
	Home loan refinancing			$	72,448	$	71,203	$	40,090
	Home construction loans				12		11		13
	Home equity loans and lines of credit and consumer				693		904		641
	Multi-family and other real estate				707		903		322

			Total refinancing	$	73,860	$	73,021	$	41,066

Home Loan Volume by Index:
	Short-term adjustable-rate mortgages:
		Treasury indices		$	4,539	$	3,972	$	6,480
		COFI			249		316		728
		Other			218		244		90

			Total short-term adjustable-rate mortgages		5,006		4,532		7,298
	Medium-term adjustable-rate mortgages				21,530		24,896		11,832
	Fixed-rate mortgages				70,934		68,746		39,836

			Total home loan volume	$	97,470	$	98,174	$	58,966

⁽¹⁾: Represents purchased subprime loan portfolios and mortgages originated by Long Beach Mortgage.
⁽²⁾: Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale.
⁽³⁾: Represents 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-7

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

					Change from Dec. 31, 2002 to Mar. 31, 2003			Mar. 31, 2003			Dec. 31, 2002			Mar. 31, 2002
Loans by Property Type and MBS
	Loans held in portfolio:
		Home loans:
			Adjustable rate and fixed rate		$	903		$	83,745		$	82,842		$	85,401
			Purchased specialty mortgage finance			476			10,604			10,128			8,974

				Total home loans		1,379			94,349			92,970			94,375
		Home construction loans:
			Builder⁽¹⁾			30			1,047			1,017			1,476
			Custom⁽²⁾			(6	)		926			932			915
		Home equity loans and lines of credit:
			Banking subsidiaries			1,921			18,089			16,168			12,676
			Washington Mutual Finance			87			2,017			1,930			2,093
		Multi-family				618			18,618			18,000			17,228
		Other real estate				(24	)		7,962			7,986			8,422

				Total loans secured by real estate		4,005			143,008			139,003			137,185
		Consumer:
			Banking subsidiaries			(383	)		1,280			1,663			1,908
			Washington Mutual Finance			(11	)		1,718			1,729			1,707
		Commercial business				(582	)		4,551			5,133			4,130

				Total loans held in portfolio		3,029			150,557			147,528			144,930
	Less: allowance for loan and lease losses					(27	)		(1,680	)		(1,653	)		(1,621	)
	Loans securitized and retained as mortgage-backed securities					(1,385	)		23,669			25,054			21,145

				Total net loans held in portfolio and loans securitized and retained as mortgage-backed securities		1,617			172,546			170,929			164,454
	Loans held for sale					10,018			44,014			33,996			24,751

				Total net loans and loans securitized and retained as mortgage-backed securities		11,635			216,560			204,925			189,205
	Purchased mortgage-backed securities					(222	)		3,099			3,321			3,202

				Total net loans and mortgage-backed securities	$	11,413		$	219,659		$	208,246		$	192,407

⁽¹⁾: Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale.
⁽²⁾: Represents construction loans made directly to the intended occupant of a single-family residence.

WM-8

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

				Dec. 31, 2002 to Mar. 31, 2003
Rollforward of Mortgage Servicing Rights⁽¹⁾
	Balance, beginning of period			$	5,341
		Home loans:
			Additions		940
			Amortization		(969	)
			Recovery		37
			Sale of servicing rights		(141	)
		Net change in commercial real estate mortgage servicing rights			2

	Balance, end of period⁽²⁾			$	5,210

Rollforward of Valuation Allowance for Mortgage Servicing Rights Impairment
	Balance, beginning of period			$	4,521
		Recovery			(37	)
		Other than temporary impairment			(536	)
		Sale of servicing rights			(84	)

	Balance, end of period			$	3,864

Rollforward of Loans Serviced for Others
	Balance, beginning of period			$	604,504
		Home loans:
			Additions		79,516
			Loan payments and other		(92,556	)
		Net change in commercial real estate loans serviced for others			453

	Balance, end of period			$	591,917

			Mar. 31, 2003 Balance
Total Servicing Portfolio
		Loans serviced for others	$	591,917
		Servicing on retained mortgage-backed securities without mortgage servicing rights		4,843
		Servicing on owned loans		180,160
		Subservicing portfolio		191

	Total servicing portfolio		$	777,111

			Mar. 31, 2003
			Unpaid Principal Balance		Weighted Average Servicing Fee
					(in basis points, annualized)
Loans Serviced for Others by Loan Type
		Government	$	82,552	54
		Agency		383,232	33
		Private		113,125	41
		Specialty home loans		13,008	50

	Total loans serviced for others⁽³⁾		$	591,917	38

⁽¹⁾: Net of valuation allowance.
⁽²⁾: At March 31, 2003, aggregate mortgage servicing rights fair value was $5.25 billion.
⁽³⁾: Weighted average coupon (annualized) was 6.66% at March 31, 2003.

WM-9

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

				Change from Dec. 31, 2002 to Mar. 31, 2003			Mar. 31, 2003			% of total		Dec. 31, 2002			% of total		Mar. 31, 2002			% of total
Loans Secured by Real Estate and Mortgage-Backed Securities ("MBS")
	Short-term adjustable-rate loans and MBS:
		COFI		$	(1,964	)	$	26,288		12	%	$	28,252		14	%	$	32,523		18	%
		Treasury indices			2,317			44,362		21			42,045		21			35,903		19
		Other			2,686			30,106	⁽¹⁾	14			27,420	⁽¹⁾	13			22,716	⁽¹⁾	12

			Total short-term adjustable-rate loans and MBS		3,039			100,756		47			97,717		48			91,142		49
	Medium-term adjustable-rate loans and MBS				(40	)		54,124		25			54,164		27			51,546		28
	Fixed-rate loans				9,547			55,238		26			45,691		23			40,019		21
	Fixed-rate MBS				(172	)		3,535		2			3,707		2			3,473		2

			Total loans secured by real estate and MBS	$	12,374		$	213,653		100	%	$	201,279		100	%	$	186,180		100	%

⁽¹⁾: The balance included the following amount of securities retained which bear COFI to LIBOR basis risk (dollars in billions):

Mar. 31, 2003:	$	2.8
Dec. 31, 2002:		2.8
Mar. 31, 2002:		2.8

				Quarter Ended
				Mar. 31, 2003			Dec. 31, 2002			Mar. 31, 2002
Home Loan Mortgage Banking Income (Expense)
	Loan servicing fees			$	613		$	628		$	540
	Loan subservicing fees				5			14			15
	Amortization of mortgage servicing rights				(969	)		(920	)		(479	)
	Mortgage servicing rights recovery (impairment)				37			(308	)		45
	Other, net				(137	)		(134	)		(62	)

		Net home loan servicing income (expense)			(451	)		(720	)		59
	Revaluation gain (loss) from derivatives:
		Mortgage servicing rights risk management			412			109			(15	)
		Other mortgage banking risk management			(195	)		(128	)		—

			Total revaluation gain (loss) from derivatives		217			(19	)		(15	)
	Net settlement income from certain interest-rate swaps				140			158			6
	Gain from mortgage loans				587			392			251
	GNMA pool buy-out income				154			119			13
	Loan related income				75			76			71
	Gain from sale of originated mortgage-backed securities				1			15			2

		Total home loan mortgage banking income			723			21			387

	Impact of other mortgage servicing rights risk management instruments⁽¹⁾:
		Gain from certain available-for-sale securities			—			407			—

			Total home loan mortgage banking income, net of other mortgage servicing rights risk management instruments	$	723		$	428		$	387

⁽¹⁾: Includes only instruments designated for mortgage servicing rights risk management and does not include the effects of instruments held for asset/liability risk management.

WM-10

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

						Mar. 31, 2003		Dec. 31, 2002		Mar. 31, 2002
						Balance		Balance		Balance
Deposits
	Deposits:
		Checking accounts:
			Interest-bearing			$	60,105	$	56,132	$	31,658
			Noninterest-bearing				38,263		35,730		21,718

				Total checking accounts			98,368		91,862		53,376
		Savings and money market deposit accounts					29,910		29,886		34,378
		Time deposit accounts⁽¹⁾					31,594		33,768		41,256

					Total deposits⁽²⁾	$	159,872	$	155,516	$	129,010

⁽¹⁾: Weighted average remaining maturity of time deposits was 15 months at March 31, 2003, 15 months at December 31, 2002 and 11 months at March 31, 2002.
⁽²⁾: Includes custodial and escrow deposits of $27.04 billion at March 31, 2003, $25.90 billion at December 31, 2002 and $11.76 billion at March 31, 2002.

			Mar. 31, 2003	Dec. 31, 2002	Mar. 31, 2002
Retail Checking Accounts⁽¹⁾
	Washington Mutual Bank and Washington Mutual Bank fsb		1,300,561	1,289,705	1,218,440
	Washington Mutual Bank, FA		6,160,759	5,968,850	5,318,195

		Total retail checking accounts	7,461,320	7,258,555	6,536,635

Retail Checking Account Activity⁽¹⁾
	Net accounts opened during the quarter:
		Washington Mutual Bank and Washington Mutual Bank fsb	10,856	11,900	36,055
		Washington Mutual Bank, FA	191,909	155,087	650,389(2	)

	Net new retail checking accounts		202,765	166,987	686,444

⁽¹⁾: Retail checking accounts exclude commercial business accounts. The information provided refers to the number of accounts, not dollar amounts.
⁽²⁾: Includes 358,846 checking accounts acquired from Dime.

WM-11

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

						Quarter Ended
						Mar. 31, 2003			Dec. 31, 2002			Sept. 30, 2002			June 30, 2002			Mar. 31, 2002
Allowance for Loan and Lease Losses
	Balance, beginning of quarter					$	1,653		$	1,705		$	1,665		$	1,621		$	1,404
	Allowance acquired through business combinations						—			—			—			—			148
	Allowance for transfer to loans held for sale						(3	)		(17	)		(7	)		—			(7	)
	Allowance for certain loan commitments						—			(52	)		—			—			—
	Provision for loan and lease losses						125			125			135			160			175

							1,775			1,761			1,793			1,781			1,720
	Loans charged off:
		Loans secured by real estate:
			Home loans				(15	)		(23	)		(9	)		(11	)		(11	)
			Purchased specialty mortgage finance				(10	)		(7	)		(9	)		(8	)		(9	)

					Total home loan charge-offs		(25	)		(30	)		(18	)		(19	)		(20	)
			Home equity loans and lines of credit:
				Banking subsidiaries			(4	)		(9	)		(3	)		(1	)		(1	)
				Washington Mutual Finance			(3	)		(4	)		(2	)		(3	)		(2	)
			Multi-family				—			—			(1	)		—			—
			Other real estate				(10	)		(5	)		(11	)		(32	)		(10	)

					Total loans secured by real estate		(42	)		(48	)		(35	)		(55	)		(33	)
		Consumer:
			Banking subsidiaries				(17	)		(16	)		(15	)		(20	)		(20	)
			Washington Mutual Finance				(40	)		(43	)		(42	)		(44	)		(40	)
		Commercial business					(14	)		(20	)		(17	)		(19	)		(19	)

					Total loans charged off		(113	)		(127	)		(109	)		(138	)		(112	)
	Recoveries of loans previously charged off:
		Loans secured by real estate:
			Home loans				—			—			2			—			—
			Purchased specialty mortgage finance				1			—			—			—			—
			Multi-family				—			—			1			—			—
			Other real estate				4			5			6			1			1

					Total loans secured by real estate		5			5			9			1			1
		Consumer:
			Banking subsidiaries				3			5			3			3			2
			Washington Mutual Finance				6			4			5			5			5
		Commercial business					4			5			4			13			5

					Total recoveries of loans previously charged off		18			19			21			22			13

					Net charge-offs		(95	)		(108	)		(88	)		(116	)		(99	)

	Balance, end of quarter					$	1,680		$	1,653		$	1,705		$	1,665		$	1,621

Net charge offs (annualized) as a percentage of average loans held in portfolio							0.26	%		0.29	%		0.24	%		0.32	%		0.27	%
Allowance as a percentage of total loans held in portfolio							1.12	%		1.12	%		1.15	%		1.14	%		1.12	%

WM-12

Washington Mutual, Inc.
Selected Financial Information
(dollars in millions)
(unaudited)

				Mar. 31, 2003			Dec. 31, 2002			Sept. 30, 2002			June 30, 2002			Mar. 31, 2002
Nonperforming Assets and Restructured Loans
	Nonaccrual loans⁽¹⁾:
		Home loans		$	910		$	1,017		$	1,068		$	1,092		$	1,177
		Purchased specialty mortgage finance			523			488			407			403			401

			Total home loan nonaccrual loans		1,433			1,505			1,475			1,495			1,578
		Home construction loans:
			Builder⁽²⁾		38			42			48			44			57
			Custom⁽³⁾		9			7			6			8			15
		Home equity loans and lines of credit:
			Banking subsidiaries		44			36			35			35			35
			Washington Mutual Finance		41			37			35			31			29
		Multi-family			49			50			58			64			51
		Other real estate			402			414			356			371			413

			Total nonaccrual loans secured by real estate		2,016			2,091			2,013			2,048			2,178
		Consumer:
			Banking subsidiaries		10			18			13			13			18
			Washington Mutual Finance		67			69			76			75			79
		Commercial business			73			79			86			96			116

			Total nonaccrual loans held in portfolio		2,166			2,257			2,188			2,232			2,391
Foreclosed assets					334			336			309			274			267

			Total nonperforming assets	$	2,500		$	2,593		$	2,497		$	2,506		$	2,658
			As a percentage of total assets		0.90	%		0.97	%		0.95	%		0.96	%		0.97	%
Restructured loans				$	99		$	98		$	112		$	119		$	130

			Total nonperforming assets and restructured loans	$	2,599		$	2,691		$	2,609		$	2,625		$	2,788

⁽¹⁾: Excludes nonaccrual loans held for sale of $134 million at March 31, 2003. Prior periods also reflect the exclusion of nonaccrual loans held for sale of $119 million, $105 million, $114 million and $122 million at December 31, 2002, September 30, 2002, June 30, 2002 and March 31, 2002. Loans held for sale are accounted for at lower of aggregate cost or market value, with valuation changes included as adjustments to gain from mortgage loans.
⁽²⁾: Represents loans to builders for the purpose of financing the acquisition, development and construction of single-family residences for sale.
⁽³⁾: Represents construction loans made directly to the intended occupant of a single-family residence.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		WASHINGTON MUTUAL, INC.
Date: April 15, 2003		By:	/s/ FAY L. CHAPMAN Fay L. Chapman Senior Executive Vice President and General Counsel

QuickLinks

ITEM 9. Regulation FD Disclosure.