washington mutual (wmi) - attachments/exhibits to the final report of the examiner (part 5/10)

WAMUNYCS\Aug 11\WM 8.11.08 M&A Discussion_5.doc vyaank 11 Aug 2008 16:51 17/67

DRAFT

17

Overview of Selected Buyers Selected Transaction Metrics – Moody’s Stress Case ($18.5 bn pre-tax mark) ($ in millions)

JPMorgan Wells Fargo TD US Bancorp Barclays Santander BBVA SMBC0 0 0 0 0 0 0 0

Market Data: 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0

Market Cap $ 141,104 $ 99,640 $ 47,523 $ 54,772 $ 57,253 $ 113,851 $ 67,099 $ 50,318

2009E P/E 12.3 x 12.8 x 9.9 x 12.8 x 6.7 x 7.6 x 6.7 x 11.3 x0 0 0 0 0 0 0 0

Transaction Summary: 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0

Run Rate Pre-Tax Synergies $ 3,211 $ 3,637 $ 1,539 $ 2,900 $ 925 $ 810 $ 1,285 $ 810

As a Percentage of NIE 37.8 % 42.8 % 18.1 % 34.1 % 10.9 % 9.5 % 15.1 % 9.5 %0 0 0 0 0 0 0 0

Tier 1 (6/30/08) 9.11 % 8.24 % 9.10 % 8.50 % 9.13 % 7.88 % 7.70 % 6.73 %

Tier 1 Target (At Close) 8.50 8.24 8.50 8.50 8.50 7.75 7.70 6.730.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Equity Raised to Recapitalize $ 7,715 $ 14,146 $ 11,262 $ 14,357 $ 11,142 $ 10,209 $ 11,593 $ 9,944

As a Percentage of Market Cap 5.47 % 14.20 % 23.70 % 26.21 % 19.46 % 8.97 % 17.28 % 19.76 %0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

IRR 55.2 % 53.2 % 45.5 % 49.8 % 42.2 % 48.4 % 47.5 % 51.7 %0 0 0 0 0 0 0 0

2009E Acc. / Dil. 29.1 % 36.5 % 34.4 % 52.5 % 14.6 % 15.7 % 14.9 % 44.2 %

2010E Acc. / Dil. 27.6 37.8 52.4 57.9 18.5 18.9 18.7 51.8

CONFIDENTIAL WAMUBKEXAM-GS-000036


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18

Sensitivity Analyses Equity Issued to Recapitalize Pro-Forma Entity1

($ in millions)

JPMorgan Wells Fargo Tier 1 Target at Close

7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 0 $ 0 $ 0 $ 0 $ 2,573

14,374 0 0 0 1,851 5,218

20,000 0 0 1,901 5,261 8,621

25,000 0 1,585 4,938 8,292 11,645

30,000 1,283 4,629 7,976 11,322 14,669

12/3

1/08

MTM

Los

s

Tier 1 Target at Close

7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 3,160 $ 5,130 $ 7,101 $ 9,071 $ 11,041

14,374 5,829 7,793 9,757 11,722 13,686

20,000 9,261 11,218 13,175 15,132 17,088

25,000 12,312 14,262 16,212 18,162 20,112

30,000 15,362 17,306 19,249 21,193 23,136

12/3

1/08

MTM

Los

s

US Bancorp TD Tier 1 Target at Close

7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 4,603 $ 5,755 $ 6,908 $ 8,061 $ 9,214

14,374 7,271 8,418 9,565 10,712 11,860

20,000 10,704 11,843 12,983 14,122 15,262

25,000 13,754 14,887 16,020 17,153 18,286

30,000 16,805 17,931 19,057 20,184 21,310

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 2,250 $ 3,277 $ 4,303 $ 5,330 $ 6,357

14,374 4,795 5,816 6,838 7,859 8,880

20,000 8,069 9,083 10,097 11,112 12,126

25,000 10,979 11,987 12,995 14,002 15,010

30,000 13,889 14,890 15,892 16,893 17,894

12/3

1/08

MTM

Los

s

1 Assumes all-stock transaction and does not include capital raised for transaction or make-whole



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($ in millions)

Barclays Santander Tier 1 Target at Close

7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 0 $ 0 $ 770 $ 3,108 $ 5,446

14,374 0 1,381 3,713 6,044 8,376

20,000 2,852 5,175 7,498 9,822 12,145

25,000 6,231 8,547 10,863 13,179 15,495

30,000 9,610 11,918 14,227 16,535 18,844

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 1,613 $ 3,997 $ 6,382 $ 8,766 $ 11,151

14,374 4,815 7,193 9,570 11,948 14,325

20,000 8,934 11,302 13,671 16,040 18,408

25,000 12,594 14,955 17,316 19,676 22,037

30,000 16,255 18,608 20,960 23,313 25,666

12/3

1/08

MTM

Los

s

BBVA SMBC Tier 1 Target at Close

7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 4,434 $ 6,072 $ 7,711 $ 9,349 $ 10,987

14,374 7,447 9,079 10,711 12,343 13,974

20,000 11,323 12,947 14,570 16,193 17,816

25,000 14,768 16,384 18,000 19,615 21,231

30,000 18,213 19,821 21,429 23,038 24,646

12/3

1/08

MTM

Los

s


6.50% 6.75% 7.00% 7.25% 7.50%

$ 10,000 $ 11,020 $ 13,169 $ 15,319 $ 17,469 $ 19,618

14,374 13,853 15,996 18,139 20,283 22,426

20,000 17,496 19,632 21,767 23,903 26,038

25,000 20,734 22,863 24,991 27,120 29,248

30,000 23,973 26,094 28,215 30,337 32,458

12/3

1/08

MTM

Los

s




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IV. Structural Alternatives



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Contingent Value Securities Structural Overview

A bank holding company (“Acquiror”) is seeking to acquire another bank holding company (“Target”) which holds a portfolio of higher risk assets (“Assets”) on its balance sheet

In addition to cash and other consideration the Acquiror can deliver to Target shareholders Contingent Value Securities (“CVS”) which track the performance of the Assets and convert into common stock of the Acquiror based on Asset performance

CVS return will be based on asset performance post purchase accounting mark

Initial value of the CVS would be based on the size of the Asset portfolio, and the purchase accounting mark on the Assets

Dividends would be non-cumulative and paid based on an arms length fixed annual rate

Conversion into Acquiror common stock would be mandatory and occur upon the earlier of [5 yrs] and the date on which [80%] of the assets have paid off — Investors receive a variable number of shares

to return a fixed value within a range based on (i) performance of the asset portfolio and (ii) Acquiror stock price on the conversion date

— Alternately, upside can be capped or shared between Acquiror and Target shareholders

Core Business

High Risk Assets

Core Business

High Risk Assets

(marked)

Core Business

High Loss

Core Business

Low Loss

At Acquisition Upon Conversion (yr 5)



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Contingent Value Securities Regulatory, Rating Agency & Accounting Considerations

Regulatory & Rating Agency

The securities will be non-cumulative perpetual preferred stock with a mandatory conversion feature, and will qualify as Tier 1 and unrestricted core capital at the Federal Reserve

Rating Agencies will likely treat the security as a mandatory convertible preferred, which would achieve Basket E (100%) at Moody’s and 100% equity credit at S&P (up to 50% of ACE)

Accounting The value of the CVS will vary based on the value of the underlying assets, and will therefore likely be viewed as a

derivative — FAS 133 requires that the derivative should be marked to market on an ongoing basis. Consistent with the

guidance on contingent consideration in FAS141R, the change in fair value would be recorded in current earnings or OCI

— Changes in value in the CVS may be offset by electing fair value accounting on the underlying assets

− Size and timing of mark-to-market adjustments on the CVS may differ from adjustments on the underlying assets due to different assumptions underlying the valuation of each1

Since there is a requirement to deliver a variable number of shares within a range, the CVS will likely receive “if-converted” accounting treatment

To avoid EITF 00-19 issues, the CVS will require a share cap to limit the amount of common shares that could potentially be issued

1 Including volatility of the Acquiror’s share price, shifts in interest rates and shifts in credit spreads



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Contingent Value Securities Summary Term Sheet

Issuer The Acquiror

Assets A portfolio of higher-risk mortgage related assets with starting aggregate face or principal amount of $● (the “Starting Unpaid Principal Balance”)

Securities Offered Contingent Value Securities (“The Securities”)

Liquidation Preference Initially $● in the aggregate, or $● per share,

Conversion Date The earlier of (i) the date which is [5] yrs from the issue date, and (ii) the Asset Disposition Date

“Asset Disposition Date” means the last day of the first calendar quarter as of which the Unpaid Principal Balance is [20]% or less of the Starting Unpaid Principal Balance

“Unpaid Principal Balance” means, on any date, the aggregate principal amount of the loans that are part of the Assets on such date

Conversion On the Conversion Date, the Securities will convert into a number of shares of Acquiror common stock equal to the Conversion Valuedivided by the volume weighted average price of Acquiror common stock over the ten day period preceding the Conversion Date,provided that the Acquiror shall in no event be obligated to deliver more shares than the Maximum Share Cap

The “Conversion Value” will equal the sum of (a) the Liquidation Preference minus (b) Aggregate Asset Gains and Losses minus (c) Remaining Expected Losses

“Aggregate Asset Gains and Losses” means the aggregate sum of realized losses and realized gains minus the aggregate sum of expected losses as reflected on the Acquiror’s consolidated balance sheet at inception of the transaction as calculated on theConversion Date by an independent investment banking firm of international standing (the “Calculation Agent”)

“Remaining Expected Losses” means, with respect to Assets still outstanding on the Conversion Date, the aggregate sum ofexpected future losses as calculated on the Conversion Date by the Calculation Agent

“Maximum Share Cap” means [2 times] the Liquidation Preference divided by the volume weighted average price of Acquiror common stock over the ten day period preceding the date of issuance



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Dividends Non-Cumulative Dividends will be payable on the Securities as and if declared by the Board of Directors at a rate equal to [8]% per annum applied to the Liquidation Preference of the Securities quarterly on ●,●,● and ● of each year, commencing on ●, 2008 (each, a “Dividend Payment Date”). The period from, and including, a Dividend Payment Date to, but excluding, the next succeedingDividend Payment Date is referred to herein as a “Dividend Period”.

Dividends on the Securities are not cumulative. Accordingly, if for any reason the Acquiror does not declare a dividend on theSecurities before the Dividend Payment Date for a Dividend Period, that dividend will not accumulate and holders of the Securities will have no right to receive, and the Acquiror will have no obligation to pay, a dividend for that period, whether or not dividends onthe Securities are paid in full or in part in the future.

If full dividends on the Securities are not paid for a particular Dividend Period, the Acquiror will not declare or pay dividends on orredeem or purchase any common stock or other junior securities during the next succeeding Dividend Period.

Ranking The Securities will rank junior to all debt of the Acquiror, senior to common equity, and pari passu with all other preferred shares of the Acquiror

Covenants In the charter document setting forth the terms of the Securities (the “Issuance Document”), the Acquiror will covenant as follows:

the Calculation Agent will calculate, for relevant periods and as of relevant dates, the Aggregate Gains and Losses andRemaining Expected Losses (and related definitions used in computing defined amounts) in accordance with the definitions ofthose terms set forth in the Issuance Document; and

at all relevant times, the Acquiror will have entered into and have in full force and effect a “Servicing Agreement” with an “Eligible Servicer”. “Eligible Servicer” means ●; each such Servicing Agreement shall have at least the following terms: ●

adopt a policy to manage the Assets with the objective of maximizing the gains on the Assets, and to adopt that standard as thecore servicing standard in the Servicing Agreement

Servicing Commencing upon issuance of the Securities and continuing through the Redemption Date, there shall at all times be a “Servicer” who shall be an Eligible Servicer. The Servicer shall be responsible for collecting on and otherwise servicing the Assets including assets that are ● or more days delinquent or are characterized as non-performing assets. The initial Servicer shall be jointly agreed upon and appointed by the Acquiror and the Target.

Issuance • The Securities will be issued in registered, global form The Securities will be registered under the Securities Act of 1933, as amended, and listed on NYSE



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Contingent Value Securities Illustrative Impact – Wells Fargo Acquires WaMu

CVS has original notional value $4,000 mm ($2.35 / share) — Initially calculated as ~40% of mark on Option ARM portfolio at closing (mark on portfolio is 19% of 12/31/08E

balance of $51.8 billion)

Value of security contingent upon performance of reference pool (Option ARM portfolio) — Full value if portfolio performs as marked — Value adjusts on linear basis based on portfolio performance

Overview of Payment Pro Forma Impact 2009 2010 2011

As Expected: Moody's StressGain / (Loss) on Marked Portfolio $ 0.0 $ 0.0 $ 0.0Gain / (Loss) on CVS 0.0 0.0 0.0Value of CVS 4,000 4,000 4,000Wells Fargo Stock Price $ 32.57 $ 42.02 $ 45.28Number of Shares Issued 122.8 95.2 88.4Accretion / Dilution 34.3 % 36.6 % 36.3 %

Stronger Performance: Company StressGain / (Loss) on Marked Portfolio $ 276.1 $ 276.1 $ 276.1Gain / (Loss) on CVS (276.1) (276.1) (276.1)Value of CVS 4,276 4,552 4,828Wells Fargo Stock Price $ 32.57 $ 42.02 $ 45.28Number of Shares Issued 131.3 108.3 106.6Accretion / Dilution 34.1 % 36.1 % 35.7 %



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26

Debt for Equity Exchange Exchanging Extant Debt and/or Preferred for Common Equity

Washington Mutual’s debt and preferred stock is trading at a significant discount to par

Similar to recent senior debt repurchases, a repurchase of discounted debt creates an after tax gain

A further extension to this strategy would be for WaMu to exchange equity for some of its existing subordinated debt and / or preferred stock

An equity exchange increases equity by — The price paid for the debt or preferred redeemed, plus — The aggregate discount less tax leakage

− Tax leakage only applies to debt and trust preferred – there is no tax leakage on Series K DRD Preferred, Series R Convertible Preferred, and REIT Preferred securities)

In addition, can re-balance capital structure by reducing hybrids outstanding, which could improve regulatory and rating agency sentiment

The most likely route for an exchange would be through a Section 3(a)(9) exemption — A direct solicitation by Washington Mutual to investors can avoid SEC filing but must conform to tender rules

and may be subject to the same disclosure requirements as a public common equity raise



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Debt for Equity Exchange Outstanding Debt and Hybrid Securities

Security Size~Trading

PriceRepurchase

Price % ExchangedNotional

Debt RetiredEquity Issued

Discount Captured Tax Leakage

Net Increase in Equity

CapitalADP I (Cayman) $ 750 33.5 % 43.5 % 50.0 % $ 375 $ 163 $ 212 $ 0 $ 375ADP I (Delaware) 1,250 28.0 38.0 50.0 625 238 388 0 625ADP II 500 31.0 41.0 50.0 250 103 148 0 250ADP III 500 30.0 40.0 50.0 250 100 150 0 250ADP IV 1,000 47.0 57.0 50.0 500 285 215 0 500DRD Preferred (Series K) 500 32.0 42.0 50.0 250 105 145 0 250Conv Preferred (Series R) 3,000 48.9 58.9 50.0 1,500 884 617 0 1,500PIERS 1,150 40.0 50.0 50.0 575 288 288 101 474Total $ 8,650 40.0 % 50.0 % 50.0 % $ 4,325 $ 2,164 $ 2,161 $ 101 $ 4,224

Holdco Senior5.25% '17 $ 750 70.0 % 80.0 % 45.0 % $ 338 $ 270 $ 68 $ 24 $ 3144.20% '10 600 75.0 85.0 30.0 180 153 27 9 171L+14 '09 500 75.0 85.0 30.0 150 128 23 8 142L+40 '12 500 75.0 85.0 35.0 175 149 26 9 166L+30 '12 450 75.0 85.0 35.0 158 134 24 8 1495.5% '11 400 75.0 85.0 35.0 140 119 21 7 1335.0% '12 400 70.0 80.0 35.0 140 112 28 10 130L+30 '10 250 80.0 90.0 30.0 75 68 8 3 724.0% '09 1,000 85.0 95.0 30.0 300 285 15 5 295L+9 '09 1,000 85.0 95.0 30.0 300 285 15 5 295Total $ 5,850 77.6 % 87.6 % 33.4 % $ 1,955 $ 1,702 $ 253 $ 89 $ 1,866

Bank SeniorL+15 '10 $ 750 75.0 % 85.0 % 30.0 % $ 225 $ 191 $ 34 $ 12 $ 2135.55% '10 250 80.0 90.0 30.0 75 68 8 3 72L+10 '08 1,000 95.0 105.0 30.0 300 315 (15) (5) 3054.5% '08 250 95.0 105.0 30.0 75 79 (4) (1) 76L+20 '11 1,000 80.0 90.0 35.0 350 315 35 12 3386.75% '36 300 75.0 85.0 50.0 150 128 23 8 142L+42 '13 600 70.0 80.0 35.0 210 168 42 15 1955.95% '13 350 70.0 80.0 35.0 123 98 25 9 114Total $ 4,500 80.9 % 90.9 % 33.5 % $ 1,508 $ 1,361 $ 147 $ 51 $ 1,456

Holdco Sub4.625% '14 $ 750 45.0 % 55.0 % 40.0 % $ 300 $ 165 $ 135 $ 47 $ 2537.25% '17 500 45.0 55.0 40.0 200 110 90 32 1698.25% '10 500 45.0 55.0 30.0 150 83 68 24 126Total $ 1,750 45.0 % 55.0 % 37.1 % $ 650 $ 358 $ 293 $ 102 $ 548

Bank Sub5.65% '14 $ 1,000 45.0 % 55.0 % 35.0 % $ 350 $ 193 $ 158 $ 55 $ 2955.50% '13 750 45.0 55.0 35.0 263 144 118 41 2216.875% '11 1 45.0 55.0 30.0 0 0 0 0 05.125% '15 1,000 45.0 55.0 35.0 350 193 158 55 295L+65 '15 500 45.0 55.0 35.0 175 96 79 28 147Total $ 3,251 45.0 % 55.0 % 35.0 % $ 1,138 $ 626 $ 512 $ 179 $ 959

Aggregate $ 24,001 57.9 % 67.9 % 39.9 % $ 9,575 $ 6,210 $ 3,365 $ 522 $ 9,053



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Debt for Equity Exchange Impact on Key Ratios

Repurchase Only Outstanding Debt Repurchase Only Outstanding Preferreds Repurchase All Outstanding Debt / Preferred6/30/08 Actual Adj. 6/30/08 PF

6/30/08 Actual Adj. 6/30/08 PF

6/30/08 Actual Adj. 6/30/08 PF

TCE $ 15,096 $ 4,829 $ 19,925 TCE $ 15,096 $ 4,224 $ 19,320 TCE $ 15,096 $ 9,053 $ 24,149

TA 302,133 302,133 TA 302,133 302,133 TA 302,133 302,133

Shares 1,699 1,011 2,710 Shares 1,699 541 2,240 Shares 1,699 1,553 3,252

TCE / TA 5.00 % 6.59 % TCE / TA 5.00 % 6.39 % TCE / TA 5.00 % 7.99 %

TBVPS $ 8.89 $ 7.35 TBVPS $ 8.89 $ 8.63 TBVPS $ 8.89 $ 7.43

TCE $ 15,096 $ 4,829 $ 19,925 TCE $ 15,096 $ 4,224 $ 19,320 TCE $ 15,096 $ 9,053 $ 24,149

Preferred 7,306 7,306 Preferred 7,306 (4,325) 2,981 Preferred 7,306 (4,325) 2,981

AOCI 1,079 1,079 AOCI 1,079 1,079 AOCI 1,079 1,079

TE 23,481 28,310 TE 23,481 23,380 TE 23,481 28,209

TA $ 302,133 $ 302,133 TA $ 302,133 $ 302,133 TA $ 302,133 $ 302,133

TE / TA 7.77 % 9.37 % TE / TA 7.77 % 7.74 % TE / TA 7.77 % 9.34 %

Tier 1 $ 24,561 $ 4,829 $ 29,390 Tier 1 $ 24,561 $(101) $ 24,460 Tier 1 $ 24,561 $ 4,728 $ 29,289

RWA 247,273 247,273 RWA 247,273 247,273 RWA 247,273 247,273

Tier 1 RBC 9.93 % 11.89 % Tier 1 RBC 9.93 % 9.89 % Tier 1 RBC 9.93 % 11.84 %

Tier 1 $ 24,561 $ 4,829 $ 29,390 Tier 1 $ 24,561 $(101) $ 24,460 Tier 1 $ 24,561 $ 4,728 $ 29,289

Avg Assets 314,882 314,882 Avg Assets 314,882 314,882 Avg Assets 314,882 314,882

Tier 1 Leverage 7.80 % 9.33 % Tier 1 Leverage 7.80 % 7.77 % Tier 1 Leverage 7.80 % 9.30 %

Note: Assumes shares issued at $4.00 / share



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Partial Sale Structures “Strawman”

Ownership [9.9 – 24.9]% fully diluted ownership

Form Convertible Preferred / Senior Common (unrestricted Tier 1 qualifying security)

Dividend Common equivalent dividend

Conversion price Current market

Regulatory Control Rebutted; Investor not regarded as a source of strength

Future Sale Investor holds right of first refusal or similar mechanism

Benefits Considerations

To WM

Gain strategic support of stronger financial institution

Increased capital levels Potential to combine with liquidity facility Potential to structure around anti-dilution

considerations

Dilution of existing shareholders Impact of triggering anti-dilution provision Right of first refusal significantly limits future

options Potential to structure a call and buyback security

at [25%] IRR at [3-5] years

To Investors Achieve path to full control

Limited downside

Must be certain that it would not be considered a source of strength by regulators



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Capital Stacks 12/31/2008E ($ in millions)

64%78% 79%

15%

6% 6%

4%

9% 6%6% 7%

2%18%

0%

20%

40%

60%

80%

100%

120%

WM JPM WFC

Unrestricted Equity Capital Minority Interest Cumulative Perpetual Preferred Non Cumulative Perpetual Preferred REIT APEXMandatory Converts TPS ETPS

$ 101,043 $ 44,672 $ 22,285

WM JPM WFC15% Restricted Elements Limit (remaining capacity) $(1,637) $(831) $(234)25% Restricted Elements Limit (remaining capacity) 2,753 13,362 2,614



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Pro Forma Capital Stacks 12/31/2008E ($ in millions)

74% 72%

8% 5%3% 6%9% 6%6% 5%

4%

0%

20%

40%

60%

80%

100%

120%

JPM / WM WFC / WM


$ 117,184 $ 63,594

JPM / WM WFC / WM15% Restricted Elements Limit (remaining capacity) $(3,552) $(2,464)25% Restricted Elements Limit (remaining capacity) 15,151 4,840



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Appendix A: Merger Analysis: Company Stress Loss Scenario



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Overview of Mark-to-Market Purchase Accounting Assumes $14.4bn Mark at Close (Company Stress Case)

JPMorgan Wells Fargo

Purchase Price

Consideration for WM (at $5.00 per share) $ 8,497

(+) Investors Make-Whole 1,422

Total Consideration $ 9,919

Implied Per Share Consideration for WM $ 5.84

Goodwill Created:


(-) Tangible Book Value At Close (12,996)

(+) After-Tax Writedown 9,343

(-) Identifiable Intangibles Created (3,232)

(+) DTL Created 854

(-) Incremental Writedown of Other Assets 0

Goodwill $ 3,888

Equity Issued To Recapitalize Entity $ 5,218

As a Percentage of Acquiror Market Cap 3.7 %

Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 3,913





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JPMorgan Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Pro Forma Capital Position Pro Forma Profitability 2008 2009 2010

JPMorgan Beginning Tangible Common Equity $ 77,508 $ 86,736 $ 89,410

(+) Equity Issued to Finance Purchase 8,497

(+) Equity Issued to Make-Whole Investors 1,422

(+) Equity Issued to Recapitalize Entity 5,218

(-) Equity Repurchased (415) (7,065) (9,441)

(-) Restructuring Charges (1,044) (1,044) (1,044)

(-) Transaction Identifiable Intangibles (3,232) 0 0

(-) Transaction Goodwill (3,888) 0 0

(+) Amortization 616 1,290 1,139

(+) Net Income 4,594 15,821 21,165

(-) Dividends (2,541) (6,328) (8,466)

JPMorgan Ending Tangible Common Equity $ 86,736 $ 89,410 $ 92,764

Standalone JPMorgan Beginning Tangible Assets $ 1,726,002 $ 1,769,422 $ 1,835,775

(+) Asset Growth 43,420 66,353 68,842

Standalone JPMorgan Ending Tangible Assets $ 1,769,422 $ 1,835,775 $ 1,904,617

Standalone Olympic Beginning Tangible Assets $ 302,123 $ 288,890 $ 276,449

(+) Asset Growth (13,233) (12,441) (4,578)

Standalone Olympic Ending Tangible Assets $ 288,890 $ 276,449 $ 271,871

Pro Forma JPMorgan Ending Tangible Assets $ 2,058,312 $ 2,112,224 $ 2,176,488

Pro Forma TE / TA 4.86 % 4.86 % 4.87 %

Pro Forma TCE / TA 4.21 4.23 4.26

Pro-Forma Tier 1 RBC Ratio 8.50 % 8.50 % 8.50 %

Pro-Forma Tier 1 Leverage Ratio 5.64 5.70 5.69

2008 2009 2010 2011

JPMorgan Net Income $ 8,970 $ 11,341 $ 15,913 $ 17,084

Olympic Standalone Net Income (685) 628 2,778 2,430

(+) Post-Tax Provision Benefit 0 2,289 839 1,109

(+) Accretion of Interest-Rate Mark 0 785 687 587

Olympic Pro Forma Net Income (685) 3,701 4,304 4,125

(-) Debt Interest Expense 0 0 0 0

(+) Olympic Amortization Expense 0 68 57 48

(-) Additional Amortization Expense 0 (210) (210) (210)

(+) Return on Cash From New Equity Issuance 0 188 188 188

(-) Lost Investment Income on Share Repurchases 0 (243) (550) (888)

(-) Lost Yield on Restructuring Charge 0 (68) (102) (102)

(+) Net Synergies 0 1,044 1,565 1,722

Pro Forma Operating Net Income¹ $ 8,970 $ 15,821 $ 21,165 $ 21,968

JPMorgan Beginning Diluted Shares Outstanding 3,436 3,801 3,638 3,483

New Shares Issued to Finance Purchase 203

New Shares Issued to Make-Whole Investors 34

New Shares Issed to Recapitalize Entity 138

Shares Repurchased (10) (162) (155) (158)

Total Pro Forma Shares Outstanding 3,801 3,638 3,483 3,325

JPMorgan Standalone EPS $ 2.56 $ 3.33 $ 4.70 $ 5.08

Pro Forma EPS 2.56 4.35 6.08 6.61

Accretion / Dilution ($) $ 0.00 $ 1.02 $ 1.38 $ 1.53

Accretion / Dilution (%) 0.0% 30.6% 29.3% 30.1%

1 Assumes restructuring charges excluded from operating EPS.



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JPMorgan Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00

Implied Price Per Share (Inc. Make-Whole) 4.28 5.06 5.84 6.61 7.39

Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559

Equity Issued to Recapitalize Entity 5,218 5,218 5,218 5,218 5,218

Aggregate Deal Value $ 12,497 $ 13,817 $ 15,137 $ 16,457 $ 17,777

% Premium / Discount (Excluding Make-Whole) (43.4)% (24.5)% (5.7)% 13.2 % 32.1 %

% Premium / Discount (Including Make-Whole) (19.2)% (4.5)% 10.1 % 24.8 % 39.4 %

Deal Multiples Value

P / 2010E EPS $ 1.76 4.2 x 4.6 x 5.1 x 5.5 x 5.9 x

P / 2009E Adjusted EPS 2.18 3.4 3.7 4.1 4.4 4.8P / 2010E Adjusted EPS 2.53 2.9 3.2 3.5 3.8 4.1P / TBVPS 8.88 0.8 0.9 1.0 1.1 1.2P / Adjusted TBVPS (at closing) 2.15 3.4 3.8 4.1 4.5 4.9Transaction IRR (8.0x Terminal) 75.3 % 68.7 % 63.1 % 58.2 % 53.9 %Core Deposit Premium (0.3) 0.5 1.3 2.1 2.9

Accretion / Dilution

2009 EPS 32.8 % 31.7 % 30.6 % 29.5 % 28.5 %2010 EPS 31.5 30.4 29.3 28.2 27.2



DRAFT

36

JPMorgan Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E

WM EarningsStandalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492(+) Post-Tax Provision Benefit 2,289 839 1,109 521 0Accretion of Interest Rate Mark 785 687 587 549 389Pro-forma Net Income $ 3,701 $ 4,304 $ 4,125 $ 4,244 $ 3,881

Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38Cash Net Income 3,769 4,361 4,173 4,282 3,919

Transaction Adjustments (AT)(+) Cost Synergies $ 1,044 $ 1,565 $ 1,722 $ 1,894 $ 2,083(+) Cost of Funds (Restructuring Reserve) (68) (102) (102) (102) (102)(+) Return on Cash From New Equity Issuance 188 188 188 188 188(+) Transaction Intangible Amortization (210) (210) (210) (210) (210)

Total Adjustments $ 954 $ 1,442 $ 1,598 $ 1,771 $ 1,960

Pro Forma Net Income $ 4,723 $ 5,802 $ 5,772 $ 6,053 $ 5,879WM CapitalBeginning Tier 1 $ 26,646 $ 19,232 $ 18,914 $ 18,901(+) Net Income 4,723 5,802 5,772 6,053(-) Post-Tax Writedown (9,343)(+) Amortization 1,290 1,139 1,028 952(-) Restructuring Charge (1,044) (1,044) (1,044)(Excess) / Infusion (3,041) (6,217) (6,812) (6,112)Ending Tier 1¹ $ 26,646 $ 19,232 $ 18,914 $ 18,901 $ 19,794

Risk-Weighted Assets $ 236,442 $ 226,260 $ 222,513 $ 222,368 $ 232,876

Tier 1 Ratio 11.27 % 8.50 % 8.50 % 8.50 % 8.50 %

Cash FlowsPurchase Price $ (9,919) Additional Equity Issued (5,218)Excess / (Infusion) $ 3,041 $ 6,217 $ 6,812 $ 6,112Terminal Value (8.0 x) Earnings 47,031

Cash flow to JPMorgan $ (15,137) $ 3,041 $ 6,217 $ 6,812 $ 53,142

Internal Rate of Return (@ 31-Dec-08) 63.1 %

Note: Assumes WM targets same Tier 1 target as acquiror. 1 Pro forma for equity raised to recapitalize entity and restructuring charge



DRAFT

37

Wells Fargo Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


Wells Fargo Beginning Tangible Common Equity $ 30,159 $ 44,657 $ 46,194








(+) Amortization 128 547 521

(+) Net Income 3,361 12,592 15,591

(-) Dividends (1,947) (5,037) (6,237)

Wells Fargo Ending Tangible Common Equity $ 44,657 $ 46,194 $ 48,386

Standalone Wells Fargo Beginning Tangible Assets $ 591,992 $ 612,893 $ 645,070

(+) Asset Growth 20,901 32,177 33,866

Standalone Wells Fargo Ending Tangible Assets $ 612,893 $ 645,070 $ 678,936


(+) Asset Growth (13,233) (12,441) (4,578)


Pro Forma Wells Fargo Ending Tangible Assets $ 901,783 $ 921,519 $ 950,807

Pro Forma TE / TA 5.84 % 5.88 % 5.93 %

Pro Forma TCE / TA 4.95 5.01 5.09



2008 2009 2010 2011

Wells Fargo Net Income $ 7,113 $ 7,691 $ 9,758 $ 10,474











(+) Net Synergies 0 1,182 1,773 1,950


Wells Fargo Beginning Diluted Shares Outstanding 3,303 4,031 3,866 3,711






Wells Fargo Standalone EPS $ 2.15 $ 2.35 $ 3.00 $ 3.24

Pro Forma EPS 2.15 3.26 4.20 4.53






DRAFT

38

Wells Fargo Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419






P / 2010E EPS $ 1.76 6.3 x 6.7 x 7.2 x 7.6 x 8.0 x

P / 2009E Adjusted EPS 2.18 5.1 5.4 5.8 6.1 6.5P / 2010E Adjusted EPS 2.53 4.4 4.7 5.0 5.3 5.6P / TBVPS 8.88 1.2 1.3 1.4 1.5 1.6P / Adjusted TBVPS (at closing) 2.15 5.1 5.5 5.9 6.2 6.6Transaction IRR (8.0x Terminal) 69.7 % 64.4 % 59.8 % 55.7 % 52.0 %Core Deposit Premium 3.6 4.4 5.2 6.0 6.8


2009 EPS 41.6 % 40.1 % 38.6 % 37.2 % 35.7 %2010 EPS 43.1 41.6 40.1 38.6 37.1



DRAFT

39

Wells Fargo Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E




Total Adjustments $ 1,317 $ 1,869 $ 2,047 $ 2,242 $ 2,456

Pro Forma Net Income $ 5,086 $ 6,230 $ 6,220 $ 6,523 $ 6,375WM CapitalBeginning Tier 1 $ 32,932 $ 18,644 $ 18,335 $ 18,323(+) Net Income 5,086 6,230 6,220 6,523(-) Post-Tax Writedown (9,343)(+) Amortization 547 521 448 417(-) Restructuring Charge (1,182) (1,182) (1,182)(Excess) / Infusion (9,396) (5,877) (6,680) (6,074)Ending Tier 1¹ $ 32,932 $ 18,644 $ 18,335 $ 18,323 $ 19,189


Tier 1 Ratio 13.93 % 8.24 % 8.24 % 8.24 % 8.24 %


Cash flow to Wells Fargo $ (21,422) $ 9,396 $ 5,877 $ 6,680 $ 57,073





DRAFT

40

TD Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Pro Forma Capital Position Pro Forma Profitability Pro Forma Capital Position

2008 2009 2010

TD Beginning Tangible Common Equity $ 10,764 $ 23,717 $ 23,399




(-) Equity Repurchased 0 (5,540) (5,473)

(-) Restructuring Charges (477) (477) (477)




(+) Net Income 2,204 8,756 9,621

(-) Dividends (891) (3,502) (3,848)

TD Ending Tangible Common Equity $ 23,717 $ 23,399 $ 23,648

Standalone TD Beginning Tangible Assets $ 455,205 $ 466,656 $ 484,155

(+) Asset Growth 11,451 17,500 18,156

Standalone TD Ending Tangible Assets $ 466,656 $ 484,155 $ 502,311


(+) Asset Growth (12,802) (12,441) (4,578)


Pro Forma TD Ending Tangible Assets $ 755,977 $ 761,036 $ 774,613

Pro Forma TE / TA 4.42 % 4.35 % 4.31 %

Pro Forma TCE / TA 3.14 3.07 3.05



2008 2009 2010 2011

TD Net Income $ 4,093 $ 4,778 $ 4,895 $ 5,350











(+) Net Synergies 0 477 716 787


TD Beginning Diluted Shares Outstanding 805 1,133 1,066 1,008




Shares Repurchased 0 (67) (57) (56)

Total Pro Forma Shares Outstanding 1,133 1,066 1,008 953

TD Standalone EPS $ 5.33 $ 5.93 $ 6.08 $ 6.64

Pro Forma EPS 5.33 8.22 9.54 10.26






DRAFT

41

TD Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.4 x 5.8 x 6.3 x 6.7 x 7.2 x



2009 EPS 44.1 % 41.2 % 38.5 % 35.9 % 33.3 %2010 EPS 63.3 60.1 57.0 54.0 51.2



DRAFT

42

TD Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E



Transaction Adjustments (AT)(+) Cost Synergies $ 477 $ 716 $ 787 $ 866 $ 953(+) Cost of Funds (Restructuring Reserve) (30) (44) (44) (44) (44)(+) Return on Cash From New Equity Issuance 306 306 306 306 306(+) Transaction Intangible Amortization (200) (200) (200) (200) (200)

Total Adjustments $ 553 $ 777 $ 848 $ 927 $ 1,014

Pro Forma Net Income $ 4,180 $ 5,067 $ 4,944 $ 5,160 $ 4,915WM CapitalBeginning Tier 1 $ 30,874 $ 19,262 $ 18,944 $ 18,931(+) Net Income 4,180 5,067 4,944 5,160(-) Post-Tax Writedown (8,912)(+) Amortization 446 427 413 403(-) Restructuring Charge (477) (477) (477)(Excess) / Infusion (6,850) (5,335) (5,369) (4,670)Ending Tier 1¹ $ 30,874 $ 19,262 $ 18,944 $ 18,931 $ 19,824


Tier 1 Ratio 13.04 % 8.50 % 8.50 % 8.50 % 8.50 %


Cash flow to TD $ (18,799) $ 6,850 $ 5,335 $ 5,369 $ 43,986





DRAFT

43

USB Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


US Bancorp Beginning Tangible Common Equity $ 10,895 $ 24,745 $ 24,305









(+) Net Income 1,937 8,833 10,421

(-) Dividends (1,494) (3,533) (4,168)

US Bancorp Ending Tangible Common Equity $ 24,745 $ 24,305 $ 24,421

Standalone US Bancorp Beginning Tangible Assets $ 232,788 $ 236,293 $ 241,610

(+) Asset Growth 3,505 5,317 5,436

Standalone US Bancorp Ending Tangible Assets $ 236,293 $ 241,610 $ 247,046


(+) Asset Growth (13,233) (12,441) (4,578)


Pro Forma US Bancorp Ending Tangible Assets $ 525,183 $ 518,058 $ 518,917

Pro Forma TE / TA 6.39 % 6.39 % 6.40 %

Pro Forma TCE / TA 4.71 4.69 4.71



2008 2009 2010 2011

US Bancorp Net Income $ 3,943 $ 4,155 $ 4,898 $ 5,147











(+) Net Synergies 0 943 1,414 1,555


US Bancorp Beginning Diluted Shares Outstanding 1,741 2,448 2,306 2,186






US Bancorp Standalone EPS $ 2.27 $ 2.45 $ 2.94 $ 3.15

Pro Forma EPS 2.27 3.83 4.77 5.06






DRAFT

44

USB Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 6.4 x 6.8 x 7.3 x 7.7 x 8.2 x



2009 EPS 61.8 % 59.0 % 56.3 % 53.7 % 51.2 %2010 EPS 67.8 64.9 62.2 59.5 56.9



DRAFT

45

USB Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E



Transaction Adjustments (AT)(+) Cost Synergies $ 943 $ 1,414 $ 1,555 $ 1,711 $ 1,882(+) Cost of Funds (Restructuring Reserve) (61) (92) (92) (92) (92)(+) Return on Cash From New Equity Issuance 428 428 428 428 428(+) Transaction Intangible Amortization (210) (210) (210) (210) (210)




Tier 1 Ratio 14.12 % 8.50 % 8.50 % 8.50 % 8.50 %


Cash flow to US Bancorp $ (21,779) $ 9,349 $ 5,824 $ 6,363 $ 53,094





DRAFT

46

Barclays Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


Barclays Beginning Tangible Common Equity $ 35,786 $ 46,771 $ 48,572









(+) Net Income 3,593 12,888 14,185

(-) Dividends (2,656) (5,155) (5,674)

Barclays Ending Tangible Common Equity $ 46,771 $ 48,572 $ 51,039

Standalone Barclays Beginning Tangible Assets $ 2,603,859 $ 2,682,561 $ 2,803,276

(+) Asset Growth 78,702 120,715 126,147

Standalone Barclays Ending Tangible Assets $ 2,682,561 $ 2,803,276 $ 2,929,424


(+) Asset Growth (14,239) (12,441) (4,578)


Pro Forma Barclays Ending Tangible Assets $ 2,970,445 $ 3,078,719 $ 3,200,288

Pro Forma TE / TA 1.82 % 1.81 % 1.82 %

Pro Forma TCE / TA 1.57 1.58 1.59



2008 2009 2010 2011

Barclays Net Income $ 6,888 $ 8,592 $ 9,529 $ 10,292











(+) Net Synergies 0 333 499 549


Barclays Beginning Diluted Shares Outstanding 8,144 10,826 10,345 9,919

New Shares Issued to Finance Purchase 1,185


New Shares Issed to Recapitalize Entity 1,298



Barclays Standalone EPS $ 0.96 $ 1.05 $ 1.17 $ 1.26

Pro Forma EPS 0.96 1.25 1.43 1.54






DRAFT

47

Barclays Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.2 x 5.7 x 6.1 x 6.6 x 7.0 x



2009 EPS 22.2 % 20.1 % 18.1 % 16.1 % 14.2 %2010 EPS 26.5 24.3 22.2 20.2 18.2



DRAFT

48

Barclays Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E




Total Adjustments $ 411 $ 566 $ 616 $ 671 $ 731



Tier 1 Ratio 12.95 % 8.50 % 8.50 % 8.50 % 8.50 %


Cash flow to Barclays $ (18,295) $ 5,568 $ 5,453 $ 5,353 $ 42,074





DRAFT

49

Santander Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


Santander Beginning Tangible Common Equity $ 63,744 $ 75,740 $ 76,824








(+) Amortization 486 1,087 967

(+) Net Income 6,769 19,337 21,187

(-) Dividends (3,385) (7,735) (8,475)

Santander Ending Tangible Common Equity $ 75,740 $ 76,824 $ 78,470

Standalone Santander Beginning Tangible Assets $ 1,360,682 $ 1,391,470 $ 1,438,432

(+) Asset Growth 30,788 46,962 48,547

Standalone Santander Ending Tangible Assets $ 1,391,470 $ 1,438,432 $ 1,486,979


(+) Asset Growth (15,102) (12,441) (4,578)


Pro Forma Santander Ending Tangible Assets $ 1,678,491 $ 1,713,012 $ 1,756,981

Pro Forma TE / TA 4.99 % 4.95 % 4.92 %

Pro Forma TCE / TA 4.51 4.48 4.47



2008 2009 2010 2011

Santander Net Income $ 13,875 $ 15,042 $ 16,923 $ 18,214


(+) Post-Tax Provision Benefit 0 2,746 1,006 1,331







(-) Lost Investment Income on Share Repurchases 0 (440) (897) (1,367)


(+) Net Synergies 0 316 474 521


Santander Beginning Diluted Shares Outstanding 6,254 7,220 6,822 6,464






Santander Standalone EPS $ 2.21 $ 2.41 $ 2.71 $ 2.91

Pro Forma EPS 2.21 2.83 3.28 3.57






DRAFT

50

Santander Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00Implied Price Per Share (Inc. Make-Whole) 4.28 5.06 5.84 6.61 7.39

Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 4.8 x 5.3 x 5.7 x 6.2 x 6.6 x


Accretion / Dilution2009 EPS 20.2 % 19.0 % 17.9 % 16.7 % 15.6 %2010 EPS 23.6 22.3 21.1 20.0 18.8



DRAFT

51

Santander Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E

WM EarningsStandalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492(+) Post-Tax Provision Benefit 2,746 1,006 1,331 626 0Accretion of Interest Rate Mark 942 824 704 658 467Pro-forma Net Income $ 4,316 $ 4,609 $ 4,465 $ 4,458 $ 3,959




Pro Forma Net Income $ 4,735 $ 5,162 $ 5,056 $ 5,092 $ 4,650WM CapitalBeginning Tier 1 $ 29,348 $ 17,417 $ 17,126 $ 17,115(+) Net Income 4,735 5,162 5,056 5,092(-) Post-Tax Writedown (11,212)(+) Amortization 1,087 967 880 820(-) Restructuring Charge (316) (316) (316)(Excess) / Infusion (6,225) (6,104) (5,948) (5,097)Ending Tier 1¹ $ 29,348 $ 17,417 $ 17,126 $ 17,115 $ 17,929


Tier 1 Ratio 12.49 % 7.75 % 7.75 % 7.75 % 7.75 %


Cash flow to Santander $ (17,112) $ 6,225 $ 6,104 $ 5,948 $ 42,297





DRAFT

52

BBVA Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


BBVA Beginning Tangible Common Equity $ 26,130 $ 38,797 $ 39,651









(+) Net Income 4,789 14,466 16,073

(-) Dividends (2,254) (5,787) (6,429)

BBVA Ending Tangible Common Equity $ 38,797 $ 39,651 $ 41,085

Standalone BBVA Beginning Tangible Assets $ 747,507 $ 773,138 $ 812,568

(+) Asset Growth 25,631 39,430 41,441

Standalone BBVA Ending Tangible Assets $ 773,138 $ 812,568 $ 854,009


(+) Asset Growth (14,441) (12,441) (4,578)


Pro Forma BBVA Ending Tangible Assets $ 1,060,821 $ 1,087,810 $ 1,124,673

Pro Forma TE / TA 4.35 % 4.32 % 4.30 %

Pro Forma TCE / TA 3.66 3.65 3.65



2008 2009 2010 2011

BBVA Net Income $ 9,190 $ 10,028 $ 11,324 $ 12,287











(+) Net Synergies 0 471 707 778


BBVA Beginning Diluted Shares Outstanding 3,748 4,822 4,577 4,356






BBVA Standalone EPS $ 2.47 $ 2.68 $ 3.02 $ 3.28

Pro Forma EPS 2.47 3.16 3.69 4.01






DRAFT

53

BBVA Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.4 x 5.8 x 6.2 x 6.7 x 7.1 x





DRAFT

54

BBVA Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 13.06 % 7.70 % 7.70 % 7.70 % 7.70 %


Cash flow to BBVA $ (18,672) $ 7,514 $ 5,543 $ 5,634 $ 44,739





DRAFT

55

SMBC Acquires Washington Mutual Assumes $14.4bn Mark at Close (Company Stress Case) ($ in millions)


SMBC Beginning Tangible Common Equity $ 24,970 $ 36,338 $ 38,789









(+) Net Income 2,575 8,635 9,487

(-) Dividends (502) (3,454) (3,795)

SMBC Ending Tangible Common Equity $ 36,338 $ 38,789 $ 41,909

Standalone SMBC Beginning Tangible Assets $ 1,045,934 $ 1,098,884 $ 1,181,300

(+) Asset Growth 52,950 82,416 88,598

Standalone SMBC Ending Tangible Assets $ 1,098,884 $ 1,181,300 $ 1,269,898


(+) Asset Growth (13,808) (12,441) (4,578)


Pro Forma SMBC Ending Tangible Assets $ 1,387,199 $ 1,457,174 $ 1,541,194

Pro Forma TE / TA 3.15 % 3.16 % 3.19 %

Pro Forma TCE / TA 2.62 2.66 2.72



2008 2009 2010 2011

SMBC Net Income $ 4,394 $ 4,457 $ 4,774 $ 5,394











(+) Net Synergies 0 279 419 461


SMBC Beginning Diluted Shares Outstanding 7,890 10,620 10,290 10,013






SMBC Standalone EPS $ 0.56 $ 0.56 $ 0.61 $ 0.68

Pro Forma EPS 0.56 0.84 0.95 1.01






DRAFT

56

SMBC Acquires Washington Mutual Analysis at Various Prices, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 4.9 x 5.3 x 5.7 x 6.2 x 6.6 x





DRAFT

57

SMBC Acquires Washington Mutual IRR Analysis, Assuming $14.4bn Mark at Close (Company Stress Case) ($ in millions)

2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 12.48 % 6.73 % 6.73 % 6.73 % 6.73 %


Cash flow to SMBC $ (17,171) $ 8,647 $ 5,196 $ 5,098 $ 40,711





DRAFT

58

Appendix B: Selected Merger Analysis: Moody’s Stress Loss Scenario



DRAFT

59

Overview of Mark-to-Market Purchase Accounting Assumes $18.6bn Mark at Close (Moody’s Stress Loss) ($ in millions)


Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 6,572



Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 6,597





DRAFT

60

JPMorgan Acquires Washington Mutual Assumes $18.6bn Mark at Close (Moody’s Stress Loss) ($ in millions)










(+) Amortization 616 1,290 1,139

(+) Net Income 4,594 15,909 21,252

(-) Dividends (2,541) (6,364) (8,501)



(+) Asset Growth 43,420 66,353 68,842



(+) Asset Growth (15,917) (12,441) (4,578)



Pro Forma TE / TA 4.86 % 4.86 % 4.87 %

Pro Forma TCE / TA 4.21 4.23 4.26



2008 2009 2010 2011












(+) Net Synergies 0 1,044 1,565 1,722









Pro Forma EPS 2.56 4.30 6.00 6.52






DRAFT

61

JPMorgan Acquires Washington Mutual Analysis at Various Prices, Assuming $18.6bn Mark at Close (Moody’s Stress Case) ($ in millions)


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.0 x 5.5 x 5.9 x 6.3 x 6.8 x





DRAFT

62

Wells Fargo Acquires Washington Mutual Assumes $18.6bn Mark at Close (Moody’s Stress Loss) ($ in millions)











(+) Net Income 3,361 12,680 15,678

(-) Dividends (1,947) (5,072) (6,271)



(+) Asset Growth 20,901 32,177 33,866



(+) Asset Growth (15,917) (12,441) (4,578)



Pro Forma TE / TA 5.84 % 5.88 % 5.93 %

Pro Forma TCE / TA 4.95 5.01 5.08



2008 2009 2010 2011












(+) Net Synergies 0 1,182 1,773 1,950









Pro Forma EPS 2.15 3.21 4.13 4.45






DRAFT

63

Wells Fargo Acquires Washington Mutual Analysis at Various Prices, Assuming $18.6bn Mark at Close (Moody’s Stress Case) ($ in millions)


Purchase Price $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419






P / 2010E EPS $ 1.76 7.1 x 7.6 x 8.0 x 8.4 x 8.9 x





DRAFT

64

Appendix C: BAC / CFC Mark Case Study



DRAFT

65

Overview of Countrywide Mark to Market WM vs. CFC Asset Quality Comparison ($ in billions)

BofA announced a total mark to market on their Countrywide assets of $14.3bn, or 15.6% of the $91bn HTM loan portfolio — BofA officials said marks range across asset classes from single digits to mid-20s

Underlying assumptions on these marks is peak-to-trough nationwide HPD of 25-30%, with ~38-40% in FL and CA resulting in 17.3% cumulative loss on Countrywide Financial loans

Comparing loan portfolios suggests WM’s performance is dramatically better than CFC’s, although higher proportion of subprime loans increases loss content

WM 2Q08 Asset Quality Statistics CFC 2Q08 Asset Quality StatisticsBalance NCO Rate NPA / Loans Balance NCO Rate NPA / Loans

Loans Secured by Real Estate Prime First $ 52.1 1.2 % 3.0 % $ 29.6 1.5 % 6.3 % Prime Pay Option ARM 52.9 3.9 6.2 26.4 3.9 12.7

Home Loans $ 105.0 2.6 % 4.5 % $ 56.0 2.6 % 9.3 %Home Equity Loans & Lines of Credit 60.4 4.7 2.5 33.4 5.7 2.7Subprime Mortgage Channel 16.1 13.4 18.7 2.4 15.0 26.7Home Construction 1.9 0.4 4.2Multi-family 33.1 0.0 0.5Other Real Estate 10.5 0.0 0.8

OtherConsumer 0.0

Credit Card 10.6 6.5 Other 0.2 4.4

Commercial 1.9 9.2 3.0Total $ 239.6 3.6 % 4.7 % $ 91.8 4.1 % 7.4 %



DRAFT

66

Overview of CFC Mark BAC-CFC Purchase Accounting Case Study ($ in billions)

Preliminary Countrywide Balance Sheet ($ in billions) Preliminary Countrywide Purchase Accounting Estimates

($ in billions, except per share amounts)

June 30,

2008 March 31,

2008

Loans: Held for sale $11.8 $15.7 Held for investment 99.3 98.6

Total Loans 111.1 114.3

Allowance for loan losses (5.1) (3.4) Securities purchased under agreement to resell,

securities borrowed and fed funds sold 6.6 7.8 Investments in other financial instruments 18.8 20.9 MSR, at estimated fair value 18.4 17.2 Other assets 22.3 42.2

Total Assets $172.1 $199.0

Deposits $62.8 $63.3 Securities sold under agreement to repurchase 3.5 17.9 Notes payable 82.3 87.7 Other liabilities 13.1 16.9

Total liabilities 161.7 185.8 Shareholders' equity 10.4 13.2

Total Liabilities and Shareholders' Equity $172.1 $199.0

Purchase Price Countrywide common stock exchanged (in millions) 583 Exchange ratio 0.1822

Corporation's common stock exchanged (in millions) 106 Purchase price per share of the corporation's common stock1 $38.73

Total Purchase Price $4.1

Preliminary Allocation of the Purchase Price Countrywide stockholder's equity2 8.4 Pretax adjustments to reflect assets acquired and liabilities assumed at fair value3

Loans4 (8.1) Mortgage servicing rights (1.7) Deferred costs and currency adjustments on loans and debt 1.6 All other (4.6) Pretax total adjustments (12.8) Deferred income taxes 4.5

After tax total adjustments (8.3) Fair value of net assets acquired 0.1

Preliminary Goodwill Resulting from the Countrywide Merger $4.0

1 The value of the shares of common stock exchanged with Countrywide shareholders was based upon the average of the closing prices of the corporation's common stock for the period commencing two

trading days before, and ending two trading days after January 11, 2008, the date of the Countrywide merger agreement. 2 The value of the remaining Countrywide shareholder's equity after the cancellation of the Series B convertible preferred shares owned by the corporation prior to the merger. 3 Adjustments shown in the preliminary purchase price allocation are based on values within current estimated ranges. 4 Loan portfolio credit adjustment of $14.3 billion less the allowance for loan and lease losses of $5.1 billion less $1.1 billion of loss exposure for non-impaired loans that will flow through consolidated

earnings over time, if incurred.



DRAFT

67

Mark-to-Market Valuation Comparison to CFC Mark ($ in billions)

CountrywideMark-to-Market

Balance NPL (%) (%)¹ ($)Prime First $ 29.6 6.3 % 7.0 % $ 2.1Prime Pay Option 26.4 12.7 15.0 4.0HELOC 14.5 3.5 23.0 3.3Fixed Rate Second 18.9 2.1 23.0 4.3Subprime 2.4 26.2 25.0 0.6Total $ 91.8 15.6 % $ 14.3

Washington MutualMark-to-Market

Balance NPL (%)² (%) ($)Prime First $ 52.1 3.0 % 5.0 % $ 2.6Prime Pay Option 52.9 6.0 10.0 5.3HELOC / Fixed-Rate Second 61.4 7.0 20.0 12.3Subprime 16.1 18.0 25.0 4.0Total $ 182.5 13.3 % $ 24.2

Total Mark-To-Market $ 24.2(-) 12/31 Reserve (9.7)(-) Estimated 2H 2008 NCOs (5.7)Estimated Pre-Tax Mark at 12/31 $ 8.8

1 Bank of America indicated a range from single digits to mid twenties for the mark on the Prime First and Subprime. Mark for Prime Pay Option, HELOC and Fixed Rate Second are GS estimates. 2 GS estimates.


WAMUNYCS\Aug 14\WM 8.14.08 Discussion_4.doc vyaank 13 Aug 2008 18:42 1/10

DRAFT

1

Discussion Materials for

Goldman, Sachs & Co. August 14, 2008


QUP Washington Mutual

1

DRAFT

Discussion Materials

September 23, 2008


2

DRAFT

I. Situation Overview


3

DRAFT

Current Environment

Current market anxiety limits access to capital markets

Strategic investors “frozen” by market and regulatory developments

Sufficient liquidity to withstand short-term pressure on deposits — Customers repositioning FDIC insurance

— Uninsured consumer deposits (>$100k) approximately $10bn

— 20 million customers; not seeing erosion of customer base

− Currently have approximately $20 bn of near-term available liquidity and incremental collateral available to pledge

Credit costs in-line with expectations — September charge-off trends improving for all products

— Delinquencies showing signs of moderating

— Aggressive loss mitigation and loan modification programs in place

New CEO committed to reducing company risk profile and balance sheet size

Proposed stand-alone recapitalization plan provides alternative approach without policy intervention


4

DRAFT

Deposit Balance and Mix

Deposit balances are down 7% from year-end — Cost of deposits down 73bps; CD costs down 110bps — Retail deposits as a % of assets grows to 46.6% from 43.8% at 12/31/07

Ending Balance ($ in B)

76.3 86.5 79.6 78.3 69.4

49.4 43.1 41.1 46.1 47.9

17.8 18.617.7 18.6 16.5

143.6 148.3138.4 142.9

133.9

4Q'07 2Q'08 Jul 08 Aug '08 9/19

Consumer Noninterest-Bearing

CD

Interest-Bearing Transaction

Retail Cost of Deposits 2.82% 2.23% 2.00% 2.09

CD Cost of Deposit 4.56 3.94 3.37 3.46

CD as % of Total Deposits 34.4 29.1 29.7 32.3 35.8

Retail Dep as % of Total Assets 43.8 47.9 45.0 46.6


5

DRAFT

Large Deposit Accounts

Current deposit base more stable than before IndyMac — Mix of accounts improves from July 11th – shifting to lower balance mix. Overall, 98% of accounts are under

$500K — Accounts over $500K experienced almost 2x the decrease of accounts $100 -500K (75% vs. 45%)

— Roughly two-thirds of losses over last several days from uninsured deposits

Balance > $100K ($250K for IRA) (Single-Account Methodology)

$16.3$12.8 $12.5 $11.8

$8.9

$7.7

$4.5 $4.2 $3.4

$2.0

$24.0

$17.4 $16.6$15.3

$10.9

07/11/08 08/01/08 08/29/08 09/12/08 09/19/08

$500K +

$100K - $500K

75% Decrease since 07/11



6

DRAFT

High Balance Households Bringing Deposits Back

In July only 1% of all large balance HH’s ended their WaMu relationship

14% withdrew more than $100K, but kept their relationship — As of 9/11 41% of these customers brought back $10K+ (24% brought $100K+)

High Balance Households (>$100k) Total HHLDs % of Total

HHLDs ending WaMu relationship 5,594 1.7%

Withdrawing $100k+ but retaining relationship 44,760 13.7

All Other 275,189 84.5

TOTAL 325,543 100.0%

Actions between 7/25 and 9/11 Total

HHLDs % of Total

— Brought Back $100k+ 8.2k

24%

— Brought Back $10k-$100k 5.8

17

Brought Back $10k+ 14.0 41

Other 20.2 59

TOTAL 34.2K 100%


7

DRAFT

Deposit Trends – Summer 2008 Consumer IBD + Small Business Daily Balance Net Change

WaMu demonstrated the ability to raise deposits post-IndyMac

$1.00$2.00$3.00$4.00$5.00$6.00

7/11 7/14 7/17 7/20 7/23 7/26 7/29 8/1 8/4 8/7 8/10 8/13 8/16 8/19 8/22 8/25 8/28 8/31 9/3 9/6 9/9 9/12 9/15 9/18

(1,455)

(1,764)

(1,340)

(852)

(407)

(738)

(180)

(625)

595

(100)

333

29

467

103 182 161

1,311

91219 234

28

(158)

(616)(472)

(1,843)

(2,367)

(2,022)

(2,757)

(1,349)

($3,000)

($2,500)

($2,000)

($1,500)

($1,000)

($500)

-

$500

$1,000

$1,500

$2,0007/14 7/17 7/20 7/23 7/26 7/29 8/1 8/4 8/7 8/10 8/13 8/16 8/19 8/22 8/25 8/28 8/31 9/3 9/6 9/9 9/12 9/15 9/18

WaMu Share Price

7/15 – Deposits decline $1.8B on day 2 post IndyMac, worst one-day decline in 3Q08

8/22 – First day of first 5% CD promotion

8/22 – First day of first 5% CD promotion

8/29 – Last day of first 5% CD promotion, largest one-day increase of $1.3B

8/29 – Last day of first 5% CD promotion, largest one-day increase of $1.3B

9/5 – First day of second 5% CD promotion

9/5 – First day of second 5% CD promotion

7/11 – IndyMac seized by the Fed

7/14 – Deposits decline $1.5B on day 1 post IndyMac;WaMu shares fall 35% to $3.23

7/14 – Deposits decline $1.5B on day 1 post IndyMac;WaMu shares fall 35% to $3.23

9/9 – Lehman negative news pressures financial market;WaMu shares fall 20% to $3.30

9/9 – Lehman negative news pressures financial market;WaMu shares fall 20% to $3.30

9/10 – WaMu shares declines 30% to $2.32

9/10 – WaMu shares declines 30% to $2.32 9/15 – Lehman files for

bankruptcy; WaMu shares declines 27% to $2.00

9/15 – Lehman files for bankruptcy; WaMu shares declines 27% to $2.00

9/17 – WaMu rumored for sale


8

DRAFT

Early Delinquency Performance

Total Residential Mortgage 30 – 89 Day Delinquencies Prime Loans 30 – 89 Day Delinquencies q y y g q

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

(% of Portfolio)

$ Early Stage Delinquency (30-89)Delinquency Rate (30-89)

q y y g q

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

(% of Portfolio)

$ Early Stage Delinquency (30-89)Delinquency Rate (30-89)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

(% of Portfolio)

$ Early-Stage Delinquency (30-89)Delinquency Rate (30-89)

y q

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

(% of Portfolio)


$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

(% of Portfolio)


y q

Subprime 30 – 89 Day Delinquencies Home Equity Loans 30 – 89 Day Delinquencies y g q

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7Ju

l-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

(% of Portfolio)


y g q

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7Ju

l-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

(% of Portfolio)


y g q

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7Ju

l-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08Apr-

08May

-08Ju

n-08

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

(% of Portfolio)


$0

$200

$400

$600

$800

$1,000

$1,200

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.3%

0.6%

0.9%

1.2%

1.5%

1.8%

(% of Portfolio)


$0

$200

$400

$600

$800

$1,000

$1,200

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.3%

0.6%

0.9%

1.2%

1.5%

1.8%

(% of Portfolio)


$0

$200

$400

$600

$800

$1,000

$1,200

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7

Jul-0

7Aug

-07Sep

-07Oct-

07Nov

-07Dec

-07Ja

n-08

Feb-08

Mar-08

Apr-08

May-08

Jun-0

8

Jul-0

8Aug

-08

(in $

Mill

ions

)

0.0%

0.3%

0.6%

0.9%

1.2%

1.5%

1.8%

(% of Portfolio)


These statistics are not adjusted for the effects of loan modification programs that result in Troubled Debt Restructuring (TDR) classifications of loans as non-performing. By skipping some loans forward to that later-stage, non-performing status, such activity can reduce the amounts recorded as early-stage delinquencies.


9

DRAFT

II. Selected Alternatives


10

DRAFT

Overview of Selected Alternatives

Internal Capital /

Liquidity Generation

Downstream $4bn cash from holding company to bank Conversion of REIT Preferred to Holding Company Preferred, frees up pledge-able collateral Restructuring of bank and holdco debt with lower notional and / or preferred instruments Sale of non-performing loans to reduce risk and enhance liquidity Additional liquidity sourced through collateral initiatives

Strategic Branch

Sale / Partner

Same actions as plus — Sale of East coast (NY / FL) deposit franchise with selected assets — $500mm to $1bn investment sourced from acquirer with additional equity possible from

other investors — Potential to source liquidity from acquiror to replace lost deposits

Government

Lending Facility / Ownership

Same actions as plus — Treasury provides $20bn secured loan facility — Treasury receives [79.9%] ownership

Use of TARF to Sell High Risk

Assets

Washington Mutual sells significant portion of high risk assets to new treasury facility Recent indications suggest pricing will be based on intrinsic value of assets Resulting pro forma company has adequate capital, significant liquidity and would be very

attractive for potential acquirors


11

DRAFT

1) Internal Capital / Liquidity Generation Overview

Execute public tender to exchange existing debt / preferred for more subordinated or reduced notional security

Downstream $4bn cash from WMI to WMB

Exchange WMB REIT Preferred for preferred stock in WMI based on the occurrence of an exchange event

Sell $[15]bn in NPLs and other residential mortgages loans at price of [40]%


12

DRAFT

1) Internal Capital / Liquidity Generation Additional Detail

Description Bank Liquidity Impact Bank Capital Impact Downstream

Cash Downstream approximately

$4bn of cash from WMI to WMB

-- Common Equity

+ $4bn

Conversion of REIT Preferred

REIT Preferred converts to Holding Company preferred with occurrence of exchange event

Collateral $6bn --

Debt / Preferred Restructuring

Public tender to exchange existing debt/preferred into more subordinated or reduced notional securities

Reduced debt maturities

$1.5bn in 2009 maturities

Preferred Stock + $10bn

Asset Sale

Given capital generation from previous strategies, sell high risk loans to reduce overall portfolio exposure

Cash $5-10bn Depending on price Likely negative

Total Restructured Company has significantly more capital, an increased liquidity profile, a more focused business model, and a de-risked portfolio

$13-$18bn Up to $14 bn


13

DRAFT

Liability Restructuring Debt / Preferred for Preferred Equity ($ in millions)

Public exchange offer to holders of debt and preferred — 2 weeks to document — 4 weeks (20 business days) to execute

Holders offered an exchange for a reduced notional value of preferred stock

Holders also granted common stock representing a significant portion of the company

— Shares allocated proportional to discount surrendered by holder

Offer contingent on 80% success rate

Assuming Estimated AllocationCommon

Security Restructure Estimated Notional Discount Tax Net Equity SharesCurrent Security Received Price Allocation Restructured Captured Leakage Increase Issued

HoldCo Subdebt Holdco Preferred 25 80 % $1,299 $975 $341 $958 85

HoldCo Senior Holdco Preferred 30 80 3,297 2,308 808 2,489 200

Bank Subdebt Bank Preferred 35 80 4,520 2,938 1,028 3,492 255

Bank Senior Bank Preferred 50 80 6,452 3,226 1,129 5,323 280

WM PFD FDG CAYM Holdco Preferred 20 80 600 480 0 480 42

WM PFD FDG DEL Holdco Preferred 20 80 1,000 800 0 800 69

WM PFD FDG II Holdco Preferred 20 80 400 320 0 320 28

WM PFD FDG III Holdco Preferred 20 80 400 320 0 320 28

WM PFD IV Holdco Preferred 20 80 800 640 0 640 56

WM INC DRD Holdco Preferred 20 80 400 320 0 320 28

WM INC Convertible Pref Holdco Preferred 20 80 2,400 1,920 0 1,920 167

WM INC PIERS Holdco Preferred 20 80 920 736 0 736 64

Total Potential $22,488 $14,982 $3,306 $17,798 1,301


14

DRAFT

Consolidated Impact Comprehensive Debt / Preferred for Preferred ($ in millions)

Standalone Downstream Capital Restructuring Pro08/31/08 WMI Cash WMI Preferred WMI Debt REIT Preferred WMB Debt Forma Change

Consolidated WaMu ChangeCash & Investments $ 35,457 $ 35,457Loans, Net of Reserves 229,757 229,757Goodwill 7,284 7,284Other Assets 34,508 34,508Total Assets $ 307,007 $ 0 $ 0 $ 0 $ 0 $ 0 $ 307,007 $ 0

Deposits $ 174,894 $ 174,894Other Borrowings 31,911 (5,516) (10,972) 15,423 (16,488)FHLB Borrowings 68,420 68,420Minority Interest 3,914 (3,129) 784 (3,129)Other Liabilities 3,138 1,149 2,157 6,444 3,306Total Liabilities $ 282,277 $ 0 $ 0 $(4,368) $(3,129) $(8,814) $ 265,966 $(16,311)Preferred Equity 3,392 (2,240) 1,498 569 4,808 8,027 4,635Common Equity 21,337 2,240 2,870 2,560 4,007 33,013 11,676Total Liabilities & Equity $ 307,007 $ 0 $ 0 $ 0 $ 0 $ 0 $ 307,007 $ 0

Holdco (WMI) ChangeCash & Investments $ 5,369 $(4,000) $ 1,369 $(4,000)Loans, Net of Reserves 58 58Goodwill 0 0Other / Investment in Subs 27,470 4,000 3,129 34,599 7,129Total Assets $ 32,897 $ 0 $ 0 $ 0 $ 3,129 $ 0 $ 36,026 $ 3,129

Other Borrowings $ 7,215 $(5,516) $ 1,699 $(5,516)Other Liabilities 952 1,149 2,101 1,149Total Liabilities $ 8,167 $ 0 $ 0 $(4,368) $ 0 $ 0 $ 3,799 $(4,368)Preferred Equity 3,392 (2,240) 1,498 569 3,219 (173)Common Equity 21,337 2,240 2,870 2,560 29,007 7,670Total Liabilities & Equity $ 32,897 $ 0 $ 0 $ 0 $ 3,129 $ 0 $ 36,026 $ 3,129

WMB Consolidated ChangeCash & Investments $ 30,033 $ 4,000 $ 34,033 $ 4,000Loans, Net of Reserves 229,733 229,733Goodwill 7,284 7,284Other Assets 37,874 37,874Total Assets $ 304,924 $ 4,000 $ 0 $ 0 $ 0 $ 0 $ 308,924 $ 4,000

Deposits $ 179,838 $ 179,838Other Borrowings 25,556 (10,972) 14,584 (10,972)FHLB Borrowings 68,420 68,420Minority Interest 3,912 (3,129) 782 (3,129)Other Liabilities 2,332 2,157 4,489 2,157Total Liabilities $ 280,058 $ 0 $ 0 $ 0 $(3,129) $(8,814) $ 268,114 $(11,944)Preferred Equity 0 4,808 4,808 4,808Common Equity 24,867 4,000 3,129 4,007 36,002 11,136Total Liabilities & Equity $ 304,924 $ 4,000 $ 0 $ 0 $ 0 $ 0 $ 308,924 $ 4,000

Standalone Pro08/31/08 Forma Change

ConsolidatedTier 1 Leverage 7.3 % 12.1 % 483 bpsTier 1 Ratio 8.9 15.1 619 bpsWMBTier 1 Leverage 7.2 % 11.4 % 412 bpsTier 1 Ratio 8.6 15.2 664 bps


15

DRAFT

Timeline of Strategic Plan

ImmediateBank

LiquidityBank

Capital

Downstream Cash from Holding Company

$4 $4

Conversion of REIT Preferred to HoldCo Preferred

$6

Debt / Preferred Restructuring $10¹ $10

Non-Performing Loan Sale $5 $[ ]

Other Asset Sale [TBD] $10 $[ ]

30 Days 60 Days

1 Reduction of debt maturities in [x] years


16

DRAFT

1) Internal Capital / Liquidity Generation Balance Sheet Rollforward

Consolidated Balance SheetStandalone

Q3 2008EDebt

RestructuringPro-Forma Q3 2008E

AssetsSecurities / Other Earning Assets $ 26,232 $ 26,232Total Loans 238,749 238,749ALLL (10,687) (10,687)Goodwill and Intangibles 7,561 7,561Other Assets 29,458 29,458Total Assets $ 291,313 $ 291,313

LiabilitiesDeposits $ 185,318 $ 185,318Public Debt 20,610 (16,488) 4,122Government Lending Facility 0 0Borrowed Funds 49,065 49,065Other Liabilities 8,717 3,306 12,023Minority Interest 3,914 (3,129) 784Total Liabilities $ 267,623 $(16,311) $ 251,312

Shareholder's EquityPreferred Stock $ 3,392 $ 4,635 $ 8,027Common Equity 21,376 11,676 33,052AOCI (1,079) (1,079)Total Shareholder's Equity $ 23,689 $ 16,311 $ 40,000

Tangible Common Equity $ 12,736 $ 11,676 $ 24,412

Key Ratios: Impact to Standalone RatiosTE / TA 7.06 % 465 bps 11.71 %TCE / TA 4.49 411 8.60Tier 1 RBC 8.69 565 14.34TBVPS 7.49 $ 0.66 $ 8.15Ending Shares Outstanding 1,699 2,994

Excess to Well Capitalized: Tier 1 RBC $ 19,459


17

DRAFT

2) Strategic Transaction with TD


Sell East Coast branches and deposits (approximately $30bn) to TD



Enter into $5bn secured liquidity facility with TD

Sell $[15]bn in NPLs and other residential mortgage loans at price of [40]%

$[1 bn] investment in WMI preferred by TD and potentially other investors


18

DRAFT

2) Strategic Transaction with TD Additional Detail

Description Bank Liquidity Impact Bank Capital Impact Downstream

Cash Downstream approximately

$4bn of cash from WMI to WMB

-- Common Equity

+ $4bn

Conversion of REIT Preferred

REIT Preferred converts top Holding Company preferred with occurrence of exchange event

Collateral $6bn --

Debt / Preferred Restructuring

Public tender to exchange existing debt/preferred into more subordinated or reduced notional securities

Reduced debt maturities

$1.5bn in 2009 maturities

Preferred Stock + $10bn

Asset Sale

Given capital generation from previous strategies, sell high risk loans to reduce overall portfolio exposure

Cash $5-10bn Depending on price Likely negative

Sell East Coast Branches

Transfer of approximately $30bn of deposits and [243] branches along with selected assets to buyer

Current discussions with Toronto Dominion

Assumption of deposits

Asset transfer Premium paid Lost borrowing

capacity

-$30bn

+ 27bn + 3bn - [5]bn

Reduced Footings Premium Paid

$1.5bn - $2.0bn $2bn

Strategic Investors

Investment of $500mm of bank level preferred stock by purchaser of East Coast branches

Cash $500mm - $1bn Preferred Stock $500mm - $1bn

Liquidity Facility

Buyer of East Coast branches enters into a $5bn [18] month secured lending facility

Line of Credit $5bn None None

Total $14-$19bn Up to $19bn


19

DRAFT

2) Strategic Transaction with TD Balance Sheet Rollforward


Q3 2008EDebt

RestructuringBranch

SalePro-Forma Q3 2008E

AssetsSecurities / Other Earning Assets $ 26,232 $(7,492) $ 18,740Total Loans 238,749 (20,300) 218,449ALLL (10,687) (10,687)Goodwill and Intangibles 7,561 7,561Other Assets 29,458 (1,081) 28,377Total Assets $ 291,313 $(28,873) $ 262,440

LiabilitiesDeposits $ 185,318 $(30,880) $ 154,438Public Debt 20,610 (16,488) 4,122Government Lending Facility 0 0Borrowed Funds 49,065 49,065Other Liabilities 8,717 3,306 12,023Minority Interest 3,914 (3,129) 784Total Liabilities $ 267,623 $(16,311) $(30,880) $ 220,433

Shareholder's EquityPreferred Stock $ 3,392 $ 4,635 $ 8,027Common Equity 21,376 11,676 2,007 35,059AOCI (1,079) (1,079)Total Shareholder's Equity $ 23,689 $ 16,311 $ 2,007 $ 42,007

Tangible Common Equity $ 12,736 $ 11,676 $ 2,007 $ 26,419

Key Ratios: Impact to Standalone RatiosTE / TA 7.06 % 465 bps 159 13.82 %TCE / TA 4.49 411 130 10.37Tier 1 RBC 8.69 565 186 16.80TBVPS 7.49 $ 0.66 $ 1.18 $ 8.82Ending Shares Outstanding 1,699 2,994



20

DRAFT

Timeline of Strategic Plan

ImmediateBank

LiquidityBank

Capital

Downstream Cash from Holding Company

$4 $4

Conversion of REIT Preferred to HoldCo Preferred

$6

Debt / Preferred Restructuring $10¹ $10

Non-Performing Loan Sale $5 $[ ]

Other Asset Sale [TBD] $10 $[ ]

Branch Sale ($5) $4

Investment $1 $1

Liquidity Facility $5

30 Days 60 Days

Signing Closing

1 Reduction of debt maturities in [x] years


21

DRAFT

3) Treasury Liquidity and Ownership

US Treasury provides $20bn [secured] loan to WMB

Treasury receives warrants for 79.9% pro forma ownership of WMI at nominal price




Sell $[15]bn in NPLs and other residential mortgages at price at 40%


22

DRAFT

3) Treasury Liquidity Ownership Balance Sheet Rollforward


Q3 2008EDebt

RestructuringBranch

SaleGovernment

Lending FacilityPro-Forma Q3 2008E

AssetsSecurities / Other Earning Assets $ 26,232 $(7,492) $ 18,740Total Loans 238,749 (20,300) 218,449ALLL (10,687) (10,687)Goodwill and Intangibles 7,561 7,561Other Assets 29,458 (1,081) 28,377Total Assets $ 291,313 $(28,873) $ 262,440

LiabilitiesDeposits $ 185,318 $(30,880) $ 154,438Public Debt 20,610 (16,488) 4,122Government Lending Facility 0 20,000 20,000Borrowed Funds 49,065 (20,000) 29,065Other Liabilities 8,717 3,306 12,023Minority Interest 3,914 (3,129) 784Total Liabilities $ 267,623 $(16,311) $(30,880) $ 0 $ 220,433

Shareholder's EquityPreferred Stock $ 3,392 $ 4,635 $ 8,027Common Equity 21,376 11,676 2,007 35,059AOCI (1,079) (1,079)Total Shareholder's Equity $ 23,689 $ 16,311 $ 2,007 $ 42,007

Tangible Common Equity $ 12,736 $ 11,676 $ 2,007 $ 0 $ 26,419

Key Ratios: Impact to Standalone RatiosTE / TA 7.06 % 465 bps 159 0 13.82 %TCE / TA 4.49 411 130 0 10.37Tier 1 RBC 8.69 565 186 0 16.80TBVPS 7.49 $ 0.66 $ 1.18 $(6.56) $ 1.76Ending Shares Outstanding 1,699 14,970



23

DRAFT

4) Balance Sheet Actions and Loan Sale to TARF Debt Restructuring and Loan Sale


Q3 2008EDebt

Restructuring Loan SalePro-Forma Q3 2008E

AssetsSecurities / Other Earning Assets $ 26,232 $ 26,232Total Loans 238,749 (60,000) 178,749ALLL (10,687) 3,600 (7,087)Goodwill and Intangibles 7,561 7,561Other Assets 29,458 3,990 33,448Total Assets $ 291,313 $(52,410) $ 238,903

LiabilitiesDeposits $ 185,318 $ 185,318Public Debt 20,610 (16,488) 4,122Government Lending Facility 0 (44,357) (44,357)Borrowed Funds 49,065 49,065Other Liabilities 8,717 3,306 12,023Minority Interest 3,914 (3,129) 784Total Liabilities $ 267,623 $(16,311) $(44,357) $ 206,956

Shareholder's EquityPreferred Stock $ 3,392 $ 4,635 $ 8,027Common Equity 21,376 11,676 (7,410) 25,642AOCI (1,079) (1,079)Total Shareholder's Equity $ 23,689 $ 16,311 $(7,410) $ 32,590

Tangible Common Equity $ 12,736 $ 11,676 $(7,410) $ 17,002

Key Ratios: Impact to Standalone RatiosTE / TA 7.06 % 465 bps 11.16 %TCE / TA 4.49 411 7.35Tier 1 RBC 8.69 565 11.16TBVPS 7.49 $ 0.66 $ 5.68Ending Shares Outstanding 1,699 2,994



24

DRAFT

4) Balance Sheet Actions and Loan Sale to TARF Pro Forma Loan Portfolio ($ in millions)

Total Less: Pro08/31/08 Sales Forma

Prime ARMPerforming $ 38,731 $ 0 $ 38,73130+ Days Past Due 3,498 0 3,498Total Prime ARM $ 42,229 $ 0 $ 42,229Home Equity - 1st LienPerforming $ 15,065 $ 0 $ 15,06530+ Days Past Due 507 0 507Total Home Equity - 1st Lien $ 15,572 $ 0 $ 15,572Home Equity - 2nd LienPerforming $ 42,183 $(10,178) $ 32,00530+ Days Past Due 1,822 (1,822) 0Total Home Equity - 2nd Lien $ 44,005 $(12,000) $ 32,005Option ARMsPerforming $ 49,366 $(37,883) $ 11,48330+ Days Past Due 10,117 (10,117) 0Total Option ARMs $ 59,483 $(48,000) $ 11,483Multi-FamilyPerforming $ 33,412 $ 0 $ 33,41230+ Days Past Due 0 0 0Total Multi-Family $ 33,412 $ 0 $ 33,412SubprimePerforming $ 10,267 $ 0 $ 10,26730+ Days Past Due 5,012 0 5,012Total Subprime $ 15,279 $ 0 $ 15,279Credit Card / Other ConsumerPerforming $ 12,785 $ 0 $ 12,78530+ Days Past Due 1,549 0 1,549Total Credit Card / Other Consumer $ 14,333 $ 0 $ 14,333Other Real Estate / CommercialPerforming $ 14,494 $ 0 $ 14,49430+ Days Past Due 0 0 0Total Other Real Estate / Commercial $ 14,494 $ 0 $ 14,494TotalPerforming $ 216,302 $(48,061) $ 168,24030+ Days Past Due 22,505 (11,939) 10,566Total $ 238,807 $(60,000) $ 178,807


25

DRAFT

Conclusion

Current environment requires extraordinary actions

Stand-alone proposal strengthens capital position and allows company to weather credit cycle

— Capital generation allows for aggressive asset reduction

— Pro forma company in excess of well-capitalized with 14.4% Tier 1 ratio

— Liquidity manageable if provided with loans against eligible collateral and expressions of support

Avoids public policy debate

Stabilizes consumer banks

Limits systemic risk by limiting need for government-led solution

Provides replicable model to other challenged institutions



DRAFT

1






DRAFT

2

Table of Contents

I. Process Discussion

II. Mark-to-Market Discussion

III. Merger Analysis







DRAFT

3




DRAFT

4

Overview of March / April Process

Initial Contact (March 3-7) — JPMorgan — Wells Fargo — Banco Santander — Barclays — BBVA

Indications of Interest / Initial Management Meetings (March 10-14)

— JP Morgan, Wells Fargo

Second Round Management Meetings / Final Bids (March 17 – April 1) — JP Morgan – Offered $5.00 / share with upside of $3.00 / share via a contingent value security

if the low end of losses in home equity portfolio (8.5% cumulative losses on $60.6bn home equity portfolio) proved to be correct

− Based on current assumptions of losses in home equity portfolio, aforementioned contingent value security would be worth $0

— Wells Fargo declined second round meetings due to concerns over mortgage portfolio and geographic overlap in higher-risk states (i.e. California)



DRAFT

5

M&A Process Preliminary Timeline

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Finalize Management Presentation

Finalize Data Room

Contact Potential PartnersConfidentiality Agreement

Management Meetings

Preliminary Indications of Interest

Due Diligence

Negotiate Terms

Announce Transaction



DRAFT

6

Potential Strategic Partners / Acquirers of WaMu

Name Market Cap

($ in bn) 1-Yr Price

Performance 2009 P/E

Current Price/TBV

TCE/ TA

Tier 1 RatioCommentary

CEO: Jamie Dimon

$141.1 (11.7) % 12.3 x 1.8 x 4.5 % 9.1 % Relatively well-positioned to execute

a large transaction Unclear how participation in April

sale process will affect posture

CEO: Alfredo Sáenz Abad

113.9 (13.9) 7.6 2.6 3.5 7.7 Well-positioned to execute a large

transaction Considering U.S. strategic options

CEO: John Stumpf

99.8 (13.8) 12.8 3.0 5.1 8.2

Maybe reluctant to substantially increase mortgage and MSR exposure

Declined to proceed during the April sale process due to loan portfolio concerns

Has demonstrated interest in multi-family assets and California branches/deposits

CEO: Francisco González Rodríguez

67.1 (34.6) 6.7 2.6 4.7 7.9 Continued interest in growing U.S.

franchise WM footprint highly complementary

to BBVA’s targeted Sun Belt markets

CEO: John Varley

57.2 (47.2) 6.7 1.2 1.5 9.1 Focused on improving financial

performance and investor credibility; however, actively considering U.S. opportunities

CEO: Richard Davis

54.8 (1.5) 12.8 5.1 4.9 8.5

Unlikely to pursue transformative deal given conservative credit culture

Strong financial stability Might have an interest in certain

assets

CEO: Yoshifumi Nishikawa

50.3 (29.8) 11.3 1.7 2.4 6.7 Proactively considering U.S.

opportunities; however, unlikely to move quickly

CEO: W. Edmund Clark

47.8 (11.0) 10.0 4.4 2.4 9.1 Recently completed acquisition of

Commerce may limit near-term appetite



DRAFT

7

Transaction Considerations

Consideration Comment

Mark-to-Market

Mark on portfolio at closing will be the primary driver for sizing the capital requirement of the acquiring institutions

Likely to be calculated based on a discounted cash flow methodology (expected prepayments, interest, losses, etc) as level 3 assets

BAC / CFC provides one recent data point on “accountant-approved” methodology

Form of Consideration

Contingent value security may be a form of consideration for potential acquirors Likely to be linked to performance of some subset of higher risk residential real

estate portfolio (or all of it) — JPMorgan linked to low-end of loss range on home equity portfolio to obtain

full value of CVS

Capturing Discount in Debt / Preferred

WaMu’s debt and preferred outstandings are currently trading at a significant discount to par — Aggregate discount of approximately $10.0 billion on $24.0 billion liability /

preferred base Capturing this discount in some fashion prior to executing a strategic transaction

would potentially improve the ability to pay of a potential partner due to decreased goodwill creation / capital needed

Transaction contingent on exchange / tender of debt / preferred may also be structured



DRAFT

8




DRAFT

9

Cumulative Loss Roll-Forward Company High Stress Case vs. Moody’s Stress Case ($ in millions)

Company High Stress (April 2008) As of Q1 As of Q2 Estimated as of Q4

Mar Balance

Cum Loss (%)

Expected Cum Loss 2Q NCOs

Jun Balance

Expected Cum Loss

RemainingCum Loss 3Q NCOs 4Q NCOs

Losses Left

RemainingCum Loss

SFR: Option ARM $ 55,846 9.9% $ 5,552 $ 466 $ 52,886 $ 5,086 9.1% $ 560 $ 672 $ 3,854 6.9%SFR: Other 52,574 2.6% 1,378 221 52,141 1,157 2.2% 265 318 575 1.1%Home Equity: 1st Lien 16,739 3.3% 557 50 16,922 507 3.0% 60 72 376 2.2%Home Equity: 2nd Lien 44,495 16.6% 7,383 659 43,464 6,724 15.1% 791 949 4,983 11.2%Subprime 17,344 22.5% 3,906 569 16,052 3,337 19.2% 683 819 1,835 10.6%Subtotal Residential $ 186,998 10.0% $ 18,776 $ 1,965 $ 181,465 $ 16,811 9.0% $ 2,358 $ 2,830 $ 11,623 6.2%Card Services 8,989 10.0% 899 153 10,589 746 8.3% 184 220 342 3.8%Commercial & Retail Smal 46,827 2.0% 937 53 47,573 884 1.9% 64 76 744 1.6%Total $ 242,814 $ 20,611 $ 2,171 $ 239,627 $ 18,440 $ 2,605 $ 3,126 $ 12,709

Moody’s Stress (July 2008) As of Q1 As of Q2 Estimated as of Q4

Mar Balance

Cum Loss (%)


Jun Balance

Expected Cum Loss


Losses Left

RemainingCum Loss

SFR: Option ARM $ 55,846 17.7% $ 9,885 $ 466 $ 52,886 $ 9,418 16.9% $ 560 $ 672 $ 8,187 14.7%SFR: Other 52,574 2.9% 1,525 221 52,141 1,304 2.5% 265 318 722 1.4%Home Equity: 1st Lien 16,739 3.8% 636 58 16,922 578 3.5% 70 84 424 2.5%Home Equity: 2nd Lien 44,495 16.0% 7,119 651 43,464 6,468 14.5% 781 937 4,750 10.7%Subprime 17,344 26.2% 4,545 569 16,052 3,976 22.9% 683 819 2,474 14.3%Subtotal Residential $ 186,998 12.7% $ 23,710 $ 1,965 $ 181,465 $ 21,745 11.6% $ 2,358 $ 2,830 $ 16,557 8.9%Card Services 8,989 20.0% 1,798 153 10,589 1,645 18.3% 184 220 1,241 13.8%Commercial & Retail Smal 46,827 2.0% 937 53 47,573 884 1.9% 64 76 744 1.6%Total $ 242,814 $ 26,444 $ 2,171 $ 239,627 $ 24,273 $ 2,605 $ 3,126 $ 18,542



DRAFT

10

Illustrative Purchase Accounting Mark-to-Market Overview of Discounted Cash Flow Methodology on Residential Mortgage Assets ($ in billions)

Overview Expected Cumulative Mark to Market Sensitivity

12/31/08 Loss at 12/31/08 2Q08 Discount to Discount Rate – Company Stress CaseBalance Moody's Company CPR Coupon Rate¹ 0.00 % 0.50 % 1.00 % 1.50 % 2.00 %

SFR: Option ARM $ 51.8 $ 8.2 $ 3.9 10.0 % 6.6 % 8.1 % 0 2 5 7 9

SFR: Other 49.4 0.7 0.6 10.0 6.4 7.9 0 3 5 8 10

Home Equity: 1st Lien 15.7 0.4 0.3 10.0 5.9 7.4 0 3 5 8 10

Home Equity: 2nd Lien 40.6 4.8 5.0 10.0 5.9 7.4 0 2 5 7 9

Subprime 15.0 2.5 1.8 10.0 8.0 9.5 0 2 4 6 8

Total $ 172.5 $ 16.6 $ 11.6

Illustrative Impact at Close Moody's Stress Case Company Stress Case

Credit Impact Discount Rate Illustrative Mark Credit Impact Discount Rate Illustrative Markon Mark Impact on Mark to Market on Mark Impact on Mark to Market

%-Pts Amount %-Pts Amount %-Pts Amount %-Pts Amount %-Pts Amount %-Pts Amount

SFR: Option ARM 13 $ 6.6 6 $ 3.2 19 $ 9.8 5 $ 2.8 7 $ 3.6 12 $ 6.4

SFR: Other 0 0.1 8 3.8 8 3.9 0 0.0 8 3.8 8 3.8

Home Equity: 1st Lien 2 0.2 8 1.2 9 1.5 1 0.2 8 1.2 9 1.4

Home Equity: 2nd Lien 10 4.0 7 2.8 17 6.8 10 4.3 7 2.8 17 7.0

Subprime 13 2.0 6 0.9 19 2.9 9 1.4 6 0.9 15 2.3

Total 7 $ 12.9 7 $ 11.9 14 $ 24.8 5 $ 8.6 7 $ 12.4 12 $ 20.9

(1) Assumes base case discount rate of coupon + 150 bps



DRAFT

11

Other Assets & Liabilities Estimated Mark-to-Market ($ in millions)

Other Assets Other Liabilities

Jun Balance % LossMark-to-Market

Other Assets:

Cash and cash equivalents $ 7,235 0% $ 0

Fed Funds Sold 2,750 0% 0

Trading Assets 2,308 10% 231

Mortgage-backed Securities 18,241 5% 912

Investment securities 6,134 10% 613

Investment in FHLB 3,498 0% 0

Mortgage Servicing Rights 6,175 10% 618

Accounts receivable¹ 3,456 0% 0

Investment in bank-owned life insurance¹ 5,523 5% 276

Premises and equipment¹ 2,914 0% 0

Accrued interest receivable¹ 1,930 0% 0

Derivatives¹ 3,035 0% 0

Identifiable intangible assets¹ 378 0% 0

Foreclosed Assets¹ 1,462 20% 292

Other¹ 4,360 0% 0

Other Assets 23,058 2% 569

Total Assets (Excluding Loans) $ 69,399 4% $ 2,942

Jun Balance % Loss

Mark-to-Market

Liabilities:

Non-interest-bearing retail checking $ 25,435 0% $ 0

Interest-bearing retail checking 21,715 0% 0

Retail Savings and money market 58,016 0% 0

Retail Time Deposits 43,086 0.75% 323

Commercial business / other deposits 8,892 0% 0

Brokered Deposits 19,348 0.75% 145

Escrow 5,431 0% 0

Total Deposits $ 181,923 0% $ 468

Federal Funds / CP / Repos 289 0% 0

FHLB Advances 58,363 0% 0

Other Borrowings 30,590 0% 0

Other Liabilities 8,566 0% 0

Minority Interests 3,914 0% 0

Total Liabilities $ 283,645 0% $ 468

1 Assumes other assets allocated in constant ratio as Q1 2008.



DRAFT

12

Estimated ALLL Roll-Forward 2008 ($ in millions)

1,429

3,511

5,913

3,9083,126

(747)(1,368)

(2,171)(2,605)

(3,126)

1,8892,571

4,714

8,456

9,759 9,759

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

10,000

12,000

3Q07 4Q07 1Q08 2Q08 3Q08E 4Q08E

Provision

NCOs

Ending ALLL

Quarterly NCO Growth 77.4% 83.1% 58.7% 20.0% 20.0% Provisions / NCOs 1.9x 2.6x 2.7x 1.5x 1.0x



DRAFT

13

Summary of Estimated Mark-to-Market ($ in millions)

12/31 Expected Balance

Company Stress Mark (%)

Moody's Stress Mark (%)

Company Stress Mark ($)

Moody's Stress Mark ($)

Loan PortfolioSFR: Option ARM $ 51,822 12 % 19 % $ 6,408 $ 9,783SFR: Other 49,363 8 8 3,782 3,908Home Equity: 1st Lien 15,749 9 9 1,399 1,466Home Equity: 2nd Lien 40,552 17 17 7,040 6,815Subprime 14,975 15 19 2,317 2,864Credit Card 10,589 0 0 0 0Multifamily / CRE / Other 47,573 2 2 714 951

Total Loan Portfolio Mark (12/31) $ 230,623 9.4 % 11.2 % $ 21,659 $ 25,788

Other Assets Writedown (12/31) 2,942 2,942

Liabilities Mark (468) (468)

Expected ALLL (12/31) (9,759) (9,759)

Total Pre-Tax Writedown (12/31) $ 14,374 $ 18,503



DRAFT

14




DRAFT

15

Merger Assumptions

Financial Assumptions — Financial data as of June 30, 2008. Market data as of August 8, 2008 — Acquirer IBES standalone financial assumptions — $5.00 purchase price

Transaction Assumptions — 100% stock financed — Company High Stress Case: $14.4 billion total pre-tax mark in excess of allowance at closing — Moody’s Stress Case: $18.5 billion total pre-tax mark at closing in excess of allowance at closing — Pro Forma Capital ratios

− Wells Fargo, USB, BBVA, SMBC maintain current Tier 1 RBC ratio − JPMorgan, Barclays and TD allowed 60 bps of Tier 1 capital flexibility − Santander allowed ~15 bps of Tier 1 capital flexibility − Acquirer issues shares at 10% discount to recapitalize entity

— Identifiable intangibles created: 1.5% of core deposits (CDI), 3.0% of managed credit card receivables (PCCR) — Restructuring charge of 1.5x run-rate synergies, over three years

Synergies detailed below (phased in 50% in 2009, 75% in 2010 and 100% thereafter)

JPMorgan Wells Fargo TD US Bancorp Barclays Santander BBVA SMBCWM 2008E Expenses

Mortgage Banking $ 1,759 60.0 % 60.0 % 20.0 % 40.0 % 10.0 % 10.0 % 10.0 % 10.0 %Commercial 219 30.0 30.0 20.0 30.0 10.0 10.0 10.0 10.0Card Services 1,149 30.0 20.0 15.0 20.0 20.0 10.0 10.0 10.0Corporate 1,524 50.0 60.0 30.0 50.0 20.0 20.0 20.0 20.0

Retail Banking Detail: Cost Save on Entire Franchise 20.0 % 20.0 % 10.0 % 20.0 % 5.0 % 5.0 % 15.0 % 5.0 % Branch Overlap 13.9 39.9 8.4 24.0 0.0 0.0 5.8 0.0 Cost Save on Overlap 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0Total Retail Banking $ 3,849 25.5 % 36.0 % 13.4 % 29.6 % 5.0 % 5.0 % 17.3 % 5.0 %

Total Expense Synergies $ 8,500 $ 3,211 $ 3,650 $ 1,539 $ 2,900 $ 925 $ 810 $ 1,285 $ 810As % of NIE 37.8 % 42.9 % 18.1 % 34.1 % 10.9 % 9.5 % 15.1 % 9.5 %



DRAFT

16

Overview of Selected Buyers Selected Transaction Metrics – Company Stress Case ($14.4 bn pre-tax mark) ($ in millions)


Market Data: 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0

Market Cap $ 141,104 $ 99,640 $ 47,523 $ 54,772 $ 57,253 $ 113,851 $ 67,099 $ 50,318

2009E P/E 12.3 x 12.8 x 9.9 x 12.8 x 6.7 x 7.6 x 6.7 x 11.3 x0 0 0 0 0 0 0 0




Tier 1 (6/30/08) 9.11 % 8.24 % 9.10 % 8.50 % 9.13 % 7.88 % 7.70 % 6.73 %




IRR 63.1 % 59.8 % 51.8 % 56.0 % 49.0 % 57.3 % 55.3 % 61.0 %0 0 0 0 0 0 0 0

2009E Acc. / Dil. 30.6 % 38.6 % 38.5 % 56.3 % 18.1 % 17.9 % 18.1 % 48.6 %

2010E Acc. / Dil. 29.3 40.1 57.0 62.2 22.2 21.1 22.1 56.6



DRAFT

17



Market Data: 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0

Market Cap $ 141,104 $ 99,640 $ 47,523 $ 54,772 $ 57,253 $ 113,851 $ 67,099 $ 50,318

2009E P/E 12.3 x 12.8 x 9.9 x 12.8 x 6.7 x 7.6 x 6.7 x 11.3 x0 0 0 0 0 0 0 0




Tier 1 (6/30/08) 9.11 % 8.24 % 9.10 % 8.50 % 9.13 % 7.88 % 7.70 % 6.73 %




IRR 55.2 % 53.2 % 45.5 % 49.8 % 42.2 % 48.4 % 47.5 % 51.7 %0 0 0 0 0 0 0 0

2009E Acc. / Dil. 29.1 % 36.5 % 34.4 % 52.5 % 14.6 % 15.7 % 14.9 % 44.2 %

2010E Acc. / Dil. 27.6 37.8 52.4 57.9 18.5 18.9 18.7 51.8



DRAFT

18


($ in millions)


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 0 $ 0 $ 0 $ 0 $ 2,573

14,374 0 0 0 1,851 5,218

20,000 0 0 1,901 5,261 8,621

25,000 0 1,585 4,938 8,292 11,645

30,000 1,283 4,629 7,976 11,322 14,669

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 3,160 $ 5,130 $ 7,101 $ 9,071 $ 11,041

14,374 5,829 7,793 9,757 11,722 13,686

20,000 9,261 11,218 13,175 15,132 17,088

25,000 12,312 14,262 16,212 18,162 20,112

30,000 15,362 17,306 19,249 21,193 23,136

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 4,603 $ 5,755 $ 6,908 $ 8,061 $ 9,214

14,374 7,271 8,418 9,565 10,712 11,860

20,000 10,704 11,843 12,983 14,122 15,262

25,000 13,754 14,887 16,020 17,153 18,286

30,000 16,805 17,931 19,057 20,184 21,310

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 2,250 $ 3,277 $ 4,303 $ 5,330 $ 6,357

14,374 4,795 5,816 6,838 7,859 8,880

20,000 8,069 9,083 10,097 11,112 12,126

25,000 10,979 11,987 12,995 14,002 15,010

30,000 13,889 14,890 15,892 16,893 17,894

12/3

1/08

MTM

Los

s




DRAFT

19


($ in millions)


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 0 $ 0 $ 770 $ 3,108 $ 5,446

14,374 0 1,381 3,713 6,044 8,376

20,000 2,852 5,175 7,498 9,822 12,145

25,000 6,231 8,547 10,863 13,179 15,495

30,000 9,610 11,918 14,227 16,535 18,844

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 1,613 $ 3,997 $ 6,382 $ 8,766 $ 11,151

14,374 4,815 7,193 9,570 11,948 14,325

20,000 8,934 11,302 13,671 16,040 18,408

25,000 12,594 14,955 17,316 19,676 22,037

30,000 16,255 18,608 20,960 23,313 25,666

12/3

1/08

MTM

Los

s


7.50% 7.75% 8.00% 8.25% 8.50%

$ 10,000 $ 4,434 $ 6,072 $ 7,711 $ 9,349 $ 10,987

14,374 7,447 9,079 10,711 12,343 13,974

20,000 11,323 12,947 14,570 16,193 17,816

25,000 14,768 16,384 18,000 19,615 21,231

30,000 18,213 19,821 21,429 23,038 24,646

12/3

1/08

MTM

Los

s


6.50% 6.75% 7.00% 7.25% 7.50%

$ 10,000 $ 11,020 $ 13,169 $ 15,319 $ 17,469 $ 19,618

14,374 13,853 15,996 18,139 20,283 22,426

20,000 17,496 19,632 21,767 23,903 26,038

25,000 20,734 22,863 24,991 27,120 29,248

30,000 23,973 26,094 28,215 30,337 32,458

12/3

1/08

MTM

Los

s




DRAFT

20




DRAFT

21










Core Business

High Risk Assets

Core Business

High Risk Assets

(marked)

Core Business

High Loss

Core Business

Low Loss




DRAFT

22















DRAFT

23


Issuer The Acquiror














DRAFT

24














DRAFT

25










DRAFT

26












DRAFT

27



PriceRepurchase








Holdco Sub4.625% '14 $ 750 45.0 % 55.0 % 40.0 % $ 300 $ 165 $ 135 $ 47 $ 2537.25% '17 500 45.0 55.0 40.0 200 110 90 32 1698.25% '10 500 45.0 55.0 30.0 150 83 68 24 126Total $ 1,750 45.0 % 55.0 % 37.1 % $ 650 $ 358 $ 293 $ 102 $ 548

Bank Sub5.65% '14 $ 1,000 45.0 % 55.0 % 35.0 % $ 350 $ 193 $ 158 $ 55 $ 2955.50% '13 750 45.0 55.0 35.0 263 144 118 41 2216.875% '11 1 45.0 55.0 30.0 0 0 0 0 05.125% '15 1,000 45.0 55.0 35.0 350 193 158 55 295L+65 '15 500 45.0 55.0 35.0 175 96 79 28 147Total $ 3,251 45.0 % 55.0 % 35.0 % $ 1,138 $ 626 $ 512 $ 179 $ 959

Aggregate $ 24,001 57.9 % 67.9 % 39.9 % $ 9,575 $ 6,210 $ 3,365 $ 522 $ 9,053



DRAFT

28



6/30/08 Actual Adj. 6/30/08 PF

6/30/08 Actual Adj. 6/30/08 PF

TCE $ 15,096 $ 4,829 $ 19,925 TCE $ 15,096 $ 4,224 $ 19,320 TCE $ 15,096 $ 9,053 $ 24,149

TA 302,133 302,133 TA 302,133 302,133 TA 302,133 302,133




TCE $ 15,096 $ 4,829 $ 19,925 TCE $ 15,096 $ 4,224 $ 19,320 TCE $ 15,096 $ 9,053 $ 24,149


AOCI 1,079 1,079 AOCI 1,079 1,079 AOCI 1,079 1,079

TE 23,481 28,310 TE 23,481 23,380 TE 23,481 28,209

TA $ 302,133 $ 302,133 TA $ 302,133 $ 302,133 TA $ 302,133 $ 302,133

TE / TA 7.77 % 9.37 % TE / TA 7.77 % 7.74 % TE / TA 7.77 % 9.34 %

Tier 1 $ 24,561 $ 4,829 $ 29,390 Tier 1 $ 24,561 $(101) $ 24,460 Tier 1 $ 24,561 $ 4,728 $ 29,289

RWA 247,273 247,273 RWA 247,273 247,273 RWA 247,273 247,273


Tier 1 $ 24,561 $ 4,829 $ 29,390 Tier 1 $ 24,561 $(101) $ 24,460 Tier 1 $ 24,561 $ 4,728 $ 29,289






DRAFT

29









To WM



considerations





Limited downside




DRAFT

30


64%78% 79%

15%

6% 6%

4%

9% 6%6% 7%

2%18%

0%

20%

40%

60%

80%

100%

120%

WM JPM WFC


$ 101,043 $ 44,672 $ 22,285




DRAFT

31


74% 72%

8% 5%3% 6%9% 6%6% 5%

4%

0%

20%

40%

60%

80%

100%

120%

JPM / WM WFC / WM


$ 117,184 $ 63,594




DRAFT

32




DRAFT

33



Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 3,888



Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 3,913





DRAFT

34











(+) Amortization 616 1,290 1,139

(+) Net Income 4,594 15,821 21,165

(-) Dividends (2,541) (6,328) (8,466)



(+) Asset Growth 43,420 66,353 68,842



(+) Asset Growth (13,233) (12,441) (4,578)



Pro Forma TE / TA 4.86 % 4.86 % 4.87 %

Pro Forma TCE / TA 4.21 4.23 4.26



2008 2009 2010 2011












(+) Net Synergies 0 1,044 1,565 1,722









Pro Forma EPS 2.56 4.35 6.08 6.61






DRAFT

35


Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 4.2 x 4.6 x 5.1 x 5.5 x 5.9 x



2009 EPS 32.8 % 31.7 % 30.6 % 29.5 % 28.5 %2010 EPS 31.5 30.4 29.3 28.2 27.2



DRAFT

36


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 11.27 % 8.50 % 8.50 % 8.50 % 8.50 %







DRAFT

37












(+) Net Income 3,361 12,592 15,591

(-) Dividends (1,947) (5,037) (6,237)



(+) Asset Growth 20,901 32,177 33,866



(+) Asset Growth (13,233) (12,441) (4,578)



Pro Forma TE / TA 5.84 % 5.88 % 5.93 %

Pro Forma TCE / TA 4.95 5.01 5.09



2008 2009 2010 2011












(+) Net Synergies 0 1,182 1,773 1,950









Pro Forma EPS 2.15 3.26 4.20 4.53






DRAFT

38


Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419






P / 2010E EPS $ 1.76 6.3 x 6.7 x 7.2 x 7.6 x 8.0 x



2009 EPS 41.6 % 40.1 % 38.6 % 37.2 % 35.7 %2010 EPS 43.1 41.6 40.1 38.6 37.1



DRAFT

39


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 13.93 % 8.24 % 8.24 % 8.24 % 8.24 %







DRAFT

40



2008 2009 2010










(+) Net Income 2,204 8,756 9,621

(-) Dividends (891) (3,502) (3,848)



(+) Asset Growth 11,451 17,500 18,156



(+) Asset Growth (12,802) (12,441) (4,578)



Pro Forma TE / TA 4.42 % 4.35 % 4.31 %

Pro Forma TCE / TA 3.14 3.07 3.05



2008 2009 2010 2011

TD Net Income $ 4,093 $ 4,778 $ 4,895 $ 5,350











(+) Net Synergies 0 477 716 787









Pro Forma EPS 5.33 8.22 9.54 10.26






DRAFT

41


Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.4 x 5.8 x 6.3 x 6.7 x 7.2 x



2009 EPS 44.1 % 41.2 % 38.5 % 35.9 % 33.3 %2010 EPS 63.3 60.1 57.0 54.0 51.2



DRAFT

42


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 13.04 % 8.50 % 8.50 % 8.50 % 8.50 %


Cash flow to TD $ (18,799) $ 6,850 $ 5,335 $ 5,369 $ 43,986





DRAFT

43












(+) Net Income 1,937 8,833 10,421

(-) Dividends (1,494) (3,533) (4,168)



(+) Asset Growth 3,505 5,317 5,436



(+) Asset Growth (13,233) (12,441) (4,578)



Pro Forma TE / TA 6.39 % 6.39 % 6.40 %

Pro Forma TCE / TA 4.71 4.69 4.71



2008 2009 2010 2011












(+) Net Synergies 0 943 1,414 1,555









Pro Forma EPS 2.27 3.83 4.77 5.06






DRAFT

44


Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 6.4 x 6.8 x 7.3 x 7.7 x 8.2 x



2009 EPS 61.8 % 59.0 % 56.3 % 53.7 % 51.2 %2010 EPS 67.8 64.9 62.2 59.5 56.9



DRAFT

45


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 14.12 % 8.50 % 8.50 % 8.50 % 8.50 %







DRAFT

46












(+) Net Income 3,593 12,888 14,185

(-) Dividends (2,656) (5,155) (5,674)



(+) Asset Growth 78,702 120,715 126,147



(+) Asset Growth (14,239) (12,441) (4,578)



Pro Forma TE / TA 1.82 % 1.81 % 1.82 %

Pro Forma TCE / TA 1.57 1.58 1.59



2008 2009 2010 2011












(+) Net Synergies 0 333 499 549









Pro Forma EPS 0.96 1.25 1.43 1.54






DRAFT

47


Price Per Share $ 3.00 $ 4.00 $ 5.00 $ 6.00 $ 7.00


Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.2 x 5.7 x 6.1 x 6.6 x 7.0 x



2009 EPS 22.2 % 20.1 % 18.1 % 16.1 % 14.2 %2010 EPS 26.5 24.3 22.2 20.2 18.2



DRAFT

48


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 12.95 % 8.50 % 8.50 % 8.50 % 8.50 %







DRAFT

49












(+) Net Income 6,769 19,337 21,187

(-) Dividends (3,385) (7,735) (8,475)



(+) Asset Growth 30,788 46,962 48,547



(+) Asset Growth (15,102) (12,441) (4,578)



Pro Forma TE / TA 4.99 % 4.95 % 4.92 %

Pro Forma TCE / TA 4.51 4.48 4.47



2008 2009 2010 2011












(+) Net Synergies 0 316 474 521









Pro Forma EPS 2.21 2.83 3.28 3.57






DRAFT

50



Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 4.8 x 5.3 x 5.7 x 6.2 x 6.6 x





DRAFT

51


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 12.49 % 7.75 % 7.75 % 7.75 % 7.75 %







DRAFT

52












(+) Net Income 4,789 14,466 16,073

(-) Dividends (2,254) (5,787) (6,429)



(+) Asset Growth 25,631 39,430 41,441



(+) Asset Growth (14,441) (12,441) (4,578)



Pro Forma TE / TA 4.35 % 4.32 % 4.30 %

Pro Forma TCE / TA 3.66 3.65 3.65



2008 2009 2010 2011

BBVA Net Income $ 9,190 $ 10,028 $ 11,324 $ 12,287











(+) Net Synergies 0 471 707 778









Pro Forma EPS 2.47 3.16 3.69 4.01






DRAFT

53



Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.4 x 5.8 x 6.2 x 6.7 x 7.1 x





DRAFT

54


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 13.06 % 7.70 % 7.70 % 7.70 % 7.70 %


Cash flow to BBVA $ (18,672) $ 7,514 $ 5,543 $ 5,634 $ 44,739





DRAFT

55












(+) Net Income 2,575 8,635 9,487

(-) Dividends (502) (3,454) (3,795)



(+) Asset Growth 52,950 82,416 88,598



(+) Asset Growth (13,808) (12,441) (4,578)



Pro Forma TE / TA 3.15 % 3.16 % 3.19 %

Pro Forma TCE / TA 2.62 2.66 2.72



2008 2009 2010 2011

SMBC Net Income $ 4,394 $ 4,457 $ 4,774 $ 5,394











(+) Net Synergies 0 279 419 461









Pro Forma EPS 0.56 0.84 0.95 1.01






DRAFT

56



Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 4.9 x 5.3 x 5.7 x 6.2 x 6.6 x





DRAFT

57


2008E 2009E 2010E 2011E 2012E 2013E







Tier 1 Ratio 12.48 % 6.73 % 6.73 % 6.73 % 6.73 %


Cash flow to SMBC $ (17,171) $ 8,647 $ 5,196 $ 5,098 $ 40,711





DRAFT

58




DRAFT

59



Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 6,572



Purchase Price





Goodwill Created:





(+) DTL Created 854


Goodwill $ 6,597





DRAFT

60











(+) Amortization 616 1,290 1,139

(+) Net Income 4,594 15,909 21,252

(-) Dividends (2,541) (6,364) (8,501)



(+) Asset Growth 43,420 66,353 68,842



(+) Asset Growth (15,917) (12,441) (4,578)



Pro Forma TE / TA 4.86 % 4.86 % 4.87 %

Pro Forma TCE / TA 4.21 4.23 4.26



2008 2009 2010 2011












(+) Net Synergies 0 1,044 1,565 1,722









Pro Forma EPS 2.56 4.30 6.00 6.52






DRAFT

61



Purchase Price $ 7,279 $ 8,599 $ 9,919 $ 11,239 $ 12,559






P / 2010E EPS $ 1.76 5.0 x 5.5 x 5.9 x 6.3 x 6.8 x





DRAFT

62












(+) Net Income 3,361 12,680 15,678

(-) Dividends (1,947) (5,072) (6,271)



(+) Asset Growth 20,901 32,177 33,866



(+) Asset Growth (15,917) (12,441) (4,578)



Pro Forma TE / TA 5.84 % 5.88 % 5.93 %

Pro Forma TCE / TA 4.95 5.01 5.08



2008 2009 2010 2011












(+) Net Synergies 0 1,182 1,773 1,950









Pro Forma EPS 2.15 3.21 4.13 4.45






DRAFT

63



Purchase Price $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419






P / 2010E EPS $ 1.76 7.1 x 7.6 x 8.0 x 8.4 x 8.9 x





DRAFT

64




DRAFT

65








OtherConsumer 0.0





DRAFT

66




June 30,

2008 March 31,

2008





















DRAFT

67










DRAFT

1





00

Management PresentationSeptember 2008


1

Agenda

• Situation Overview

• Company Overview

• Business Line Overview

• Asset Quality Update

• Financial Outlook


2

Company Highlights

• Strong retail and small business banking franchise with leading share in strategic, high-growth markets

• Recognized and prominent national brand

• Diverse set of core consumer products including deposits, mortgages, credit cards and investment products

• Uniquely positioned and growing multi-family platform

• Core business lines generate significant stable earnings as credit cycle normalizes

• Diversified funding anchored by strong branch-based deposit franchise

• Strong management team with deep experience

• Attractive valuation


3

Company Overview


4

A Leader in Consumer and Small Business Banking

Leading Retail Franchise

• #6 depository, with over 2,200 retail banking stores • Growth footprint: population growth of 11% vs. national average of 6%• #6 largest bank card issuer• #1 multi-family lender

Washington#2 in deposits#2 in stores

Oregon#3 in deposits

Nevada1

#3 in deposits

California#3 in deposits#3 in stores

Texas#6 in deposits#4 in stores

New York#5 in deposits#7 in stores

Florida#5 in deposits#5 in stores

Source: SNL Financial as of 6/30/071 Excludes all Henderson home office deposits except online, Enterprise Customer Care (ECC) and branch deposits.

U.S. Deposits


5

$2.0

$1.5

$1.9$1.8

$1.5

$1.8$1.6

$1.4$1.3

$1.5

$1.7

Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08F

Stable Core EarningsPre-tax Income from Continuing Operations($ in billions)

Core pre-tax earnings excludes provision, foreclosed asset expense, resizing expense, net gain/loss on trading and available for sale securities, Q4’07 $415M gain on sale of WM Group of Funds, and Q4’07 $1.78B home loans goodwill write-down

3


6Note: As of 6/30/081 Includes minority interests (REIT Preferreds).

Stable Funding Base

• Majority of funding through core retail deposits

• Substantial FHLB excess capacity

• Holding company liquid through 2010

2%

7%

13%

19%

59%

Total: $310 billion

Deposits FHLB Advances

Other Borrowings and Liabilities

Common Stockholders Equity

Preferred Stock1


7

Strategic Priorities

• Drive top-tier growth through retail distribution– Deliver strong household growth

– Continue rapid growth of small business

– Proactively manage store network

• Enhance cross-sell initiatives through retail channel

• Continue to take aggressive actions to right size Home Loans while maintaining flexibility to capitalize on future opportunities

• Continue to move towards best-in-class productivity

• Aggressively manage credit through difficult environment


8

Business Line Overview


9

Unique and Valuable Retail Banking Franchise

Retail Banking Driven Strategy

Innovative Products

Industry-Leading Service

Leading Retail Banking Brand

Powerful Distribution


10

Summary of Business LinesHome Loans

Commercial Banking

Card Services

Retail Banking

• David Schneider• Al Brooks• Tony Vuoto• Steve Rotella -Acting

President

• 7,338• 1,342• 2,940• 27,857Employees

• $2,0763 M• $264 M• $1,259 M• $4,814 MExpenses1

• $1,624 M• $752 M• $2,5892 M• $8,311 MRevenue1

• Nationwide single-family residential real estate lending and servicing

• Multi-family and commercial real estate lending business in selected markets

• Nationwide credit card lending business

• 2,239 retail branches in 15 states

Description:

1 Represents total revenues and expenses from Q3 ‘07 to Q2 ‘082 Card services revenue is reported on a GAAP basis.3 Excludes 4Q ’07 $1.78 bn goodwill writedown.


11

Retail Focused Strategy

Retail Banking Card Services Home Loans Commercial

Optimize new store expansion and existing store performance

Expand small business

Drive deposit growth

Pursue balanced growth strategy

Leverage retail bank distribution

Grow small business receivables

Migrate to retail production channels

Leverage retail bank distribution

Drive operating efficiency

Expand leading multi-family business

Leverage leading efficiency position

Expand relationships through deposit-gathering products and services

Delivering on cross-business opportunities


12

Retail Banking


13

Retail Banking Overview

• Strong performance delivers top-tier operating leverage

• Significant household growth driven by free checking

• Growing success in deepening customer relationships through a wide mix of products and services

• Aggressively pursuing sizeable small business opportunity

• Increased focus on deposit growth coupled with disciplined margin management

• Optimizing store and internet distribution networks

• Highly experienced management team


14

Retail Banking Team

Diana GrahanChief Risk OfficerYears of Experience: 22

Years at WaMu: 1

Steve RotellaActing PresidentYears of Experience: 25

Years at WaMu: 3

Frank VellaSmall Business

Years of Experience: 35Years at WaMu: 2

Nandita BakhshiPayments and Deposits


Scott MawChief Financial Officer


James LivesayOperations and ECC


Ken KidoStore DistributionYears of Experience: 30

Years at WaMu: 6


15

Retail Franchise Growth • Strong core operating results

– $796M in Q2 operating earnings1; Q3 estimate = $800M

– Brand continues to attract customers; estimated Q3 gross free checking production equal to Q2 at ~760K

– Depositor fee income grows 10% from Q3 2007

– Disciplined store closures improve efficiency with minimal impact on deposit balances

• Deposit portfolio forecasted to increase from December 2007 levels– Cost of deposits down 73bps; CD mix consistent with year end level

– Broad response to IndyMac: Marketing, Incentives, Customer Communication, Pricing

– Accounts below $100K have grown 2% since IndyMac

– As expected, deposit decreases concentrated in higher balance accounts and in Southern California (IndyMac markets)

– CD promotion results more cost effective than historical campaigns

– Large deposit customers are keeping relationships and bringing back deposits 1 Retail Banking excluding impact of home equity and small business provision, foreclosed asset expense and taxes


16

Retail Model Drives Core Earnings

11% CAGROperating Earnings1

($ millions)

• Operating earnings ~$800M for past 2 quarters

• Efficiency ratio (excl. FDIC premiums) drops from 64% in Q2-05 to 57% in Q3-08

$560

$751$862 $796 $797

Q2'05 Q2'06 Q2'07 Q2'08 Q3'08F

1 Retail Banking excluding impact of home equity and small business provision, foreclosed asset expense and taxes


17

11.812.7 12.9

Q2'07 Q2'08 Q3'08F

Checking Account GrowthTotal Free Checking Accounts($ millions)

Consumer Free CheckingGross New 853,301 761,233 758,276Closed/Transferred 416,114 472,661 533,111Net Change 438,187 288,572 225,165

6% CAGR


18

Strong Fee Income Growth

$0

$200

$400

$600

$800

$1,000

Q2'05 Q2'06 Q2'07 Q2'08 Q3'08F

Depositor & Other Retail Banking FeesSecurities Fees & Commissions($ millions)

$587

$697

$790 $831

10% CAGR

$875

+8.5% vsQ3 ‘07


19

76.3 86.5 79.6 78.3

49.4 43.1 41.1 46.1

17.8 18.617.7 18.6

143.6 148.3138.4 142.9

4Q07 2Q08 Jul 08 Aug 08

Deposit Balance and Mix • Deposit balances increase from December 2007

− Cost of deposits down 73bp; CD costs down 110bp and CD mix flat to December− Retail deposits as a % of assets grows to 46.6% from 43.8% at 12/31/07− Record deposit growth in August; adjusting for $2.7B of internal transfers to CD’s, non CD deposits

up 1.7%− The Majority of July decline due to uninsured deposit withdrawals

Ending Balance ($ in B)

Retail Cost of Deposits 2.82% 2.23% 2.00% 2.09%CD Cost of Deposit 4.56% 3.94% 3.37% 3.46%

CD as % of Total Deposits 34.4% 29.1% 29.7% 32.3%Retail Dep as % of Total Assets 43.8% 47.9% 45.0% 46.6%

ConsumerNoninterest-Bearing

CD

Interest-BearingTransaction

143.6 148.3138.4

142.9

Q4’07 Q2’08 Jul 08 Aug 08


20

Large Deposit Accounts• Current deposit base more stable than before IndyMac

– Balances under $100K have grown 2% to $124.8B since the IndyMac announcement– Mix of accounts improves from July 11th – shifting to lower balance mix. Overall, 98% of

accounts are under $500K (233,350 accounts)– Accounts over $500K experienced 2x the decrease of accounts $100 -500K (46% vs 23%)



Balances > $100K ($250K for IRA) (Single-Account Methodology)

$16.3$12.8 $12.5

$7.7

$4.5 $4.1

$24.0

$17.4 $16.6

-

$5 B

$10 B

$15 B

$20 B

$25 B

$30 B

7/11/08 8/1/08 9/5/08

$100K - $500K $500K + Total

$7.7

$4.5 $4.1

$12.8 $12.5

$24.0

$17.4 $16.7

Balance > $100K ($250K for IRA) (Single-Account Methodology)

$16.3


21

• In July only 1% of all large balance HH’s ended their WaMu relationship

• 10% withdrew more than $100K, but kept their relationship− In August 37% of these customers brought back $10K+ (22% brought $100K+)

37%34.2k• Brought Back $10k+

63%21.6k• Other

100%34.2KTOTAL

22%7.6k- Brought Back $100k+

15%5.0k- Brought Back $10k-

$100k

% of Total

Total HHLDs

Actions between 7/25 and 8/22

88.5%288,234• All Other

1.0%3,097• HHLDs ending WaMu

relationship

100%325,543TOTAL

10.5%34,212• Withdrawing $100k+ but

retaining relationship

% of Total

Total HHLDs

High Balance Households (>$100k)

High balance households bringing deposits back


22

• Increased store focus and transparency to assist in deposit retention– Sales incentives increased and simplified to drive deposits– “Win-back” calling programs for large balance customers

• Implemented customer communication and education programs– FDIC basics to all store sales staff – explaining coverage options– New program allowing customers to receive double FDIC insurance

• Marketing increased for deposit products– Added $13MM to our Q3 marketing budget including radio, print, in-store and

online ads

• Short CD pricing promotions to drive growth– Two 5 day promotion periods for optimal CD balance growth– Scripting and focus to drive incremental household and checking growth

Comprehensive action plan to maintain & grow deposits


23

Growing Small Business RapidlyBut Significant Opportunity Remains

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

4Q '05 1Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 4Q '070

200

400

600

800

1,000

1,200

4Q '05 1Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 4Q '07

Total Small Business Accounts (in thousands)

Small Business Deposits ($ in millions)

33% CAGR21% CAGR

Market share: ~1%


24

Proactively Managing Store Network

1. Grow aggressively in established markets

2. Manage critical underperforming markets

3. Stabilize remaining markets

Performance (variance from net income after tax target)

Site

attr

activ

enes

s

RE-FOCUSAttractive site, poor performance

LEVERAGEAttractive site, high performance

RECONSIDER Unattractive site, poor performance

OPTIMIZE Less attractive site, high performance

Performance Improvement PlanDeNovo Store Decision Matrix


25

Measured Growth of Store Portfolio

75-10077

210

250260

144

0

100

200

300

2003 2004 2005 2006 2007 2008F0%

5%

10%

15%

20%New Stores

New Stores as a %of Total Stores

90%84%76%66%52%48%

% of New Stores Opened in EstablishedMarket

~404585118110Store Closures

1 WaMu also consolidated 79 grocery store locations into larger, existing retail banking stores in 2004.


26

Industry Leading Service

• Retail Bank Customer Satisfaction

#1 West

#1 California1

#1 Midwest

#3 Mid-Atlantic

#3 Southwest

#4 Southeast

1 For large banks.

65

75

85

2004 2005 2006 2007

W achovia W aM u JPM organ Bank of America

• Only Retail Bankon list

• #14

ACSI Satisfaction Ratings


27

Key Takeaways and Opportunities

• Strong performance with upside opportunity

• Leading West Coast retail franchise

• Top-tier player in checking and household growth

• Sizable opportunities to deepen relationships with deposits, cards and home loans

• Small business expansion still in early stages

• Optimizing store and internet distribution networks to capture full potential


28

Card Services


29

Card Services Overview

• Proven track record of acquiring and managing receivables in the mass middle market

• Leveraging multiple distribution channels with emphasis on retail stores

• Strong receivables growth fueled by access to WaMu brand and customers with risk premium

• Continue to leverage information based marketing and strong risk management capabilities

• Managing balance between growth and risk cautiously in weakening economic environment

• Deep and experienced management team


30

Card Services Team

Tony VuotoPresident


Susan GleasonChief Operations Officer


Michele Iversen Chief Financial Officer


David TomlinsonChief Marketing

OfficerYears of Experience: 20

Years at WaMu: 6

Chaomei Chen Chief Risk Officer



31

June 30 2007 June 30 2008

Card Services – Segment Contribution($ in millions)

Note: % of Total Revenue from Q3 ’07 to Q2 ’08 excludes Corporate Support / Treasury / Other. Card Services revenue growth is net of securitization adjustments and is reported on a GAAP basis

% Q3 ’07 to Q4 ‘08 WM Total Revenues

6% YOY growth

Card Services Managed Receivables

Total Revenues: $13.3bn

Commercial Group

6%

Home Loans12%

Card Services

19%

Retail Banking

63%

$24,987

$26,430


32

Balanced Growth Strategy

• Continued focus on target market with new products and “Simpler Banking”

• Current initiatives underway to expand beyond core middle market

Goal: Expand Accessible Market from 12 mm to 20 mm

Risk

Ret

urn

HighLow

Hig

hLo

w

Core Middle Market

Universe

UnderservedExpansion

Prime Expansion

MiddleExpansion


33

An Industry Leader

• 6th largest Visa/MasterCard bank card issuer

• $26.4 billion in managed receivables

• Over 12.7 million customer accounts

• Large, information-driven direct marketer (500 million contacts annually)

Note: All data as of 6/30/08 except for Card Issuer Ranking which is as of 06/30/07


34

Balanced Business Model

Customer Management

New Account Acquisitions

Enhancement Services

Marketing Services

Direct response program

Full spectrum focus

Broad product array

National

Existing customer lists

Physical channels (stores and call center)

New customer enrollment

Retail

Co-branded and affinity

Cooperative issuance

Limited number of select partners

Partnership

Direct response channels

Retail cross-sell

Specialized product features

Small Business


35

Significant Benefits from WaMu Brand

$23.6$25.0

$26.2$27.2

$26.4 $26.4

$18.5

$20.1$21.1

$22.2$23.5

$19.3$18.6 $18.1

$20.0

$10

$12

$14

$16

$18

$20

$22

$24

$26

$28

$30

4Q ’04 1Q ’05 2Q ’05 3Q ’05 4Q ’05 1Q ’06 2Q ’06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 4Q '07 1Q '08 2Q '08

Note: WaMu acquired Providian on 10/1/05

6% CAGR

12% CAGR

Providian WaMu

Managed Portfolio Balances at Period End ($ in billions)

TighterUnderwriting


36

Leveraging Retail Distribution

413

683

920

1,137

1,377

1,633

1,889

2,067

13%14%

16%

18%19%

21%22%

23%

0

500

1,000

1,500

2,000

2,500

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007

Acc

ount

s (00

0s)

0%

5%

10%

15%

20%

25%

Pene

trat

ion

Rate

(%)

Cum. New Card AcctsRetail Household Penetration

2006 / 2007 Retail Account Growth


37

Balanced Customer Targeting

0%

5%

10%

15%

20%

600-619 620-639 640-659 660-679 680-699 700-719 720-739 740-759 760-779 780-799 800-819

National programs Partnership Programs Retail programs

Note: Estimate based on Card Services prospect database

FICO Bands of Targeted Customers - 2007


38

Risk Control Initiatives

• Actions taken to minimize the impact of the mortgage and economic downturn– Map negative HPA regions into marketing program suppressions

– Suppression of WaMu subprime mortgages in retail channels

– Suppression of 2+ mortgage positions in all new account channels, in credit line increase programs, and in relationship marketing programs

– Tighten the prescreen score cut offs in all acquisition programs

– Suspended line increases in Q4’07

– Tighten underwriting score cut-offs

– Tighten high credit line assignment criteria

– Close excessive inactive accounts. Stop authorization expansions

– Remove 660 FICO cap on “Risk-Based Re-pricing” eligible populations


39


• Unique expertise in mass middle market that delivers high risk-adjusted returns

• WaMu brand and customer base fuels receivables growth with upside opportunity

• Targeting and acquisitions continue to migrate to higher FICO mix

• Proactively balancing growth and risk in a softening environment


40

Commercial Group


41

Commercial Group Overview

• Leading multi-family lending business

• Operates in select markets with stable demand and supply constraints

• Targets small balance customers with competitive pricing and best-in-class efficiency ($1.3 million average loan balance)

• Rigorous focus on pristine credit quality

• Management team with deep industry experience


42

Home Loans Team

John WoodsChief Financial Officer


Arlene HydeProduction


John BerensServicing


Don WhiteRisk ManagementYears of Experience: 16

Years at WaMu: 1

David BeckCapital Markets


Beth GanemHuman ResourcesYears of Experience: 19

Years at WaMu: 11

Mike ZarroChief Admin. Officer


Tom MorganChief Technology Officer


David SchneiderPresident



43

Target Market• Select markets with

stable demand and natural supply constraints

• Moderately priced, less volatile buildings

• Renters by necessity

Focused Operating StrategyUnique Value Proposition

Target Customer• Small balances• “In the box”

transactions• Value shoppers• Moderate leverage at a

fair price

Market Differentiators• Local presence • Competitive pricing• Fast & simple process• Targeted product

solutions• Certainty of execution• Direct borrower

relationships


44

Commercial Group – Segment Contribution($ in millions)

$35,218

$42,301

June 30 2007 June 30 2008

20% YOY growth

Total Revenues: $13.3bn

Commercial Group Loans Receivable% of Q3 ’07 to Q2 ‘08 WM Total Revenues

Commercial Group

6%

Home Loans12%

Card Services

19%

Retail Banking

63%

Note: % of Q3 ’07 to Q2 ‘08Total Revenue excludes Corporate Support / Treasury / Other. Card Services revenue is net of securitization adjustments


45

Portfolio Composition

$16 $16 $18 $20 $22$26

$30 $32 $33$6

$10$12

$11 $9$7

$8$11

$12

2000 2001 2002 2003 2004 2005 2006 2007 Q2'08

M ulti-Family Lending Other Commercial

$22

$26

$30 $31 $31$33

$38

$43

Note: Portfolio breakdown as of 6/30/2008. Other Commercial consists of Other Real Estate, Retail Small Business and Commercial Loans.

Historical Breakdown ($ in billions)Portfolio Breakdown

M ulti-Family

Lending73%

Other Commercial

27%$45


46Source: 2006 HMDA data

Existing markets

New market (2007)

Leading Share in Select Markets

Seattle #2

Portland #1

Sacramento #1San Francisco #1

Los Angeles #1

San Diego #1

Denver #2

Chicago #1

Boston #1

New York #1

Philadelphia #7

Washington, DC #6

Minneapolis #1Milwaukee #3

Phoenix


47

Largest Multi-Family Portfolio in Banking

$3.0

$3.1

$3.9

$5.0

$7.6

$8.0

$10.3

$31.1

$2.5

$13.5

WaMu

NY Community Bancorp

Citigroup

Wachovia Corporation

Bank of America

Capital One

Sovereign Bank

LaSalle Bank

Astoria Federal Savings

Wells Fargo & Company

Source: FDIC and OTS, per SNL DataSource. Balances may differ slightly to filings reported on a GAAP basisNote: As of June 30, 2007; rankings for banks and thrifts only (most recent data available)1 Bank of America acquired LaSalle Bank on October 1, 2007.

1

Multi-Family Portfolio Holdings ($ in billions)


48

Conservative Underwriting Philosophy

• Typically, maximum 75% LTV and minimum 1.15x debt service coverage (“DSC”), with 680 minimum FICO score

• Higher DSC for office (1.20 DSC)

• DSC requirements increase based on property age, quality and cash flow stability

• Collateral focused underwriting

• Proceeds based on property net operating income

• Recourse to an individual is common on the majority of our loans

• Do not originate large construction loans; average loan size is $1.3 million

• No condo conversions

• No conduit lending

• No corporate banking

• Exited tract and condo development financing business in 2004

• Do not focus on structured finance

• De minimis residential land lending

What We Don’t DoConservative Metrics


49


• Leading small-balance multi-family business with competitive advantage in efficiency and service

• Strong growth opportunities primarily in existing and selected new markets

• Maintaining focus on conservative credit philosophy with good results

• Significant opportunity to expand relationships through deposit gathering products and services


50

Home Loans


51

Home Loans Overview

• Significantly restructured and refocused the business model– Exited volatile businesses – Conduit, Broker Dealer, and Wholesale

– Exited high-cost Home Loan Centers

– Tightened credit parameters and implemented additional policies in high-risk markets

– Reduced expenses eliminating 6,700 positions since the end of 2006 and consolidated 24 fulfillment centers into 3

• Proactively responding to structural changes in industry volumes, mix, and secondary markets

• Positioned for production success– Significant opportunity to grow retail store production and cross sell WaMu bank products

– Strong call center capabilities

– Completed transition to state of the art production systems in retail

– Simplified product set and focused on agency-eligible product with minimal portfolio lending

• Best in class servicing and default management capabilities

• Built strong, veteran management team


52

Home Loans Team

John WoodsChief Financial Officer


Arlene HydeWholesale


John BerensServicing


Don WhiteRisk ManagementYears of Experience: 16

Years at WaMu: 1

David BeckCapital Markets


Beth GanemHuman ResourcesYears of Experience: 19

Years at WaMu: 11

Mike ZarroChief Admin. Officer


Tom MorganChief Technology Officer


David SchneiderPresident



53

$1,191 $1,180

$863

$631

1H '07 Rev. 1H '08 Rev. 1H '07 Exp. 1H '08 Exp.

Home Loans – Segment Contribution($ in millions)

Commercial Group

6%

Home Lo12%

Retail Banking

63%

Card Services

19%

Revenues Flat

Total Revenues: $13.3 bn

Home Loan Revenues & Expenses% of Q3 ’07 to Q2 ‘08 WM Total Revenues

Note: % of Q3 ’07 to Q3 ‘08Total Revenue excludes Corporate Support / Treasury / Other. Card Services revenue is net of securitization adjustments. Home Loans 1H revenue excludes trading losses and provision for repurchase loans in ’07 and ’08. Home Loans 1H expenses excludes indirect expenses, and foreclosed asset expense in ’07 and ’08.

Expenses down 27%


54

Leading Servicer

Home Equity11%

Subprime6%

Prime83%

Investor: $424bnOwned: $172bnTotal: $596bnSource: Inside Mortgage Finance. Bank of America acquisition of Countrywide pending

Portfolio Overview – August 2008Top 10 Servicers – Q2 2008 ($ in billions)Total

Rank Servicer Servicing1 Wells Fargo 1,497

2 Countrywide 1,485

3 Chase Home Finance 829

4 CitiMortgage 817

5 Washington Mutual 604 6 Bank of America 541

7 Residential Capital 395

8 Wachovia 201

9 IndyMac 195

10 National City Mortgage 190


55

Leading Servicing Capability

• Highly experienced servicing management team

– Average over 19 years of industry experience

– Strong background in subprime servicing

• Efficient, consolidated operations

• State of the art technology

• Strong default performance

Highly Rated by Third Parties

Leading Servicing Franchise

• Standard & Poor’s – “Above Average”

• Fitch – “RPS2+ Full Approval (with Noted Strengths)”

• Freddie Mac (FHLMC) “Tier 1” Platinum Servicer for both Default and Investor

• Fannie Mae (FNMA) – Highest Servicer rating for Investor; maximum payout for Default incentives


56

Loss Mitigation and REO Initiatives• Significant investment in Loss Mitigation and REO Capabilities have resulted in industry leading

Default Management

• Increased Loss Mitigation staff by 124% over past year resulting in 454% increase in work outs

• Comprehensive array of modification alternatives

• Member of Hope Now

• Local Market Representatives – 500+ Community Events Annually

• Servicing facilities located in strong labor markets– Staffing model integrated with default forecasting to anticipate workload spikes

– Outsourcing arrangements smooth out peaking issues

– Industry leading loss mitigation per employee: 75 / person

• REO performance at highest level in industry– REO turnover over 25% for available inventory

– Less inventory aged past 180 days from listing (prime 3%, Home Equity 4%, Subprime 6%)

– Online sales – wamuproperties.com

• Recent Credit Suisse study identified WaMu as leader in foreclosure and REO timeline management

• Upgraded robust dialer capabilities to state of the art Avaya in third quarter providing virtual agent pools across the enterprise

• Installed “Back in the Black” web-based application in 2006 to automate work out decisioning


57


• Efficient “retail-only” production platform capitalizing on the strong WaMu name and extensive retail platform

• Scaled cost effective servicing platform

– Competitive cost structure

– Extensive default management systems and expertise

• Significant investment in technology over the last two years will allow WaMu to maintain a competitive cost structure through the next cycle

• Seasoned management team well equipped to proactively respond to the fast changing mortgage environment

• Recent restructuring has positioned the segment for profitable operating earnings


58

Asset Quality Update


59

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Other Card SFR Home Equity Subprime

1Q’07 2Q’07 3Q’07 4Q’07 1Q’08 2Q’08

Net Charge-offs:

Reserve ($M M ) $1,541 $1,560 $1,889 $2,571 $4,714 $8,456

ActualProvision:

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Other Card SFR Home Equity Subprime

1Q’07 2Q’07 3Q’07 4Q’07 1Q’08 2Q’08

Net Charge-offs:

Reserve ($M M ) $1,541 $1,560 $1,889 $2,571 $4,714 $8,456

ActualProvision:

• With a provision of near $6 billion in Q2, well above the pace of net charge-offs, we built the reserve to about $8.5 billion last quarter.

• The Q2 increase in net charge-offs to near $2.2 billion largely owed to higher charge-offs on SFR Prime and Subprime mortgage loans.

• The sharper drop in home prices in Q2 was reflected in the severity of charge-offs. Many loans previously partially charged-off were re-evaluated and marked down further.

SFR Prime & SubprimeLoans with Net Charge-Offs*

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

*

*Loans with significant charge-off activity (at least $10k net charge-off amount)

Commentary

Recap of Q2’08


60

0

1

2

3

4

5

6

Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008

NC

O o

r Pro

visi

on ($

bil)

NCOProvision

0

500

1,000

1,500

2,000

Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008

NC

O G

row

th ($

mil)

Qtr

ove

r Qtr

0%

25%

50%

75%

100%

% N

CO

Gro

wth

(Qtr

ove

r Qtr

)

NCO Growth $mil

NCO Growth %

NCO and Provision Trends

NCO GrowthCommentary

Provision Projection

NCO Growth $mil(3/2 * actual through August)

NCO Actuals extrapolated $mil (3/2 * actual through August)

NCO Growth through August

NCO Growth through August at a quarterly rate

Forecast Q3 Provision range $4 - $5 billion

• Net charge-off growth in Q3 through August slowed to a 16 percent quarterly pace, down significantly from the 60 percent increase in Q2

• Net charge-offs in Q3 through August were $1.7 billion, or $2.5 billion at a quarterly rate

• We expect to continue to provision in excess of net charge-offs in Q3, but the substantial Q2 ending reserve allows the pace of provisions to decline in Q3Residential share of

Provision

Q3 Credit Trends


61

Effect of Loan and Property Management Activities on Non-Performing Assets

CommentaryCredit Outcomes

• Total delinquencies increased at a 22% quarterly pace in Q3 through August, similar to the 16% rate of increase in Q2. Non-Performing Loan (NPL) delinquencies increased in July and August, owing largely to a surge of Troubled Debt Restructurings (TDRs)

REO Management and Property Valuation

• We are keeping up a strong pace of REO sales, holding down the foreclosed asset share of non-performing assets to about 13%.

• Estimated property values for charge-off measurement began to include in Q2:

• Additional haircuts

• Increased use of BPOs (vs. AVMs) that reflect property-specific value declines

Loan Modifications

• Loans we classified as Troubled Debt Restructurings (TDRs) are on track to increase to a $4 Billion pace in Q3 ($3.2 billion actuals through August), up from $1.4 billion in Q2

• TDRs in Q3 through August now represent 24% of Non-Performing Assets

Shares of Non-Performing Assets

78% 75% 77% 78% 74%64%

4% 9% 9% 7% 13%24%

19% 16% 14% 15% 13% 13%

0%

20%

40%

60%

80%

100%

2Q '07 3Q '07 4Q '07 1Q '08 2Q '08 QTD Aug '08

Nonperforming Loans Troubled Debt Restructurings Foreclosed Assets

Total Delinquencies

32.57%37.43%41.53%44.76%45.51%47.12%

49.27%53.32%53.47%

49.53%

48.40%

50.40%

18.16%

9.25%5.00%

5.71%

6.10%

2.47%

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 (through August)

(in $

Mill

ions

)

$ TDR$ Other NPL

$ Early Stage Delinquent


62

($ billions)

Pool Low High Aug-08 Total Low HighSFR: Option ARM 52.5 3.4 5.6 0.21 0.90 2.50 4.70SFR: Other 58.7 0.9 1.4 0.08 0.31 0.59 1.09

Home Equity: 1st Lien 15.9 0.3 0.6 0.02 0.10 0.20 0.50Home Equity: 2ndLien 44.8 4.8 7.4 0.29 1.19 3.61 6.21

SubPrime: 1st Lien 15.1 2.1 2.8 0.10 0.62 1.48 2.18SubPrime: 2nd Lien 2.3 0.8 1.1 0.05 0.25 0.55 0.85

189.4 12.3 18.9 0.75 3.38 8.92 15.52

0.00 0.03

0.75 3.41

0.11 0.40

0.86 3.81

0.00 0.05

0.86 3.861 As of 2008 Q1 Earnings Release2 Net Charge-Offs since March 31, 20083 HELOCs draw n as of March, 20084 Net Charge-Off Losses on foreclosed assets that w ere in REO in March 2008

Total WMI Net Charge-Offs

NCOs on Foreclosed Assets as of March '084

Implied Remaining Losses Beyond August 2008March 2008

BalanceCollateral Type

Losses Since March 20082

Original Remaining Loss Estimate1

SFR

Home Equity3

Card, Commercial, Small Business & Other

Total WMI Loans

Total Home Loans & Home Equity3, March '08 Pool

SubPrime Mortgage Channel

Total Home Loans & Home Equity

Losses on New Home Loan and Home Equity OriginationsNew Draws on Home Equity Lines Since March 2008

Charge-Offs to Date and Implied Remaining Losses Relative to Initial Range


63

($ billions)

PoolMarch 2008

Balance New1 Exit2Continuing3

(March)Continuing4

(August)August 2008

BalanceSFR: Option ARM 52.5 0.1 2.9 49.6 49.5 49.6

SFR: Other 58.7 1.7 4.7 54.0 53.8 55.5

Home Equity: 1st Lien 15.9 0.1 0.8 15.2 14.8 14.9

Home Equity: 2ndLien 44.8 0.2 1.9 42.9 42.5 42.7

SubPrime: 1st Lien 15.1 0.0 1.2 13.9 13.8 13.8

SubPrime: 2nd Lien 2.3 0.0 0.1 2.3 2.2 2.2

189.4 2.0 11.6 177.7 176.6 178.7

3.8 3.8

2.0 11.6 177.7 180.5 182.5

1 Represents the current balance of loans added to the active loan population since March 20082 Represents the balance as of March 2008 of loans that have since become inactive (e.g. by prepayment, full charge-off, entering REO, or other loan termination)3 Represents the balance as of March 2008 of all loans that have remained active to the current period4 Represents the current balance of all loans that have remained active since March 2008. Those current balances exclude any draws on HELOCs that occurred since March 2008, except as reported in the separate line for such draws

Draws on Home Equity Lines Post March 2008Total Home Loans & Home Equity

Collateral Type

Total Home Loans & Home Equity, March '08 Pool

SFR

Home Equity1

SubPrime Mortgage Channel

- - - - - - - - - - - - - - - - - - - - - - Balances - - - - - - - - - - - - - - - - - - - - - -

Portfolio Evolution Since Q1 2008


64

Net Charge-Off Flow Tracking Cumulative Loss Tracking

Severity Tracking Commentary

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)

Actual Quarter-to-dateMonitoring Range

500

1,000

1,500

2,000

2,500

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rter

ly N

et C

harg

e-O

ff($

mill

ions

)


5,000

10,000

15,000

20,000

Q2 Q3 Q4

2008 2009 2010 TotalRemaining

Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)

Cumulative NCO to dateMonitoring Range

The orange lines show the monitoring range of cumulative loss for each quarter or year.

Net Charge-off Flow Tracking: This quadrant tracks the flow of Net Charge-Offs each quarter.

The orange lines show the monitoring range of charge-offs for each quarter.

The solid green bar shows actual net charge-offs to

date for the quarter.

Cumulative Loss Tracking: This quadrant tracks cumulative, the sum of charge-offs to-date.

The solid green bar shows actual cumulative loss to date for the quarter.

Severity Tracking: This quadrant tracks the severity* of Net Charge-Offs each quarter.

The blue lines show the monitoring range of loss severity for each

quarter (or the quarterly average range for 2009 and 2010).

The green bar indicates loss severity to date for the quarter

We will summarize Highlights here.

• Commentary Text

* Net Charge-Off Severity for a given period will be calculated based on loans receiving a charge-off of at least $10K in any month since March 2008. Given this set of loans, this severity measure will be cumulative in that it will represent the cumulative loss to date for all such loans expressed as percentage of their March 2008 balance. Note that loans that become eligible for a charge-off (eg. >180 days past due) that receive smaller than a $10k charge-off or no charge-off in every month since March 2008 are excluded from the both the numerator and denominator.

Cumulative Loss Tracking: Overview


65

500

1,000

1,500

2,000

2,500

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)

Actual Quarter-to-date at Quarterly Rate


5,000

10,000

15,000

20,000

Q2 Q3 Q4


Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)

Cumulative NCO to date at Quarterly Rate

Cumulative NCO to dateMonitoring Range

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)


Cumulative Loss Tracking: Home Loans & Home Equity – March 2008 Pool


Severity Tracking

$ in Billions

Low High Low High Low High Low High Provision - Non Card 13.7 14.8 3.5 6.0 1.3 1.9 18.5 22.7 Provision - Card 1.8 1.9 1.5 1.7 1.6 1.8 4.9 5.5 Total Provision 15.4 16.7 5.1 7.8 3.0 3.7 23.5 28.1

Foreclosed Asset Expense 0.9 0.9 1.6 1.7 1.3 1.7 3.8 4.4 Lost Interest (NPA Cost) 0.8 1.0 0.8 0.9 0.7 0.8 2.3 2.7 Total Credit Costs 17.2 18.6 7.5 10.4 4.9 6.2 29.6 35.2

3 year Total2009 20102008

Total Estimated Credit Costs 2008 to 2010


66

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($

mill

ions

)


200

400

600

800

1,000

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)

Actual Quarter-to-date at Quarterly Rate



Severity Tracking

Cumulative Loss Tracking: Option ARM – March 2008 Pool

1,000

2,000

3,000

4,000

5,000

6,000

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly) TotalRemaining

Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)

Cumulative NCO to date at Quarterly RateCumulative NCO to dateMonitoring Range


67

OTS 90+ Delinquencies,* 2004-2007 Vintages

0%

2%

4%

6%

8%

10%

12%

14%

Jan-

05Ap

r-05

Jul-0

5Oct-

05Ja

n-06

Apr-0

6Ju

l-06

Oct-06

Jan-

07Ap

r-07

Jul-0

7Oct-

07Ja

n-08

Apr-0

8

90+

Del

inqu

ency

Rat

e (%

) 1

Option ARM Industry 2004, $13 BillionOption ARM WaMu HFI 2004, $6 Billion

0%

2%

4%

6%

8%

10%

12%

14%

Jan-

05Ap

r-05

Jul-0

5Oct-

05Ja

n-06

Apr-0

6Ju

l-06

Oct-06

Jan-

07Ap

r-07

Jul-0

7Oct-

07Ja

n-08

Apr-0

8

90+

Del

inqu

ency

Rat

e (%

) 1


0%

2%

4%

6%

8%

10%

12%

14%

Jan-

05Ap

r-05

Jul-0

5Oct-

05Ja

n-06

Apr-0

6Ju

l-06

Oct-06

Jan-

07Ap

r-07

Jul-0

7Oct-

07Ja

n-08

Apr-0

8

90+

Del

inqu

ency

Rat

e (%

) 1


0%

2%

4%

6%

8%

10%

12%

14%

Jan-

05Ap

r-05

Jul-0

5Oct-

05Ja

n-06

Apr-0

6Ju

l-06

Oct-06

Jan-

07Ap

r-07

Jul-0

7Oct-

07Ja

n-08

Apr-0

8

90+

Del

inqu

ency

Rat

e (%

) 1


Vintage 2004 Vintage 2005

Vintage 2006 Vintage 2007

*LoanPerformance TS Securities through April 2008

WaMu Option ARMs Outperform MBS/ABS Securities


68

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)


50

100

150

200

250

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)

Actual Quarter-to-date at Quarterly RateActual Quarter-to-date

Monitoring Range

Cumulative Loss Tracking: Other SFR Prime – March 2008 PoolNet Charge-Off Flow Tracking Cumulative Loss Tracking

Severity Tracking

300

600

900

1,200

1,500

Q2 Q3 Q4


Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)

Cumulative NCO to date at Quarterly RateCumulative NCO to date

Monitoring Range


69

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly

Net C

harg

e-O

ff 1

($ m

illio

ns)


20

40

60

80

100

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)


Monitoring Range

Cumulative Loss Tracking: Home Equity 1st Lien – March 2008 PoolNet Charge-Off Flow Tracking Cumulative Loss Tracking

Severity Tracking

200

400

600

Q2 Q3 Q4


Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)


Monitoring Range


70

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)


200

400

600

800

1,000

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)


Monitoring Range

Cumulative Loss Tracking: Home Equity 2nd Lien – March 2008 Pool


Severity Tracking

2,000

4,000

6,000

8,000

Q2 Q3 Q4


Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)


Monitoring Range


71

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)


100

200

300

400

500

600

700

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)


Monitoring Range

Cumulative Loss Tracking: SubPrime 1st Lien – March 2008 Pool


Severity Tracking

500

1,000

1,500

2,000

2,500

3,000

Q2 Q3 Q4


Cum

ulat

ive

Net C

harg

e-O

ff($

mill

ions

)


Monitoring Range


72

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Q2 Q3 Q4

2008 2009 2010

Seve

rity

of Q

uarte

rly N

et C

harg

e-O

ff 1

($ m

illio

ns)


50

100

150

200

Q2 Q3 Q4 2009 2010

2008 (Avg Qtrly)

Qua

rterly

Net

Cha

rge-

Off

($ m

illio

ns)


Monitoring Range

Cumulative Loss Tracking: SubPrime 2nd Lien – March 2008 Pool


Severity Tracking

250

500

750

1,000

1,250

Q2 Q3 Q4


Cum

ulat

ive

Net

Cha

rge-

Off

($ m

illio

ns)


Monitoring Range


73

Financial Outlook


74

Q3 2008 Outlook• Net interest margin expected to be in line with Q2 and within earnings

guidance range of 3.15% to 3.25% for the full year ’08

• Q3 provision expected to remain elevated, but lower than Q2 and still in line with cumulative loss projections

– Residential NCOs forecasted to increase ~14% from Q2 to Q3, downfrom 64% increase from Q1 to Q2

• Forecasted Q3 noninterest income (excluding losses from trading and AFS securities) of $1.9B above Q2 and in line with expectations

– Q3 depositor fees up 10% year over year

• On track to achieve expected savings related to business resizing

• Ending Q3 assets anticipated to remain relatively flat to Q2 levels due to elevated cash and maturing card securitizations

• Forecasted WMI Tier 1 risk-based capital of 8.72% and Tier 1 Leverage of 7.27%, above well-capitalized levels


75

• Decline in Q3 driven largely by gains from debt buybacks recognized in Q2123274224Other Income

• Fee income grows as on-balance sheet receivables increase ~$7B from end of 2007235177181Card Fee Income

• Slowing SFR prepayments drive higher MSR valuations

• Scaling down mortgage business resulted in lower production and sales volume, which will be more than offset by expense saves

585(109)411Mortgage Revenue

• Stable net interest income as $18B YTD balance sheet decline is offset by 17bps NIM improvement$2,261$2,296$2,175Net Interest Income

$2,056$1,513$1,881Operating Earnings

(2,002)

117

814

Q3’08 Forecast

(1,974)

159

767

Q2’08 Actual

(1,986)

248

704

Q1’08 Actual

• Lower gains on new and existing sales due to lower securitization levels and lower excess spread

Sales & Servicing of Consumer Loans

• Resizing efforts on track to deliver expected savingsOperating Expenses

• Fee increases and net new checking account growth of 725K Q3 YTD drive growth

• Jan-Sep YOY depositor fee growth of 7.5%

Comments

Depositor & Other Retail Banking Fees

($ in millions)

2008 Earnings Trends


76

• Credit costs remain in line with expectations as we provision in excess of NCOs

• Residential net charge-off growth decelerating

• Early stage residential delinquency rates moderating to declining

• Q3 reflects ~$420M provision due to maturing credit card securitizations

• Allowance for loan losses expected to be $10.3B at 9/30

~3,500

~900

~4,400

5,531

381

5,913

3,355

156

3,511

Non-card provisionCard ProvisionTotal Provision

• Impacted by market illiquidity and industry-wide credit losses

• In process of finalizing our impairment study to assess additional Q3 write-downs

(518)(707)(198)G/(L) on Trading & AFS Securities (MTM)

~(1,800)(3,328)(1,138)Net Income

(1.10)-(1.20)(3.34)(1.40)EPS (excl BCF)

(35)

(177)

Q3’08 Forecast

(217)

(217)

Q2’08 Actual

(11)

(155)

Q1’08 Actual

• Majority of resizing expenses recognized in Q2

• Continuing to evaluate Retail branch strategyResizing Costs

• FAE elevated driven by $1B increase in foreclosures from 2007 and lower home values

• Decelerating pace of home price declines results in lower valuation write-downs in Q3

Comments

Foreclosed Asset Expense

($ in millions,Except EPS)

2008 Earnings Trend (cont.)


77

• Fed ease drives NIM expansion• Pressured by wider 3M LIBOR to Fed Funds spread• Partially offset by on balance sheet Card receivables• Pressure from increasing NPAs

~3.25%3.22%3.05%NIM

• MSR value improves with slower loan prepayments, offsetting capital impact of higher than expected asset levels

6,6576,1755,726MSR

• Maintaining sufficient excess cash to manage liquidity position12,8649,98512,616Cash & Equivalents

• Residential loan portfolio running off• Partially offset by higher on balance sheet Card

receivables due to additional securitization maturities• Continued MFL / commercial loan growth

238,749176,67015,35646,723

239,626183,36810,58945,669

242,814189,086

8,98844,470

Loans in PortfolioResidentialCard ReceivablesCommercial/Other

• Overall balance sheet declines due to lower mortgage production with further reduction expected in Q4310,382309,731319,668Ending Assets

• Reflects uninsured deposit run-off related to IndyMac collapse

• Represents approximately 50% of liabilities• Account growth remains solid

~140,000148,425151,804Retail Deposits

Q3’08 Forecast

Q2’08 Actual

Q1’08 Actual

Comments($ in millions)

2008 Balance Sheet Trend


78

100%1%<1%1%2%96%% of Total MBS @ 6/30/08

89%18%32%41%56%95%Book value as % of par value2

$18,241$143$84$108$416$17,490Total MBS

6,590118-86,563CMBS

32640365540155Subprime

523637144408Alt-A

3,3012933523242,863Prime

$7,501$-$-$-$-$7,501Agency

TotalBelow IGBBBAAAAAA1

AFS MBS Portfolio by asset type and Investment grade

(in millions)

1 Includes not rated securities that are guaranteed by the U.S. Government or U.S. Government sponsored agencies2 Book value written down through losses on AFS of $407 million in Q2, $67 million in Q1 and $375 million in 2007 as well as $1.2 billion in other comprehensive income

(as of 6/30/2008)

AFS MBS Portfolio 96% AAA Rated


79

Key Economic Assumptions

Recession scenarioDeeper deterioration of housing market and unstable economy

Fed rate cuts to 1.00% and holds steady through 2009

GDP declines in 2008 ending at -0.5% but rebounds next year

Unemployment rises to an average of 6.5% in 2009

Housing prices in WaMu’s top 10 markets decline by 39% peak-to-trough

Base caseBorderline recession with modest recovery in 2009

Fed cuts rates to 1.75% by YE 2008, but increases to 2.75% by YE 2009

GDP growth remains below trend through 2009

Unemployment peaks at 5.5% in 2008

Housing prices in WaMu’s top 10 markets decline by 20% peak-to-trough


80

Base Long Range Forecast

($ in millions) 2007 2008F 2009F 2010F ($ in billions) 2007 2008F 2009F 2010FNet Interest Income 8,177 8,961 8,698 9,209 AssetsProvision 3,107 16,554 5,053 2,956 Cash & Investments 45,097 27,434 25,195 24,015 Noninterest Income 6,042 5,082 6,439 6,956 Loans 249,789 231,444 214,076 204,888 Non Interest Expense 10,600 9,244 8,851 8,592 ALLL (2,571) (10,687) (7,694) (6,358) Minority Interest Expense 203 301 301 301 Other Assets 35,599 34,628 34,616 33,479 Net Income Before Tax 309 (12,056) 931 4,314 Total Assets 327,913 282,820 266,192 256,024 Tax 376 (4,962) 47 1,280 Net Income (67) (7,095) 884 3,034 Liabilities:Preferred Dividends - 3,553 256 256 Deposits 181,926 182,798 199,566 210,002 Net Income Attrib. to Common (67) (10,648) 629 2,778 Borrowed Funds 108,962 64,825 30,324 6,534 EPS (0.08)$ (8.14)$ 0.36$ 1.59$ Other Liabilities 8,523 8,755 9,005 9,187 Avg Diluted Shares ($M) 864 1,308 1,744 1,744 Total Liabilities 299,411 256,378 238,895 225,723

Minority Interest 3,919 3,914 3,914 3,914 Total Shareholders' Equity 24,584 22,828 23,684 26,687

Select Details Total Liabilities and Equity 327,913 283,120 266,492 256,324 Retail Banking Fees % Growth 13% 9% 7% 8%Total Revenue 14,219 14,043 15,137 16,165 NIM 2.86% 3.22% 3.42% 3.86%

2007 2008F 2009F 2010F 2007 2008F 2009F 2010FDividend/Share (Annual) 2.21$ 0.18$ 0.04$ 0.04$

ROA 0.00% -2.32% 0.32% 1.16% Buyback/Equity Issue ($B) (3.5) 7.0 - - Efficiency Ratio 74.6% 65.8% 58.5% 53.2% TE/TA 6.67% 7.49% 8.34% 9.89%Expense Growth (Decline) 20.4% -12.8% -4.2% -2.9% TCE/TA 4.39% 4.75% 5.54% 6.98%Revenue Growth -1.9% -1.2% 7.8% 6.8% Tier I Leverage 6.84% 7.18% 8.41% 9.98%Loan to Deposit Ratio 137% 127% 107% 98% Tier I RWA 7.93% 8.70% 9.40% 10.93%

FINANCIAL METRICS CAPITAL METRICS

BALANCE SHEETINCOME STATEMENT


81

Recession Scenario Results($ in millions) 2009 2010 2009 2010 CommentsIncome StatementNet Interest Income 8,625 8,690 (72) (519)

NIM 3.42% 3.70% 0.00% -0.16%

Provision Non Card 6,046 1,852 2,526 522 Cum Losses increase from $17B to $19B combined with the acceleration of loss timingProvision Card 1,716 1,822 184 195 Card provision increases as NCL increase with worsening economic conditions

Total Provsion 7,762 3,673 2,710 717

Non Interest Income 5,798 6,324 (641) (632)

Non Interest Expense 9,067 9,169 216 577 FAE increases along with higher expenses due to increasing volumes

Minority Int. Exp 301 301 - -

Pre-tax net Inc (2,707) 1,869 (3,638) (2,445)

Tax (1,323) 360 (1,370) (920)

Net Income (1,384) 1,509 (2,269) (1,525)

Preferred Dividends 256 256 - -

Net Income attrib to common (1,640) 1,253 (2,269) (1,525)

EPS (0.94) 0.74 (1.30) (0.89) Return to profitability delayed to Q3 2009

Non Interest Income DetailsMortgage Banking Income 722 801 (96) (34) Retail Fees 3,197 3,456 (177) (191) Card Fees 933 1,134 (11) (13) Lower Card balancesCard Sales/Svg 377 397 (317) (333) Higher NCLs drives lower excess spreads combined with higher discount ratesOther 570 537 (40) (60) Lower custodial deposit fees in HLsNon Interest Income 5,798 6,324 (641) (632) CapitalTE/TA 7.35% 8.14% -0.99% -1.75%TCE/TA 4.52% 5.24% -1.02% -1.74%Tier I Leverage 7.42% 8.24% -0.99% -1.74%Tier I RWA 8.26% 8.95% -1.14% -1.98%

Lower interest rates improves GOS with higher production, which is more than offset by Consumer spending softens combined with lower account acquisition and lower incident

NIM declines with falling short term interest rates due to higher "loan to deposit ratio" and higher non-accrual reversals. At absolute rate of 2% the ability to reduce deposit pricing limited, and the current ALM position reduces sensitivity to decling rates. In addition, Libor Treasury spreads widen causing MTA loans to reprice faster than borrowings.

Lower rates drives faster run off, which impacts the MSR and Service fees more than offsetting improved GOS. Softening consumer spending drives lower retail fee growth, and high NCLs impact Card residual values


82

Outstanding Capital SecuritiesNon Equity-Linked

Equity-Linked

Basket D (75%)100% up to33% of ACE

25% of Tier 11,00012/15/20129.750%PerpNC10 ADP/REITWashington Mutual Pfd Funding Trust IV10/18/2007


25% of Tier 15006/15/20126.895%PerpNC5 ADP/REITWashington Mutual Pfd Funding Trust III5/20/2007


25% of Tier 150012/15/20166.665%PerpNC10 ADP/REITWashington Mutual Pfd Funding Trust II12/5/2006


50% of Tier 15009/18/2011L + 70PerpNC5 DRDWashington Mutual9/11/2006


25% of Tier 11,2503/15/20116.534%PerpNC5 ADP/REITWashington Mutual Pfd Funding2/24/2006


25% of Tier 17503/15/20117.250%PerpNC5 ADP/REITWashington Mutual Pfd Funding (Cayman)2/24/2006

Basket A (0%)100% up to12% of ACE

25% of Tier 158Traditional TPSWashington Mutual (various)2001 - 2005

Moody’sTreatment

S&PTreatment

Regulatory Treatment

Size($mm)Call DateCouponStructureIssuerIssue Date


50% of Tier 13,000• 22% Premium• $21.25 Conversion

Price • Optionally convertible by holder at

any time

• WM can force conversion after 12/18/12 if stock price exceeds 130% of conversion price

7.750%Optional Convertible Preferred

Washington Mutual

12/17/2007

Basket A (0%)[TPS portion]

100% up to12% of ACE [TPS portion]

25% of Tier 1 [TPS portion]

1,150 [755 TPS]

• Unit consists of trust preferred + warrant

• Exercise price of warrantis initially $32.33 accreting to $50 at expiration date

• WM can force conversion after 5/3/06 if stock price is above $49.33

5.375%PIERS UnitsWashington Mutual

4/24/2001

Moody’s TreatmentS&P Treatment

Regulatory Treatment

Size ($mm)TermsCall/Conversion DateCouponStructureIssuerIssue Date


83

2008 Direct Expense – Long Range Forecast($ in millions)

Retail Bank

Home Loans

Commercial Group

Card Services

Corp./Treasury/Other Total

Compensation & Benefits $1,771 $651 $149 $291 $777 $3,640Occupancy & Equipment 966 132 24 52 703 1,876 Telecomm & Outsourced Info Svcs 111 41 1 154 217 523 Depositor & Oth Retail Bkg Losses 279 0 (0) 0 0 279 Advertising And Promotion 111 15 4 185 105 420 Professional Fees 29 16 3 14 110 172

Postage, Express Mail & Courier 150 34 2 208 4 398 Regulatory Assessments 129 5 10 0 53 197 Office Supplies 17 6 1 3 (53) (26) Travel & Training 27 18 6 6 75 132 Proprietary Mutual Fund Expense 0 0 0 0 0 0 Other Taxes & Licenses 15 10 2 13 7 47 Other Operating Losses, Net 40 19 0 16 (17) 58 Loan Expenses 12 39 6 6 0 64 Credit Card Loan Expenses 0 0 0 117 0 117 Other-Real Estate-Net (0) 0 1 0 (0) 1 Security Services 21 1 0 0 11 33 Contributions (1) 0 0 0 25 25 Outside Printing 52 12 0 0 3 68 Other Outside Services 58 54 4 1 29 147 Other Operating Expense & Oth (9) 45 (1) (0) 29 63 Foreclosed Assets Expense, Net 299 606 1 0 1 907 Amort Of Other Intangibles 43 0 6 75 - 124

Other Noninterest Expense 852 848 39 446 169 2,355 Total 4,118 1,704 220 1,143 2,081 9,266

Memo: Resizing Expense $224 $185 $2 $3 $209 $624


84

Headcount Overview(6/30/2008)

Retail Bank Home Loans Commercial GroupRetail Store Distribution 22,046 Home Loans Support 1,058 Multifamily Lending 281 Relationship & Investing 1,659 Home Loans Production 2,272 Commercial Real Estate 73 Consumer Deposit Pricing 70 Wholesale Channel 598 Commercial Mortgage Lending 103 Retail Marketing 47 Consumer Direct 143 Commercial Treasury Solutions 110 Customer Care / Operations 2,892 Servicing 2,829 Other Commercial Group 6 Enabler Groups 560 FAS 91 257 Support Operations 750 Technology 412 Overhead / Support 1 Total 27,687 Total 7,157 Total 1,323

Card Services Corp. / Treasury / Other WM ConsolidatedCommunications 16 Technology 1,013 Retail Bank 27,687 Credit 117 Community & External Affairs 123 Home Loans 7,157 Executive 4 Finance & Treasury 444 Commercial Group 1,323 Finance 80 Legal 644 Card Services 2,915 Human Resources 31 Communications 55 Corp./ Treasury / Other 4,116 Marketing 383 Enterprise Operations 371 Technology 207 Human Resources 709 Operations 2,077 Enterprise Risk Management 377

Executive 27 Marketing / Ecommerce 353

Total 2,915 Total 4,116 Total 43,198


85

Credit Performance Results

Note: Home Loans SFR Prime includes SFR Prime, Custom and Builder portfolios Subprime Mortgage Channel includes Purchased SMF, Long Beach Mortgage, HEL Subprime, and HEL Purchased portfolios. Home Equity includes HEL and HELOC portfolios; excludes Other Consumer portfolio

(in $ Millions)SFR Prime Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding Portfolio Balance $90,601 $108,003 $112,614 $110,508 $106,929

Total Delinquencies $2,164 $3,086 $4,703 $6,369 $7,988Total Delinquency Rate 2.39% 2.86% 4.18% 5.76% 7.47%Non Performing Loans $1,038 $1,496 $2,358 $3,581 $4,835Non Performing Loan Rate 1.15% 1.39% 2.09% 3.24% 4.52%Net Charge-offs $21 $52 $100 $339 $690Net Charge-off Rate (Qtrly Annualized) 0.09% 0.20% 0.36% 1.22% 2.55%

Subprime Mortgage Channel Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding Portfolio Balance $20,457 $19,993 $18,648 $17,344 $16,052

Total Delinquencies $2,680 $3,495 $3,963 $4,004 $4,044Total Delinquency Rate 13.10% 17.48% 21.25% 23.09% 25.19%Non Performing Loans $1,707 $2,356 $2,721 $2,881 $3,008Non Performing Loan Rate 8.34% 11.78% 14.59% 16.61% 18.74%Net Charge-offs $92 $145 $273 $386 $569Net Charge-off Rate (Qtrly Annualized) 1.79% 2.85% 5.73% 8.70% 13.83%

Home Equity Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding Portfolio Balance $55,776 $53,489 $54,755 $61,234 $60,387

Total Delinquencies $778 $1,154 $1,708 $2,131 $2,416Total Delinquency Rate 1.40% 2.16% 3.12% 3.48% 4.00%Non Performing Loans $378 $533 $835 $1,103 $1,521Non Performing Loan Rate 0.68% 1.00% 1.52% 1.80% 2.52%Net Charge-offs $52 $101 $244 $477 $709Net Charge-off Rate (Qtrly Annualized) 0.38% 0.74% 1.80% 3.12% 4.66%

Quarter-End

Quarter-End

Quarter-End


86

Credit Performance Results(in $ Millions)Card Services Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding (Managed) Portfolio Balance $24,987 $26,227 $27,239 $26,378 $26,430

On Balance sheet Delinquencies $291 $299 $379 $452 $581On Balance sheet Rate 2.93% 3.41% 4.29% 5.03% 5.48%Managed Delinquencies $1,277 $1,503 $1,762 $1,817 $1,864Managed Rate 5.11% 5.73% 6.47% 6.89% 7.05%On Balance Sheet Net Charge-offs $91 $106 $95 $123 $153On Balance Sheet Net Charge-off Rate (Qtrly Annualized) 3.64% 4.36% 4.23% 5.47% 6.31%Managed Net Charge-offs $392 $413 $464 $623 $709Managed Net Charge-off Rate (Qtrly Annualized) 6.40% 6.38% 6.92% 9.33% 10.78%

MFL/CRE Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding Portfolio Balance $35,999 $39,001 $41,126 $42,404 $43,476

Total Delinquencies $190 $280 $233 $326 $329Total Delinquency Rate 0.53% 0.72% 0.57% 0.77% 0.76%Non Performing Loans $101 $151 $168 $217 $256Non Performing Loan Rate 0.28% 0.39% 0.41% 0.51% 0.59%Net Charge-offs $2 $0 $5 $5 $4Net Charge-off Rate (Qtrly Annualized) 0.02% 0.00% 0.05% 0.04% 0.03%

Other Comm./Retail Small Business Jun-07 Sep-07 Dec-07 Mar-08 Jun-08Outstanding Portfolio Balance $2,005 $2,030 $2,031 $2,149 $2,016

Total Delinquencies $84 $77 $91 $93 $124Total Delinquency Rate 4.19% 3.79% 4.48% 4.32% 6.16%Non Performing Loans $50 $40 $38 $40 $69Non Performing Loan Rate 2.50% 1.95% 1.89% 1.86% 3.41%Net Charge-offs $12 $16 $28 $37 $45Net Charge-off Rate (Qtrly Annualized) 2.46% 3.10% 5.61% 6.85% 8.87%

Quarter-End

Quarter-End

Quarter-End

MFL/CRE includes MFL and CRE portfolios; excludes Other Commercial/Retail Small Business


WAMUNYCS\WGL\Full Team WGL 08.doc hortond 21 Sep 2008 11:43 1/12

Project Ocean Working Group List

For updates, please contact: Derek Horton [email protected] 212.902.0128 Updated September 19, 2008


1

Working Group List Washington Mutual

Company/Address Business Phone Home Phone Home Address Executive Office Alan Fishman CEO

Email: [email protected]

Steve Rotella President & COO Asst: Mary O'Rourke

Tel: 206-500-8302 Email: [email protected] Tel: 206-500-8302 Email: [email protected]

Tom Casey CFO Asst: Marita Robbins


Frank Baier Special Assistant to the CEO Asst: Denise Roberts

Tel: 206-500-3336 Fax: 206-377-3021 Email: [email protected] Tel: 206-500-6273 Email: [email protected]

Mob: 206-605-1819

Corporate Strategy & Development

Todd Baker Executive Vice President Asst: Meggan Weir


Mob: 206-849-5734

Sasha Kipkalov Senior Vice President

Tel: 206-500-3567 Email: [email protected]

Mob: 206-465-1058

Eunhee Choi Sumner First Vice President


Mob: 206-372-8057

James Capolongo Vice President


Mob: 206-226-0602


2

Working Group List Washington Mutual

Company/Address Business Phone Home Phone Home Address Corporate Strategy & Development (cont.) Carolyn Holtzen Vice President


Mob: 206-291-8020

Adam Pearson Analyst


Mob: 360-708-2885

Treasury

Robert Williams Senior Vice President & Treasurer


Mob: 206-372-6457

Steve Stearns First Vice President


Mob: 206-779-9740

Peter Freilinger Senior Vice President


Mob: 206-399-8557

Vicky Wu First Vice President


Mob: 206-302-9862

Credit John McMurray Senior Vice President & CCO


Mob: 703-304-7464

Legal Carey Brennan Senior Vice President & Deputy CLO


Mob: 206-914-6412

Chad Smith Assistant GC, Team Lead


Mob: 206-321-0187

Chris Bellavia First Vice President, Asst. GC


Mob: 206-245-3778


3

Working Group List Goldman, Sachs & Co.

Company/Address Business Phone Home Phone Home Address Investment Banking Division John Mahoney Managing Director

Tel: 212-902-9963 Fax: 212-357-0926 Email: [email protected]

Tel: 203-869-0370 Mob: 914-260-6470 Fax: 203-869-6677

630 Park Avenue #4A New York, NY 10021

Todd Owens Managing Director


Tel: 310-656-0517 Mob: 310-560-8044 Fax: 310-656-0518

616 18th Street Santa Monica, CA 90402

Samir Shah Vice President


Mob: 917-846-5782 10501 Wilshire Blvd, #1601 Los Angeles, CA 90024

Ankur Vyas Associate


Mob: 704-649-2693 Fax: 775-254-6182

240 E. 86th St. # 6G New York, NY 10028

Anand Krishnamurthy Analyst


Mob: 732-616-7235 2 Gold Street #1810 New York, NY 10027

Derek Horton Analyst


Mob: 469-261-4815 523 E. 14th St. #M-D New York, NY 10009


4


Company/Address Business Phone Home Phone Home Address Americas Financing Group Scott Romanoff Managing Director


Mob: 917-859-2623 Mob: 732-616-7235

257 Central Park West # 10A New York, NY 10024

Huntley Garriott Managing Director

Tel: 212- 902-6314 Fax: 646-769-7044 Email: huntley.garriott @gs.com

Mob: 917-374-2518

655 Sixth Avenue 2J New York, NY 10010

Jim Mannoia Vice President


Tel: 917-650-0012

375 South End Ave. #15U New York, NY 10280

Hafize Gaye Erkan Associate

Tel: 212-902-8227 Email: hafize.erkan @gs.com

Tel: 609.240.3944

Tad Smith Associate


Mob: 917-843-1364

Jehan Ilahi Associate


Mob: 617-697-5397 355 South End Avenue #10K New York, NY 10280

Andre D’Souza Analyst

Tel: 212-902-9162 Fax: 917-977-3556 Email: andre.d’[email protected]

Matthew Cannan Analyst


Mob: 614-403-5180


5


Company/Address Business Phone Home Phone Home Address Equity Capital Markets Stuart Bernstein Managing Director


Tel: 203-637-5080 Mob: 203-561-9874 Fax: 212-428-1107

100 Club Road Riverside, CT 06878

Erich Bluhm Managing Director


Tel: 914-481-4969 Mob: 646-207-7312

26 Lawrence Lane Harrison, NY 10528

Lyla Bibi Associate


Mob: 914-672-4220 245 East 54th Street, #3M New York, NY 10022

Jamie Meltzer Associate


Mob: 610-547-9973 145 East 16th Street, #8F New York, NY 10003

David Bauer Analyst


Mob: 732-778-0220 347 E 19th St #3 New York NY 10003

Equity Derivatives

Jason Lee Vice President


Tel: 212-386-7825 Mob: 917-699-4037

66 West 38th Street, #9H New York, NY 10018

Jared Kramer Associate


Mob: 603-475-5583 96 Crotona Ave, 2nd Floor Harrison, NY 10528

Bryan Goldstein Analyst


Mob: 732-614-8358 378 3rd Avenue #5B New York, NY 10016


6


Company/Address Business Phone Home Phone Home Address Credit Risk Management

Carey Halio Vice President


Tel: 646-678-3747 Mob: 917-304-0643

Nithya Navaratnam Associate


Mob: 917-304-0643

FICC SPSG Michelle Gill Managing Director


Tel: 212-724-2072 Mob: 917-992-4076

Michael Dente Vice President


Mob: 203-246-6156

Barrie Ribet Associate


Mob: 267-257-6031

Charles Griffin Analyst


Mob: 917-434-2024

Jon Puckhaber Tel: 212-902-4668 Fax: 646-769-7767 Email: [email protected]

Mob: 603-738-6028


7

Working Group List Morgan Stanley

Company/Address Business Phone Home Phone Home Address Investment Banking – FIG Kirk Wilson Vice Chairman


Mob: 646-645-5482

Mal Durkee Managing Director


Mob: 917-969-0011

John Esposito Managing Director


Mob: 917-513-9449

Aron Natale Vice President


Mob: 646-280-6561

Sebastiano Visentini Vice President


Andrew Deringer Associate

Tel: 212 761-7027 Email: [email protected]

Diego Rojas Paez Associate


Mob: 917-328-3240

Theo Farge Analyst


Mob: 919-454-6525


8


Company/Address Business Phone Home Phone Home Address Structured Solutions Group

Matthew Salvner Managing Director


Mob: 917-445-5633

Warren Friend Managing Director


Mob: 917-520-8213

Valerie Kay Managing Director


Mob: 646-256-3724

Kevin Ryan Managing Director


Mob: 917-847-8584

Lydia Foo Executive Director


Mob: 626-644-9046

Daniel Chen Vice President


Mob: 917-455-7831

Parichart Thepvongs Vice President


Mob: 917-548-6224

Michael Carver Analyst


Mob: 860-334-4315


9


Company/Address Business Phone Home Phone Home Address Fixed Income Capital Markets Matthew Diczok Executive Director


Mob: 212-961-7123

Christopher Chan Analyst


Mob: 603-667-5139

Equity Capital Markets Taylor Wright ECM FIG Coverage Officer Asst: Jan Ellis


Mob: 908-656-5443

John Tyree Managing Director Asst: Carol Palmer


Mob: 646-641-0676

Serkan Savasoglu Executive Director


Mob: 646-515-6730

Sarah McKinnon Analyst


Mob: 214-808-4608


10

Working Group List Simpson Thacher & Bartlett

Company/Address Business Phone Home Phone Home Address Corporate Lee Meyerson Partner Asst: Marjorie Grant

Tel: 212-455-3675 Fax: 212-455-2502 Email: [email protected] Tel: 212-455-2657

Tel: 203-966-6852 Fax: 203-966-6858 Mob: 917-496-5947

88 Four Winds Lane New Canaan, CT 06840

Maripat Alpuche Partner

Tel: 212- 455-3971 Fax: 212-455-2502 Email: [email protected]

Tel: 914-238-4823 Mob: 917-843-9631

45 Carolyn Place Chappaqua, NY 10514

Elizabeth Cooper Associate


Tel: 212-228-9588 Mob: 646-295-9509

260 Park Avenue South, Apt. 3J New York, NY 10010

Mark Bussey Associate


Mob: 608-628-4701 31 East 93rd Street New York, NY 10128

Elsa Wang Associate


Mob: 646-271-7369 250 East 73rd Street, Apt. 2A New York, NY 10021


11

Working Group List Simpson Thacher & Bartlett

Company/Address Business Phone Home Phone Home Address ERISA Andrea Wahlquist Partner


300 E. 77th St., #10C New York, NY 10075

Aimee Adler Associate


Mob: 917-843-9667 195 Adams Street, Apt. 14J Brooklyn, NY 11201

Credit David Eisenberg Partner


Mob: 917-834-1026 28 Linden Ave. Larchmont, NY 10538

Brian Steinhardt Partner


Mob: 917-494-9439 60 West 66th Street, Apt # 34E New York, NY 10023

Chris Bell Associate


Mob: 917-903-8387 14 Schermerhorn Street, Apt. 3 Brooklyn, NY 11201

Tax Steve Todrys Administrative Partner


Mob: 917-592-9995 180 East End Avenue, Apt. 6H New York, NY 10128

Sean Austin Associate


Mob: 917-664-4311 350 Sharon Park Drive, #L-211 Menlo Park, CA 94025



DRAFT

1






DRAFT

2

Table of Contents










DRAFT

3




DRAFT

4

Overview of March / April Process

Initial Contact (March 3-7) — JPMorgan — Wells Fargo — Banco Santander — Barclays — BBVA

Indications of Interest / Initial Management Meetings (March 10-14)

— JP Morgan, Wells Fargo

Second Round Management Meetings / Final Bids (March 17 – April 1) — JP Morgan – Offered $5.00 / share with upside of $3.00 / share via a contingent value security

if the low end of losses in home equity portfolio (8.5% cumulative losses on $60.6bn home equity portfolio) proved to be correct

− Based on current assumptions of losses in home equity portfolio, aforementioned contingent value security would be worth $0

— Wells Fargo declined second round meetings due to concerns over mortgage portfolio and geographic overlap in higher-risk states (i.e. California)



DRAFT

5

M&A Process Preliminary Timeline

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Finalize Management Presentation

Finalize Data Room

Contact Potential PartnersConfidentiality Agreement

Management Meetings

Preliminary Indications of Interest

Due Diligence

Negotiate Terms

Announce Transaction



DRAFT

6

Potential Strategic Partners / Acquirers of WaMu

Name Market Cap

($ in bn) 1-Yr Price

Performance 2009 P/E

Current Price/TBV

TCE/ TA

Tier 1 RatioCommentary

CEO: Jamie Dimon

$141.1 (11.7) % 12.3 x 1.8 x 4.5 % 9.1 % Relatively well-positioned to execute

a large transaction Unclear how participation in April

sale process will affect posture

CEO: Alfredo Sáenz Abad

113.9 (13.9) 7.6 2.6 3.5 7.7 Well-positioned to execute a large

transaction Considering U.S. strategic options

CEO: John Stumpf

99.8 (13.8) 12.8 3.0 5.1 8.2

Maybe reluctant to substantially increase mortgage and MSR exposure

Declined to proceed during the April sale process due to loan portfolio concerns

Has demonstrated interest in multi-family assets and California branches/deposits

CEO: Francisco González Rodríguez

67.1 (34.6) 6.7 2.6 4.7 7.9 Continued interest in growing U.S.

franchise WM footprint highly complementary

to BBVA’s targeted Sun Belt markets

CEO: John Varley

57.2 (47.2) 6.7 1.2 1.5 9.1 Focused on improving financial

performance and investor credibility; however, actively considering U.S. opportunities

CEO: Richard Davis

54.8 (1.5) 12.8 5.1 4.9 8.5

Unlikely to pursue transformative deal given conservative credit culture

Strong financial stability Might have an interest in certain

assets

CEO: Yoshifumi Nishikawa

50.3 (29.8) 11.3 1.7 2.4 6.7 Proactively considering U.S.

opportunities; however, unlikely to move quickly

CEO: W. Edmund Clark

47.8 (11.0) 10.0 4.4 2.4 9.1 Recently completed acquisition of

Commerce may limit near-term appetite



DRAFT

7

Transaction Considerations

Consideration Comment

Mark-to-Market

Mark on portfolio at closing will be the primary driver for sizing the capital requirement of the acquiring institutions

Likely to be calculated based on a discounted cash flow methodology (expected prepayments, interest, losses, etc) as level 3 assets

BAC / CFC provides one recent data point on “accountant-approved” methodology

Form of Consideration

Contingent value security may be a form of consideration for potential acquirors Likely to be linked to performance of some subset of higher risk residential real

estate portfolio (or all of it) — JPMorgan linked to low-end of loss range on home equity portfolio to obtain

full value of CVS

Capturing Discount in Debt / Preferred

WaMu’s debt and preferred outstandings are currently trading at a significant discount to par — Aggregate discount of approximately $10.0 billion on $24.0 billion liability /

preferred base Capturing this discount in some fashion prior to executing a strategic transaction

would potentially improve the ability to pay of a potential partner due to decreased goodwill creation / capital needed

Transaction contingent on exchange / tender of debt / preferred may also be structured



DRAFT

8




DRAFT

9

Cumulative Loss Roll-Forward Company High Stress Case vs. Moody’s Stress Case ($ in millions)

Company High Stress (April 2008) As of Q1 As of Q2 Estimated as of Q4

Mar Balance

Cum Loss (%)


Jun Balance

Expected Cum Loss


Losses Left

RemainingCum Loss

SFR: Option ARM $ 55,846 9.9% $ 5,552 $ 466 $ 52,886 $ 5,086 9.1% $ 560 $ 672 $ 3,854 6.9%SFR: Other 52,574 2.6% 1,378 221 52,141 1,157 2.2% 265 318 575 1.1%Home Equity: 1st Lien 16,739 3.3% 557 50 16,922 507 3.0% 60 72 376 2.2%Home Equity: 2nd Lien 44,495 16.6% 7,383 659 43,464 6,724 15.1% 791 949 4,983 11.2%Subprime 17,344 22.5% 3,906 569 16,052 3,337 19.2% 683 819 1,835 10.6%Subtotal Residential $ 186,998 10.0% $ 18,776 $ 1,965 $ 181,465 $ 16,811 9.0% $ 2,358 $ 2,830 $ 11,623 6.2%Card Services 8,989 10.0% 899 153 10,589 746 8.3% 184 220 342 3.8%Commercial & Retail Smal 46,827 2.0% 937 53 47,573 884 1.9% 64 76 744 1.6%Total $ 242,814 $ 20,611 $ 2,171 $ 239,627 $ 18,440 $ 2,605 $ 3,126 $ 12,709

Moody’s Stress (July 2008) As of Q1 As of Q2 Estimated as of Q4

Mar Balance

Cum Loss (%)


Jun Balance

Expected Cum Loss


Losses Left

RemainingCum Loss

SFR: Option ARM $ 55,846 17.7% $ 9,885 $ 466 $ 52,886 $ 9,418 16.9% $ 560 $ 672 $ 8,187 14.7%SFR: Other 52,574 2.9% 1,525 221 52,141 1,304 2.5% 265 318 722 1.4%Home Equity: 1st Lien 16,739 3.8% 636 58 16,922 578 3.5% 70 84 424 2.5%Home Equity: 2nd Lien 44,495 16.0% 7,119 651 43,464 6,468 14.5% 781 937 4,750 10.7%Subprime 17,344 26.2% 4,545 569 16,052 3,976 22.9% 683 819 2,474 14.3%Subtotal Residential $ 186,998 12.7% $ 23,710 $ 1,965 $ 181,465 $ 21,745 11.6% $ 2,358 $ 2,830 $ 16,557 8.9%Card Services 8,989 20.0% 1,798 153 10,589 1,645 18.3% 184 220 1,241 13.8%Commercial & Retail Smal 46,827 2.0% 937 53 47,573 884 1.9% 64 76 744 1.6%Total $ 242,814 $ 26,444 $ 2,171 $ 239,627 $ 24,273 $ 2,605 $ 3,126 $ 18,542
