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WAMU Investigation Question 2: Separate Return State Amounts

WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2006 Original PA -308.429 308.429 0 12.17.07 0 0
WMB WMB & Subs WMBFA 2 2007 Original PA -2.161.335 2.161.335 0 11.10.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended PA, Phila 187.259 -187.259 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2002 Amended PA, Phila -44.573 44.573 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2003 Amended PA, Phila -128.159 128.159 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2004 Amended PA, Phila 74.979 -74.979 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2004 Original PA, Phila -310.261 310.261 0 12.12.05 0 0
WMB WMB & Subs WMBFA 2 2007 Original PA, Randor 0 10 0 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended RI 519 0 0 01.00.00 0 519
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended RI 3.328 0 0 01.00.00 0 3.328
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended RI 14.960 0 0 01.00.00 0 14.960
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended RI -9.184 0 0 01.00.00 -9.184 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original RI -12.609 12.609 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original RI -5.500 5.500 0 04.06.09 0 0
WMB WMB & Subs Seafair Insurance Agency corp 324 2005 Original RI -1.000 0 0 01.00.00 -1.000 0
WMB WMB & Subs Seafair Insurance Agency corp 324 2007 Original RI -600 600 0 01.01.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended RI 7.444 -7.444 0 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2002 Amended RI -173.376 173.376 0 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2003 Amended RI -188.022 188.022 569 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2004 Amended RI -350.469 350.469 0 12.06.05 0 0
WMB WMB & Subs Dime NJ Agency, Inc. 334 2004 Original SC -25 25 0 01.01.05 0 0
WMB WMB & Subs HCP Properties, Inc. 241 2007 Original SC -25 25 0 01.01.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended SC 948 0 0 01.00.00 0 948
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended SC 2.587 0 0 01.00.00 0 2.587
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended SC 791 0 0 01.00.00 0 791
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended SC -17.672 17.672 2.774 03.03.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original SC -46.057 46.057 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original SC -10.950 10.950 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended SC 9.251 0 0 01.00.00 0 9.251
WMB WMB & Subs WMBFA 2 2002 Amended 1st SC -212.124 212.124 27.801 12.04.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd SC 31.773 0 0 01.00.00 0 31.773
WMB WMB & Subs WMBFA 2 2003 Amended SC -404.607 404.607 87.237 06.09.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original SC -225.996 225.996 0 08.24.06 0 0
WMB WMB & Subs ECP Properties, Inc. 278 2004 Original TX -12.306 12.306 0 01.01.05 0 0
WMB WMB & Subs ECP Properties, Inc. 278 2006 Original TX -2.049 2.049 0 01.01.07 0 0
WMB WMB & Subs HCP Properties of Kansas, Inc. 266 2005 Original TX -5.337 5.337 0 07.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended TX 12.592 0 0 01.00.00 0 12.592
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended TX 42.211 0 0 01.00.00 0 42.211
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended TX -30.911 0 0 01.00.00 -30.911 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended TX -225.828 225.828 27.734 07.01.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original TX -920.771 920.771 0 12.06.05 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original TX -58.016 58.016 0 12.11.06 0 0
WMB WMB & Subs Providian Bancorp Services 447 2005 Original TX -28.276 28.276 0 01.17.07 0 0
WMB WMB & Subs Providian Bancorp Services 447 2006 Original TX -10.000 10.000 117 01.18.08 0 0
WMB WMB & Subs Providian Leasing Corporation 449 2005 Original TX -628 628 0 01.01.07 0 0
WMB WMB & Subs Providian Leasing Corporation 449 2006 Original TX -3.000 3.000 0 01.01.07 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2004 Original TX -3.323 3.323 0 03.16.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2005 Original TX -3.072 3.072 0 10.17.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2006 Original TX -2.307 2.307 0 01.01.07 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2004 Original TX -884 884 0 01.01.05 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2005 Original TX -1.498 1.498 0 10.25.06 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original TX -1.400 1.400 0 11.15.07 0 0
WMB WMB & Subs WMBFA 2 1998 Amended TX -8.964 8.964 0 09.22.08 0 0
WMB WMI & Subs WMBFA 2 1999 Amended TX 2.741 -2.741 0 09.22.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended TX 18.144 -18.144 -9.446 08.05.08 0 0
Page 7 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2002 Amended TX -119.054 119.054 13.062 08.05.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended TX -198.959 198.959 27.587 08.05.08 0 0
WMB WMB & Subs WMBFA 2 2005 Original TX -9.217 9.217 0 12.01.06 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2005 Original TX -2.832 2.832 0 09.27.06 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2006 Original TX -1.500 1.500 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended VA 4.342 -4.342 0 12.20.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended VA 18.706 -15.595 0 12.20.07 0 3111
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended VA -3.111 2.184 0 11.12.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended VA -90.611 0 0 01.00.00 -90.611 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original VA -156.797 156.792 0 12.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original VA -36.500 36.500 320 12.19.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended VA 2.456 -2.456 -7.456 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2002 Amended VA -387.076 395.533 167.272 12.09.05 0 0
WMB WMB & Subs WMBFA 2 2003 Amended VA -1.770.066 0 0 01.00.00 -1.770.066 0
WMB WMB & Subs WMBFA 2 2004 Original VA -945.000 945.000 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended VT 39 0 0 01.00.00 0 39
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended VT 35 0 0 01.00.00 0 35
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended VT 105 0 0 01.00.00 0 105
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended VT -434 0 0 01.00.00 -434 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original VT -6.811 9.436 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original VT -250 250 0 01.01.07 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2004 Original VT -250 250 0 01.01.05 0 0
WMB WMB & Subs California Reconveyance Company 111 2006 Original WI -31.954 31.979 0 01.01.07 0 0
WMB WMB & Subs California Reconveyance Company 111 2007 Original WI -30.000 30.000 0 09.09.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended WI 117 0 0 01/00/00 0 117
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended WI 896 0 0 01.00.00 0 896
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended WI -1.482 0 0 01.00.00 -1.482 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended WI -22.444 22.444 7.444 04.07.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original WI -5.014 5.014 481 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original WI -8.975 8.945 1.156 01.01.08 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2005 Original WI 0 25 0 10.17.08 0 0
WMB WMB & Subs WaMu Insurance Services 233 2007 Original WI 0 25 0 09.24.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended WI 2.108 -2.108 -13.051 02.04.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended WI -1.282.484 0 0 01.00.00 -1.282.484 0
WMB WMB & Subs WMBFA 2 2003 Amended WI -2.418.666 0 0 01.00.00 -2.418.666 0
WMB WMB & Subs WMBFA 2 2004 Original WI -1.299.975 1.299.975 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended WV -294 294 0 11.26.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended WV -2.838 2.838 0 11.26.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original WV -3.113 3.113 0 01.01.07 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2005 Original WV -225 225 0 02.01.07 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2007 Original WV -175 175 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st WV -72.716 72.716 0 12.05.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd WV 10.201 -10.201 0 07.08.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended WV -398.557 398.557 10.161 07.08.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original WV -142.051 142.051 0 12.28.08 0 0
-182.707.489 110.721.934 -252.532 -73.709.753 1.714.854
Total Separate Return State Refunds Outstanding -71.994.898
Page 8 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended AL -15.013 0 0 01.00.00 -15.013 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended AL -10.970 0 0 01.00.00 -10.970 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original AL -15.781 8.524 740 04.08.08 -7.257 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original AL -9.000 9.000 20 01.23.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended AL -24.217 24.217 0 09.08.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended AL -45.308 0 0 01.00.00 -45.308 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original AL - PSA -10.990 0 0 01.00.00 -10.990 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended AR 1.221 -1.221 645 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended AR 8.429 -8.429 3.607 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended AR 23.546 -23.546 8.109 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended AR -14.895 0 0 01.00.00 -14.895 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original AR -4.500 4.500 0 11.27.07 0 0
WMB WMB & Subs Providian Bancorp Services 447 2005 Original AR -2.354 2.354 0 11.20.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st AR -53.704 53.704 15.699 10.17.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd AR 7.533 -7.533 -3.455 12.14.07 0 0
WMB WMB & Subs WMBFA 2 2003 Amended AR -67.090 67.090 21.248 12.14.07 0 0
WMB WMB & Subs WMBFA 2 2004 Original AR -43.000 43.000 0 01.01.05 0 0
WMB WMB & Subs HCP Properties, Inc. 241 2008 Original CT -250 250 0 10.20.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended CT 919 0 0 01.00.00 0 919
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended CT 3.531 0 0 01.00.00 0 3.531
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended CT -25.579 4.662 2.172 02.04.09 -20.917 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended CT -86.949 0 0 01.00.00 -86.949 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original CT -117 117 0 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original CT -92.707 92.707 0 10.25.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original CT -44.250 44.250 0 02.23.09 0 0
WMB WMB & Subs WMBFA 2 1998 Amended CT -100.402 0 0 01.00.00 -100.402 0
WMB WMB & Subs WMBFA 2 1999 Amended CT 95.607 0 0 01.00.00 0 95.607
WMB WMB & Subs WMBFA 2 2000 Amended CT -99.148 0 0 01.00.00 -99.148 0
WMB WMB & Subs WMBFA 2 2001 Amended CT 172.628 0 0 01.00.00 0 172.628
WMB WMB & Subs WMBFA 2 2002 Amended CT -1.916.207 0 0 01.00.00 -1.916.207 0
WMB WMB & Subs WMBFA 2 2003 Amended CT -4.223.062 0 0 01.00.00 -4.223.062 0
WMB WMB & Subs WMBFA 2 2004 Original CT -1.661 1.661 0 07.24.06 0 0
WMB WMB & Subs WMBFA 2 2005 Original CT -2.648.280 2.648.280 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2006 Original CT -21.650 0 0 01.00.00 -21.650 0
WMB WMB & Subs WMBFA 2 2007 Original CT -11.750 11.750 0 11.24.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended DC 14.810 0 0 01.00.00 14.810 0
WMB WMB & Subs WMBFA 2 2002 Amended DC -167.000 0 0 01.00.00 -167.000 0
WMB WMB & Subs WMBFA 2 2003 Amended DC -439.587 0 0 01.00.00 -439.587 0
WMB WMB & Subs WMBFA 2 2004 Original DC -260.853 0 0 01.00.00 -260.853 0
WMB WMB & Subs WMBFA 2 2001 Amended DE 10.399 0 0 01.00.00 0 10.399
WMB WMB & Subs WMBFA 2 2002 Amended 1st DE -135.583 135.583 0 06.20.07 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd DE 19.020 0 0 01.00.00 0 19.020
WMB WMB & Subs WMBFA 2 2003 Amended DE -303.943 303.943 31.356 04.15.08 0 0
WMB WMB & Subs WMBFA 2 2005 Original DE -150.000 150.000 0 01.01.07 0 0
WMB WMI & Subs ACD3 248 2005 Original FL -126.125 126.000 0 09.21.06 0 0
WMB WMI & Subs ACD3 260 2005 Original FL -50 50 0 09.21.06 0 0
WMB WMI & Subs ACD5 248 2006 Original FL -10.000 10.000 0 01.01.07 0 0
WMB WMI & Subs Ahmanson Residential 4 261 2005 Original FL -125 125 0 09.21.06 0 0
WMB WMB & Subs HMP Properties, Inc. 279 2005 Original FL -8.943 8.943 0 08.28.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended FL 24.130 -24.130 -12.435 09.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended FL 148.017 -148.017 -55.263 09.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended FL 268.621 -268.621 -89.223 09.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended FL -272.501 0 0 01.00.00 -272.501 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original FL -357.633 357.633 0 10.06.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original FL -109.500 109.500 0 01.01.07 0 0
Page 1 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs Sunpoint Financial Corp 104 2006 Original FL -1.748 1.640 0 01.01.07 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2004 Original FL -100.000 100.000 0 01.01.05 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2005 Original FL -26.542 26.542 0 10.02.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2007 Original FL -15.500 15.500 0 10.01.08 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Amended FL -20.129 20.129 0 05.07.09 0 0
WMB WMB & Subs WMBFA 2 1998 Amended FL -332.574 332.574 0 08.15.08 0 0
WMB WMB & Subs WMBFA 2 1999 Amended FL 324.766 -324.766 0 08.15.08 0 0
WMB WMB & Subs WMBFA 2 2000 Amended FL -403.566 403.566 0 08.15.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended FL -495.008 495.008 0 01.22.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended FL 1.109.655 -1.109.655 -181.015 01.22.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended FL -6.665.409 6.665.409 193.021 01.22.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original FL -8.260.000 8.260.000 0 11.05.05 0 0
WMB WMB & Subs WMBFA 2 2005 Original FL -500.000 500.000 0 10.24.06 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2005 Original FL -12.087 12.087 0 11.01.06 0 0
WMB WMB & Subs HCP Properties, Inc. 241 2006 Original GA -4.020 4.010 0 01.01.07 0 0
WMB WMB & Subs HCP Properties, Inc. 241 2007 Original GA -20 20 0 01.01.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended GA 2.235 1.609 0 03.18.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended GA 22.142 0 0 01.00.00 0 22.142
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended GA -125.209 125.209 52.588 03.18.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended GA -265.004 265.004 79.513 03.18.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original GA -851.250 652.760 0 04.20.07 -198.490 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original GA -80.000 0 0 01.00.00 -80.000 0
WMB WMB & Subs Providian Leasing Corporation 449 2005 Original GA -1.994 1.984 0 01.01.07 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2007 Original GA -1.475 0 0 01.00.00 -1.475 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2005 Original GA -550 0 0 01.00.00 -550 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original GA -660 0 0 01.00.00 -660 0
WMB WMB & Subs WMBFA 2 1998 Amended GA -2.213 0 0 01.00.00 -2.213 0
WMB WMB & Subs WMBFA 2 1999 Amended GA 19.548 0 0 01.00.00 0 19.548
WMB WMB & Subs WMBFA 2 2000 Amended GA 7.831 0 0 01.00.00 0 7.831
WMB WMB & Subs WMBFA 2 2001 Amended GA 75.346 0 0 01.00.00 0 75.346
WMB WMB & Subs WMBFA 2 2002 Amended GA -1.703.808 0 0 01.00.00 -1.703.808 0
WMB WMB & Subs WMBFA 2 2003 Amended GA -2.249.779 0 0 01.00.00 -2.249.779 0
WMB WMB & Subs WMBFA 2 2004 Original GA -1.335.944 1.335.944 0 11.02.05 0 0
WMB WMB & Subs WMBFA 2 2007 Original GA -4.989 0 0 01.00.00 -4.989 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2004 Original GA -20 0 0 01.00.00 -20 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2005 Original GA -762 0 0 01.00.00 -762 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended HI 57.293 -57.293 0 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended IA 2.735 -2.735 -1.578 12.14.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended IA 5.342 -5.342 -1.912 12.14.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended IA -1.470 1.470 384 08.06.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended IA -23.410 23.410 157 02.13.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original IA -18.187 18.187 273 01.23.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original IA -6.000 6.000 48 04.14.09 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st IA -59.489 59.489 9.994 06.16.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd IA 8.917 -8.917 0 01.30.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended IA -73.811 73.811 15.500 01.30.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original IA -30.000 30.000 0 01.01.05 0 0
WMB WMB & Subs WMB & Subs 70 1998 Amended IN -7.567 0 0 01.00.00 -7.567 0
WMB WMB & Subs WMB & Subs 70 1999 Amended IN 19.008 0 0 01.00.00 0 19.008
WMB WMB & Subs WMB & Subs 70 2000 Amended IN -14.275 0 0 01.00.00 -14.275 0
WMB WMB & Subs WMB & Subs 70 2001 Amended 1st IN 33.300 0 0 01.00.00 0 33.300
WMB WMB & Subs WMB & Subs 70 2001 Amended 2nd IN 33.300 0 0 01.00.00 0 33.300
WMB WMB & Subs WMB & Subs 70 2002 Amended 1st IN -569.714 569.714 2.167 11.29.06 0 0
WMB WMB & Subs WMB & Subs 70 2002 Amended 2nd IN -476.491 476.491 -9.886 09.10.08 0 0
WMB WMB & Subs WMB & Subs 70 2003 Amended IN -905.306 905.306 0 09.10.08 0 0
Page 2 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMB & Subs 70 2004 Original IN -1.137.376 1.137.376 9.722 03.16.06 0 0
WMB WMB & Subs WMB & Subs 70 2005 Original IN -870.000 870.000 10.227 05.07.07 0 0
WMB WMB & Subs WMB & Subs 70 2006 Original IN -310.000 310.000 0 02.05.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended KS 2.520 -2.520 0 12.14.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original KS -42.712 42.712 549 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original KS -1.000 1.000 0 01.03.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended KS 660 -660 -61 06.09.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st KS -44.687 44.687 926 08.16.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd KS 1.311 -1.311 -926 06.09.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended KS -30.973 30.973 995 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2004 Original KS -75.038 75.038 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended KY 542 -542 0 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended KY 2.556 -2.556 0 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended KY 52.325 -52.325 10.462 08.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended KY -35.038 35.038 5.086 12.03.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original KY -106.553 106.553 2.323 07.16.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original KY -37.286 37.286 2.176 12.03.08 0 0
WMB WMB & Subs Providian Bancorp Services 447 2006 Original KY -5.395 5.395 212 01.01.08 0 0
WMB WMB & Subs Providian Leasing Corporation 449 2006 Original KY -4.650 4.650 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 2002 Amended KY, Boone County -624 624 0 11.21.07 0 0
WMB WMB & Subs WMBFA 2 2003 Amended KY, Boone County -836 836 16 11.21.07 0 0
WMB WMB & Subs Providian Bancorp Services 447 2005 Original KY, Louisville -1.971 1.971 479 03.29.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended LA 29.470 0 0 01.00.00 0 29.470
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended LA 8.897 0 0 01.00.00 0 8.897
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended LA -11.513 11.513 1.697 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original LA -42.990 42.990 0 01.01.07 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2007 Original LA 0 0 0 01.00.00 0 0
WMB WMB & Subs WM Home Loans, Inc. 315 2001 Original LA -13 13 0 10.23.08 0 0
WMB WMB & Subs WM Home Loans, Inc. 315 2003 Original LA -17 17 0 10.23.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended MA 14.472 -14.472 -7.168 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended MA 57.614 -57.614 -22.858 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended MA -2.868 2.868 8 11.26.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended MA -90.747 0 0 01.00.00 -90.747 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original MA -295.310 295.310 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original MA -58.044 58.044 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 1998 Amended MA -118.373 0 0 01.00.00 -118.373 0
WMB WMB & Subs WMBFA 2 1999 Amended MA 82.112 0 0 01.00.00 0 82.112
WMB WMB & Subs WMBFA 2 2000 Amended MA -146.785 0 0 01.00.00 -146.785 0
WMB WMB & Subs WMBFA 2 2001 Amended MA 230.838 0 0 01.00.00 0 230.838
WMB WMB & Subs WMBFA 2 2002 Amended MA -2.453.170 0 0 01.00.00 -2.453.170 0
WMB WMB & Subs WMBFA 2 2003 Amended MA -3.704.393 0 0 01.00.00 -3.704.393 0
WMB WMB & Subs WMBFA 2 2004 Amended MA -13.732 0 0 01.00.00 -13.732 0
WMB WMB & Subs WMBFA 2 2005 Original MA -4.899.321 4.868.667 0 04.11.06 -30.654 0
WMB WMI & Subs Ahmanson Residential Development 247 2005 Original MD -500 500 0 10.11.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended MD 3.633 -3.633 0 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended MD 17.733 -17.733 0 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended MD -4.122 4.122 0 10.24.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended MD -108.417 108.417 14.917 01.09.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original MD -97.105 97.105 0 11.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original MD -45.500 45.500 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 1998 Amended MD -35.081 35.081 0 07.18.08 0 0
WMB WMB & Subs WMBFA 2 1999 Amended MD 63.130 -63.130 0 07.18.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended MD 82.140 0 0 01.00.00 0 82.140
WMB WMB & Subs WMBFA 2 2002 Amended MD -1.131.389 1.016.940 540 12.28.07 -114.449 0
WMB WMB & Subs WMBFA 2 2003 Amended MD -1.753.535 1.766.377 119.999 12.28.07 0 0
Page 3 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2004 Amended MD -20.658 0 0 01.00.00 -20.658 0
WMB WMB & Subs WMBFA 2 2005 Original MD -898.421 898.421 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended MI 806 -806 0 11.20.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended MI 8.560 -8.560 0 11.20.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended MI -1.453 1.453 0 11.20.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended MI -17.372 17.372 0 12.31.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original MI -85.096 85.096 297 03.03.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original MI -27.000 27.000 0 07.09.09 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2005 Original MI -150 150 0 02.14.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended MI 24.812 -24.812 0 02.18.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended MI -332.542 332.542 2.078 02.18.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended MI -577.023 577.023 3.917 02.18.08 0 0
WMB WMB & Subs WMBFA 2 2004 Amended MI -60.698 0 0 01.00.00 -60.698 0
WMB WMB & Subs WMBFA 2 2005 Original MI -360.988 361.505 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2006 Original MI -508.724 508.724 0 11.19.07 0 0
WMB WMB & Subs WMBFA 2 2007 Original MI -396.000 396.000 0 01.27.09 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended MO 4.480 -4.480 -940 06.27.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended MO 16.021 -16.024 -7.051 06.27.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended MO -19.343 19.343 0 12.15.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended MO -34.638 34.638 0 12.15.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original MO -43.920 43.920 0 03.16.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original MO -65.297 65.249 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original MO -21.000 30.491 0 02.12.08 0 0
WMB WMB & Subs WMBFA 2 1998 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 1999 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2000 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2001 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2002 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2003 Amended MO 0 0 0 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended MS 167.560 -167.560 -125.294 08.12.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended MS 4.237 -4.237 -2.627 08.12.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended MS 425 -425 -213 08.12.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original MS -40.975 40.975 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st MS -10.414 10.414 0 10.25.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd MS -580 580 0 11.06.07 0 0
WMB WMB & Subs WMBFA 2 2003 Amended MS -15.683 15.683 0 11.06.07 0 0
WMB WMB & Subs WMBFA 2 2004 Original MS -38.002 38.002 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2006 Original MS -1.075 1.075 0 01.23.08 0 0
WMB WMB & Subs HCP Properties of North Carolina 378 2005 Original NC -16.823 16.823 693 01.01.08 0 0
WMB WMB & Subs HCP Properties of North Carolina 378 2006 Original NC -1.352 1.352 82 03.06.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended NC 4.156 0 0 01.00.00 0 4.156
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended NC 19.039 0 0 01.00.00 0 19.039
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended NC -5.851 5.851 0 03.26.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended NC -56.283 0 0 01.00.00 -56.283 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original NC -148.439 0 0 01.00.00 -148.439 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original NC -40.500 0 0 01.00.00 -40.500 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original NC -620 0 0 01.00.00 -620 0
WMB WMB & Subs WMBFA 2 1998 Amended NC -15.710 0 0 01.00.00 -15.710 0
WMB WMB & Subs WMBFA 2 1999 Amended NC 17.835 0 0 01.00.00 0 17.835
WMB WMB & Subs WMBFA 2 2000 Amended NC -24.083 0 0 01.00.00 -24.083 0
WMB WMB & Subs WMBFA 2 2001 Amended NC 28.639 0 -24.822 01.00.00 0 53.461
WMB WMB & Subs WMBFA 2 2002 Amended NC -661.386 0 0 01.00.00 -661.386 0
WMB WMB & Subs WMBFA 2 2003 Amended NC -1.026.234 0 0 01.00.00 -1.026.234 0
WMB WMB & Subs WMBFA 2 2004 Original NC -404.570 404.681 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2006 Original NC -157.285 157.225 5.531 06.26.08 0 0
Page 4 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2007 Original NC -161.993 0 0 01.00.00 -161.993 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended NE 1.444 -1.444 0 02.18.09 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended NE 4.081 -4.081 0 02.18.09 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended NE -1.409 1.409 0 02.18.09 0 0
WMB WMB & Subs Anchor Systems Corp. 336 2007 Original NJ -824 746 -44 01.09.09 0 0
WMB WMB & Subs L.V.S. Corporation 351 2007 Original NJ -2.080 2.080 0 07.23.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended NJ 1.720 0 0 01.00.00 0 1.720
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended NJ 15.502 0 0 01.00.00 0 15.502
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended NJ -5.609 0 0 01.00.00 -5.609 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended NJ -225.354 0 0 01.00.00 -225.354 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original NJ -44.668 25.888 0 01.01.08 -18.780 0
WMB WMB & Subs North Properties, Inc. 376 2004 Original NJ -6.075 6.075 0 05.23.06 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2005 Original NJ -50 0 0 01.00.00 -50 0
WMB WMB & Subs WaMu Insurance Services 233 2004 Original NJ -12.200 12.200 0 01.01.05 0 0
WMB WMB & Subs WaMu Insurance Services 233 2005 Original NJ -1.450 1.450 0 11.21.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2004 Original NJ -105.297 105.217 0 01.01.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2005 Original NJ -2.100 2.100 0 10.24.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2007 Original NJ -2.860 700 0 11.13.08 -2.160 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2005 Original NJ -1.000 1.000 0 12.01.06 0 0
WMB WMB & Subs WMBFA 2 1998 Amended NJ -39.166 0 0 01.00.00 -39.166 0
WMB WMB & Subs WMBFA 2 1999 Amended NJ 17.123 0 0 01.00.00 0 17.123
WMB WMB & Subs WMBFA 2 2000 Amended NJ -27.128 0 0 01.00.00 -27.128 0
WMB WMB & Subs WMBFA 2 2001 Amended NJ 63.226 0 0 01.00.00 0 63.226
WMB WMB & Subs WMBFA 2 2002 Amended NJ -2.878.703 0 0 01.00.00 -2.878.703 0
WMB WMB & Subs WMBFA 2 2003 Amended NJ -6.409.217 6.409.217 0 04.30.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original NJ -2.000.000 2.000.000 0 01.01.06 0 0
WMB WMB & Subs WMBFA 2 2007 Original NJ -881.921 881.921 -9 01.26.09 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2004 Original NJ -20.950 20.950 0 07.28.05 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2005 Original NJ -2.000 2.000 0 10.05.06 -2.000 0
WMB WMB & Subs 620-622 Pelhamdale Ave Owners Corporation 387 2004 Original NY -1.145 1.145 0 05.20.05 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended NYC 74.254 0 0 01.00.00 0 74.254
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended NYC 151.778 0 0 01.00.00 0 151.778
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended NYC -41.429 0 0 01.00.00 -41.429 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original NYC -223.848 0 0 01.00.00 -223.848 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original NYC -444.532 444.532 0 11.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original NYC -43.200 43.100 0 01.01.07 0 0
WMB WMB & Subs WMB & Subs 2 2001 Amended NYC 30.656 -30.656 -24.397 12.27.07 0 0
WMB WMB & Subs WMB & Subs 2 2002 Amended 1st NYC -7.476.263 7.476.263 31 12.08.06 0 0
WMB WMB & Subs WMB & Subs 2 2002 Amended 2nd NYC 1.074.866 -1.074.866 -747.380 12.27.07 0 0
WMB WMB & Subs WMB & Subs 2 2003 Amended NYC -10.084.113 10.084.113 0 12.27.07 0 0
WMB WMB & Subs WMB & Subs 2 2004 Original NYC -10.085.052 10.085.052 -20.455 01.01.06 0 0
WMB WMB & Subs WMB & Subs 2 2006 Original NYC -383.518 383.518 0 02.05.08 0 0
WMB WMB & Subs WMB & Subs 2 2007 Original NYC -17.683 17.683 301 02.18.09 0 0
WMB WMB & Subs WMB & Subs 2 2008 Original NYC -46.819 0 0
WMB WMB & Subs WMB & Subs 2 1998 Amended NYC -4.718 3.622 0 04.07.09 0 0
WMB WMB & Subs WMB & Subs 2 1999 Amended NYC 11.366 -11.366 -7.883 02.18.09 0 0
WMB WMB & Subs WMB & Subs 2 2000 Amended NYC -7.246 7.246 191 04.07.09 0 0
WMB WMI & Subs Ahmanson Residential Development 247 2007 Original NYS 0 0 0 02.03.09 0 0
WMB WMI & Subs First Select Corporation 441 2006 Original NYS -199 0 0 01/00/00 0 0
WMB WMB & Subs Harmony Agency, Inc. 349 2004 Original NYS -1.452 1.452 0 06.03.05 0 0
WMB WMB & Subs Lincoln Realty Capital, Inc. 344 2005 Original NYS -150 150 4 09.19.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended NYS 29.423 0 0 01.00.00 0 29.423
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended NYS 55.536 0 0 01.00.00 0 55.536
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended NYS -13.251 0 0 01.00.00 -13.251 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended NYS -401.809 0 0 01.00.00 -401.809 0
Page 5 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original NYS -184.572 182.572 0 12.06.05 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original NYS -91.146 101.368 0 10.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original NYS -77.212 0 0 01.00.00 -77.212 0
WMB WMB & Subs WMB & Subs 2 1998 Amended NYS -9.996 0 0 01.00.00 -9.996 0
WMB WMB & Subs WMB & Subs 2 1999 Amended NYS 14.558 0 0 01.00.00 0 14.558
WMB WMB & Subs WMB & Subs 2 2000 Amended NYS -6.555 0 0 01.00.00 -6.555 0
WMB WMB & Subs WMB & Subs 2 2001 Amended NYS -43.468 0 0 01.00.00 -43.468 0
WMB WMB & Subs WMB & Subs 2 2002 Amended NYS -12.768.586 0 0 01.00.00 -12.768.586 0
WMB WMB & Subs WMB & Subs 2 2003 Amended NYS -21.479.078 0 0 01.00.00 -21.479.078 0
WMB WMB & Subs WMB & Subs 2 2004 Original NYS -17.771.545 17.771.545 0 01.01.07 0 0
WMB WMB & Subs WMB & Subs 2 2005 Original NYS -1.441.809 1.441.809 93.516 03.19.07 0 0
WMB WMB & Subs WMB & Subs 2 2006 Original NYS -1.841.813 1.841.813 14.917 02.05.08 0 0
WMB WMB & Subs WMB & Subs 2 2007 Original NYS -381.998 0 0 01.00.00 -381.998 0
WMB WMB & Subs WMB & Subs 2 2008 Original NYS -1.227.887 0 0 -1.227.887 0
WMB WMB & Subs Yellowstone Ventures, Inc. 371 2008 Original NYS -29.257 29.257 0 05.29.09 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original NYS Metro -24.127 0 0 01.00.00 -24.127 0
WMB WMB & Subs WMB & Subs 2 2001 Amended NYS Metro 43.468 0 0 01.00.00 0 43.468
WMB WMB & Subs WMB & Subs 2 2002 Amended NYS Metro -2.494.705 0 0 01.00.00 -2.494.705 0
WMB WMB & Subs WMB & Subs 2 2003 Amended NYS Metro -4.381.732 0 0 01.00.00 -4.381.732 0
WMB WMB & Subs WMB & Subs 2 2004 Original NYS Metro -2.269.313 2.269.313 0 01.01.07 0 0
WMB WMB & Subs WMB & Subs 2 2006 Original NYS Metro -419.548 413.760 0 01.23.08 -5.788 0
WMB WMB & Subs WMB & Subs 2 2007 Original NYS Metro -88.915 72.482 0 02.02.09 0 0
WMB WMB & Subs WMB & Subs 2 2008 Original NYS Metro -405.689 0 -405.689 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original OH -5.034 5.034 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 2005 Original OH -250.000 250.000 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 2006 Original OH -503.041 503.041 0 11.20.07 0 0
WMB WMB & Subs WMBFA 2 2007 Original OH -74.582 74.582 0 11.14.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Original OH, Columbus 0 35.777 4.280 04.13.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Original OH, Columbus 0 16.000 0 04.13.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original OH, Columbus 0 16.500 0 04.13.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original OH, Columbus -33.675 17.500 0 04.13.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original OH, Columbus -21.000 21.000 0 04.13.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended OH, Independence 88 0 0 01.00.00 0 88
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended OH, Independence 240 0 0 01.00.00 0 240
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended OH, Independence -1.279 0 0 01.00.00 -1.279 0
WMB WMB & Subs WMBFA 2 2004 Original OH, Montgomery -500 500 -25 03.12.09 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original OH, RITA -59.321 59.321 0 03.27.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original OH, RITA -2.500 0 0 01.00.00 -2.500 0
WMB WMB & Subs WMBFA 2 2004 Original OH, Springdale -14.879 14.879 0 01.01.05 0 0
WMB WMB & Subs WMB & Subs 70 2005 Original OK -95.000 95.000 8.082 08.01.07 0 0
WMB WMB & Subs Seneca Street Inc. 121 2004 Original OR -5.900 5.900 0 10.26.05 0 0
WMB WMB & Subs Seneca Street Inc. 121 2005 Original OR -51.381 51.381 0 10.02.06 0 0
WMB WMB & Subs University Street, Inc. 122 2004 Original OR -216 216 0 12.09.05 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended PA 3.015 0 0 01.00.00 0 3.015
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended PA 19.761 0 0 01.00.00 0 19.761
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended PA 61.371 0 0 01.00.00 0 61.371
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended PA -62.986 0 0 01.00.00 -62.986 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Amended PA -646 0 0 01/00/00 -646 0
WMB WMB & Subs New American Capital, Inc. 52 2007 Original PA -21.500 21.500 0 10.27.08 0 0
WMB WMB & Subs Providian Bancorp Services 447 2006 Original PA -1.586 1.586 0 01.01.07 0 0
WMB WMB & Subs Washington Mutual Mortgage Securities, Inc. 316 2005 Original PA -31.437 31.437 0 01.01.06 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original PA -1.738 1.738 -866 01.01.07 0 0
WMB WMB & Subs WM Home Loans, Inc. 315 2002 Amended PA -69.677 69.677 0 10.24.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original PA 28.973 -28.973 0 12.17.07 0 0
WMB WMB & Subs WMBFA 2 2005 Original PA -660.632 660.632 0 12.01.06 0 0
Page 6 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2006 Original PA -308.429 308.429 0 12.17.07 0 0
WMB WMB & Subs WMBFA 2 2007 Original PA -2.161.335 2.161.335 0 11.10.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended PA, Phila 187.259 -187.259 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2002 Amended PA, Phila -44.573 44.573 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2003 Amended PA, Phila -128.159 128.159 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2004 Amended PA, Phila 74.979 -74.979 0 08.24.07 0 0
WMB WMB & Subs WMBFA 2 2004 Original PA, Phila -310.261 310.261 0 12.12.05 0 0
WMB WMB & Subs WMBFA 2 2007 Original PA, Randor 0 10 0 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended RI 519 0 0 01.00.00 0 519
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended RI 3.328 0 0 01.00.00 0 3.328
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended RI 14.960 0 0 01.00.00 0 14.960
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended RI -9.184 0 0 01.00.00 -9.184 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original RI -12.609 12.609 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original RI -5.500 5.500 0 04.06.09 0 0
WMB WMB & Subs Seafair Insurance Agency corp 324 2005 Original RI -1.000 0 0 01.00.00 -1.000 0
WMB WMB & Subs Seafair Insurance Agency corp 324 2007 Original RI -600 600 0 01.01.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended RI 7.444 -7.444 0 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2002 Amended RI -173.376 173.376 0 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2003 Amended RI -188.022 188.022 569 04.21.09 0 0
WMB WMB & Subs WMBFA 2 2004 Amended RI -350.469 350.469 0 12.06.05 0 0
WMB WMB & Subs Dime NJ Agency, Inc. 334 2004 Original SC -25 25 0 01.01.05 0 0
WMB WMB & Subs HCP Properties, Inc. 241 2007 Original SC -25 25 0 01.01.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended SC 948 0 0 01.00.00 0 948
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended SC 2.587 0 0 01.00.00 0 2.587
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended SC 791 0 0 01.00.00 0 791
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended SC -17.672 17.672 2.774 03.03.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original SC -46.057 46.057 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original SC -10.950 10.950 0 01.01.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended SC 9.251 0 0 01.00.00 0 9.251
WMB WMB & Subs WMBFA 2 2002 Amended 1st SC -212.124 212.124 27.801 12.04.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd SC 31.773 0 0 01.00.00 0 31.773
WMB WMB & Subs WMBFA 2 2003 Amended SC -404.607 404.607 87.237 06.09.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original SC -225.996 225.996 0 08.24.06 0 0
WMB WMB & Subs ECP Properties, Inc. 278 2004 Original TX -12.306 12.306 0 01.01.05 0 0
WMB WMB & Subs ECP Properties, Inc. 278 2006 Original TX -2.049 2.049 0 01.01.07 0 0
WMB WMB & Subs HCP Properties of Kansas, Inc. 266 2005 Original TX -5.337 5.337 0 07.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended TX 12.592 0 0 01.00.00 0 12.592
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended TX 42.211 0 0 01.00.00 0 42.211
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended TX -30.911 0 0 01.00.00 -30.911 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended TX -225.828 225.828 27.734 07.01.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Original TX -920.771 920.771 0 12.06.05 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original TX -58.016 58.016 0 12.11.06 0 0
WMB WMB & Subs Providian Bancorp Services 447 2005 Original TX -28.276 28.276 0 01.17.07 0 0
WMB WMB & Subs Providian Bancorp Services 447 2006 Original TX -10.000 10.000 117 01.18.08 0 0
WMB WMB & Subs Providian Leasing Corporation 449 2005 Original TX -628 628 0 01.01.07 0 0
WMB WMB & Subs Providian Leasing Corporation 449 2006 Original TX -3.000 3.000 0 01.01.07 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2004 Original TX -3.323 3.323 0 03.16.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2005 Original TX -3.072 3.072 0 10.17.06 0 0
WMB WMB & Subs WaMu Investments, Inc 5 2006 Original TX -2.307 2.307 0 01.01.07 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2004 Original TX -884 884 0 01.01.05 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2005 Original TX -1.498 1.498 0 10.25.06 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2006 Original TX -1.400 1.400 0 11.15.07 0 0
WMB WMB & Subs WMBFA 2 1998 Amended TX -8.964 8.964 0 09.22.08 0 0
WMB WMI & Subs WMBFA 2 1999 Amended TX 2.741 -2.741 0 09.22.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended TX 18.144 -18.144 -9.446 08.05.08 0 0
Page 7 of 8
WAMU Investigation Question 2: Separate Return State Amounts
WMB/WMI/Combined
WMI &
Subs/WMB &
Subs Name Co # Year
Original/
Amended Jurisdiction
(Refund) Due/
Tax Due
Refund Received/
(Tax Due Paid)
P&I Received/
(Paid)
Date
Received
(Refund)
Outstanding
Tax Due
Outstanding
WMB WMB & Subs WMBFA 2 2002 Amended TX -119.054 119.054 13.062 08.05.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended TX -198.959 198.959 27.587 08.05.08 0 0
WMB WMB & Subs WMBFA 2 2005 Original TX -9.217 9.217 0 12.01.06 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2005 Original TX -2.832 2.832 0 09.27.06 0 0
WMB WMB & Subs WMBFA Insurance Agency, Inc. 62 2006 Original TX -1.500 1.500 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended VA 4.342 -4.342 0 12.20.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended VA 18.706 -15.595 0 12.20.07 0 3111
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended VA -3.111 2.184 0 11.12.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended VA -90.611 0 0 01.00.00 -90.611 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original VA -156.797 156.792 0 12.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original VA -36.500 36.500 320 12.19.07 0 0
WMB WMB & Subs WMBFA 2 2001 Amended VA 2.456 -2.456 -7.456 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2002 Amended VA -387.076 395.533 167.272 12.09.05 0 0
WMB WMB & Subs WMBFA 2 2003 Amended VA -1.770.066 0 0 01.00.00 -1.770.066 0
WMB WMB & Subs WMBFA 2 2004 Original VA -945.000 945.000 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended VT 39 0 0 01.00.00 0 39
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended VT 35 0 0 01.00.00 0 35
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended VT 105 0 0 01.00.00 0 105
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended VT -434 0 0 01.00.00 -434 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original VT -6.811 9.436 0 01.01.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original VT -250 250 0 01.01.07 0 0
WMB WMB & Subs WM Funds Distributors Inc. 16 2004 Original VT -250 250 0 01.01.05 0 0
WMB WMB & Subs California Reconveyance Company 111 2006 Original WI -31.954 31.979 0 01.01.07 0 0
WMB WMB & Subs California Reconveyance Company 111 2007 Original WI -30.000 30.000 0 09.09.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2001 Amended WI 117 0 0 01/00/00 0 117
WMB WMB & Subs Long Beach Mortgage Company 130 2002 Amended WI 896 0 0 01.00.00 0 896
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended WI -1.482 0 0 01.00.00 -1.482 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended WI -22.444 22.444 7.444 04.07.08 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2005 Original WI -5.014 5.014 481 01.00.00 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original WI -8.975 8.945 1.156 01.01.08 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2005 Original WI 0 25 0 10.17.08 0 0
WMB WMB & Subs WaMu Insurance Services 233 2007 Original WI 0 25 0 09.24.08 0 0
WMB WMB & Subs WMBFA 2 2001 Amended WI 2.108 -2.108 -13.051 02.04.08 0 0
WMB WMB & Subs WMBFA 2 2002 Amended WI -1.282.484 0 0 01.00.00 -1.282.484 0
WMB WMB & Subs WMBFA 2 2003 Amended WI -2.418.666 0 0 01.00.00 -2.418.666 0
WMB WMB & Subs WMBFA 2 2004 Original WI -1.299.975 1.299.975 0 01.01.06 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2003 Amended WV -294 294 0 11.26.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2004 Amended WV -2.838 2.838 0 11.26.07 0 0
WMB WMB & Subs Long Beach Mortgage Company 130 2006 Original WV -3.113 3.113 0 01.01.07 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2005 Original WV -225 225 0 02.01.07 0 0
WMB WMB & Subs WaMu Capital Corp. 403 2007 Original WV -175 175 0 01.00.00 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 1st WV -72.716 72.716 0 12.05.06 0 0
WMB WMB & Subs WMBFA 2 2002 Amended 2nd WV 10.201 -10.201 0 07.08.08 0 0
WMB WMB & Subs WMBFA 2 2003 Amended WV -398.557 398.557 10.161 07.08.08 0 0
WMB WMB & Subs WMBFA 2 2004 Original WV -142.051 142.051 0 12.28.08 0 0
-182.707.489 110.721.934 -252.532 -73.709.753 1.714.854
Total Separate Return State Refunds Outstanding -71.994.898
Page 8 of 8
WAMU Investigation Question 10: Total Aggregate Federal and State Refund Amounts to be Split Between JPMCB and WMI
Estimated Refunds as of August 1, 2010
Non-C/B Refund to WMI 20%
Non-Homeownership C/B to WMI 20%
Item #
Gross Receivable
Amount
Highly
Uncertain
Amount
Risk Weighted
Amount % to WMI WMI Amount JPMC Amount Description
Category I : State Tax Refunds Outstanding
1
1 277.627.618 277.627.618 - 20% - - State Tax Receivable (attributable to federal adj's)
2 26.858.795 26.858.795 - 20% - - State Tax Receivable (attributable to federal litigation)
3 2.464.064 2.464.064 - 20% - - 2008 State Loss Carryback
4 51.500.000 51.500.000 - 20% - - California US Obligation Refund Claim
5 39.324.664 39.324.664 - 20% - - State Transcript Review Items
397.775.141 (a) - - - Sub-Total
Category II : Federal Tax Refunds Outstanding
6 47.100.099 - 47.100.099 20% 9.420.020 37.680.079 1905 Agency: In litigation - item not in dispute with IRS, but timing and final amount is open issue
7 5.611.639 - 5.611.639 20% 1.122.328 4.489.311 Ahmanson Obligation Company: Joint Tax Committee Approved (4/22/10)
8 148.825.188 133.942.669 14.882.519 20% 2.976.504 11.906.015 90-'05 Federal Litigation Items (1905 Agency & AOC items excluded)
9 12.209.038 - 12.209.038 20% 2.441.808 9.767.230 90-'97 HFA NOL Carryback: No docs yet from WMI
10 447.173.176 - 447.173.176
2
20% 89.434.635 357.738.541 01-'03 Appeals Cycle: per Joint Committee Approved refunds (2/3/10) and additional RAR (5/26/10)
11 (78.630.126) - (78.630.126) 20% (15.726.025) (62.904.101) 04-'07 Cycle: per Verdino schedule (based on WMI/IRS Agreed RAR 5/20/10)
12 32.790.846 - 32.790.846 20% 6.558.169 26.232.677 2008 Overpayment recorded on WMI 1120X (3/8/10)
13 1.889.720.246 - 1.889.720.246 20% 377.944.049 1.511.776.197 2008 2 Year NOL, 3 Year Capital Loss and 1 Year Credit Carryback: per Verdino schedule
14 74.500.577 12.304.577 62.196.000 20% 12.439.200 49.756.800 IRS Transcript Review Items: at risk due to uncompleted work (KPMG engagement terminated)
2.579.300.683 (b) 2.433.053.437 486.610.687 1.946.442.749 Sub-Total
15 362.631.149 (c) 240.730.715 121.900.434 20% 24.380.087 97.520.347 Interest on Refunds: interest on gross receivable (Category I & II) and interest on net receivable
(interest calculated through 9/30/2010, with no interest on NOL Carrybacks)
Category III : Refunds Received by WMI
16 9.322.104 - 9.322.104 20% 1.864.421 7.457.684 99-'01 Dime Capital Loss Carryback, Net of Termination Fee (received by WMI post 9/25)
17 234.526.524 - 234.526.524 20% 46.905.305 187.621.219 2007 Federal Overpayment (received by WMI post 9/25)
18 2.964.868 - 2.964.868 20% 592.974 2.371.895 State Tax Refunds from Prior Years Overpayments (received by WMI post 9/25)
19 127.945 - 127.945 20% 25.589 102.356 State Tax Refunds from 2004 and Prior Years Amended Returns (received by WMI post 9/25)
20 3.580.143 - 3.580.143 20% 716.029 2.864.114 Other State Tax Refunds Received by WMI (not reconciled b/w overpayments and amended returns)
250.521.584 (d) 250.521.584 50.104.317 200.417.267 Sub-Total
(A) 3.590.228.557 (abcd) 784.753.102 2.805.475.455
3
20% 561.095.091 2.244.380.364 Total
^ Cross-Foot
1
Risk Weighting accounts for legacy WMI state FIN 48 of 393.511.000 $ , less state tax principal amounts (not interest) received to date.
2
Joint Committee Approved Refunds.
3
Difference between Gross Receivable Amount and Risk Weighted Amount = 784.753.102 , which highly uncertain litigation items and state tax receivables.
WAMU Investigation Question 10: Total Aggregate Federal and State Refund Amounts to be Split Between JPMCB and WMI
Estimated Refunds as of August 1, 2010
Non-C/B Refund to WMI 20%
Non-Homeownership C/B to WMI 20%
Item #
Gross Receivable
Amount
Highly
Uncertain
Amount
Risk Weighted
Amount % to WMI WMI Amount JPMC Amount Description
Category I : State Tax Refunds Outstanding
1
1 277.627.618 277.627.618 - 20% - - State Tax Receivable (attributable to federal adj's)
2 26.858.795 26.858.795 - 20% - - State Tax Receivable (attributable to federal litigation)
3 2.464.064 2.464.064 - 20% - - 2008 State Loss Carryback
4 51.500.000 51.500.000 - 20% - - California US Obligation Refund Claim
5 39.324.664 39.324.664 - 20% - - State Transcript Review Items
397.775.141 (a) - - - Sub-Total
Category II : Federal Tax Refunds Outstanding
6 47.100.099 - 47.100.099 20% 9.420.020 37.680.079 1905 Agency: In litigation - item not in dispute with IRS, but timing and final amount is open issue
7 5.611.639 - 5.611.639 20% 1.122.328 4.489.311 Ahmanson Obligation Company: Joint Tax Committee Approved (4/22/10)
8 148.825.188 133.942.669 14.882.519 20% 2.976.504 11.906.015 90-'05 Federal Litigation Items (1905 Agency & AOC items excluded)
9 12.209.038 - 12.209.038 20% 2.441.808 9.767.230 90-'97 HFA NOL Carryback: No docs yet from WMI
10 447.173.176 - 447.173.176
2
20% 89.434.635 357.738.541 01-'03 Appeals Cycle: per Joint Committee Approved refunds (2/3/10) and additional RAR (5/26/10)
11 (78.630.126) - (78.630.126) 20% (15.726.025) (62.904.101) 04-'07 Cycle: per Verdino schedule (based on WMI/IRS Agreed RAR 5/20/10)
12 32.790.846 - 32.790.846 20% 6.558.169 26.232.677 2008 Overpayment recorded on WMI 1120X (3/8/10)
13 1.889.720.246 - 1.889.720.246 20% 377.944.049 1.511.776.197 2008 2 Year NOL, 3 Year Capital Loss and 1 Year Credit Carryback: per Verdino schedule
14 74.500.577 12.304.577 62.196.000 20% 12.439.200 49.756.800 IRS Transcript Review Items: at risk due to uncompleted work (KPMG engagement terminated)
2.579.300.683 (b) 2.433.053.437 486.610.687 1.946.442.749 Sub-Total
15 362.631.149 (c) 240.730.715 121.900.434 20% 24.380.087 97.520.347 Interest on Refunds: interest on gross receivable (Category I & II) and interest on net receivable
(interest calculated through 9/30/2010, with no interest on NOL Carrybacks)
Category III : Refunds Received by WMI
16 9.322.104 - 9.322.104 20% 1.864.421 7.457.684 99-'01 Dime Capital Loss Carryback, Net of Termination Fee (received by WMI post 9/25)
17 234.526.524 - 234.526.524 20% 46.905.305 187.621.219 2007 Federal Overpayment (received by WMI post 9/25)
18 2.964.868 - 2.964.868 20% 592.974 2.371.895 State Tax Refunds from Prior Years Overpayments (received by WMI post 9/25)
19 127.945 - 127.945 20% 25.589 102.356 State Tax Refunds from 2004 and Prior Years Amended Returns (received by WMI post 9/25)
20 3.580.143 - 3.580.143 20% 716.029 2.864.114 Other State Tax Refunds Received by WMI (not reconciled b/w overpayments and amended returns)
250.521.584 (d) 250.521.584 50.104.317 200.417.267 Sub-Total
(A) 3.590.228.557 (abcd) 784.753.102 2.805.475.455
3
20% 561.095.091 2.244.380.364 Total
^ Cross-Foot
1
Risk Weighting accounts for legacy WMI state FIN 48 of 393.511.000 $ , less state tax principal amounts (not interest) received to date.
2
Joint Committee Approved Refunds.
3
Difference between Gross Receivable Amount and Risk Weighted Amount = 784.753.102 , which highly uncertain litigation items and state tax receivables.
Olivier X To: melaroche@hotmail.com
de Grivel cc:
Subject: Ccb / cit + wamu
03/ 27/ 2008
12:28 PM
Elaine,
My name is olivier de grivel.
I work at jpm, in charge of the financial ins titutions in as ia pac, I report to gaby abdelnour.
Gaby as ked me to contact you reg a convers ation you had with ccb chairman guo reg wamu + cit.
Difficult for jpm to engage any client reg wamu. But would vey much like to do s o reg. CI T.
I can s end you s ome background info if des ired / neces s ary. But rather like to dis cus s with you the s ituation and
what ccb could envis age.
Currently in s ingapore and reachable on mobile +852 6343 9888.
Or I can call you either my early morning tomorrow / your evening tonight or your friday morning / my evening.
Thanks for giving me your preference and tel number I can reach you on.
Bes t
Olivier
Confidential WMCD_000003218.00001
me
Confidential
Olivier X To
de Grivel cc
03/27/2008
12:28 PM
Ccb 1 cit + wamu
I can on.
18JJ0001
Return
To: Gaby A Abdelnour/IPMCHASEWPMCHASE
Olivier X
Subject: Re: Chairman Quo - CCB
de Grivel
03/20/2008
0156MA
Will also send you package for elaine to send over
. . ' " ' Olivier X de Grivel
Original Message
From: Olivier X de Grivel
Sent: 03/20/2008 01:47 PM ZE8
To: Gaby Abdelnour
Subject: Re: Chairman Guo - CCB
Will check with tim and conflicts
As you know, wamu is sensitive but might have gone away given bear,
Cit should be ok as far as jpm principal but will check if working for them or somebody else
we know both very well
Gaby A Abdelnour
Original Message
From: Gaby A Abdelnour
Sent: 03/20/2008 01:42 PM ZE8
To: Olivier de Grivel
Subject: Fw: Chairman Guo - CCB
Can you look into the 2 names below. Thanks
Sent from my Blacld3erry Handheld.
elaine la roche
Original Message
From: elaine la roche [melaroche@hotmail. com]
Sent: 03/20/2008 01:30 AM GMT
To: Gaby Abdelnour
Subject: Chairman Guo - CCB
Gaby - Chairman Guo just called me to discuss the US state of the world, BS,concern re
some of the investments in their portfolio, whether another investment bank would fail
etc and I took the occasion to discuss my pending move. He was personally quite
supportive and I made the distinction of being in the IB, which he said he had no problem
with and we agreed to discuss it further and he said he would personally talk to CBRC on
my behalf as he said it would be better for CCB to have me in Beijing.
The real reason for his call however was to pick my brain on CIT and WaMu. Given that I
am not yet on board and don' t know whom to contact can you tell me whether we have any
involvement or axe on either of these two companies ? Quality of management etc. This
was a most unusual call for him to initiate and definitely one focused on acquisition or
investment. I promised to get back to him and also to send him some " street " insights
Confidential WMCD_000003220. 00001
also
Olivier X
de Grivel
03/2012008
01:56 AM
cc:
to
From: Olivier X de Grivel
Sent: 03/20/2008 01: 7 PM ZE8
Abdelnour
A
Re: Chairman Guo - CCB
over
. Re. Chairman Guo - CCB
From: A Abdelnour
Sent: 03/20 2008 01:42 PM ZE8
To: Olivier de Grivel
Chairman
2 names
From: elaine la roche [melaroche@hotmail
Sent: 03 20 2008 01:30 AM GMT
To: Abdelnour
Chairman Guo CCB
or
Chairman Guo just called me to discuss the US state of the world, BS,concern re
some of the investments in their portfolio, whether another investment bank would fail
etc and I took the occasion to discuss my move. He was
and I made the distinction f in the IB, he had no
with and we to discuss it further and he said he tal to CBRC on
my behalf as he said it be better for CCB
The real reason for his call however was to my brain on CIT and 1iiTaMu. Given that I
am not yet board and 't know whom to contact tell me whether we have any
involvement axe either of these two of management etc. This
was a most unusual call for him to initiate and de focused on sition or
investment. I sed to get back to him and also to send some "street
"
ins
Confidential
Return
and information and to continue the dialogue.
Thanks E
Elaine La Roche
office: 860-435-4006
fax: 860-435-4604
mobile :860-480-9380
Confidential JPMCD_000003220.00002
and information and to continue the
Thanks E
Elaine La Roche
ffice: 86 35- 00
fax: 860-4 5-460
mobile .8 0- 80-9 80
Confidential
Return
Olivier X
de Grivel
To: "Gaby Abdelnour" <gaby.abdelnour@jpmorgan.com>
cc:
Subject: Fw: Wamu + cit
03/23/2008
09 03 PM
See below email from tim main
Wamu is off-limits and not advis able to dis cus s it with ccb (or any other clien)
Cit very much s omething we can engage ccb on. We are pitching for s trategic advis ory role, mandate to be
awarded s oon s o delicate timing.
Fig ny to put together an info pack.
Can come back to ccb mid this week
Tim Main
Original Mes s age
From: Tim Main
Sent: 03/21/2008 02:34 PM CST
To: Olivier de Grivel
Subject: Re: Wamu cit
We can have dialogue
Let's try to s et a time
Don't think we could work for them on either, clos e to both
Olivier X de Grivel
Original Mes s age
From: Olivier X de Grivel
Sent: 03/20/2008 10:31 PM ZE8
To: Tim Main
Subject: Re: Wamu cit
Tried and left voice mail
"::" Tim Main
Original Mes s age
From: Tim Main
Sent: 03/20/2008 07:48 AM CST
To: Olivier de Grivel; John Chrin; John Simmons
Subject: Re: Wamu cit
On cell now 917 593 6069
Main
Original Mes s age
From: Tim Main
Sent: 03/20/2008 01:55 AM CDT
To: Olivier de Grivel; John Chrin; John Simmons
Confidential WMCD_000003224.00001
Confidential
Olivier X To
de Grivel cc
From: Tim Main
03/23/2008
09:03 PM
Sent: 03/21 2008 02:34 PM eST
To: Olivier de Grivel
: Re: Wamu + cit
on
From: Olivier de Grivel
Sent 03/20/ 008 10 1 PM ZE
To: Tim Main
: Re: Wamu + cit
From: Tim Main
Sent: 03/20/2008 07: 8 AM eST
AhdclnOllr"
Fw: Wamll + cit
to
To. Olivier de Grivel; John ehrin; John Simmons
: Re: Wamu + cit
now 917
From: Tim Main
Sent: 03/20 2008 01:5 AM eDT
To: Olivier de Grivel; John ehrin; John Simmons
Return
Subject: Re: Wamu cit
Yes
Call me live
X de Grivel
Original Message
From: Olivier X de Grivel
Sent: 03/20/2008 01:58 PM ZE8
To: Tim Main; John Chrin; John Simmons
Subject: Wamu cit
We are being questionned by chinese bank (ccb - keep it for yourself) on wamu + cit. They are not asking to
advise on anything but want our views But body language is thinking of investing.
Can we engage dialogue with them on these ?
Amreachable on mobile +852 6343 9888
Confidential WMCD_000003224. 00002
Confidential
Re: liJamu + cit
From: Olivier X de Grivel
Sent: 03/20/2008 01:58 PM ZE
To: Tim Main; John Chrin; John Simmons
. Wamu + cit
on
are not to
Return
-f
Confidential
Return
Confidential
Return
answer i was
Enrico Bombieri
IB
floor 0
Tel: +44-207-3251967 Mob:
Confidential OOOO0l341.00()() )
Return
Tim To: Kevin D WillseyIJPMCHASE, Scott M AlbinsonlJPMCHASE, Fernando
Main@JPMCHASERivasl.WMCHASE
u;: Ddill X SdClI/JPMCHASE, Ginll B PlIntllno/JPMCHASE, Gt':rrnllim: X
0711512008 II :38 Hams/JPMCHASE. John E Sinunons/JPMCHASE, .!ohn R ChrinlJPMCHASE
PM Subject: Re: FDIC/OCC Meetings
This is about 100x more important in my humble opinion
From: Kevin D Willsey
To: Tim Main; Scott M Albinson; Fernando Rivas
Cc: Delia X Selca; Gina B Pantano; Germaine X Harris; John E Simmons; John R Chrin
Sent: Tue lullS 23:33:49 2008
Subject: Re: FDIC/DCC Meetings
NY Bancorp pitch currently on that date in Long: Island
Kevin D. Willsey
Managing Director
Head of EqU1ty CapItal Markets
.J.P, Morgan Securities Inc.
277 Park Avenue - 8th Floor
New York, NY 10172
Tel: (212) 622-5574
Fax: (212) 622-0839
Email: kevin.d.willsey@jpmorgan.com
----- Original Message -----
From: Tim Main
Sent : 07/ 15/2008 11: 14 PM AST
To: Scan Albinson: Fernando Rivas
Cc: Delia Selca: Gina Panl3llo; Germaine Harris: John Simmons: John Chrin: Kevin Willsey
Subject: Re: FDIC/OCC Meetings
Three of us plus Willsey if he can
From: Scott M Albinson
To: Tim Main; Femando Rivas
Cc: Delia X Selca; Gina B Pantano; Germaine X Harris; John E Simmons; John R Chrin
Sent: Tue lullS 14: 17:562008
Subject: FDIC/OCC Meetings
TimlFem,
I have confi rmed meetings on Friday, Jul y 18, in DC with both the ace and FDIC.
ace
Confidential JPMCD 00000335500001
Return
10 am
250 E Street, SW
Attendees:
John Dugan, Comptroller (tentative - he is getting in from a flight but will try to make it)
John Wat sh, Chief of Staff
Doug Roeder, Senior Deputy Comptroll er, Large Bank Supervision
Jennifer Kell y, Senior Deputy Comptroller, Mid-size and Community Bank Supervision
Mark Levonian, Chief Economist
Others TBD
FDIC
Ipm
550 t 7th Street, NW
Attendees:
Shei la Bair, Chainnan
Jesse Villarreal , Chief of Staff
Others TBD
Any word from Steve Bl ack's office on whether he can join li S?
Confidential JPMCD 00000335500002
Return
March
Mr. LJ'UUV'''.
to approve at
5>nr'rn1"p" at
The Chainnan said that lU,,",''''''''!!!> was to a
the ...... ,,'"'''''" """" ........ ,"" .. referred to in these
this ""."UII1i!'!i_
ooc
1
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the first
Return
market concerns;
have interest in
tenns a IJ\J.;",1iUU;;
there no
the
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JPMCD 000003489.00001
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I

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=
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=
-
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-

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0
Q
Q
Q
Q
Q
CH
.-
QO
;.0
Q
Q
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N
Summary of situation
r--
w
>:
t-
u
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0
ct:
QI
J
West approa.ched
Park reaarding
potential
transaction on
March 7
W.er,.t pur-suiAi two


\IIorganO
PreferreEI $4-5
billion caj:)1tal raise
(private .AIiI public)
Sale to strattigic buyer
Senior
management
meeting on
Mqrcn 10
Due diligence
In Seattle
March 17-19
Online data
room
Continues
remotely
through today
PRO ) f C T ',l [ S T
R
e
t
u
r
n
Headquarters
Market capitalization
$10,149
EfIllIoyees
49,103
Total Asset s (managed}
$]46,3U
.50
Mar-Q5 Dec::-Oo
Jun-07 Total EQUIty
$24,584


La'ifO
Option Arm>
$58,870
flDrk1a
266
Prirre Horre Equity
bO,962
Texas
219
New York
235
Subprirre
18,617
Washington
18b
Other
63,267
Illinois
144 Total
$201 Oregon
105
Multifamily
]1,754 New Jefsey
86
C ornrner c Ia I
1,880
Georgia

Credit card (managed)
27.231
Arizona
61
G<x>dw\UIi I ntal1glbles
Colorado
10 7,675
Nevada
37
w
3:
MSRs
6,278
Utah
31
Cash & Secuflties
45,096
Idaho
22 \J Other Assets
24,683 ConnectKut
13
w
TotalA>sets (managed)'
$346,313
0
at:
".. Source: SNl Financial, fact5et Q
I PMnr .... "" ....
2
Note: Market data as of March 26,2008, financial data as 0( December 11,2007
p
o JE ( T W( T
I GAAP as,ets ot S32 abo R
e
t
u
r
n
Cc
Park GAAP earnings 18ES
Pro forma contnbution from West
Pro forma GAAP Net Income
Pro forma ca5h net income
GAAP
EPS accretIOn I (dilution) ($)
EPS accretion I (dilution) ($mm)
Cash
EPS accretIOn I (dilution) IS)
EPS accretion I (dilution) (Smm)
Excess capita! contributIOn (cumulative)
Pro forma tlef 1 ratio'
ROle
IRR
Note: Market data as of March 26, 2008
kisumes lOOt, stock considenltioo and base case
Excess capital in excess of stllndalooe tier 1 ratio
2009
448
($0.22)
$3,664
8.w.r.
8.5:1'.
30.41
2010
$16,085
$OAt
Sl,513
$0.59
$2,153
S8,244
8.7311;
18.81
30.4:1>
f a l ~ of S2.Obn of WITS, S4.Obn DRO Preferred and $9.600 MEl),; and S+t 11 Park stock price
used to repurchase shares
2011
S17,69-4
$22,201
$0.71
" .... ~ ,-'
$2,558
$0.81.1
$l.141
$12.369
8.861
22.91
30.-41
J
R
e
t
u
r
n
l-
V)
3:
w
o
IX
Q
Assets
Residential realestate
Arms
Prime Home
Other
Total
CorrmerciaL
Goodwill&:
MSRs
Cash &: securities
Other assets
Total assets
Total COfl1lll)n
TCE/TAl
12131/07
7
31
8
4.69%
4.36%
interest
a,!>elS (GAAPI. 12101 TeE/Tangible managed assets 013.9%
Wholesale
Other I"l.nrr"'".Hna<
Trust n .. "'t.; ..... ""rI
Other liabilities
Total liabilities
Preferred
COfl1lll)n
Total liabilities ft
12131/07
7
21,192
4.22%
22
21.192
:3
PROl( r WEST 4
R
e
t
u
r
n
line of business
2005
2006
2007
Retail
$1
Card services
165
724
540
Commercial
462
396
375
Home loan
Other
/258\
200
Total
l>ti\t:smtlQt
2005
IfWa
200.7
interest income
8
177
Noninterest income
T otai revenue
Provision for loan losses
107
Total noninterest
Total expense
Pre-tax
Taxes
376
f
Income from
,-"
w
income from discontinued
3::
Net Income
l-
Source: Company
u
w
NOle: financial dala a, of December 11, 2007
-, , lnclu.::les mlnorily eJ>\lll'ffi:ie
0
a:
Q
...... " .... "'_it,.
0; ( T WE T 5 R
e
t
u
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I-
w
3:
l--
U
Lw
IX
Q
Net income to common
EPS
cOlTIDOn
TCE/TA
guidance gNefI on 4Q conference call
lCE/TA
TCE/TA target required $15,211 of TeE
Provision
(1
4.0%
OHCT WE) 6
R
e
t
u
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n
I
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=
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-=

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...
00
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Q
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00
West asset quality metrics
tKO's (Sffim) _
- NCO Rate (l)
1
1,800
[ 3.5%

I
1,600
1.400 I- 2.5%
1.200


tj
800
1.5%
600

200
/1
_ _ O.5l
o
O.OX
lQ06 2Q06 3Q06 4Q.06 1Q07 2Q07 3Q07 4Q07 lQ08
I-
VI
w
S.
Source: West management presentation; March 17, 2008
I-
V
w
..
1


, '- ;
- NooaceruAis (Smm) -Nona4;aual Rate (I)
$8.000 ., - Troubled debt restructures ($mml
l.5l
$7,000
S6.000
$6,0.00
$4,000
$3,000
$2,000
$1,000
so

UI
2.,QI
1 ,til

Q.lil
..
1 Qfl6 2Q06 lQ06 4Q06 1Q071Q07 3Q07 4Q,07 Jan fW
'Q8 '08
PROJECT WE'JT
j
....... '
7
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(j
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=
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I
0
0
0
0
0
W.I

00
\f;)
b
0
0
0
\f;)
. -: !. ; : .:
Net charge-offs by portfolio
I
Chargeoff rate (.\)
3.91"
I


I
2.n'



I
aa
---
O.l9fr.

I
lQ
zn 3Q. 4Q Jon feb MAr ,
\
2.007
2008
\
Gharge-off Pllte (I)
I
I
lOS 1
lU 1
I
8il;J
I
1
-
-
1 6.Ji 6.l.\
I

i -""1
I I I
41
2l\; I
1-
--
I
>-
'"
(1.f. 1 _________ --. __________

.....
1111 4Q Jan Feb Mar
lQ. 2Q. 3Q.
;;.
....
1001
2008
2001
v
Source: West management pre!>eolalloo; March 17, 2008
Note: March portfoUo e)(ttapolated
0
, Net marQe-ofts 00 a managed basis
cr.
Q.
JPMorganO
: I
Charilt-oH rilte IS)
1
1.7lr.

1.0'l
O.SS
Q .
lQ 2Q 3Q

Jlln I'eb Mar
2001
1003

O\lIieofl tl)
til.
lei 1


---
b"
--
-.-


tI
<tQ Jan
"d>
Melr
lQ 2Q. 3Q 4Q Jon foG Mar
2008
2007
2008
PROJ[ ( l WE S T
8 R
e
t
u
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n
N
.....
M N I.t"l
o
"" a.
10
Return
rate
15
5 or

current
r-
V>
.....
:::
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0
;:,;:
a.
"""

PRO J ( w[ S T 10
R
e
t
u
r
n
o
-
15 ] M 1 H d
12
Return
-
~
Arms
Home
Source: We;t manilliemefil presentation; Ma,,:h, 2008 and Park
~ "
w ' A>sumes (15l1i) CA &. (18X) Fl
:::: l Assumes 12%1 (A & (9") Fl
".
u
~
0:
[l

3.
9.2
21
7
34.5
Il>UQI)\Gnll;'Qui)!' worse
PRO JE( T NE.<,
12
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e
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n
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w
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0
"""
"-
FIII';IIx:1aI PfO!ecUOOI
-2009-
2II.IO
!\eye."",
$14,928 SI),19) $15.393 !\eyenue
,10,921 SI5,.11
Provi1l!Of1
fIr".1> 10"
Nonlnter"",
8,220 7,977
8,0.5 Noo-interest ,,.pense
I.Wl 1,105
MInority Vlt"""",
305 l05
105 MlOOflty Imerest expeose
105 105
flre-u.ln(""",
(6,0971 1,411
3,443
!'"Hill< 1oc00ll!
19,(97) 2,001
I;e{ ""orne
Hellocome
[PS
EPS
(S6 . Z) $1.<16
(omTIO<l lVI,
$11 ,192 $111,021 $19,511 (oom:m IV11 y
$15,52) ,16,543
i ""1I1bio '''''''''''''" IV"Y 9,835 10,532
Ta"1lible CO<TlITOI'I equity
1,\164
',054
TeE I TA
un un> 4.41'11 TeE I TA
2.141
3.26'
---.--
(apot..tdehcl""'y I <ushlOn'
Capita.! dehc;c,ocy I cushIOn'
Source: West projections
Nole: Nllproj&ctiool do not account fIK Increa>ed nonaccrual loans and greater write-offs. Assumes 00 dillldend In 2008, $0.30 2009 and 30% payout riltlO from 2010 to 2012. West's WlStMldlng S3.000 of Series R Convertible Preferred. S4.Obn ot REIT Preferred and SO.5bn of preferred would add -Z.61. 10 TCE/TA. As'>Umes no share boybacils
Above 4.15\ TCE/TA
PRO H C
:;15,1"
I, t 13
105
3,650
SBI
$11,121
10,69';
3.92'11
WE :;
3 R
e
t
u
r
n
V)
UJ
3:
r-
u
UJ
,
0
-
0:
Ut
Q
flM<1<;l<>l Pro,,",tlom



ftevel\ue
514.928 Sl5,163 fleveoue
514,9211 515,.11
PrQ't/lj,lQo
15,500 5,000 3,100 ProvISion
14,300 9,200
HQ"'I<\!et<'>1 ",.per",,,
8.220 8,105 8,111
Hooiol"'el>1 "'peflSe 8,220
1,105
expen5.e )05
lOS 31)5
Mioo< il Y lIlterest e:q>eru;e )05 31)5
Pre-I"" In<:",,,,, (9,091 ,
2,00& 3,650 Pre'lal< 1n<:OfI'e
(7,191) (2,192)
Helloc""",
Net inc""'"
""
EPS
($6.<421
S 1.44 $2.52 EPS
(SUOI ($0.391
Coomoo""'"Y 515.521 516.5d $\1,127 COO11I::l<\equlty
S16,ll5 5H,$6)

7.%b 9,054 10,695 Taflllillll! (00lfI100 eqully
8,158 1,014 TCE I TA

1.11>" 3.92:1> TCE I TA
1.On.
2.551 ...... ....... "'--.........
. ' :
C3pitaldefKIeI1<:yi cU$/iloo'
Source: West prO}et:llOflS
NOle: WltSt HII jlfu}octioos do nut acoount fOf increased nooaccrualloans and greater wrlte-Qffs. A5sumes 00 diYiaefld In 2008. 50.30 iii 2009 and )OS payout ratio frOOl 2010 to 2012. West's oulStaodlng Sl.Obn of Series R Convertible Preferred. $4.Obn of REIT Preferred and SO.5bn of preferred wool.d add -2.6i1i to TCE/TA. Assumes 00 share buybacb
, Above 4.75:11; TCEITA
PRO lEe
$15,1"

&,I\)
)05
{50,
($0.04)
51<1,381
6,955
2551
\Ai [ "
14 R
e
t
u
r
n
u
w
i>:
Q
0\
12131/07 Tangible common equity
less: 2008 and dividends
12131/08 Tangible common equity at closing
loan reserve adjustment
Conforming LLR
Purchase Accounting
Total
Tangible common equity at close
, As>Uffies $10.2bn reduction (rom B/S downsizing
I
Pre-tax
6,632
(2,414)
After-tax
<$2,(46)
I Excludes. hybrids In 15" restricted Fed bucket when Park (apaol), is fully utilized

12131/2008 Total assets
Risk weighted assets at closing'
Capital required at 8.0%
West hybrids!
Tier 1 needed
Tier 1 sources
Hybrid capacity
Reduce Park balan.ce sheet
Common issuances
213,560
$17,085
PRO [
I w[ T 15
R
e
t
u
r
n
.-


VI
VI
OJ
u
U
10
1 3
c
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o
0:
0..
Return



'-
Q)
E
::J
V1
c:
o
u
o
.j.oI

..... .....
::J ::J
o 0
!I
1 j lJ3rO d
Return
co
-
lS3M l)),Olid
Confidential
JPMCD _ 000003489.00019
Return
Ne\la(Ja'
2 37 63,683 36.2%
";.2:1:: New York
8 235 15,691 2.n;
654 221,318 31.7:1::
31.7:1:: Wasilingtoo
2 186 13,002 12 . .n>
12. .. ~
Florida
5 266 11.880 3.2% 59 13 5b8 0.2%
19.4
Texas
7 249 9.062 2.5%
460 68,245 18.8%
18.8% Orej!.00
1 105 5,696
1'.9\
" ' U ~ New Jersey
12 86 3,308 1.6% 8 16.4 7,052 3.4%
16.4 illinois
33 144 1,373 0.4% 2 347 38,619
1111 Arizooa
11 64 1,124 1,4% 1 236 19,187
2-4.0% Utah I)
34 &48 1.9% 3 34 5,159
<IO.n Georgia 18 68 759 0.4%
10. J1I: Idaho
8 22 627 1.6%
20.0% Colorado 16
40 498 0.6% :;
87 5.0%
17.6%
~ 2 13 166 0.2% 7 41
' I U ~
HA
Single branch in NV holdS $62.400 of
Source: SNl DataSource (BriIf>Ch data as
J
... it
f. ')
9
R
e
t
u
r
n
I-
V<
W

I-
J
w
o
oc
0..
.
1
2007 Braocnel> % of total bfilfIChe$
1,002

1,030
14.2%
{'
6.l!J

Wachovla
167

Los AngelesLong BeachSanta Ana
13.2
2 San frand$Co-Oakland-Fremont
4.3
3 San
Marcos
3.1
4 San JoseSunnyvaLe-Santa Clara
1.6
5 Rlverside-San Bernardino-Ontalio
4.2
Source: s.Hl FinanCIal (Branch oata as of 3125/08; deposit data of 6/30107)
;.;
2007
114.885
15.4%
43,106
5.8:1>
18.2"
8.5"
1.
2'19
'1
93
11.317

26.5"
3
75
7.284
15.6%

3
36
4.916
9.4"
24.0'Aii
2
48
4.789
12.4"
21.1:1>
PROHC W[S 10 R
e
t
u
r
n
Branch Branh CeURt
Branch
eQUAt I of Tot.al
InstitutiElA CQOlit
353 14.4% $57,206 19.0%
1 Bank of Amelica 159
2 Wells &. Co. 170 16.3% 37,865
3 Wells Fargo &. Co. 319 13.0% 32,580 10.8%
3 Citigroup
88
UnionBanCal 107 4.4% 20,512 ,.. ,
"
5 Wachovia
21 2.2!11: 10,935 6.3%
1 Bani< of Amelica
2 Wells Farllo &. Co. lOD 7,734 16.5%
2 Bank of America 61 16.6% 10,300 19.6%
"1.,,;)"-
o QW" :t 1
\r
60 4,434 9.5!!>
4 Camerica
5 WachoVla
11 1.8% 2,632 5.6%
5 SVB financial
2 0.5% 3,579
6.'"
Source: SJ;It DatiiSource (8rarn:h data a5 01 3/25/08, depos.it data a5 ot 6/30/01)
>I J (
E S r 21 R
e
t
u
r
n
!-
V"\
'"'
3;
!-
2
1
4
Wachovia
Sank of America
SunTru!>t Banks
Regions Financial
3 U.S. 6ancorp
765 1 3 . 3 ~
665 11.6%
562 9.8l1i:
430 7.5%
166
9.7%
153
7.9%
$71,335 19.4%
67,008 18.2%
Beach
33,883 9.2%
Ortando-Kissimmee
17,679 4.8%
Palm
Port St. lucie
Tampa-St. Petersburg Clearwater
Sebastian-Vero Beach
Sarasota -Bradenton Venice
Lakeland
Deltona-Dayton Beach-Ormond Beach
2 Wells Fargo &. Co_
IlS
8,225 7.8%
'." l".
8,040 7.6%
4 flank of AmeOca
88
3 125
5.9%
5 49 1,038 5 . 4 ~
5 12 477 6.6X
13 44 384
0.9%
9 6 269 3.6,'4;
10 2 77 l.U:
33 12 69
0.4%
12 10
66 1.2%
22 2 45 0.5%
11.6l1i 5,946
12.4%
B.ox.
5,680
),466
PROJECfW', 22
R
e
t
u
r
n
Park
65-1 12.3% 221.318 3U"
1 Park <41;0 6.l1:li; 68,1'15 IS.ft
2 HS6C
392 7.3% 70.<468 10.1%
2 Sank or America 463 6.ft 48,113 I3.G )
CIUgroup
259 4.9% 51.,425 8.2%
1 Wells filfgo &; Co.
564 8.311; 28,1+4 7.7%
"
8ank of Amen;;:<1 37'5 7./1lI; 37.n7 S.4ll> ... Banco Bilbao \lizcaya 329 20.90-4 S.G
5 Capital One flnaodill 285 5.3% 34,563
5 Wacholfia
211 J.2lIIi 12.2<18 J.G
1iIl>lt r.1!I1
1 Bank of Amer1<a
397 u.ft $34,304 16.G
2 Wilchovla
323 9.6% 28,7'19 13.8% 1 Bank of Amer1<a 220 4 . .no 39.763
11. '"
3 Toronto-Oomlnioo 323 9.6% 26,213 11.5" 2 Park
1<17 6.9li> 38.619 II lIS
<4 PMC Finane ial
339 10.0% 18.282 8.7lIi 3 SMO flnlllicial 184 J.6% 29.116 B.9li>
5 Hudson City 8i1l)(orp
91 2.7lIi 12.732 6.1:11;
"
Natiooal City
ll1l J.6S 12.982
5 Northern Trust
19 O .no 8,950 1.7%
u
o Source: SNl OiItaSource (6rarxh data as 3/25/08, deposjt data as of 6/30J01)
a.
PR
T 23
R
e
t
u
r
n
BAC
Park WFC
Network
U.S. Households
Households
74.8%
48.3%
Income
53.4%
25.5% 27.9%
Total It of Branches
Growth
5 Year Growth
5.3%
3.5%
6.7%
% of
Growth
17.7% 36.2%
% of Hisoaoic Growth
71.4%
30.1% 47.1%
-----, --,--
Branch count before consolidations; assuming 440 consolidations branch count would be 4,843
I- Note: Analysis based on 3 mile radius around each branch; assumes no new branches after Jut\! 2007
VI
"-'
3:
l-
V
W
-,
o
a::
Q
WB Wait STI
3% 12.4%
.6%
26.7% 32.7% 3.5%
5.5% 5.8% 6.8%
53.
15.9%
( T IN f ~ T 24
R
e
t
u
r
n
'""'
3:
u
Q
Retail
Home loans
Card
Commercial
Corpora te I Other
Total
Investments In fAs &: Business and Commercial Bankers
Net change in expense '07 '11

Total HIE less intangible aroonrzatlOO and 4Q goodwill impairment charge for Mortgage Banking
realized mergel' as of 2011
'As 01 2011
u,1IJIIiIIfIWI' aa.e
Total Reduction
P R Jf (
30.01
50,01
51,21
21.31
53.51
25
R
e
t
u
r
n
I--
w
S:

v
....
o
'"
a.
Retail
and Business
Home
Commercial
Card
Staff
Entire
100tlal pojltUlatioo IOcludes. employees aod contractors
500
450
to St;;ltf inc;lu<is;
Advisors
BusIness Banking Relationship Managers
Business Bankers
Initial
Adds to Staff
IU\d I"OLlllliiUl
o
o
180
2
4.132
o
2,118
(1
PROJ
II
26
R
e
t
u
r
n
Q.
6aseline
G.AAP
Ca:>t;
Park share price ($ I
l
Park's 201' net income
Capital raise I fMV I lLR
1(l()S Issuance of base CiI!>e capaill rai!>el
MEDs cooveflolOCl
Source: Company filings
Note: Market data as of March 26, 2008
.00 6.7
1.00 2.1
500 2.11
1,000 6.'1
n.8li:,
16.5
(0.6)
0.2
(0.1)
(1.51
(5.1I)
(2.9)
SO.71
0.88
(O.Oll
0.01
(0.011
to.03)
(0.30)
(0.15)
S2.S!la
3.141
(117)
39
(27)
17
(1,073)
(533)
S 1 27
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GAAP EPS accretion I
GAAP EPS ac c retion I
GAAP EPS accretion I
West GAAP net income breakeven
Pre-tax cushion
Source: COO1pany flUngs
o Note: Martel data as ot Milrch 26, 2008
a::
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2009
2010
8.s;;.
3
13.8%
5
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Illustrative option ARM representative payment schedule
1
---

----LOJP.mt
----lJiiItjilloao amt . . . . - - . NegAmcap
----lOyear payment
'3.600 "I - - - - - - - - - _ __ _ _ _ __ _ __
.,
.".

, ........ 1;tQ.%.


i
. '
PlOt
Jl.QjlO
$Q.oo
u
1
i
1S
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i4 41
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Source: repon to Finance Commitlee of the Board ot Directors: (redit Deep Dive; January IS, 2008

f
I
(4 '
<t ! JPMorgan 0
I that borrower setecu minimum payment option every time. Representative loan is an MIA indexed Option AAM, S350k loan amount, no IIltroductory period, 115X negam cap
PROJECT W[5T
34
R
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James
V. Futter
to <linlnr ... V,. at
transaction
.... 1 ....... .. 11 to as
1
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continue to pursue a
no
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...,
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&Co.
$1.
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$1.10
$1
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TeE
REI T and Debt
Acquired TeE
Marks
Purchase accounting adjustments
Other tier 1 adjustments'
Pro forma TeE
Required capital to support RWA
Total capital required
. Bank ...

debt ' . \ . , ' '.,: .
. ,I ,

$14
$14
$14
0
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17
$14
$26
$31
($30)
($28)
($28)
(2)
(2)
(2)
(1 )
(5)
(4)
($19)
($8)
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$15
$15
$15
$34
$23
$17
. ,....- - - .. .- -."- .
'f bank only J more capital and potential to structure alternatives
with government
I lI1c1udes de1ened tax asset per regulatory limitations, wntedown 01 PPftE due to oegative iQOdwiU rules and 0It1er adjustmenu
CHASE.&CO.
PIlOJECl w['>T 4 R
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income
Ongoing
$512 $2,550 $3,189
liquidating 3,788 2,820 2,119 1,635
Total
Capital from balance sheet reduc tlon
Ongoing
$270 $233
1,988 927 6n 397
Total
0

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....
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:\
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Note: Oata <u 0/ September 18. 2008
a
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Source: SNl finandal
u ... 1'lt';;' ' . :, . {
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.
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:- .... ,' ...... ', /,; _ : : .: (::',: .. ,,,.. .
Note: Deposit data as of June 30, 2007; excludes greater than S500mm in a single branch; <lemoraphic data dep05itwe
i
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\'MORGA."< CHASE &CO.
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PArk
IIrGfonna <.ombinod
Cuccefll ,.C.,' k
OcllQlit
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'of

RWkot IeaIW
StAlte Rani<. bfaocl\es {$mml (S)

bnlnclles ($mml (1').
i411k

lSI
Cablorma
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" . Ii" 20.31 l ( v - <, >1, ;w ,,,, x Hew York 6 237 15,1.91
3.9
651 n,461 17.9

17.9 v ' ., <, ' - .. " , ,
W,uhmaton 1 187 13,002 116 1 0 0.0
;st p.OQZ ::--.. -:,,!: .I;(t(.; 15.5
flondil 5 261 11,830
3.7 59 13 568 0.2
c ':r. ...... J. ffi" "'11.r. O<'''l
4.6
- 5 -;1 l ,'J . 7 253 9,062 3.1
467 28,668 9.9
..
9.9 Oregon 2 105 5,696
12.8
0 0.0
,t'"; i.'. 'IT' -"
17.4 ... tU .
b . . t:. .. "'a \fo' ?' ,
HewJeney 12 86 3,308 2.5 8 167 7,450 5.7

20.0 /leYQdi\' 7
37 1,774 5.0
0 0.0
' 0
22.5 Illinois
.......... .'- - - '\
))
115 1,373 0.5 2 347 21,503 8.5
' I .' _ 41 O, i ;; 8.5 AI1ZOOil 9 64
1,12" 1.6
244 15,221 22.0
,.1:.,. ..
22.0
1
; .. 1i - ... ... Utah 6 33
2.1 3 3 .. 1,993 5.7
f,
17.9 Geot'gla 17 66 759 0.5 297
0 0.0
raO.of ... --: . .
9.5
...-, ..... ", ..... ;-1.''* . _.t';! . - _, ... . 1
ldilho 8 22 627 3.5
0 0.0
,,!>';2' 20.0 CoIofaoo lb 40 498
0.7 5 89 3,395 4.7
.;i<if, 15.5 Cooneaiwt
> t:o:> ... . " \
.. 2 13 166 0.2 7 42 3,507 5.0
. ; ,
13.0 Other
285.3+4 HA
. . . : . , "'-i '
HA
HA 1,144
L:" .,.!. ' ...
. . . .
. . .. . _ _ <. _ __ _ _ u ____ _ ___ ". " _ _ #_ .
__ -1-_! ." 'Q '1--.- )'" , <
, ; . .
Source: SNL finafl(lai
HQte: Deposit data,u of June 30, 2007, branch data as of September 16, 2006; excludes deposits greater than $5OOmm in a single branch; demoiriPf\1c datAl
by county
i Single branch itl NV hold5 $62.4bn of deposits
JPMORGA:\ Clf:\SE,&CO.
PRO J (T WE. S 1 10
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4 San
179
379
5 Riverside-San Bernardino-Ontario
Source: SNl Flnarloai
Note: Branch dilta as of September 17, 2008, data as of
&Co.
4.3 4
3.1 3
.8 3
4.2 2
30,2007
251
94
75
38
49
41 5.6%
6.6%
15.7%
9.4%
12.4%
26.6%
17.0%
24.0%
21.2%
PROJECT R
e
t
u
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n
165 16.01 37,865 22.01
88
8.5" 18.5-46 10.8%
-4 UnlonBanCal
113 4.6% 20,512 6.9%
5 Cjti
146 5.9% 13,482 4.5%
z
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Source: SNl Flnal)oal
<.( tiote: Branch data as of September 17. 2008, data as June 30, 2007
"
-
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&Co.
PROJEC WfS 2
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3 SunTrust
"
5 WeUs Fargo
Source: SNl fInanCial
657
574
159
11.4
9.9
7.9
8.2
67,008
34,105
8,040
7,412
18.2
9.]
7.6
7.0
Note: !!ranch data as of September 17, 2008, dePOSIt data as of June 30, 2007
CHAS&Co.
lauderdale Pompano Beach
OrlandoKlssimmee
Tampa-St.Peteobori-Clearwater
Palm Say-Melbourne-
Bradentoo-Sarasota Venice
lill<eIandWlntet: Haven
Port St. lude
Sebastian- Vero Beach
Deltooa-OaytOO4 Beach-Ormond Beach
CdjJe Coral' fort Myers
Island
Jacksonville
Il'Jjfiell';ll
5 Umpqua
70
1 126 S8,3Q.4 5.'1:11
5 -47 1,6118 5.<4
13 .. 0 384
0."
5 12 'In 6.6
J2 69 0 .
12 10 66 U
9 7 269 3.6
10 2 77 2.
22 2 "IS 0.5
41 2 0
31 0 0,0
40 0 0.0
.J

6.3 3,466 7.2
P OJ W[" r 3
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Par1l
2 HSOC
389
7.3
70,468 10.1
3 C1ti
260
4.9 57,425
8.2
Bank of Amen<:a
379
7.1
n,n?
5.4
5 Capital One
2&8
5.<1 34,563
5.0
2 Wadlovla
317
9.4 28,749
13.7 3 TI)
32 ..
9.6 26,213
12.5
.. PNC
331
9.8 18,282
8.7
5 Hudson City
93
2.8
12,7::12
6. t
Source: SNl financial
Note: IIr.mch data as 0{ September 17, 2006, deposit data ill> of June :.0, 2001
&
2 Bank of America
466 6.7 48.7'13 13.4
3 weUs fal1ilo
595
8.6 29,122 8.0
'I 8BVA
327
".7 20.90<1 5.7
5 Wachovia
229
3.3 12,218
3.4
2 Park
3'17 6.9 311,619
1.8
3 BMO
186 3.7 29,115
8.9
4 National Cit;,'
18<1
3.6 12,982
"1.0
5 Nortllem Trust
19
0.4 8,9510
2.7
PRO teT WE T
R
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u.s.
48.9%
24.4% 25.1%
30.3%
28.4%
Income
53.4%
26.7%
Total II of Branches
5,598
Growth (200611)
5 Year
.... "
" 5.3%"
6.7%
%
'-
17.7% 36.2% 26.1%
--
% of
71,4%
30.1% 47.1%
Source: FOIC and Financial
Note: Data as of June 30, 2008. Analysis based on 3 mile radius around each branch; assumes no new branches after July 2007
I Branch count before consolidations; assuming 440 consolidations branch count would be 4,970
CHASE&
32.7%
38.3%
2.4%
11.6%
3.5%
16.8%
15.9%
PRj[ (')1 15
R
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It was milrlutles to <1"",,,,,,",, at be
"nr,,.n,/ .. f1 at
Ul"'''u;);)lV'Ul. upon lUI.'U,",'" sc(:onoe.ll, it was
I
Return
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J ofl
upon mCltlo'n it was
as
15,
such amendment to be effective from and after S .. ,..,tPlm
"",,, .... ,,,,,,'vu, there no
Return
as of ::selDtemt)e 2008
.J
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10000"6t00000 a 3 1 ~ d r
STRICTLY PRIVATE ANO CONFIOENTIAL
r,:..:
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PRESENTATION TO THE BOARD OF 0 RECTORS
Return
E:<:ECUTIV( SUMMARY
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process over
model with income statement at a
review of West and
and nrnrpn,
with statement and balance sheet
w I JPMORGAN CHASE&CO.
unft
rh,,,",,",,,, to credit
", .. o",,,,..orll at a business unit
PROJECT wEST J
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XECUTIVE SUMMARY

..,
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P ESEHTATION TO THE BOARD OF DIRECTORS
Return
wE S T OVERVIEW
(,...,
"'0
;s::
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0
6
.. 11
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Creates broader branch network

Pari( branches - 3,203
*
West branches - 2,207
~ I
Total combined branches - 5,410
Branch overlap
'"
~ I
New markets
0
:1
Source: SHl fltunc \at
Kate: DaY IS 04 September ll, 20011
w
~ I JPMORGAN CHASE &CO.
PIlOHCT WlST 7
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Provides significant expansion of retail deposit base

- .+., ....... 11-,.. .. . _2
Park
Wetot
""
\ "
..f'\" ... ..


' '-
.1; .f
.: 1 .1-:

,
\
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..
.. '";

ObIo
IWn0i5
... , . . {-
t ;' :'. '
Source: SHl FINneIaI
Note: DepasJt dillias of 30, 2.007; excludes <IeposIts !lreater than $500mm in a single branch; delllOifllphlc data deposltwelillted by county
, 2.0072012
JPMOllCAN CHASE&CO.
... . .. .

f .. 1 \
.' 6
PROJECT WEST
8
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Footprint attractiveness
Park
Network Comparisons .----
U S Househ td
- . ';,',:' ",'J ., 1",, ' '\ 2" ACV )0 301
. .. 0 S ,,!f'o6 . t "1",:1 '."AJ . JO
.f : '"
Hispanic Households
':-\?'<
Average Income
Businesses
T otalll of Branches
Population Growth (2006-11)
5 Year Growth
% of Population Growth
% of Hispanic Growth
Soorce: FDIC and SHL flnanclal
33.4%
$70,652
25.5%
3,203
--..
" 3.5% "
I
, I
\ ... 17.7: ... "
30.1%
Hote: Dlta as 0( June 30, 2008. based on 3 mile radius around each branch; assumes 00 new bf-anches after July 2007
I Branch count before consolidations; assuming 400 consolidations branch count would be 5,010
JPMORGAI\ CHASE&CO.
58.6%
$74,238
32.7%
2,207
5.8%
38.3%
53.7%
PROJECT wlST
,.,1', :
9
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II
PRESENTATION TO THE BOARD Or: D RECTORS
-0.
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INTEGRATION


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West provides significant branch cross-sell opportunities
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-i
Branch network provides opportunity to cross-sell more products, particularly credit card and
investment sales:
Credit card
In 2007, Park produced 2x the per branch credit card production of West
Achieving this productivity with West would generate an additional 500,000 credit cards
sold annually through the branches
Investment sales
'.'t-
-- - Park's % of retail bank households that have an investment product is 2x greater than West
Park's Financial Advisors produce on average 60% more investment sales per year
Achieving Park investment sales productivity and increasing Financial Advisors could lead
to an additional $8-10 billion in sales annually through the branches
'. 'Wftl.'Pad<
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Park successfully increased branch productivity for credit card and investment sales after the
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Release of Allowance on Credit
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51,517
61,234
18,617
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16,032
51,125
55,518
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2,692
14,252
7,502
2m: $2,710 52,968 $2,736 $1,501
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514,252
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.,. REIT Preferred from West Bank
+ Eliminate subordinated debt
+ Eliminate senior debt
. Elimination of West's net OTA
Net asset value at 9/30/2008
Otht>f lI"l<:Wdel. resu1JCtuliol! dllII1te. west other Tier I, aoo PPftE
JPMORG,"IK CIIASE & Co.
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Purchase
loan marks
lLR release
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lot bill
11,219
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17,6lO
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55]1,714
S2)j!,463
(525,0IIII)
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57,573
(S7,573,
$51,S6I
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$238,618
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Tangible anet:\ l,n7 1,981 2,000 1,992 1,999 2,002 2,011 2,101 2,206
RWA 1,080 1,105 1,313 1,306 1,).01() 1,365 1,396 1,<456 ,528
Averaae assets for leverage ratio ,18S 1,485 1,79<4 1,8)4 1,871 ,914 1,958 2,().41 2,144
Tangible common equity $78.7 587.4 $89.9 $93.1 $96.2 $99.3 S102.6 S119.1 $136_)
Tier 1 capital 98.8 112.9 117.2 120.5 123.6 127.1 130.9 '47.4 16<4.1
Total capital 145.0 162.6 167.1 170.0 173.3 176.9 180.8 198.0 216.2
ReauLiltory
TCEITA '1.38l
"AI"
4.49"
4.67'.11; 4.9611; 5.10l 5.67'.11;
6.18"
leverage 7.13 7.60 6.53 6.57 6.61 6.6<1 6.69 7.22 1.63
Tier capital 9.15 8.65 8.93 9.23 9.23 9.12 9.38 10.12 10.n

Total capital 11.'43 12.46 12.73 13.02 12.94 12.96 12.95 13.60 1"1.14

Moody's

TCE/MRWA 6.84% U7'Jr. 6.S4" 7 .201\ 7.37'Jr. 7.59111; 7.79'1 8.59l1: 9.301\
'"
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Note: Park pro rOOlla ORO Preferred In August 2008
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Park GAAP EPS
Pro forma contribution from West
Pro forma GAAP net income
Pro forma GAAP EPS
2009 201.0
$11.7 $15.8
53.29 $4.41
S2A
$1<4.2 $18.8
$3.79 $5.01
error
z Note: Cast and iIIIIlonlzation of intNllllble assets ina:Iqlorated In We.t eafolngl.. Par\( eamln!l!O bas.ed 00 lInil1vst estimates
<l
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$16.7
$4.67
53.'!
1
$5.37
PRO fCr WEST 25
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2011
West assets
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JPMORGAN CIiASE&CO.
PROJECT we" 26
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Tim To: RDouglas L Braunslein" <douglas.braunstein@j pmorgan.com>
Main@JPMCHAS[Cc:
SubjlXl: AnoLhcr updalt:
03/181200811:58
AM
Fyi
Santander said if Bear occupying us, would like our fig team to advise them on W AMU. Said they would only
work with us.
Talked to Steve and agreed
- tell them not able to do right now (not say conflict)
- appreciate call and want to advi se them on all US deals we can and they should not assume connicted on any
situati on
- not tell peopl e in bank beyond Enrico, Fern, you, me ... .. too sensiti ve.
Tim
Confidential JPMCD 00000352500001
Return
"Gearin, David" To:<dan. cooney @chase. coin>
<DGearin@FDIC.gov>ce:
Subject:RE:Contract
09/24/2008 09:03 AM
Can you forward or fax me a copy of the agreement that Rogin talked toJim Wigand about? Fax (703) 562-
2476
From:dan.cooneychase.com [mailto:dan.cooneychase.corn]
Sent:Wednesday, September 24, 2008 8:45 AM
To:Gearin, David
Subject:Re:Contract
David - Thanks. 10:15 is fine. I' ll send you a dial in #.
Dan
Daniel P. Cooney
Dan.Cooney@Chase.com
(312) 732-3171 (Chicagovoice)
(312) 732-5976 (Chicagofax)
(212) 270-7094 (New York voice)
(212) 270-9643 (New York fax)
"Gearin, David" <DGearin@FDIC.gov>
09/24/2008 07:39 AM
To
<dan.cooney@chase.corn>
CC
Subject Re:Contract
Thanks dan - jim thinks that he will be available for a call at 10:15 if that works for
you.
Original Message
From:dan.cooney@chase.com <dan.cooney@chase.com>
Confidential WMCD_000003562.00001
09/24/20080903 AM
or mea
David - Thanks. 10:15 is fine. I'll send you a dial in #.
Dan
"Gearin, David" <DGearin@FDIC.gov>
09/24/2008 07:39 AM
RE. Contract
to
To <dan.cooney@chase.com>
cc
Subject Re: Contract
Thanks dan im that he will be available for a call at O 5 if
Message-----
From. dan. .com <dan.
Confidential
for
Return
To: Gearin, David
CC: Eitelm@sullcrom.com <Eitelm@sullcrom.com>; Wigand, James
Sent: Wed Sep 24 07:17:49 2008
Subject: Re: Contract
David and Jim - We can explain these more fully on our call but given the extreme
shortness of time, here are the main issues we'd like to discuss:
Authority for transaction - Section 13(k) [raised yesterday with David]
Subsidiary thrift being put into receivership [raised yesterday with David]
Section 2.1 - how will liabilities for benefit plans be assumed/transfer of
relevant plan; what plans are actually fully with bank vs fully with the holding company
and thrift, etc.
Article 2 - liabilities for tax sharing arrangements
Section 4.8(b) - what is this provision intended to do, particularly with
respect to mortgage servicing agreements which are absolutely critical to operating the
business?
Article XI - exception to consents rep?
Article XII - Indemnification - [raised yesterday with David]
Confirm treatment of REIT preferred
Non-thrift subsidiaries - where in structure post-transaction/required
approvals/notices
As we go thru the agreement we may have some drafting tweaks but I think these are the
main ones.
Dan
Daniel P. Cooney
Dan. Cooney@Chase. com
( 312) 732-3171 ( Chicago voice)
( 312) 732-5976 ( Chicago fax)
( 212) 270-7094 ( New York voice)
( 212) 270-9643 ( New York fax)
This transmission may contain information that is privileged, confidential, legally
privileged, and/or exempt from disclosure under applicable law. If you are not the
intended recipient, you are hereby notified that any disclosure, copying, distribution,
or use of the information contained herein (including any reliance thereon) is STRICTLY
PROHIBITED. Although this transmission and any attachments are believed to be free of any
virus or other defect that might affect any computer system into which it is received and
opened, it is the responsibility of the recipient to ensure that it is virus free and no
responsibility is accepted by JPMorgan Chase & Co., its subsidiaries and affiliates, as
applicable, for any loss or damage arising in any way from its use. If you received this
transmission in error, please immediately contact the sender and destroy the material in
its entirety, whether in electronic or hard copy format. Thank you.
Confidential WMCD_000003562.00002
To: Gearin, David
CC: Eitelm@sullcrom.com <Eitelm@sullcrom.com>;
Sent: Wed Sep 24 07:17:49 2008
ect Re Contract
David and Jim We
shortness of time,
can
here are
these more
the main issues
for transaction
James
our call but
'd like to discuss.
the extreme
thrift put into
Section 2.1 how will liabilities for benefit
with David]
assumed/transfer of
relevant ; what are with bank vs with the company
and thrift, etc
respect
Article 2 liabilities
Section 4.8(b) - what i
arrangements
intended to
mortgage agreements which are the
business?
Dan
Daniel
Dan.
( 12)
(312)
(212)
(212)
Article XI to consents rep?
Article XII Indemnification [raised
Confirm treatment of REIT preferred
Non-thrift subsidiaries where in structure
s/notices
thru the agreement we have some dra
P. Cooney
.com
732 3171 voice)
7 5976 fax)
70-7094 (New York voice)
70-96 (New York fax)
with David]
red
tweaks but I think these are the
This transmission may contain information that is confidential, y
or exempt from disclosure under law. If you are not the
are fied that , di
or use the information contained herein ( any reliance thereon) is STRICTLY
PROHIBITED. this transmission and attachments are believed to be free f
other defect that affect any computer system into it is received and
of the to ensure that it is virus free and no
., its subsidiaries and affiliates, as
in from its use If received s
transmission in error, contact the sender and the material in
its entirety, whether in electronic or hard copy format. Thank you.
Confidential
Return
From:
Sent:
To:
Subject:
Fernando Rivas <fernando.rivas@jpmorgan.com>
Saturday, September 13,2008 4:00 PM
Frode X Riksfjord <frode.x.riksfjord@jpmorgan.com>; Gregg B Gunselman
<gregg.b.gunselman@jpmorgan.com>
Re: TIME CHANGE: West Call @4pm Today
Sorry - was talking to santander
Give a ring when have a second
From: Frode X Riksfjord
To: Vishal X Idnani; Fernando Rivas; Gregg B Gunselman; Genevieve E Hovde; Scott RHynes
Sent: Sat Sep 13 15 :55 :50 2008
Subject: Re: TIME CHANGE: West Call @4pm Today
Need a few more mins to make powerpoint. New time: 4: 15 pm.
Frode Riksfjord, CFA
Financial Institutions and Governments Group
J.P. Morgan
383 Madison Avenue, 36th Floor
New York, NY 10179
212-622-6321
646-284-8926 (mobile)
917-464-5886 (e-fax)
frode.x.riksfjord@jpmorgan.com
From: Vishal X Idnani
To: Fernando Rivas; Gregg B Gunselman; Frode X Riksfjord; Genevieve E Hovde; Scott RHynes
Sent: Sat Sep 13 14:47:39 2008
Subject: TIME CHANGE: West Call @4pm Today
Just received card update in last few mins and still working to complete earlier changes. Call now at 4pm today. Same dial-in.
From: Fernando Rivas
Sent: Saturday, September 13, 2008 2:14 PM
To: Vishal X Idnani; Gregg B Gunselman; Frode X Riksfjord; Genevieve E Hovde; Scott RHynes
Subject: Re: West Call @3pm Today
Thanks
From: Vishal X Idnani
To: Fernando Rivas; Gregg B Gunselman; Frode X Riksfjord; Genevieve E Hovde; Scott RHynes
Sent: Sat Sep 13 14:00:232008
Subject: West Call @3pm Today
All:
We are targeting 3pm for a West call this afternoon. If we need to push-back start time, we will send another note. Dial-in details
are below.
Dial-in: 866-870-8212
Pass: 779-36248
Confidential JPMCD 000003849.00001
Return
To: OlivierXde GrivelLTPMCHASEWPMCHASE
Tim
cc:
mainwpmcHAsESubject Re: Wamu + eit
03/21/2008 04:34
PM
We can have dialogue
Let's try to set a time
Don't think we could work for them on either, close to both
Olivier X de Grivel
Original Message
From: Olivier X de Grivel
Sent: 03/20/2008 10:31 PM ZE8
To: Tim Main
Subject: Re: Wamu cit
Tried and left voice mail
Tim Main
Original Message
From: Tim Main
Sent: 03/20/2008 07:48 AM CST
To: Olivier de Grivel; John Chrin; John Simmons
Subject: Re: Wamu cit
Oncell now 917 593 6069
Tim Main
Original Message
From: Tim Main
Sent: 03/20/2008 01:55 AM CDT
To: Olivier de Grivel; John Chrin; John Simmons
Subject: Re: Wamu cit
Yes
Call me live
Olivier X de Grivel
Original Message
From: Olivier X de Grivel
Sent: 03/20/2008 01:58 PM ZE8
To: Tim Main; John Chrin; John Simmons
Subject: Wamu cit
We are being questionned by chinese bank (ccb - keep it for yourself) on wamu + cit. They are not asking to
Confidential WMCD_000003978. 00001
Confidential
Tim
03/21120080434
PM
on
From: Olivier de Grivel
Sent: 03/20 2008 10:31 ZE8
To Tim Main
: Re: Wamu + cit
From: Tim Main
Sent: 03/20/2008 07: 8 AM CST
To
ee:
To: Olivier de Grivel; ehrin;
+ cit
now 917
From: Tim Main
Sent: 03/ 0/ 008 01:55 AM eDT
de
Re: Wamu + cit
to
Simmons
To: Olivier de Grivel; John ehrin; John Simmons
: Re: Wamu + cit
me
From: Olivier X de Grivel
Sent: 03/20 2008 01:58 ZE8
To Tim Main; John ehrin; John Simmons
: Wamu + cit
are it on wamu are not to
Return
advise on anything but want our views But body language is thinking of investing.
Can we engage dialogue with them on these ?
Am reachable on mobile +852 6343 9888
Confidential JPMCD_000003978.00002
IS LHLLU'--'U5
on lin_lUll\,,>
Confidential
Return
February 2008
Mo Tu We Th Fr Sa Su
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11 12 13 14 15 16 17
18 19 20 21 22 23 24
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March 2008
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Tuesday, March 11, 2008
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West Meeting (Brian, Billy King, Jay, Tom Novack, Charlie)
Location: Simpson , Thatcher & Bartlett - 425 Lexington Ave @ 43rd Street. 30th floor







Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 11
CONFIDENTIAL JPMCD_000004589.00001 Return Return
February 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
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March 2008
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April 2008
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Tuesday, March 18, 2008
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11



Project Olympic finance meeting (dial-in: 1-866-319-4553 pc:
1472872)
Project Olympic Treasury, Investments & BOLI meeting (dial-in: 1-866-319-4553 pc: 2415869)

Project Olympic Accounting meeting (dial-in: 1-866-319-4553 pc:
6245445)



Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 18
CONFIDENTIAL JPMCD_000004589.00002 Return Return
February 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29
March 2008
Mo Tu We Th Fr Sa Su
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
April 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
Friday, March 28, 2008
12
1
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Meeting: OCC (Charlie, Rodgen Cohen)
Location: 250 East Street SW

Meeting: FDIC (Charlie, Rodgen Cohen)
Location: 550 17th Street




Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 28
CONFIDENTIAL JPMCD_000004589.00003 Return Return
March 2008
Mo Tu We Th Fr Sa Su
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
April 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
May 2008
Mo Tu We Th Fr Sa Su
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
Tuesday, April 1, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

Conference call with Charlie Scharf & OTS & FDIC







Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 32
CONFIDENTIAL JPMCD_000004589.00004 Return Return
March 2008
Mo Tu We Th Fr Sa Su
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
April 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
May 2008
Mo Tu We Th Fr Sa Su
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
Wednesday, April 2, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11





OCC / FRB Preview Meeting for Annual Roll-up Reports (Ned Pollock, Barbara Yelcich, Jamie, Frank, Steve Cutler, John Bradley,
Barry, Steve Black, Bill Winters, Tony Horan, John Hogan, John Watkins, Alex Hatzopolous, Martha) -- Location: 8/270 Park -


Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 33
CONFIDENTIAL JPMCD_000004589.00005 Return Return
March 2008
Mo Tu We Th Fr Sa Su
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
April 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
May 2008
Mo Tu We Th Fr Sa Su
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
Thursday, April 3, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11





Conference call with Charlie & OTS
Location: 9/270 Park


Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 34
CONFIDENTIAL JPMCD_000004589.00006 Return Return
April 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30
May 2008
Mo Tu We Th Fr Sa Su
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
June 2008
Mo Tu We Th Fr Sa Su
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30
Thursday, May 15, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11





Ned Pollock (Introduce Scott Waterhouse)
Location: 8/270 Park



Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 76
CONFIDENTIAL JPMCD_000004589.00007 Return Return
May 2008
Mo Tu We Th Fr Sa Su
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31
June 2008
Mo Tu We Th Fr Sa Su
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30
July 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
Monday, June 23, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11



Jamie, John Dugan, Doug Roeder, Scott Waterhouse / OCC
Location: 48/270 Park


Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 115
CONFIDENTIAL JPMCD_000004589.00008 Return Return
June 2008
Mo Tu We Th Fr Sa Su
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30
July 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
August 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
Wednesday, July 16, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

Quarterly Earnings Meeting with Fed & OCC (Scott Waterhouse, Barbara Yelcich, Jeff Levine, Theonilla Lee-Chan)
Location: 48/270 Park - conference room A


Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 138
CONFIDENTIAL JPMCD_000004589.00009 Return Return
August 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
September 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
October 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
Tuesday, September 9, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

entofTreasury-1500PennsylvaniaAvenue
#15548171/Phone:1-800-672-7676
MeetingwithSheilaBair/Chairmanof
FDIC&Charlie
Location:601PennsylvaniaAvenue

Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 193


CONFIDENTIAL JPMCD_000004589.00010 Return Return
August 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
September 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
October 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
Monday, September 22, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

FDICMeeting
Location:48/270Park-conferenceroomA

Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 206


CONFIDENTIAL JPMCD_000004589.00011 Return Return
August 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
September 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
October 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
Wednesday, September 24, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

ConferencecallCharlie&OCC:DougRoeder,GraceDaley,Scott
Host:62408519)

Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 208


CONFIDENTIAL JPMCD_000004589.00012 Return Return
September 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
October 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
November 2008
Mo Tu We Th Fr Sa Su
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
Tuesday, October 14, 2008
12
1
2
3
4
5
6
7
8
9
10
11
12
1
2
3
4
5
6
7
8
9
10
11

QuarterlyEarningsMeetingwithOCC:ScottWaterhouse,FredCrumlish&Fed:BarbaraYelcich,TheonillaLee-Chan,Jennifer
Tranter,VickyWhite--Location:48/270Park-conferenceroomB

Mike Cavanagh/IL/ONE 09/17/2010 06:21:20 PM 228


CONFIDENTIAL JPMCD_000004589.00013 Return Return
August 2008
Mo Tu We Th Fr Sa Su
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
September 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30
October 2008
Mo Tu We Th Fr Sa Su
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31
Wednesday, September 24, 2008
7
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11
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1
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4
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6
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ConferencecallCharlie&OCC:DougRoeder,GraceDaley,ScottWaterhouse,JuliaWilliams(Dial-in:1-866-870-8212pc:27833977
Host:62408519)
Mike Cavanagh/IL/ONE 09/20/2010 08:27:15 PM 1
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THURSDAY, MARCH 06, 2008
PHONE CALLS
[ First Last Name Action Numbers
John Mahoney Spoke to Cell: 914-260-6470 Goldman
Scharf
9124120 I 0 I I :22 AM
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TUESDAY, MARCH 11, 2008
PHONE CALLS
I First Last Name Action Numbers
I Kerry Kill i nger LM 206-5C
9/24120 1011 :05 AM
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WEDNESDAY, MARCH 12,2008
PHONE CALLS
[ First Last Name Action , ___ ___________________ _
Kerry Kill i nger RYC 206-931-3784 cell Call on his cell. If he doesn't answer send an email and he'll see it on
___________ +-____ --t_:..: ke"'r.:.. ry '-.:,killinger@wamu,net his blackberry and ca"ll-,Y-"o-" u-=b:..: a:..: c", k.c. ' ______________ _
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THURSDAY, MARCH 13,2008
PHONE CALLS
I FirsC---cast Name Action Numbers
--
I Kerrv K i l l i n ~ e r X 206-5 00-31
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9124120 I 0 I I :06 AM
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MONDAY, MARCH 17,2008
PHONE CALLS
First Last Name Action Numbers
Kerry Killinger x 206-500- 3139
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9/24/20 I 0 II :07 AM
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MONDAY, MARCH 24, 2008
PHONE CALLS
I First Last Name Action Numbers
t Tom Baxter X 212-720-5035
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912412010 5:28 PM
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TUESDAY, MARCH 25, 2008
PHONE CALLS
First Last Name Action Numbers
Ned Pollack 9:30 am 212-789-4501 Would like to spend 5 min w/you whenever you have ti me
9/24/2010 5:39 PM
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PHONE
First Last Name
Sheila Bair
9124/201011 : 17 AM
CALLS
Action Numbers
WZ -898-6974
THURSDA Y, APRIL 03, 2008
She is calling to see if you would speak at a conf_ on July 8th_
Bernanke is opening and she wants you to be the lunchtime speaker
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FRIDAY, APRIL 04, 2008
PHONE CALLS
First Last Name Action
Numbers
Ned Pollock
T x
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912412010 1\ : 17 AM
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FRIDAY, SEPTEMBER 05,2008
PHONE CALLS
I Fi rst Last Name . - .. --T-Action --,-
Sheila Bair X 2028986974
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9124120 1012: 11 PM
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MONDA Y, SEPTEMBER 15, 2008
PHONE CALLS
I First Last Name Action
I I
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Alan Fishman
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9124120 10 12:12 PM
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TUESDAY, SEPTEMBER 16, 2008
PHONE CALLS
First Last Name Action Numbers
Sheila Bair x 202-898-6974
Alan Fishman T x I
206-500-8781
9/24nOlO 12:13 PM
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6
THURSDAY, SEPTEMBER 18, 2008
PHONE CALLS
I First Last Name- Action Numbers
John Rich
9/24120 1012:14 PM
x 202-253-3680 (Scott Polakoff I Office of Thrift Supervision - he and Scott Polakoff wi ll be in NY
202-746-3803 (John Rich) tomorrow and would like to meet with you regarding Washington
Mutual.
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MONDAY, SEPTEMBER 22, 2008
PHONE CALLS
First Last Name Action Numbers
Sheila Bair X 202 -898-697 4
9124/20 1012: 16 PM
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PHONE CALLS
I First Last Name Action Numbers--I
FYI
r
FRIDAY, OCTOBER 03, 2008
Monday's 9 am mtg w/OCC has been cancel led because some of the
participants have been called out of town. They will call to reschedule.
I Nancy FYI I Deb Horvath (Wamu CIO) added to your calendar on Monday at 9:15
9124120 10 12: 17 PM
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THURSDAY, MARCH 06, 2008
PHONE CALLS
[ First Last Name Action Numbers
John Mahoney Spoke to Cell: 914-260-6470 Goldman
Scharf
9124120 I 0 I I :22 AM
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TUESDAY, MARCH 11, 2008
PHONE CALLS
I First Last Name Action Numbers
I Kerry Kill i nger LM 206-5C
9/24120 1011 :05 AM
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WEDNESDAY, MARCH 12,2008
PHONE CALLS
[ First Last Name Action , ___ ___________________ _
Kerry Kill i nger RYC 206-931-3784 cell Call on his cell. If he doesn't answer send an email and he'll see it on
___________ +-____ --t_:..: ke"'r.:.. ry '-.:,killinger@wamu,net his blackberry and ca"ll-,Y-"o-" u-=b:..: a:..: c", k.c. ' ______________ _
9124/201 0 I I :06 AM
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THURSDAY, MARCH 13,2008
PHONE CALLS
I FirsC---cast Name Action Numbers
--
I Kerrv K i l l i n ~ e r X 206-5 00-31
I --=l
9124120 I 0 I I :06 AM
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MONDAY, MARCH 17,2008
PHONE CALLS
First Last Name Action Numbers
Kerry Killinger x 206-500- 3139
c
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9/24/20 I 0 II :07 AM
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MONDAY, MARCH 24, 2008
PHONE CALLS
I First Last Name Action Numbers
t Tom Baxter X 212-720-5035
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912412010 5:28 PM
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TUESDAY, MARCH 25, 2008
PHONE CALLS
First Last Name Action Numbers
Ned Pollack 9:30 am 212-789-4501 Would like to spend 5 min w/you whenever you have ti me
9/24/2010 5:39 PM
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PHONE
First Last Name
Sheila Bair
9124/201011 : 17 AM
CALLS
Action Numbers
WZ -898-6974
THURSDA Y, APRIL 03, 2008
She is calling to see if you would speak at a conf_ on July 8th_
Bernanke is opening and she wants you to be the lunchtime speaker
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FRIDAY, APRIL 04, 2008
PHONE CALLS
First Last Name Action
Numbers
Ned Pollock
T x
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212-789 __ -:.:.. 45::..: 0:.:.. 1 __ -+ _____________________ _
-
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FRIDAY, SEPTEMBER 05,2008
PHONE CALLS
I Fi rst Last Name . - .. --T-Action --,-
Sheila Bair X 2028986974
or
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9124120 1012: 11 PM
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MONDA Y, SEPTEMBER 15, 2008
PHONE CALLS
I First Last Name Action
I I
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Alan Fishman
I
LM 206-500-8781
- ~ -
~
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TUESDAY, SEPTEMBER 16, 2008
PHONE CALLS
First Last Name Action Numbers
Sheila Bair x 202-898-6974
Alan Fishman T x I
206-500-8781
9/24nOlO 12:13 PM
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THURSDAY, SEPTEMBER 18, 2008
PHONE CALLS
I First Last Name- Action Numbers
John Rich
9/24120 1012:14 PM
x 202-253-3680 (Scott Polakoff I Office of Thrift Supervision - he and Scott Polakoff wi ll be in NY
202-746-3803 (John Rich) tomorrow and would like to meet with you regarding Washington
Mutual.
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MONDAY, SEPTEMBER 22, 2008
PHONE CALLS
First Last Name Action Numbers
Sheila Bair X 202 -898-697 4
9124/20 1012: 16 PM
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8
PHONE CALLS
I First Last Name Action Numbers--I
FYI
r
FRIDAY, OCTOBER 03, 2008
Monday's 9 am mtg w/OCC has been cancel led because some of the
participants have been called out of town. They will call to reschedule.
I Nancy FYI I Deb Horvath (Wamu CIO) added to your calendar on Monday at 9:15
9124120 10 12: 17 PM
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MLA_EXAMINER_BG001
BRACEWELL
&CIlILIANI
MEMORANDUM
New York
Connecticut
Texas
Washington. DC
Kazakhstan
LOIldon
Dubal
TO: The Federal Deposit Insurance Corporation, as
Receiver of Washington Mutual Bank
FROM: Bracewell & Giuliani LLP
DATE: November 25, 2008
RE: Anticipated Tax Refund
I. Bllckgl'oulld
Evan D. Flaschen
Partner
860.256.8537 Office
660.760.6310 Fax
860.518.6799 Mobile
evan.llaschen@bgflp.com
BraceweU & Giuliani LLP
Goodwin Square
225 Asylum Street. Suite 2600
Hartford, CT 06103
Washington Mutual Bank ("WMB"), a federal savings and loan association and
direct, wholly-owned subsidiary of Washington Mutual, Inc. ("WMllt), was placed into
receivership ("Receivership ") by the Office of Thrift Supervision (the "OTS") on September
25, 2008. On the same date, after the Receivership was effective, the Federal Deposit
Insurance Corporation, in its capacity as statutory receiver for WMB (the "FDIC" or
"ReceiveI'"), entered into a Purchase and Assumption Agreement (the ''Purchase Agreement")
with JPMorgan Chase Bank, National Association ("JPM"), whereby JPM acquired
substantially all of the assets of WMB, including the stock of its subsidiary, Washington
Mutual Bank fsb ("WMBfsb"), in exchange for $1.9 billion and the assumption of certain
liabilities of WMB. Under the terms of the Purchase Agreement, JPM did not assume the
approximately $6.1 billion of senior notes or $7.6 billion of subordinated notes issued by
WMB.
NEWYORK\34195.1
Return
MLA_EXAMINER_BG002
BRACEWELL
&CIULIANI
Memorandum to FDIC
November 25, 2008
Page 2
The purpose of this memorandum is to explain why the anticipated tax refund
resulting from the carryback of WMB's 2008 losses to 2006 and 2007 income taxes paid was
not sold to JPMorgan Chase pursuant to the Purchase Agreement.' The sh0l1 answer is that
the Purchase Agreement excludes claims that WMB has against WMI, and the anticipated tax
refund is, from WMB's perspective, a claim by WMB against WMI under their tax sharing
agreement.
II. The Purchase Agreement
The Purchase Agreement states that JPM shall acquire all of the assets of
WMB from the Receiver, subject to celtain exclusions. Specifically, the Purchase
Agreement, in Section 3.1, provides:
[T]he Receiver hereby sells, assigns, transfers, conveys, and delivers to [JPM], all
right, tide and interest of the Receiver in and to all of the assets (real, personal and
mixed, wherever located and however acquired) including all subsidiaries, joint
ventures, partnerships, and any and all other business combinations or arrangements,
whether active, inactive, dissolved or tenninated, of [WMB] whether or not reflected
on the books of [WMB] as of[the close of business on the date the OTS closed WMB
(the "WMB Closing")].
The Purchase Agreement fUlther provides, in Section 3.5, that:
JPM does not purchase, acquire or assume, or (except as otherwise expressly
provided in this Agreement) obtain an option to purchase, acquire or assume under
this Agreement the assets or Assets listed on the attached Schedule 3.5.
, This memorandum focuses on federal income tax law but there may also be relevant
. anticipated state tax refunds, recognizing that many states (unlike federal) do not pelmit the
carryback of losses.
NEWYORK.\34 I 95.1
Return
MLA_EXAMINER_BG003
BRACEWELL
&CILILIANI
Memorandum to FOI C
November 25, 2008
Page 3
Schedule 3.5 to the Purchase Agreement specifically provides that assets so excluded from
the sale to JPM incJude:
[A]ny interest, right, action, claim, or judgment against. .. any shareholder or holding
cqmpany of [WMB] ... provided, that for the purposes hereof, the acts, omissions, or
other events giving rise to such cJaim shall have occurred on or before [the WMB
Closing], regardless of when any such claim is discovered ....
The Purchase Agreement does not specifically identify any tax-related items of WMB as
being incJuded in or excluded from the assets sold to JPM.
For the years ended December 31, 2006 and 2007, WMB reported, in the aggregate,
profits of approximately $4 billion and over $2 billion in income tax expense.
2
In 2008,
however, WMB incurred losses in excess of $3 billion in the first six-months of 2008.
3
Although there is no publicly-available infonnation regarding V.S. federal taxable income of,
01' taxes paid by or on behalf of, WMB for these years, it is reasonable to conclude that WMB
had significant taxable income in 2006 and 2007 and incUlTed substantial tax losses in 2008
prior to the Receivership (the "WMB Pre-Closing Losses"). It is also believed that WMB
incuned losses as a result of the Receiver's sale of WMB's assets to JPM (the "Sale Losses")
2 Washington Mutual Inc., Annual Report (Form 10-K) (Year Ended Dec. 31, 2006);
Washington Mutual Inc., Annual Repolt (Folm 10-K) (Year Ended Dec. 31,2007).
3 Washington Mutual Inc., Quarterly Report (Fonn 10-Q) (Period Ended June 30,
2008).
NEWYORK\34195.1
Return
MLA_EXAMINER_BG004
BRACEWELL
&CrULfANI
Memorandum to FDIC
November 25, 2008 .
Page 4
and has and wiH continue to generate tax losses from the disposition of its retained assets
until the Receivership terminates (the "WMB Post-Sale Losses").
For U.S. federal income tax purposes, WMI and WMB are members ofa consolidated
group that files a single U.S. federal income tax return (the "WMI Group"). WMI has been
the common parent of such group for at least the past three years, and WMB was a whol1y-
owned direct subsidiary ofWMI during such time. WMI files tax returns, and pays the taxes
owing, on behalf of the WMI Group.
WMI and WMB are parties to a Tax Sharing Agreement dated August 31, 1999 by
and between WMI and its subsidiaries (the "Tax Sharing Agreement"). The Tax Sharing
Agreement generally provides that each subsidiary that is a party to the agreement shall pay
to WMI its share of the taxes, and WMI will pay to each such subsidiary its share of the
refunds, of the WMI Group. A subsidiary'S share of the group's tax liability or tax refunds is
determined as the tax liability it would have incllned or the refund it would have earned had
such subsidiary filed tax returns separately and not as a member of the consolidated group.
Specifically, the Tax Sharing Agreement provides, in relevant part, that:
WMI shall pay to [its subsidiaries] amounts that may be due them on account of (i)
any overpayment of their said tax Hability for a taxable year or (ii) any credit that may
result from the utilization of their net operating loss for a taxable year, such credit
being detennined in accordance with the provisions of item 1 abovel] within 30
4 Item 1 of the Tax Sharing Agreement provides, in relevant pati, that "[t]or all
taxable years during which [any of its subsidiaries] is a member of an 'affiliated group' of
WMI as defined in Section 1504 of the Internal Revenue Code and is required to join in the
N/>WYORK\34195.1
Return
MLA_EXAMINER_BG005
BRACEWELL
&CJLILIANI
Memorandum to FDIC
November 25, 2008
Page 5
days after the consolidated return is filed for that taxable year or, to the extent any
such amount due must be recovered from the IRS, within 30 days after payment is
received from the IRS.[5]
1II. Summary of U.S. Federal Income Tax Law With Respect to Net Operating
Losses
The Internal Revenue Code of ] 986, as amended (the "Code") allows a
deduction for certain net operating loss ("NOL") carrybacks and carryforwards by corporate
taxpayers.
6
An NOL, generally the excess of allowable deductions ovel' gross income of a
corporation,7 is computed for each taxable year of a corporate taxpayer.
8
An NOL may be
carried back two taxable years and forward twenty taxable years to offset taxable income of
the corporation in such years.9 Absent an affirmative election, an NOL must first be carried
back to tbe second prior year, then the first prior year to obtain refunds for taxes paid in those
years, with any remaining NOL carried forward to the next following taxable year 01' years to
filing of a consolidated federal income tax return of WMI and its consolidated subsidiaries,
the federal income tax liability Of such consolidated group shall be allocated and shared
among [the subsidiaries] as if such entities filed a separate or consolidated return, as the case
may be,"
5 Tax Sharing Agreement, at Section 2(b).
6 Code Section 172.
7 Code Section 172( c).
8 Treasury Regulation Section 1. 172-2(a).
9 Code Section 172(b)(I).
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offset taxable income.
tO
A corporation's "taxable year" generally is the calendar year or
fiscal year ending during such calendar year, for which the taxpayer computes taxable
income and files a tax return. Such period generally is the twelve month period properly
adopted by the corporation for tax reporting purposes, but can be less than twelve months as
corporate reorganizations and liquidations can cause an early termination of a tax yeaL
l1
The
taxable year of a subsidiary of a consolidated group does not end solely because it is placed
into bankruptcy or receivership or upon a sale of substantial1y aU of its assets, and its tax year
continues until the tax year of its consolidated group ends.
12
The NOL for a corporate consolidated group generalJy is the excess, if any, of the
aggregate allowable deductions over aggregate gross income of all members of a group for
the taxable year.13 The consolidated NOL can be carried back and carried forward by the
taxpayer to other consolidated return years under the principles of Code Section 172. If a
consolidated group has an NOL in a taxable year, then the common parent corporation, or its
designated agent, may file for a tentative carryback adjustment to apply such NOL against
10 Code Section 172Cb )(2).
tllQ.
12 Treasury Regulation Section 1.1502-75 and Rev. Rul. 63-104, 1963-1 CB 172. See
also IRS PLR 200643001 (July 26, 2006).
\3 Treasury Regulation Section 1.1502-11 (a).
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prior year consolidated taxable income to obtain a refund.
14
A tentative application for an
NOL carryback to adjust the taxes paid by a taxpayer during prior taxable years may be filed
with Internal Revenue Service (the "IRS") only on or after the due date for filing such
taxpayer's tax return for the year in which the NOL is generated.
ls
Any refund due is then
paid to the common parent ofthe consolidated group, or its designated agent. 16
Notwithstanding the generalmle that tax refunds attributable to a consolidated group
are applied for by, and payable to, the common parent of such group, when a subsidiary of
the consolidated group is an insolvent financial institution for which the FDIC is authorized
to act as receiver, the FDIC may also file a canyback claim and receive the refund directly as
an agent of the consolidated groUp.17 While the FDIC, as receiver for a subsidiary of a
consolidated group, may file for the direct receipt of a refund with respect to the consolidated
14 Treasury Regulation Section 1. 1502-78(a).
15 Code Section 6411. Because claims for refunds often trigger a complete audit of
the return(s) for the relevant tax years prior to payment of the refund, a taxpayer may be
required to wait a substantial amount of time to obtain a refund. To expedite the process,
Code Section 6411 enables a taxpayer to apply for a tentative carryback adjustment where
the cash payment may be made prior to a full audit. The amount received by the taxpayer,
however, is only a tentative allowance of any overpayment. Any overpayment made by the
IRS pursuant to a tentative carryback adjustment can later be pursued by the IRS through a
deficiency claim, whereas an overpayment of a refund can only obtained if the IRS
commence an action to recover the refund from the taxpayer. For purposes of this letter both
tentative calTyback adjustments and refund claims will be referred to as refund claims.
16 Treasury Regulation Section 1.1502
M
78(b).
17 Treasury Regulation Section 301.6402-7.
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group, the IRS is not obligated to pay the FDIC all 01' any portion of such refund and may use
its sole discretion to determine the amount, if any, paid to the FDIC with respect to such
claim.
I8
If a corporation is acquired through an acquisition of its stock, such corporation
retains its NOLs (generally subject to limitation on future utilization).19 In contrast, if the
assets of a corporation are purchased, the purchaser cannot acquire such corporation's
NOLs.
20
A corporation can, however, sell its right to receive a tax refund in connection with
the asset sale?'
Accordingly, the WMB Losses can be carried back to the two prior tax
years of the WMI Group to obtain a refund of prior years' taxes paid by the WMI Group with
any remaining amount of such losses being carried forward up to twenty years to offset
future taxable income of the WMI Group. Any refund received by WMI and attributable to
the WMB Pre-Closing Losses is payable to WMB as determined under the terms of the Tax
Sharing Agreement (the "WMB Tax Payment").
18 Treasury Regulation Section 30 7(g).
19 Code Sections 381, 382.
20Mergers, Acquisitions. and Buyouts, Martin D. Ginsburg and Jack S. Levin, Vol. 3
at J 205 (January 2008).
21 See infra footnote 27.
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N. Treatment of Consolidated Group Tax Refunds under the Bankrll'ptcy Law
A. A Debtor's Accrued Losses Create an Inchoate Right to a Tax Refund which is
Prope11y of the Debtor's Bankruptcy Estate.
Although under the tax law a corporate taxpayer cannot obtain a refund in connection
with the carryback of NOLs until after the tax year of such losses closes, the U.S. Supreme
Court has interpreted the bankruptcy law to include as property in a debtor's bankruptcy
estate a debtor's inchoate right to receive a loss carryback refund.
22
In Segal the debtors had
incurred net tax losses for the taxable year through the date of the bankruptcy petition, which
did not coincide with the end of the debtors' taxable year. The Court acknowledged that the
tax law provides for calculation of tax refunds only on a full year's experience after the tax
year has closed and, as of the date of bankruptcy, the amount of any tax claim with respect to
losses of the debtors for such year could not be ascertained nol' could any claim for payment
from the IRS be made. Neve11heless, the Court held that the combination of the losses
22 Segal v. Rochelle, 382 U.S. 375, 379-381 (1966). Bankruptcy law is relevant with
respect to an FDIC receivership. The FDIC has stated that "[i]n many ways the powers of
the FDIC as receiver of a failed institution are similar to those of a bankruptcy trustee." The
FDIC's Role as Receiver, in The FDIC Resolution Handbook at 67-68 (Apr. 2, 2003),
available at, <http://www.fdic.govlbanklhistorical/reshandbookl>. See also Hightstown Rug
Co. v. Nat'l Sav. & Trust Co., 186 F.2d 10, 12 (D.C. App. 1947) (stating that because similar
considerations apply to the administration of both bankruptcy and receivership estates, "the
legal principles applying to them naturally should follow a similar pattern"); In re Merctll'y
Engineering Co., 60 F. Supp. 786, 788 (S.D. Cal. 1945) (noting that the same principles
apply to bankruptcy and receivership cases); In re Riggs, 51 F. Supp. 961, 962 (E.D. Pa.
1943) (same); and Beck v. FOlt James Corp. an re Crown Vantage, Inc.). 421 F.3d 963, 971
(9th Cir. 2005) (finding that a receiver stands in the same capacity as a trustee in
bankruptcy).
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incurred by the debtors as of the date. of bankruptcy and the payment of taxes in years to
which such losses could be carried back for a refund was sufficient to find that there was an
inchoate claim for refund that was transferable property of the bankmptcy estate. Although
no refund with respect to such losses could be collected from the IRS until the following
year, the "postponed enjoyment does not disqualify an interest as propelty.
1f
23 The Court
found a property interest in the inchoate right to a refund despite acknowledging that post-
petition earnings of the debtors in the same tax year could offset the losses previously
incurred, eliminating the opportunity fol' a refund. Further, the Court noted that had the
debtors incurred additional losses in the same tax year after the date of bankruptcy, the
proration of such refund would be made between the pre and post-petition periods.
24
The Ninth Circuit has stated its acceptance of the holding in Segal. In In re Wade
Cook Financial Corp.,25 a petition for bankruptcy was filed before the end of the debtor's tax
year and the debtor had incurred a tax loss for such tax year as of the date of the petition.
After the debtor's tax year ended, a claim for a cal1'yback of such losses was filed to obtain a
23 Id.
24 The practice of prorating tax refunds based upon the amount of losses inClined
before and after a petition for bankmptcy filed before the end of the debtor's tax year has
been followed in numerous cases. See, ~ Kokoszka v. Belford, 417 U.S. 642 (1974); In re
Barowsky,946 F.2d at 1518 (cites nine cases and notes that "[e]very court that has
considered [the] issue has held that the pOliion of an income tax refund that is based upon the
pre-petition poliion of a taxable year constitutes property of the bankruptcy estate.")
(citations omitted).
25 375 B.R. 580 (9th Cir. 2007).
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tax refund. The court determined that the claim for the tax refund with respect to losses
incurred prior to the petition was a prepetition claim and not a postpetition claim even though
the claim may have been contingent, unliquidated or unmatured when the petition was filed.
To resolve any doubt about the applicability of Segal, the cOUli noted "[t]hough Segal was
decided under the prior Bankruptcy Act, it remains good law under the Bankruptcy Code
applicable to the instant case.,,26
An inchoate tight to a future tax refi.md is assignable by a debtor. In Danningv.
Mintz,27 the court held that a taxpayer's right to its tax refund is generally assignable. As
long as the assignment of a tax refund is made pursuant to a valid, enforceable, contract
between the parties, the assignee obtains all of the assignor's rights to receive the refund.
B. A Subsidiary Debtor's Right to its Share of a Consolidated Group Tax Refund
is a Claim against its Parent in Bankruptcy.
The courts have considered the nature of an inchoate right to a refund of a subsidiary
in a consolidated group when refi.mds payable with respect to taxes of a consolidated group
generally are payable by the IRS to the common parent of such group. The courts have
evaluated the subsidiary debtor's claim for tax refi.mds received by its parent with and
26 Id. at 597-598. See also U.S. v. Sims (In re Feiler), 218 F.3d 948, 955 (9th Cir.
2000); Chappel v. Proctor (In re Chapel), 189 B.R. 489, 493 (9th Cir. 1995).
27 367 F.2d 304 (9th Cir. 1966). See also In re Lagerstrom, 300 F. Supp. 538 (S.D.
Illinois 1969) and Puget Sound Nat. Bank v. State, 123 Wash. 2d 284,292 (1994) (holding
that a sales tax refund is generally assignable, because to hold would be contrary to the
general principles of assignment).
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without a tax sharing agreement. In the absence of tax sharing agreement between the
parties, the courts generally find that if a subsidiary would have been entitled to a refund in
connection with a carryback ofNOLs had it always filed as a separate company, the refund
received by the parent inures to the benefit of the subsidiary that incuned the loss and the
parent holds such refund as an agent of such subsidiary. To permit the parent to retain such
refund would result in its unjust eruichment.
28
When a subsidiary and the parent of a consolidated group are parties to a tax sharing
agreement that addresses the treatment of tax refunds, absent a clear agreement that the
parent holds refunds attributable to losses generated by a subsidiary in trust for, 01' as an
agent of, such subsidiary, the cOUl1s find the parties to have a debtor-creditor relationship
with respect to refunds.
29
A tax sharing agreement generally will be found to create a trustee
28 Westem Dealer Mgmt, Inc. v. England (In re Bob Richards Chrysler-Plymouth
Corp.), 473 F.2d 262, 265 (9th Cir. 1973). See also, Jump v. Manchester Life & Cas. Mgmt.
Corp., 438 F. Supp. t 85, 189 (E.D. Mo. 1977) ("subsidiary has a right to recover an income
tax refund channeled through a parent company filing a consolidated return, and... this right
is limited to the recovery which the subsidiary would have had if it had filed individual
returns throughollt"); U.S. v. Revco D.S., Inc. (In re Revco), 111 B.R. 631, 639 (Bania'. N.D.
Oh. 1990) (held that subsidiary was entitled to loss-carryback refund based on In re Bob
Richards holding, noting that where the parties made no agreement, the parent corporation
acted as an agent for the consolidated group); FDIC v. Brandt (In re Florida Park Banks), 110
B.R. 986, 989 (Bankr. M.D. Fla. 1990) (held that FDIC, as receiver of subsidiary bank, was
entitled to the tax refund received by debtor parent that was generated through the
subsidiaries' operating losses).
29 Franklin Savings Corp. v. Franklin Savings Ass'n (In re Franklin Savings Corp.),
182 B.R. 859, 862-863 (D. Kan. 1993), affd 31 F.3d 1020 (lOth Cir. 2004) (holding that a
debtor-creditor relationship existed where "[u]nder the tenns of the agreement, the taxes were
not held in trust for the benefit of the subsidiary to be automatically turned ovel' to it").
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or agency relationship between a parent corporation in possession of a tax refund and its
subsidiary if it (i) requires the parent to segregate the tax refund from its other funds; or
(ii) restricts the parent's use of the cash tax refund.
3o
If the tax sharing agreement does not
explicitly or implicitly create a tmst or agency relationship between the parent and
subsidiary, the court will not deem such relationship to exist.
In In re MCorp Financial, Inc.,ll the court specifically addressed the rights of a bank
subsidiary in receivership to collect its share ofa tax refund received by its parent, a debtor in
bankruptcy, pursuant to the terms of a tax sharing agreement. The bank subsidiary and its
parent were parties to a tax sharing agreement that did not characterize the parent as
receiving any refunds attributable to the subsidiary's losses as an agent or nominee for the
subsidiary. Thus, the obligation of the parent to remit any portion of a tax refund it received
to its subsidiary created a debtor-creditor relationship between the parties. Accordingly, the
Similarly, in U.S. v. MCorp Financial, Inc. (In re MCorp Financial, Inc.), 170 B.R. 899, 903
(S.D. Tex. 1994), the court held that where the tax allocation agreement did not contain
language creating a trustee relationship or provide that the parent held a "mere nominal claim
to the refund," the agreement created a debtor-creditor relationship between the parent and
subsidiary.
30 Superintendent ofIns. v. First Central Financial Corp. (In re First Central Financial
Corp.), 269 B.R. 481, 496 (Bankr. E.D.N.Y. 2001), affd 377 F.3d 209 (2d Cit'. 2004).
31 170 B.R. 899,903 (S.D. Tex. 1994).
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court held that if the subsidiary bank, 01' the purchaser of its assets in receivership, wanted to
enforce its right to such refund against the parent it must file a claim in bankruptcy.32
The agreement for the sale of the bank subsidiary's assets between the FDIC and the
purchaser provided that the FDIC retained aU claims against the parent corporation. Thus,
the court found that the bank's claim against its parent for the tax refund pursuant to the tax
sharing agreement was a claim retained by the FDIC. Further, the purchaser of the bank's
assets could not claim any p0l1ion of the refund received by the parent on the equities of
unjust enrichment because such right does not exist between a post-bankruptcy purchaser out
of a receivership and a creditor of the estate.
The courts' interpretation of subsidiades' rights to refunds received by their parent in
bankruptcy is consistent with the FDIC's policy statement regarding tax allocations in a
holding company structure (the "Interagency Tax Policy,,).3) The Interagency Tax Policy
provides that a parent company that receives a tax refund obtains such funds as agent for the
consolidated group on behalf of the group members.
34
If a refund is not paid by a parent
)2 Id.
33 Interagency Policy Statement On Income Tax Allocation In A Holding Company
Structure, 64758 Interagency Policy Stmt., Federal Register/Vol. 63, No. 225 (Nov. 23,
1998).
34 Citing Treasury Regulation Section 1.1502-77(a) that states, except as othelwise
provided, the common parent for a consolidated return year is the sole agent (agent for the
group) that is authorized to act in its own name with respect to all matters relating to the tax
liability for that consolidated return year, for each member in the group ... [t]he common
parent files claims for refund, and any refund is made directly to and in the name of the
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Memorandum to FDIC
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company within a reasonable time period, the receivable should be treated as either an
extension of credit or a dividend from the subsidiary to the parent. The Interagency Tax
Policy also encourages holding companies and subsidiary financial institutions to enter into
written, comprehensive tax allocation agreements and recommends parameters for such
agreements including allocating each member's liabilities and benefits as if it had always
filed on a separate entity basis.
35
The Interagency Tax Policy ful1her provides that an
institution incul1'ing a loss for tax purposes should receive a refund fi'om its parent in an
amount that is no less than the amount the institution would have been entitled to receive as a
separate entity. The Interagency Tax Policy is thus consistent with the bankruptcy law that a
tax refund paid to a parent corporation inures to the benefit of the subsidiary that incurred the
loss resulting in such refund; however, if a fair and reasonable tax sharing agreement exists
among the pa11ies, it should be followed to determine the rights of the parties with respect to
tax refunds.
common parent and discharges any liability of the Government to any member with respect
to such refund.
35 Interagency Tax Policy, at 64758. Moreover, one of the primary purposes of a
written tax sharing agreement in banking organizations is to govem the rights and
responsibilities of the consolidated group's members in order to comport with banking laws
and regulations regarding transactions between an insured depository institution and its
affiliates. In the absence of a written agreement among the parties of a consolidated group,
intercompany tax payments may not be properly recorded and are subject to potential abuse.
For example, under Section 11(a) of the Home Owners' Loan Act (12 U.S.C. 1468(a),
transactions between WMI and WMB, as affiliates, are subject to the requirements of the
provisions of Sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c and 12
U.S.C. 37Ic-l) and the related regulations of the OTS.
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V. JPM's Entitlement to the WMB Tax Payment under the Purchase Agl'eement
A. The Plain Language of the Purchase Agreement.
Under the Purchase Agreement, JPM acquired from the Receiver all right, title and
interest of the Receiver in and to all of the assets of WMB as of the WMB Closing.
Specifically excluded from that transfer, however, was any interest, right, action, claim, or
judgment against any shareholder or holding company of WMB; provided, that, the acts,
omissions, 01' other events giving rise to such claim occurred on or before the WMB Closing.
The critical questions then are: what is the nature of WMB's rights to the tax refund
attributable to the WMB Pre-Closing Losses and did JPM acquire such rights?
Prior to undertaking the substantive analysis, the procedural rules for applying the
Purchase Agreement must be considered. The Purchase Agreement provides that its
interpretation will be governed by federal law and, in the absence of controlling federal law,
the law of the state in which the main office of WMB is 10cated.
36
WMB is a Washington
corporation and its main office is in Seattle, Washington. Under Washington law, whenever
possible, the plain language of a contract should be considered firse
7
and words should be
given their ordinary, usual, and popular meaning unless the agreement, as a whole, clearly
demonstrates a contrary intent,38 Intent should be detelmined by objective manifestations
36 Purchase Agreement, at Section 13.4.
37 Flores v. American Seafood Co., 335 F.3d 904, 910 (9th Cir. 2003).
38 Id. (intemal citations omitted).
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rather than the pmties' unexpressed subjective intent.
3
? Accordingly, to the extent the plain
language of the Purchase Agreement provides a clear expression of intent, such expression
should be followed without consideration of other potentially conflicting expressions of the
pmties' intentions not memolialized in the agreement.
B. WMB's Right to a Tax Refund Attributable to the Carryback of WMB Pre-
Closing Losses is in the Form of an Accrued Claim Against WMI under the
Tax Sharing Agreement.
As discussed in Section IV of this memorandum, NOLs are computed only with
respect to completed taxable years and no refunds can be claimed in connection with an NOL
carryback until after the taxable year of such losses has ended. WMB's tax year did not end
as a result of the WMB Closing. Accol'dingly, none ofWMI, the Receiver or WMB had the
absolute right to receive a cash refund directly or indirectly from the illS with respect to
WMB Pre-Closing Losses as of the WMB Closing. Thus, no tax receivable existed with
respect to such losses as of the WMB Closing to be conveyed to JPM.
The accmal of losses together with the payment of taxes in the years to which such
losses would be carried back, however, results in an inchoate right to a refund which is
transferable propelty ofa bankruptcy estate. The WMB Pre-Closing Losses were all incurred
prior to the WMB Closing, and WMB paid taxes in the two carryback years (pursuant to the
39 Paradiso v. Drake, 135 Wash. App. 329, 336 (2006) (intemal citations omitted).
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terms oftlle Tax Sharing Agreement). Accordingly, the Receiver should include the inchoate
right to a tax refund relating to the WMB Pre-Closing Losses as propel1y ofthe Receivership.
As previously described, a subsidimy in a consolidated group generally is not entitled
to receive any refund directly from the IRS with respect to the canyback of its NOLs by the
group. Instead, such refund is payable to the parent, and the subsidiaty is entitled to seek
recovery of its share in equity or, if a tax sharing agreement exists, as a creditor of the parent,
unless the agreement otherwise provides. Because WMI and WMB are parties to the Tax
Sharing Agreement as of the WMB Closing, such agreement should govern the rights of the
parties with respect to any tax refund paid to WMI. The Tax Sharing Agreement does not
indicate that refunds with respect to the group paid to WMI are held by WMI as an agent or
nominee of its subsidiaries. Therefore, WMB's entitlement to coJlect any portion of a refund
from WMI under the Tax Sharing Agreement constitutes a creditor claim against WMI.
As noted above, under the Treasury Regulations, the FDIC, as Receiver for WMB,
has the right to request that the IRS pay WMB's share of any refund with respect to the
carryback of WMB Pre-Closing Losses directly to it ~ s Receiver. However, such right did
not vest in the FDIC until it became the Receiver of WMB. The Purchase Agreement is clear
that the rights and claims conveyed to JPM are determined as of the WMB Closing, which
occurred when WMB was closed by the OTS. The FDIC did not become the Receiver until
after such time. Thus, as of the WMB Closing, the FDIC had no right to seek a direct refund
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of taxes from the IRS, thus it could not convey such right to JPM nor could it have agreed to
remit to JPM any proceeds it received as a result of the exercise of such right.
Accordingly, as of the WMB Closing, the inchoate right to a tax refund with respect
to the WMB Pre-Closing Losses accrued to WMB and WMB's ability to collect such refund
was limited to establishing a claim as a creditor of WMI. Thus, the WMB Tax Payment is
properly characterized as a fully accrued claim against WMI as of the WMB Closing which
is expressly excluded from the assets conveyed to JPM under the plain language of the
Purchase Agreement and the Purchase Agreement must be interpreted to provide that the
WMB Tax Payment is retained by the Receiver.
Further, JPM has no right to any refund arising with respect to the Sale Losses or the
WMB Post-Sale Losses since they were not accrued as of the WMB Closing. Accordingly,
the right to such refunds is also retained by the FDIC for the benefit of the WMB creditors.
VI. The FDIC Can Collect the Tax Refund in One of Two Ways
As noted, the FDIC is entitled to request that the IRS pay the tax refund directly to the
FDIC. However, as also noted, it is within the IRS's sole discretion to determine the amount,
jf any, that it will pay directly to the FDIC.
The creditors of wMB urge the FDIC, in its capacity as Receiver with the statutory
obligation generally to maximize the return on the sale or disposition of the receivership
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estate's assets;1O to expediently seek direct payment from the IRS of the refunds attributable
to the WMB Pre-Closing Losses, the Sale Loss and the WMB Post-Sale Losses from the IRS.
In making such request, we urge the FDIC to emphasize to the IRS the impot1ance of the
refund to the Receivership and the highly inequitable results that would occur were the IRS
to make the payment to WMI instead and then for WMI to successfully persuade the
bankruptcy court that the Receivership should be accorded only an unsecured claim under the
Tax Sharing Agreement. As a creditor of WMI, WMB wOllld likely have a far lesser
recovery of such refund for the benefit of WMB's creditors than it would have if the FDIC
had successfully applied to receive such amounts directly.
Even if the IRS unjustly refuses to honor the FDIC's request, we would urge the
FDIC to enforce an altemative payment mechanism that would ensure that the Receivership
receives its full share of the refund, rather than merely an unsecured dividend. The FDIC is
well aware of WMI's assel1ion that it had bank "deposits" with WMB and WMBfsb of not
less than $4.4 billion. The FDIC is also aware that we have questioned whether the accounts
should properly be characterized as WMI deposits. However, if the accounts are so
characterized and if the IRS does not honor the FDIC's direct payment request, we urge the
FDIC to invoke its duties as Receiver to exercise its legal rights to offset the tax refund
40 FDIC Resolution Handbook, Introduction at 2, available at
<http://www.fdic.gov/bank/historicaJ/reshandbookJindex.html>. See generalJy Golden Pac.
Bancorp. v. FDIC. 375 F.3d 196,201 (2d Cir. 2004); Phelan v. Middle States Oil Corp., 154
F.2d 978,991 (2d Cir. 1946).
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against the accounts, which will ensme payment in fuIJ to the Receivership that is rightly
entitled to the refunds for the pre-Receivership taxes paid by WMB.
*****
We are grateful for your consideration of these issues and are willing, at your
convenience, to meet with you to discuss these matters or provide any other assistance
needed in interpreting the rights and obligations of the parties with respect to the tax refunds
at issue. Please do not hesitate to contact us with any questions or comments you may have.
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MLA_EXAMINER_SP001
MORRISON I FOERSTER
October 27, 2010
By Email (bsamuels@mckennalong.com)
Brad Samuels, Esq.
McKenna, Long & Aldridge LLP
1900 K Street, N.W.
Washington, D.C. 20006
1290 AVENUE Of THE AMElUCAS MORRISON & FOERSTER LLI'
NEWYORK,NY 10104-0050 NEW YORK, SAN FRANCISCO,
TELEPHONE: 212.468.8000
FACSIMILE: 212.468.7900
WWW.MOFO.COM
LOS ANGELES, PALO ALTO,
SAN DIEGO, WASHINGTON, D.C.
NORTJIERN VIRGINIA, DENVER,
SACRAMENTO, WALNUT CREEK
TOKYO, LONDON, BRUSSELS,
BEIJING, SHANGHAI, HONG KONG
Writer's Direct Contact
212.468.8016
RWhite@mofo.com
Re: In re Washington Mutual, Inc .. et ai, Docket No. 08-12229 (MFW) (Bankr. Del.)
Dear Brad:
As you know, I represent Standard & Poor's ("S&P") in connection with the above-
referenced Washington Mutual ("WaMu") bankruptcy case. I am writing in response to the
request for information that you recently made to S&P on behalf of your client, Mr.
Hochberg, in his capacity as the Court-appointed Examiner in the WaMu bankruptcy case.
You requested that S&P provide you with information regarding (1) whether there was a
meeting between representatives of S&P and representatives of J.P. Morgan Chase ("JPMC")
regarding WaMu in March or April 2008; and (2) whether there was a meeting between
representatives of S&P and representatives of JPMC regarding WaMu on September 24,
2008.
In response to your requests, I am authorized to represent to you on behalf of S&P that: (1)
no meeting between representatives of S&P and representatives of JPMC regarding WaMu
took place in March or April 2008; and (2) a meeting between representatives of S&P and
representatives of JPMC regarding WaMu took place on September 24,2008.
As you know, documents and information regarding S&P's research and publication of credit
ratings are protected by the journalist's privilege under the First Amendment to the U.S.
Constitution. The information provided in this letter does not waive, and is not intended to
waive, the protections of the journalist'S privilege or any other applicable privileges.
ny-946975
Return
MLA_EXAMINER_SP002
MORRISON I FOERSTER
Brad Samuels, Esq.
October 27, 2010
Page Two
Please feel free to contact me if you have any questions.
Sincerely,
~ 4 . ~
Ronald G. White
ny-946975
Return
OTS HIGHLY CONFIDENTIAL
OFFICE OF THRIFT SUPERVISION
Receivership Of A Federal Savings Association
Date
September
Order No 200836
OTS No 08551
The Director of the Office of Thrift
Supervision OTS or his
designee in
cooperation with the Federal
Deposit Insurance
Corporation FDIC has determined to
appoint the FDIC as receiver of
Washington Mutual Bank
Henderson Nevada
Savings
Bank
GROUNDS FOR
APPOINTMENT OF FDIC AS RECEIVER
FOR THE SAVINGS BANK
The
Director or his
designee based
upon
the administrative record finds and
determines the
following
depositors demands
i
n the normal course of
business and
The Institution
i
s
i
n an unsafe or unsound condition to transact business
The
Savings Bank
i
s
likely to be unable to
pay
its
obligations or meet its
The
Savings Bank
i
s a
Federally chartered
savings bank the accounts of which
are insured by the
Deposit Insurance Fund DIF The
Savings
Bank has its home office
i
n
Henderson Nevada As of June
30 2008 the
Savings Bank
reported total assets of
$307 billion
DISCUSSION OF GROUNDS FOR
APPOINTMENT
OF A RECEIVER FOR THE SAVINGS BANK
Section
5d2A of the Home Owners Loan Act
HOLA 12 USC
1464d 2A provides that the Director
may appoint a receiver for
any insured
savings
i i assoc at on
i
f tine Director determines that one or more grounds specified in section
11c5 of the Federal
Deposit Insurance Act
FDIA 12 USC
1821c5 exist
Under section 1
Ic5F of the
FDIA the Director
may appoint a receiver
i
f
a
savings association
i
s
likely to be unable to
pay
its
obligations or meet its
depositors
demands
i
n the normal course of business because
i
t
does not have sufficient
liquid asse
to fund
expected withdrawals The
Savings
Bank has insufficient cash and
liquid assets
convertible to cash
necessary to
pay
its
obligations and the
expected withdrawal demands
of its
depositors The Savings Bank has suffered
significant cash outflows exceeding
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Order No 200836
Page
2
S22 billion since
July 2008 in
part because of adverse
publicity The
Savings Bank has
limited and
diminishing liquidity sources available to
i
t and the current rate of outflow
Will
vines Banks cash i
Therefore the Director concludes that the Savings Base
i
s likely to be unable
obligations or meet its
depositors demands in the normal course of business
toes not have sufficient
liquid assets to
pay those obligations and fund the
expected withdrawals
Under section I
lc5C of the FDIA the Director
may appoint a receiver
i
f
a
savings association
i
s in an unsafe or unsound condition to transact business The
Savings Bank
i
s in an unsafe and unsound condition as a result of its severe
liquidity
strain
deteriorating asset
quality and
continuing significant negative operating earnings
with no realistic
prospects for
raising capital to ensure that
i
t
can
repay
all of its
liabilities including deposits
The
Director or his
designee therefore has determined that
grounds
for the
appointment for a receiver for the
Savings Bank exist under section
5d2 of the
HOLA
and sections I
Ic5C and
F
of the FDIA 12 USC

182 1
c5C and F
ACTIONS ORDERED OR APPROVED
Appointment of a Receiver
The
Director or his
designee hereby appoints
the FDIC as receiver for the
Savings Bank for the
purpose
of
liquidation pursuant to section
5d2
of the
IIOLA
and section I I
c6B of the
FDIA 12 USC
1821c6B
Delegation of
Authority to Act for OTS
The
Director or his
designee hereby authorizes the OTS West
Regional Director
or his
designee and the
Deputy
Chief Counsel for the Business Transactions Division of
the Chief Counsels
office or his
designee to
i certify orders ii sign execute attest
or certify other documents of OTS issued or authorized
by this Order iii designate the
persons or entity that hill
give notice of the
appointment of a receiver for the
Savings
Bank and serve the
Savings
Bank with a
copy
of this Order
pursuant to 12 CFR
5582 and iv perform such other functions of OTS
necessary or appropriate for
implementation of this Order All documents to be issued under the
authority of this
Order must be first
approved
in form and
content
b
y the Chief Counsels Office In
addition the
Director or his
designee hereby authorizes the
Deputy Chief Counsel for
the Business Transactions Division ofthe Chief Counsels
office or his
designee
2
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Order No 200836
Page 3
make
any subsequent technical
corrections that might be
necessary to this Order or and
documents issued under the
authority of this Order
S effective
September 25 20
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i Street NW Washington DC 20552 202 9066372
September 25 2008
Deputy Director and
Chief Counsel
CONFIDENTIAL
ATTORNEY CLIENT PRIVILEGE
LEGAL OPINION
MEMORANDUM FOR John M
Reich Directo
Office of Thrift
Supervision
FROM
Office of Thrift
Supervision
Department
of the
Treasury
John E Bowman
Deputy
Director andhief Counsel
SUBJECT
Proposed appointment of the Federal
Deposit Insurance
Corporation FDIC as
Receiver for
Washington Mutual
Bank Henderson Nevada the Institution
OTS NO 08551
FORM Federal Stock
ASSETS $3070 billion as
per
63008 TFR
LIABIL $2787 billion as
per
63008 TFR
CORE CAP $212 billion as
per
63008 TFR
CORE CAPASSETS 707 as
per
63008 TFR
I INTRODUCTION AND SUMMARY CONCLUSION
In the
SMemorandum dated
September 25 12008 the West
Regional Office
Regional
Office explains
that the Institution
i
s beset with serious
problems relating to asset
quality
earnings and its
ability to
pay
its
obligations and meet its
depositors demands The
SMemorandum
sets forth two
statutory provisions as providing grounds for
appointing a receiver
for the Institution under the standards set forth in section 11
c5 of the Federal
Deposit
Insurance Act
FDIA
The Institution
i
s
likely to be unable to
pay
its
obligations or meet its
depositors
demands
i
n the normal course of business
12 USC 1821c5F and
4
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2The
Institution
i
s in an unsafe or unsound condition to transact business
12 USC

182 1
c5F
appoint
the FDIC as receiver for the Institution
ce otl itt
Supervision OTS
We have reviewed the
record and in our opinion there
i
s
an adequate legal basis for
OTS to conclude that each of the
foregoing standards for
appointing a receiver for the Institution
has been satisfied
Moreover grounds exist for OTS to
appoint a receiver when
any
of the
foregoing standards has been satisfied
Accordingly
in our
opinion on the basis of the
record
the Director
or
his
designee has the
legal authority
to
appoint the FDIC as receiver for the
Institution
BACKGROUND
The Institution
i
s a
Deposit Insurance Fund
DIFinsured
federally chartered stock
savings
bank with its home office in
Henderson Nevada and its
primary executive and business
office in Seattle Washington The Institution
operates primarily in
major metropolitan areas on
both the east and west coasts and
i
n selected middle states with four
primarybusiness lines
1
the home loans
group
which
engages
in nationwide
singlefamily residential
SFR lending
servicing
and
capital market
activities 2 the card services
group
which
operates a nationwide
credit card
lending business 3the commercial
group
which conducts a
multifamily and
commercial real estate
lending business and
4 the retail
banking
group
which
operates a retail
bank network of 2239 offices in
California Florida Texas New York
Washington Illinois
Oregon New
Jersey Georgia Arizona Colorado Nevada Utah Idaho and Connecticut As of
June 30 2008 the Institution
reported that
i
t had $307 billion in assets The Institutions
OTSchartered
operating subsidiary Washington Mutual Bank fsb Park
City Utah holds the
Institutions investment
portfolio Washington Mutual Inc Seattle Washington Holding
Company its
toptier holding company i
s
mainly a shell
holding company Based on its
consolidated assets at December
31 2007 the
Holding Company was the seventh
largest
among
all USbased bank and thrift
holding companies
Beginning in 2005 the Institution embarked on a
strategy
to remix
assets liabilities and
capital Management began to portfolio higher yielding though riskier
assets while
diversifying
liabilities and
equity via
preferred stock and hybrid issuances As the credit environment started
to deteriorate in late 2006 and
early 2007 management began
tightening credit standards with
respect to credit card and
subprime lending and shifted focus to a more retail
strategy through
its
retail branches As more
fully addressed
i
n the
SMemorandum the Institution has instituted
significant operational changes since the third
quarter of 2007
including exiting
all
subprime
SFR
lending
discontinuing certain loan
purchasesale
operations tightening underwriting of all
portfolios closing
all
freestanding home loan offices
exiting the wholesale
lending channel
increasing reliance on Federal Home Loan Bank
FHLB advances releasing approximately $30
billion
i
n available
collateral
issuing
$3 billion and $7 billion in
preferred and common stock
respectively with $4 billion of the
proceeds infused into the
Institution
curtailing dividends
from the Institution to the
Holding Company and from the
Holding Company to
shareholders
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3ceasing
option
ARM and stated income
lending and
infusing
the Institution with an additional
$2 billion and $500 million in
capital
in
July
and
September 2008 respectively
On
September 7 2008 the
Holding Company and the Institution entered into a
Memorandum of Understanding MOU which
required among
other
things a submission of a
threeyear
business
plan on a consolidated and unconsolidated basis and a
contingency capital
plan
within
ninety days On
September 18 2008 the
Regional
Office
provided notice to the
Institution that its CAMELS
Composite
and
Liquidity ratings were downgraded to a 4
The SMemorandum describes the decline in the Institutions asset
quality and
earnings
over the last
year
As the SMemorandum recounts nonperforming assets rose to 38
percent
of
total assets as of June 30 2008 compared to 14
percent
for the same
period in 2007 The ratio
of classified assets to core
capital plus
loan allowances increased to 433
percent
at June
30
2008 an 85
percent
increase in the ratio from the same period in 2007 with the level of
classified assets
increasing over the last several
years
from$26 billion
08 percent of total
assets as of December 31 2005 to $82 billion
25 percent of total assets as of December 31
2007 to $107 billion 34 percent
of total
assets as of March
31 2008 to $129 billion as of
June
30
2008 Total
chargeoffs through
for the yeartodate June
30
2008 were $38 billion as
compared
to $23 billion for the
year
ended December
31 2007 The Institutions asset
quality
has materiallyaffected its
earnings For the first six months of
2008 the Institution
reported a
net loss total of $43 billion with a projected net loss of
approximately $6 billion for 2008
Further recent events have
nearly eliminated the Institutions
ability to meet its
operating
liquidity
needs Cash outflows in
July
and
August primarily related to withdrawal of
deposits
approximated
$91 billion
put strain on the Institutions
liquidity Thereafter the
Institution had
a net inflow of
approximately $43 billion in
deposits through promotional deposit pricing at
relatively high rates As noted above on September 8 2008 the Institution entered into an
MOU and another
deposit outflow that
gained momentum
following media
speculation about
the future of the
Institution and a
possible sale which combined with
payments on other
obligations resulted in a net cash outflow of over $173 billion in fourteen business days The
largest single day
had a net cash outflow of $36 billion
As of
September 23 2008 the Institution had
only
$46 billion in cash to meet its
liquidity
obligations Its core
earnings are insufficient to
supplement
its cash base and
i
t
i
s
dependent
upon borrowings from the FHLB of San
Francisco the FHLB of Seattle and the Federal Reserve
Bank of San Francisco FRB to meet its
funding needs The FHLB of San Francisco
recently
decreased the amount of
daily funding i
t had been
providing
the Institution and
may not provide
any significant additional funds In
addition marketbased
funding sources are not
immediately
available to
supplement liquidity As the SMemorandum
states
in the current market sales of
new unsecured debt and securitizations are
generally
unavailable
Moreover most of the assets
that the Bank has that are not now collateralizing the
borrowings at either the FHLBs or the
Federal Reserve Bank are of either insufficient
quality or lack documentation to make them
readily
saleable Those that
may
be saleable
require
time to
arrange financing and sale
6
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OTS HIGHLY CONFIDENTIAL
4Poor
earnings performance and less than
satisfactory asset quality create additional
liquidity concerns since continued deterioration
i
n
these areas could
significantly reduce the level
of available
uncertain value of
the collateral supporting its
borrowings from both the FHLBs a d th FRB i n e t
appears unlikely
that the funds the Institution
projected will
actually
be available in the amounts and in the
timing
required by
the Institution to meet its
obligations
The current outflow rate has declined from the one
day high noted above but
as noted
i
n
the SMemorandum the current rate of outflow will still
deplete
the Institutions cash
resources
and
liquidity within a short
period of time
III DISCUSSION OF LEGAL ISSUES FOR APPOINTMENT
OF A RECEIVER FOR THE INSTITUTION
Section
5d2A of the Home Owners Loan Act
HOLAZ provides that the Director
may appoint a receiver for
any
insured
savings association
i
f the Director determines that one or
more of the
grounds specified
in section
11c5 of the FDIA 12 USC
1821c5 exist
A Inability to Pay Obligations or Meet Depositors Demands
Under section 11
c5F of the
FDIA the Director
may appoint a receiver
i
f
a savings
association
i
s
likely to be unable to
pay
its
obligations or meet its
depositors demands in the
normal course of business As noted
above the Institution has suffered
significant deposit
outflows in excess of $22 billion since
July 2008 in
part because of adverse
publicity relating
to
IndyMac media speculation about the future of the Institution and
deteriorating asset
quality
and
poor earnings The
Regional Office
expects these factors to continue to cause
significant
deposit outflows into the foreseeable future
The
Regional
Office also has indicated the Institution has limited and
diminishing
liquidity sources available to it Further the Institution has been unable to find
anyone who
i
s
willing
and able to invest sufficient
capital to alleviate the Institutions
problems Based on the
foregoing in our opinion there
i
s an
adequate legal basis to conclude that
i
t
i
s
likely
that the
Institution will be unable to
pay
its
obligations or meet its
depositors demands in the normal
course of business
B Unsafe or Unsound Condition to Transact Business
Under section I Ic5C of the
FDIA the Director
may appoint a receiver
i
f
a savings
association
i
s in an unsafe or unsound condition to transact business An unsafe or unsound
condition has been identified as one where an institution
i
s
operated in a manner that causes an
OTS has been informed that the FHLB of San Francisco will advance $500 million to the Institution for
fiber 25 but will not commit to
any further advances
12 USC 1464d2A
7
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unacceptable
risk to its
depositors funds See= Franklin Savings Association v Director OTS
934 F2d 1127 1145
10th Cir
1991 cert denied 503 US 937 1992
In our opinion the record
supports a finding by the Director that a receiver
may
be
appointed for the Institution under this standard As detailed in the
SMemorandum for the first
six months of 2008 the Institution
reported a net loss of $43 billion with a projected net loss of
approximately $6 billion for 2008 The Institution
i
s
i
n
an unsafe and unsound condition as a
result of its severe
liquidity strain deteriorating asset
quality
and
continuing significant negative
operating earnings with no realistic
prospects
for
raising capital to ensure that
i
t
can repay
all of
its liabilities
including deposits
Therefore there
i
s an
adequate legal basis for the Director to
appoint a receiver for the
Institution under either of the two standards described above
BUSINESS TRANSACTIONS DIVISION CONTACT Frances CAugello
PHONE 9066151
cc West
Region Director
West Regional Counsel
John E Bowman
Kevin A Corcoran
Aaron B Kahn
OTSWMIBKRCY00000008
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OTS HIGHLY CONFIDENTIAL
Office of Thrift
Supervision
Department
of the
Treasury
Pacific Plaza 2001 Junipero Serra Boulevard Suite 650 Daly City CA 940141976
PO Box 7165 San Francisco CA 94 1 207 1 65 Telephone 650 7467000 Fax 650 7
PRIVILEGED AND CONFIDENTIAL
MEMORANDUM FOR Scott M Polakoff Senior
Deputy
Director and
Operating
Officer
THROUGH Timothy T Ward Deputy Director
Examinations Supervision
and Consumer Protection
FROM Darrel W Dochow Regional Director
West Region
DATE
September 25 2008
SUBJECT Recommendation for
Appointment
of the Federal
Deposit
Insurance
Corporation FDIC as Receiver for
Washington Mutual Bank Henderson NV OTS No 08551
1 RECOMMENDATION AND SUMMARY
The West Regional Office recommends that the Director of the OTS
appoint
the FDIC as
receiver for
Washington
Mutual Bank Henderson Nevada WMB or the Bank We believe that
grounds
exist for the
appointment pursuant
to Section 5d2 of the Home Owners Loan Act
HULA
12 USC 1464d2 and Section
11c5
of the Federal
Deposit
Insurance Act
FDIA 12 USC 1821c5
As explained below we believe the
following grounds
exist for the
appointment
of a receiver
1 The Bank
i
s
likely to be unable to
pay
its obligations or meet its depositors demands
i
n
the normal course of business and
2 The Bank
i
s in an unsafe and unsound condition to transact business
9
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West
Region Receivership Recommendation
Washington Mutual Bank Henderson NV
08551
tember 25 2008
II KEY FINANCIAL AND SUPERVISORY INFORMIATION
e ecte ounce tote 30 208 F
1 PCA Capital Cate o Well Ca italzed June 30 2t08
Tier I CoreCapitalAdjusted Total Assets FDICIACap Adequacy 7 07
Total RiskBased
CapitallRisk d Assets FDICIACap Adequacy 2
Selected Supe rvisory
Information
Date of Most Recent Safety
and Soundness Examination 191102007
CAMELS Ratings Ratings Date September 19 2008 Report
Composite C A M E L S
4 3 4 3 4 4 2
YIN Comments if applicable
Consent
Agreement YN N
Open Issues or Applications YN Y
Denied
Capital
Plan YN N
Capital Disputes YIN N
Enforcement Issues YIN y
PCA Directive YN N
III OVERVIEW AND KEY FINANCIAL INFORMATION
Corporate Structure and General Background
WMB i
s a stockform federally
chartered
savings association The FDIC insures the Banks
deposits through its
Deposit
Insurance Fund WMBs home office
i
s in Henderson Nevada
while its
primary
executive and business
segment headquarters are
i
n
Seattle Washington As of
June 30 2008 The bank had 2239 retail branches
operating in 15 states WMB
operates
primarily i
n major metropolitan areas on both coasts and
i
n selected middle states with four
primary
business lines
1
Home
Loans 2 Card Services 3 MultifamilyCommercial Loans
and
4
Retail BankingProduction and
Operations
WMBs
toptier holding company Washington Mutual Inc
WMI i
s a unitary thrift
holding
company I
t
i
s
mainly a shell
Washington
Mutual Bank fsb WMBfsb i
s the Banks
OTSchartered
operating subsidiary and
i
t holds WMBs investment
portfolio
CAMELS =
Capital
Asset
Quality Ma agement Earnings Liquidity and
Sensitivity to Market Risk
10
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West
Region Receivership Recommendation
Washington Mutual Bank Henderson NV 08551
September 25 2008
Pare 3 of 10
Senior
management
of the Bank consists of Chairman of the Board
Stephen
E Frank Chief
Executive Officer Alan Fishman Chief
Operating
Officer Steve Rotella and Chief Financial
Officer Tom Casey
The
following table contains additional information about the Bank
Home Office Address 2273 North Green Valley Pkwy Ste 14 Henderson NV
Administrative Office Address 1301 Second Avenue Seattle WA 98101
Administrative Office
Telephone 206
5008779
CEOs Administrative Assistant
Date on which Charter was Issued December
27 1988
Date of Federal
Deposit
Insurance December 27 1988
In 2005 the Bank
began a strategy to remix assets liabilities and
capital Management began to
portfolio higher yielding higher risk assets while
diversifying
liabilities and
equity
via
preferred
stock and
hybrid
issuances
During
late 2006 and
early 2007 as the credit environment started to
deteriorate
management began tightening
credit standards with
respect
to credit card and
subprime lending
In the first half of 2007 management shrank the balance sheet
by selling
certain
loweryielding
loans Total assets shrank to $3111 billion
by
June 30 2007 In
July
2007 given
the
disruption of the secondary mortgage market management cut back on loans
originated
for sale and began transferring held for sale loans to the held for investment
portfolio
at a mark to market loss The lack of loan sale
activity along with the transfer of loans into the
held for investment portfolio resulted
i
n total assets increasing to $3288 billion at
September 30
2007 Since 4Q07 management has discontinued the former
strategy to focus on a more retail
oriented
lending strategy through the branches At June 30 2008 total assets declined to $3070
billion and are projected to continue to decline due to a severe curtailment in
singlefamily
residential SFR related
lending
FW 1B `SM 63010$ 63007
Total Assets
$307022
33208 123107M
$317824 $325809
Significant operational changes
since
Q307
include
$328805 1 $311053
33107
$318295
Exiting
all
subprime SFR lending
Discontinuation of WaMu Capital Corp
and its associated conduit
loan purchasesale
operation
Continued wind down of the
Mortgage
Banker Finance warehouse lending unit
Tightened underwriting
of all portfolios including a
program
to
contractually
limit
outstanding
home
equity lines
i
n instances where collateral or borrower financial
condition has deteriorated
Closing
all
remaining freestanding home loan offices and
exiting
the wholesale broker
lending channel
11
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West
Region Receivership Recommendation
Washington Mutual Bank Henderson NV 08551
September 25 2008
Page
4 of 10
Increasing
reliance on FHLB advances by using classes of assets for collateral not
previously used
February 2008
Releasing an estimated $300 billion in available collateral from REIT
reorgan
the second
quarter of 2008
issuance of $30 billion in
perpetual
convertible
preferred
stock in December 2007
0 billion infused into WMB
Reducing
the WMI dividend from $056 to $001
per quarter
and discontinuance of
WMB dividends to WMI
WM issuance of $70 billion in common stock in
April 2008 with $30 billion infused
into WMB
Ceasing option ARM and stated income
lending
A WMI infusion of an additional $20 billion to raise capital levels at WMB
i
n July 2008
A WMI infusion of $5000 million in
September
2008
Current Condition
Asset Quality
Notwithstanding
the numerous operational changes undertaken
by
WMB
management
asset
quality
has deteriorated
significantly Nonperforming assets NPA rose to 38
percent
of total
assets as of June 30 2008 compared to 14
percent
for the same period in 2007 The increase in
NPAs
i
s concentrated primarilyin
permanent
SFR loans
primesubprime option ARM and
home equity lines of credit
HELOCs
Loans secured
by SFRs are WMBs
primary
asset
representing approximately
600
percent
of total assets at June 30 2008
Problem assets have also increased
significantly
The ratio of classified assets to core capital
plus loss allowances increased to 433
percent at June 30 2008 an 85
percent
increase
i
n the
ratio from the same period one
year
earlier The absolute level of classified assets has
steadily
increased over the last several
years
from $26 billion 08 percent
of total
assets as of December
31 2005 to $129 billion as of June 30 2008 42 percent
of total
assets
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West
Region Receivership Recommendation
Washington Mutual Bank Henderson NV
0855
September 25 2008
5 of 10
The
following table
June 302008
WUS
hts WMBs
problem asset trend
12131105 1 12131106
8000s
mDecembe
1213107
Delinquent Loans
3389 days 1793237 071 2836771 105
Nonperforming Loans 2880054 087 2740081 079
Repossessed Assets 239485 007 578385 017
Nonperforming Assets 3119539 094 331 8466 096
Special Mention Assets 863090 026 2064002 060
Classified Assets 2591527 078 3615955 105
Class AssetsCore Cap + ALjL 1143 1481
4741615 189
6431861 197
1015127 031
7446988 229
2309424 071
8177767 251
3274
CE 06130108
5441790
10025164
1531807
11556971
2485122
12873646
WMB
reported total chargeoffs of $381 billion through yeartodate YTD June 30 2008
$146 billion for
1Q08 and $235 billion for
2Q08 or 24
percent of average assets annualized
This
compares unfavorably
to the $241billion 075 percent of
average assets annualized
reported for the year ended December 31 2007 and the $106 billion
030 percent of
average
assets reported for the
year
ended December 31 2006 As with
problem loans most of the
chargeoffs are i
n
the SFR portfolio which accounted for $32 billion of YTD
chargeoffs
through
June 30 2008
The Bank predicts a
high loss case of $19 billion in residential
mortgages before lost interest and
foreclosure costs Current performance tracking i
s in line with the high end of the
Companys
estimates at the time of the April capital
raise At $1894 billion the residential mortgage
exposure includes $525 billion
i
n
option ARMs $607 billion
i
n
HELOCs and $174 billion
i
n
subprime
loans
WMBs asset
quality problems have
materially
affected the Banks earnings and
they are
projected
to have
a continuing negative impact at least
through
the second
quarter
of 2009
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West Region Receivership Recommendation
Washington
Mutual Bank Henderson NV
08551
September 25 2008
Page 6 of 10
iings
Primarily
because of the asset quality
trends
i
n the SFR
mortgage
loan
portfolios net income for
the Bank has declined
considerably
with nominal income
reported
for 2007 and significant net
losses reported through June 2008 The
following
table illustrates the affect of the decline in
credit quality on the earnings of the Bank The table
displays key
financial
performance figures
for 2006 2007 and YTD June 30 2008
2006
I
2007
lo
YTD 613008
lo
lEA Yield 641 684 611
Cost of Funds 372 388 275
Net Interest Spread 269 296 337
Net Interest Mar
i
n 257 280 313
Loss Provisions avg assets 023 096 755
Noninterest Income 242 225 074
Noninterest Expense 321 382 307
ROAA 100 008 407
ROAE 1192 099 5219
Note Except for yieldspread information and ROAE above ratios are expressed as annualized percentage
of
average
assets
Source OTS Uniform Thrift Performance
Report U TPR
In the first and second
quarter
of 2008 the Bank recorded a net loss of $11 billion and $32
billion respectively
The most recent earnings projection by the Bank forecasts an annual total
net loss of
approximately $60 billion for 2008 While actual credit losses
through
the second
quarter
of 2008 remained within the forecasted
range
a decline in
housing prices beyond
the
levels assumed could
produce a material increase in credit losses further
depressing the
projected negative earnings
Management predicts a return to
profitability
in the third
quarter
of 2009 In the meantime the
Bank continues to report core operating earnings of approximately $16 billion
per quarter
This
amount i
s insufficient to fully offset
projected
increased loan losses provide
sufficient funds to
meet significant deposit outflows and
supplement capital
Liquidity
Recent events have
significantly limited the Banks ability to meet its operating liquidity
needs
As of September 25 2008 the Bank
projected
that
i
t had $134 billion to meet
liquidity
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West
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Washington Mutual Bank Henderson NV 08551
September 25 2008
Pate 7 of 10
obligations A review of the sources that make
up
that total reveals that the Banks liqut
position i
s far less than the
projected
number
suggests
The Bank estimated
having
$38 billion in cash and investments to meet liquidity obligations as
of September 25 2008 Core earnings are insufficient to
supplement
its cash base In addition
most of the Banks assets are not
readily
saleable Accordingly
the Bank
i
s
dependent upon
borrowings
from the Federal Home Loan Banks of San Francisco and Seattle
FHLBSF
and
FHLBSEA and Federal Reserve Bank of San Francisco to meet funding needs The Bank
projected
that
i
t had
borrowing capacity
of $29 billion from the FHLBSF and the FHLBSEA
on September 25 2008 Also as of that date the Bank projected that
i
t had $67 billion available
for borrowing
from the Feds discount window
Given the Banks current ratings and the uncertain value of the collateral
supporting
its
borrowings
from both the FHLBs and the Federal Reserve Bank there i
s
no assurance that the
projected
funds will be available
i
n the amounts and in the timing needed by the Bank to meet its
obligations The Federal Housing
Finance
Agency
notified OTS that FHLBSF has agreed to
fund $05 billion on September 25 2008 but there
i
s no guarantee
that
i
t will
provide
further
funds The Federal Reserve lowered the Bank to secondary credit status on September 25 2008
which resulted in an additional reduction of $1 billion in borrowing capacity Under secondary
status
the Bank i
s
subject to increased haircuts and
pricing
The Bank will also likely lose
access to the 28day termauction facility TAF program
Moreover even
i
f available borrowings
from the FHLBs are subject to
system funding
constraints Under those constraints the FHLBSEA
i
s limited to providing approximately $05
to $10 billion maximum advances
per day on the
remaining
line Similarly should the
FHLBSF
determine that the collateral
i
s adequate to
support
continued
borrowing by
the Bank i
t
i
s
limited to
providing approximately
$20 to $30 billion
per day
At this time i
t
i
s uncertain what
i
f
any
additional advances the FHLBSF will make
2
In addition marketbased funding sources are not immediately
available to supplement liquidity
Sales of new unsecured debt and securitizations are generally unavailable Moreover most of
the Banks
unpledged assets iethat are not now collateralizing
the borrowings at either the
FHLBs or the Federal Reserve Bank are of either insufficient
quality or lack documentation to
make them
readily
saleable Those that
may
be saleable require
time to
arrange financing
and
sale
2
For example
the FLHBSF has informed the OTS that as of
September
23 they will advance $ t billion to the Bank
for September 24 but will not commit to
any
further advances The FHLBSF subsequently agreed
to advance $5CO
million on September
25 The FHLBSF also stated that they have received additional data on the loan cools
collateralizing the borrowings and are i
n the process of evaluating i
t for future lending decisions
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West Region Receivership
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Washington
Mutual Bank Henderson N 08551
September 25 2008
8 of 10
Significant deposit
outflows are compounding
the
liquidity challenge facing
the Bank The first
significant deposit
outflow occurred after the closure of
IndyMac
Bank W 1B lost
approximately
$91 billion in interest bearing
and small business deposits
from July 14
2008
through August 6 2008 Thereafter the Bank had a net inflow of approximately $43 billion in
deposits through promotional deposit pricing
at relatively high rates
Starting
with the Banks disclosure on September 8 2008 that
i
t entered into an enforcement
action Memorandum
of Understanding
with the OTS a more significant deposit
outflow
started This outflow gained momentum following
media
speculation
about the future of the
company
disclosures that the
company
was considering a sale adverse events in the financial
sector as a whole and further
rating agency downgrades
of the
company
and the Bank resulting
in a net deposit loss of approximately
$187 billion between September
8 and
September
24
2008
While the current outflow rate has declined from its
peak i
t will
deplete
the Banks available
cash resources and eliminate the Banks total projected liquidity
in the short term absent
additional extraordinary events Given the Banks limited sources of funds and
significant
ongoing deposit outflows i
t
i
s
highly unlikely
that
i
t will be able to meet its operating liquidity
needs including paying
interest on deposits
IV DESCRIPTION OF MAJOR PROBLEMSGROUNDS FOR TRANSFER
The OTS Director
i
s authorized to appoint
the FDIC as receiver for
any savings
association
i
f the
Director determines that grounds exist under 12 USC 1821c5
See 12 USC
1464d2A
The
specific grounds applicable
include
A The Bank
i
s
likely
to be unable to
pay
its obligations or meet its depositors
demands
i
n the
normal course of business
As described above given
the
continuing significant deposit
outflows from the Bank and the
limited and
diminishing
available sources of
liquidity i
t
i
s
highly likely that the bank will not
meet its funding
needs
i
n the
very
near future As a result the Bank
i
s
likely
to be unable to
pay
its
obligations
or meet its depositors demands in the normal course of business Therefore i
n
accordance with 12 USC 1821c5f
the Director
may appoint a receiver for the Bank
B The Bank
i
s in an unsafe and unsound condition to transact business
Pursuant to 12 USG 1821c5C
the Director
may appoint
a receiver for the Bank
i
f
i
t
i
s
i
n
an unsafe and unsound condition to transact business For all of the reason detailed above
including the Banks severe liquidity strain deteriorating asset quality
and conti
16
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West Region Receivership
Recommendation
Washington
Mutual Bank Henderson NV 08
September 25 2008
Pafle 9 of 10
551
earnings the Bank
i
s in an unsafe and unsound condition to transact business Therefore in
accordance with 12 USC 182Ic5C the Director
may appoint a receiver for the Bank
V ENFORCE ME l EIt ORY ACTIONS
OTS has taken the following supervisory
or enforcement actions formal and informal
with
respect
to WMB
Cease and Desist Order CD
On October 17 2007 OTS issued a CD order related to
weaknesses
i
n WMBs Bank Secrecy ActAntimoney Laundering BSAJAML programs
Management
has submitted a plan for compliance
with the CD which OTS monitors as part
of
the continuous exam process
Civil Money Penalty CMP On October 17 2007 OTS issued an order for CMPs
totaling
$60448 related to WMBs violation of flood insurance regulations
in its Commercial Loan
pup
Board resolution In
response to a supervisory ratings downgrade letter from the
Regional
Director on February 27 2008 the Board resolved on March 27 2008 to undertake strategic
initiatives to improve weaknesses related to asset quality earnings and
liquidity
WMI Memorandum of Understanding OU On
September 7 200$ WMI entered into
an
MOLT Action items include 1submission of a consolidated 3year business plan within
30
days for OTS review and
nonobjection
followed by quarterly
variance reports and 2 a
contingency capital plan within 90 days
WMB Memorandum
of Understanding On September 7 2008 WMB entered into a separate
MOLT Action items include 1 submission of a 3year business plan
both base case and
stressed scenarios within 30 days
for OTS review and nonobjection
followed by quarterly
variance
reports 2 a contingency capital plan within 90 days 3 a classified asset reduction
plan incorporated
into the business
plan 4engaging an outside consultant to review risk
management practices 45 days
and submitting a
report
to OTS 75 days 5 engaging an
outside consultant to review the underwriting process
for the Home Loans Group 45 days
and
submitting a
report
to OTS 75 days 6 submitting a report
to OTS to address the consultants
recommendations within 30 days
of
receipt
of the consultants reports 7reviewing
alerts for
the period April 1 2006 through
June 30 2008 and filing SARs where required no
later than
October 31 2008 and 8 ensuring that management
corrects all OTS findings specified in the
Report
of Examination and Findings
Memoranda Within 55 days
of the end of each
quarter
the
Board shall certify compliance
with the MOU and submit a certified
copy
to the OTS
17
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West
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Washington
Mutual Bank Henderson NV 08551
September 25 2008
Paae 10 of 10
CQNCLUSIO AND CONTACTS
Statutory grounds
exist for the appointment
of a receiver for the Bank We believe that
the
appointment
of a receiver for the Bank under these circumstances will
protect
the interests of the
Banks depositors
and the Deposit
Insurance Fund Therefore we recommend that the Director
take action to appoint
the FDIC as receiver for WMB as soon as
possible
The following personnel
available to answer any
additional questions
Name
Title Phone
Benjamin
D Franklin
Regional
Examiner 909
827 0066
James A Hendriksen Regional
Counsel 650
746704I
Darrel W Dochow
Regional
Director
Exhibit List Attached
18
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Office of Thrift
Supervision
Department
of the
Treasury
Pacific Plaza 2001 Junipero Serra Boulevard Suite 650 Daly City CA 940141976
PO Box 7165 San Francisco CA 94 1 207 1 65 Telephone 650 7467000 Fax 650 7
PRIVILEGED AND CONFIDENTIAL
MEMORANDUM FOR Scott M Polakoff Senior
Deputy
Director and
Operating
Officer
THROUGH Timothy T Ward Deputy Director
Examinations Supervision
and Consumer Protection
FROM Darrel W Dochow Regional Director
West Region
DATE
September 25 2008
SUBJECT Recommendation for
Appointment
of the Federal
Deposit
Insurance
Corporation FDIC as Receiver for
Washington Mutual Bank Henderson NV OTS No 08551
1 RECOMMENDATION AND SUMMARY
The West Regional Office recommends that the Director of the OTS
appoint
the FDIC as
receiver for
Washington
Mutual Bank Henderson Nevada WMB or the Bank We believe that
grounds
exist for the
appointment pursuant
to Section 5d2 of the Home Owners Loan Act
HULA
12 USC 1464d2 and Section
11c5
of the Federal
Deposit
Insurance Act
FDIA 12 USC 1821c5
As explained below we believe the
following grounds
exist for the
appointment
of a receiver
1 The Bank
i
s
likely to be unable to
pay
its obligations or meet its depositors demands
i
n
the normal course of business and
2 The Bank
i
s in an unsafe and unsound condition to transact business
9
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West
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Washington Mutual Bank Henderson NV
08551
tember 25 2008
II KEY FINANCIAL AND SUPERVISORY INFORMIATION
e ecte ounce tote 30 208 F
1 PCA Capital Cate o Well Ca italzed June 30 2t08
Tier I CoreCapitalAdjusted Total Assets FDICIACap Adequacy 7 07
Total RiskBased
CapitallRisk d Assets FDICIACap Adequacy 2
Selected Supe rvisory
Information
Date of Most Recent Safety
and Soundness Examination 191102007
CAMELS Ratings Ratings Date September 19 2008 Report
Composite C A M E L S
4 3 4 3 4 4 2
YIN Comments if applicable
Consent
Agreement YN N
Open Issues or Applications YN Y
Denied
Capital
Plan YN N
Capital Disputes YIN N
Enforcement Issues YIN y
PCA Directive YN N
III OVERVIEW AND KEY FINANCIAL INFORMATION
Corporate Structure and General Background
WMB i
s a stockform federally
chartered
savings association The FDIC insures the Banks
deposits through its
Deposit
Insurance Fund WMBs home office
i
s in Henderson Nevada
while its
primary
executive and business
segment headquarters are
i
n
Seattle Washington As of
June 30 2008 The bank had 2239 retail branches
operating in 15 states WMB
operates
primarily i
n major metropolitan areas on both coasts and
i
n selected middle states with four
primary
business lines
1
Home
Loans 2 Card Services 3 MultifamilyCommercial Loans
and
4
Retail BankingProduction and
Operations
WMBs
toptier holding company Washington Mutual Inc
WMI i
s a unitary thrift
holding
company I
t
i
s
mainly a shell
Washington
Mutual Bank fsb WMBfsb i
s the Banks
OTSchartered
operating subsidiary and
i
t holds WMBs investment
portfolio
CAMELS =
Capital
Asset
Quality Ma agement Earnings Liquidity and
Sensitivity to Market Risk
10
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Washington Mutual Bank Henderson NV 08551
September 25 2008
Pare 3 of 10
Senior
management
of the Bank consists of Chairman of the Board
Stephen
E Frank Chief
Executive Officer Alan Fishman Chief
Operating
Officer Steve Rotella and Chief Financial
Officer Tom Casey
The
following table contains additional information about the Bank
Home Office Address 2273 North Green Valley Pkwy Ste 14 Henderson NV
Administrative Office Address 1301 Second Avenue Seattle WA 98101
Administrative Office
Telephone 206
5008779
CEOs Administrative Assistant
Date on which Charter was Issued December
27 1988
Date of Federal
Deposit
Insurance December 27 1988
In 2005 the Bank
began a strategy to remix assets liabilities and
capital Management began to
portfolio higher yielding higher risk assets while
diversifying
liabilities and
equity
via
preferred
stock and
hybrid
issuances
During
late 2006 and
early 2007 as the credit environment started to
deteriorate
management began tightening
credit standards with
respect
to credit card and
subprime lending
In the first half of 2007 management shrank the balance sheet
by selling
certain
loweryielding
loans Total assets shrank to $3111 billion
by
June 30 2007 In
July
2007 given
the
disruption of the secondary mortgage market management cut back on loans
originated
for sale and began transferring held for sale loans to the held for investment
portfolio
at a mark to market loss The lack of loan sale
activity along with the transfer of loans into the
held for investment portfolio resulted
i
n total assets increasing to $3288 billion at
September 30
2007 Since 4Q07 management has discontinued the former
strategy to focus on a more retail
oriented
lending strategy through the branches At June 30 2008 total assets declined to $3070
billion and are projected to continue to decline due to a severe curtailment in
singlefamily
residential SFR related
lending
FW 1B `SM 63010$ 63007
Total Assets
$307022
33208 123107M
$317824 $325809
Significant operational changes
since
Q307
include
$328805 1 $311053
33107
$318295
Exiting
all
subprime SFR lending
Discontinuation of WaMu Capital Corp
and its associated conduit
loan purchasesale
operation
Continued wind down of the
Mortgage
Banker Finance warehouse lending unit
Tightened underwriting
of all portfolios including a
program
to
contractually
limit
outstanding
home
equity lines
i
n instances where collateral or borrower financial
condition has deteriorated
Closing
all
remaining freestanding home loan offices and
exiting
the wholesale broker
lending channel
11
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September 25 2008
Page
4 of 10
Increasing
reliance on FHLB advances by using classes of assets for collateral not
previously used
February 2008
Releasing an estimated $300 billion in available collateral from REIT
reorgan
the second
quarter of 2008
issuance of $30 billion in
perpetual
convertible
preferred
stock in December 2007
0 billion infused into WMB
Reducing
the WMI dividend from $056 to $001
per quarter
and discontinuance of
WMB dividends to WMI
WM issuance of $70 billion in common stock in
April 2008 with $30 billion infused
into WMB
Ceasing option ARM and stated income
lending
A WMI infusion of an additional $20 billion to raise capital levels at WMB
i
n July 2008
A WMI infusion of $5000 million in
September
2008
Current Condition
Asset Quality
Notwithstanding
the numerous operational changes undertaken
by
WMB
management
asset
quality
has deteriorated
significantly Nonperforming assets NPA rose to 38
percent
of total
assets as of June 30 2008 compared to 14
percent
for the same period in 2007 The increase in
NPAs
i
s concentrated primarilyin
permanent
SFR loans
primesubprime option ARM and
home equity lines of credit
HELOCs
Loans secured
by SFRs are WMBs
primary
asset
representing approximately
600
percent
of total assets at June 30 2008
Problem assets have also increased
significantly
The ratio of classified assets to core capital
plus loss allowances increased to 433
percent at June 30 2008 an 85
percent
increase
i
n the
ratio from the same period one
year
earlier The absolute level of classified assets has
steadily
increased over the last several
years
from $26 billion 08 percent
of total
assets as of December
31 2005 to $129 billion as of June 30 2008 42 percent
of total
assets
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West
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Washington Mutual Bank Henderson NV
0855
September 25 2008
5 of 10
The
following table
June 302008
WUS
hts WMBs
problem asset trend
12131105 1 12131106
8000s
mDecembe
1213107
Delinquent Loans
3389 days 1793237 071 2836771 105
Nonperforming Loans 2880054 087 2740081 079
Repossessed Assets 239485 007 578385 017
Nonperforming Assets 3119539 094 331 8466 096
Special Mention Assets 863090 026 2064002 060
Classified Assets 2591527 078 3615955 105
Class AssetsCore Cap + ALjL 1143 1481
4741615 189
6431861 197
1015127 031
7446988 229
2309424 071
8177767 251
3274
CE 06130108
5441790
10025164
1531807
11556971
2485122
12873646
WMB
reported total chargeoffs of $381 billion through yeartodate YTD June 30 2008
$146 billion for
1Q08 and $235 billion for
2Q08 or 24
percent of average assets annualized
This
compares unfavorably
to the $241billion 075 percent of
average assets annualized
reported for the year ended December 31 2007 and the $106 billion
030 percent of
average
assets reported for the
year
ended December 31 2006 As with
problem loans most of the
chargeoffs are i
n
the SFR portfolio which accounted for $32 billion of YTD
chargeoffs
through
June 30 2008
The Bank predicts a
high loss case of $19 billion in residential
mortgages before lost interest and
foreclosure costs Current performance tracking i
s in line with the high end of the
Companys
estimates at the time of the April capital
raise At $1894 billion the residential mortgage
exposure includes $525 billion
i
n
option ARMs $607 billion
i
n
HELOCs and $174 billion
i
n
subprime
loans
WMBs asset
quality problems have
materially
affected the Banks earnings and
they are
projected
to have
a continuing negative impact at least
through
the second
quarter
of 2009
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West Region Receivership Recommendation
Washington
Mutual Bank Henderson NV
08551
September 25 2008
Page 6 of 10
iings
Primarily
because of the asset quality
trends
i
n the SFR
mortgage
loan
portfolios net income for
the Bank has declined
considerably
with nominal income
reported
for 2007 and significant net
losses reported through June 2008 The
following
table illustrates the affect of the decline in
credit quality on the earnings of the Bank The table
displays key
financial
performance figures
for 2006 2007 and YTD June 30 2008
2006
I
2007
lo
YTD 613008
lo
lEA Yield 641 684 611
Cost of Funds 372 388 275
Net Interest Spread 269 296 337
Net Interest Mar
i
n 257 280 313
Loss Provisions avg assets 023 096 755
Noninterest Income 242 225 074
Noninterest Expense 321 382 307
ROAA 100 008 407
ROAE 1192 099 5219
Note Except for yieldspread information and ROAE above ratios are expressed as annualized percentage
of
average
assets
Source OTS Uniform Thrift Performance
Report U TPR
In the first and second
quarter
of 2008 the Bank recorded a net loss of $11 billion and $32
billion respectively
The most recent earnings projection by the Bank forecasts an annual total
net loss of
approximately $60 billion for 2008 While actual credit losses
through
the second
quarter
of 2008 remained within the forecasted
range
a decline in
housing prices beyond
the
levels assumed could
produce a material increase in credit losses further
depressing the
projected negative earnings
Management predicts a return to
profitability
in the third
quarter
of 2009 In the meantime the
Bank continues to report core operating earnings of approximately $16 billion
per quarter
This
amount i
s insufficient to fully offset
projected
increased loan losses provide
sufficient funds to
meet significant deposit outflows and
supplement capital
Liquidity
Recent events have
significantly limited the Banks ability to meet its operating liquidity
needs
As of September 25 2008 the Bank
projected
that
i
t had $134 billion to meet
liquidity
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West
Region Receivership
Recommendation
Washington Mutual Bank Henderson NV 08551
September 25 2008
Pate 7 of 10
obligations A review of the sources that make
up
that total reveals that the Banks liqut
position i
s far less than the
projected
number
suggests
The Bank estimated
having
$38 billion in cash and investments to meet liquidity obligations as
of September 25 2008 Core earnings are insufficient to
supplement
its cash base In addition
most of the Banks assets are not
readily
saleable Accordingly
the Bank
i
s
dependent upon
borrowings
from the Federal Home Loan Banks of San Francisco and Seattle
FHLBSF
and
FHLBSEA and Federal Reserve Bank of San Francisco to meet funding needs The Bank
projected
that
i
t had
borrowing capacity
of $29 billion from the FHLBSF and the FHLBSEA
on September 25 2008 Also as of that date the Bank projected that
i
t had $67 billion available
for borrowing
from the Feds discount window
Given the Banks current ratings and the uncertain value of the collateral
supporting
its
borrowings
from both the FHLBs and the Federal Reserve Bank there i
s
no assurance that the
projected
funds will be available
i
n the amounts and in the timing needed by the Bank to meet its
obligations The Federal Housing
Finance
Agency
notified OTS that FHLBSF has agreed to
fund $05 billion on September 25 2008 but there
i
s no guarantee
that
i
t will
provide
further
funds The Federal Reserve lowered the Bank to secondary credit status on September 25 2008
which resulted in an additional reduction of $1 billion in borrowing capacity Under secondary
status
the Bank i
s
subject to increased haircuts and
pricing
The Bank will also likely lose
access to the 28day termauction facility TAF program
Moreover even
i
f available borrowings
from the FHLBs are subject to
system funding
constraints Under those constraints the FHLBSEA
i
s limited to providing approximately $05
to $10 billion maximum advances
per day on the
remaining
line Similarly should the
FHLBSF
determine that the collateral
i
s adequate to
support
continued
borrowing by
the Bank i
t
i
s
limited to
providing approximately
$20 to $30 billion
per day
At this time i
t
i
s uncertain what
i
f
any
additional advances the FHLBSF will make
2
In addition marketbased funding sources are not immediately
available to supplement liquidity
Sales of new unsecured debt and securitizations are generally unavailable Moreover most of
the Banks
unpledged assets iethat are not now collateralizing
the borrowings at either the
FHLBs or the Federal Reserve Bank are of either insufficient
quality or lack documentation to
make them
readily
saleable Those that
may
be saleable require
time to
arrange financing
and
sale
2
For example
the FLHBSF has informed the OTS that as of
September
23 they will advance $ t billion to the Bank
for September 24 but will not commit to
any
further advances The FHLBSF subsequently agreed
to advance $5CO
million on September
25 The FHLBSF also stated that they have received additional data on the loan cools
collateralizing the borrowings and are i
n the process of evaluating i
t for future lending decisions
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West Region Receivership
Recommendation
Washington
Mutual Bank Henderson N 08551
September 25 2008
8 of 10
Significant deposit
outflows are compounding
the
liquidity challenge facing
the Bank The first
significant deposit
outflow occurred after the closure of
IndyMac
Bank W 1B lost
approximately
$91 billion in interest bearing
and small business deposits
from July 14
2008
through August 6 2008 Thereafter the Bank had a net inflow of approximately $43 billion in
deposits through promotional deposit pricing
at relatively high rates
Starting
with the Banks disclosure on September 8 2008 that
i
t entered into an enforcement
action Memorandum
of Understanding
with the OTS a more significant deposit
outflow
started This outflow gained momentum following
media
speculation
about the future of the
company
disclosures that the
company
was considering a sale adverse events in the financial
sector as a whole and further
rating agency downgrades
of the
company
and the Bank resulting
in a net deposit loss of approximately
$187 billion between September
8 and
September
24
2008
While the current outflow rate has declined from its
peak i
t will
deplete
the Banks available
cash resources and eliminate the Banks total projected liquidity
in the short term absent
additional extraordinary events Given the Banks limited sources of funds and
significant
ongoing deposit outflows i
t
i
s
highly unlikely
that
i
t will be able to meet its operating liquidity
needs including paying
interest on deposits
IV DESCRIPTION OF MAJOR PROBLEMSGROUNDS FOR TRANSFER
The OTS Director
i
s authorized to appoint
the FDIC as receiver for
any savings
association
i
f the
Director determines that grounds exist under 12 USC 1821c5
See 12 USC
1464d2A
The
specific grounds applicable
include
A The Bank
i
s
likely
to be unable to
pay
its obligations or meet its depositors
demands
i
n the
normal course of business
As described above given
the
continuing significant deposit
outflows from the Bank and the
limited and
diminishing
available sources of
liquidity i
t
i
s
highly likely that the bank will not
meet its funding
needs
i
n the
very
near future As a result the Bank
i
s
likely
to be unable to
pay
its
obligations
or meet its depositors demands in the normal course of business Therefore i
n
accordance with 12 USC 1821c5f
the Director
may appoint a receiver for the Bank
B The Bank
i
s in an unsafe and unsound condition to transact business
Pursuant to 12 USG 1821c5C
the Director
may appoint
a receiver for the Bank
i
f
i
t
i
s
i
n
an unsafe and unsound condition to transact business For all of the reason detailed above
including the Banks severe liquidity strain deteriorating asset quality
and conti
16
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West Region Receivership
Recommendation
Washington
Mutual Bank Henderson NV 08
September 25 2008
Pafle 9 of 10
551
earnings the Bank
i
s in an unsafe and unsound condition to transact business Therefore in
accordance with 12 USC 182Ic5C the Director
may appoint a receiver for the Bank
V ENFORCE ME l EIt ORY ACTIONS
OTS has taken the following supervisory
or enforcement actions formal and informal
with
respect
to WMB
Cease and Desist Order CD
On October 17 2007 OTS issued a CD order related to
weaknesses
i
n WMBs Bank Secrecy ActAntimoney Laundering BSAJAML programs
Management
has submitted a plan for compliance
with the CD which OTS monitors as part
of
the continuous exam process
Civil Money Penalty CMP On October 17 2007 OTS issued an order for CMPs
totaling
$60448 related to WMBs violation of flood insurance regulations
in its Commercial Loan
pup
Board resolution In
response to a supervisory ratings downgrade letter from the
Regional
Director on February 27 2008 the Board resolved on March 27 2008 to undertake strategic
initiatives to improve weaknesses related to asset quality earnings and
liquidity
WMI Memorandum of Understanding OU On
September 7 200$ WMI entered into
an
MOLT Action items include 1submission of a consolidated 3year business plan within
30
days for OTS review and
nonobjection
followed by quarterly
variance reports and 2 a
contingency capital plan within 90 days
WMB Memorandum
of Understanding On September 7 2008 WMB entered into a separate
MOLT Action items include 1 submission of a 3year business plan
both base case and
stressed scenarios within 30 days
for OTS review and nonobjection
followed by quarterly
variance
reports 2 a contingency capital plan within 90 days 3 a classified asset reduction
plan incorporated
into the business
plan 4engaging an outside consultant to review risk
management practices 45 days
and submitting a
report
to OTS 75 days 5 engaging an
outside consultant to review the underwriting process
for the Home Loans Group 45 days
and
submitting a
report
to OTS 75 days 6 submitting a report
to OTS to address the consultants
recommendations within 30 days
of
receipt
of the consultants reports 7reviewing
alerts for
the period April 1 2006 through
June 30 2008 and filing SARs where required no
later than
October 31 2008 and 8 ensuring that management
corrects all OTS findings specified in the
Report
of Examination and Findings
Memoranda Within 55 days
of the end of each
quarter
the
Board shall certify compliance
with the MOU and submit a certified
copy
to the OTS
17
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West
Region Receivership
Recommendation
Washington
Mutual Bank Henderson NV 08551
September 25 2008
Paae 10 of 10
CQNCLUSIO AND CONTACTS
Statutory grounds
exist for the appointment
of a receiver for the Bank We believe that
the
appointment
of a receiver for the Bank under these circumstances will
protect
the interests of the
Banks depositors
and the Deposit
Insurance Fund Therefore we recommend that the Director
take action to appoint
the FDIC as receiver for WMB as soon as
possible
The following personnel
available to answer any
additional questions
Name
Title Phone
Benjamin
D Franklin
Regional
Examiner 909
827 0066
James A Hendriksen Regional
Counsel 650
746704I
Darrel W Dochow
Regional
Director
Exhibit List Attached
18
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M MORAN13 OF UNDERSTANDING
ective Date
b
y and between
Washington
Mutual Bank Savings
Association or WaMu OTS
Docket No 08551 acting through
its Board of Directors Board
and the Office of Thrift Supervision OTS or Agency acting through its West Regional
Director The Board
agrees
to take or direct management to take the actions set forth below to
address the supervisory
issues identified in the OTS examination of WaMu
completed
June 30
2008
1
Business
Plan
A Within
thirty 30
calendar days ofthe Effective Date of this Memon
Board shall review and
approve
a comprehensive three 3year
business
plan Business Plan
and submit such Plan to the OTS for review and written nonobjection
The Business Plan shall
1 provide an analysis
of the earnings profitability and stability of all
existing
and
projected
business lines 2 present comprehensive
business line strategic goals
and
objectives
3 provide
a detailed financial forecast including a
forecasted levels or ratios of Tier I Core
Capital
and Total RiskBased capital for the Savings
Association
i
n the scenario reasonably
believed by management
to have the highest probability of occurrence the Base Scenario
b
forecasted levels or ratios of Tier I Core
Capital
and Total RiskBased
capital
in a scenario
where
projected
credit losses
materially
exceed those forecast in the Base Scenario the
Stressed
Scenario c
minimum levels or ratios of Tier I Core Capital
and Total RiskBased capital
for
the Savings Association and
d plans
under both the Base Scenario and the Stressed Scenario to
reduce Classified Assets The Plans submitted shall include supporting
documentation for all
assumptions
and projections
133
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Following receipt
of the nonobjection of the OTS
the Board shall
immediately
the Business Plan The Board shall
cause
management
to sr
deviate he Bur the OTS thirty 30 s prior
to the
proposed
date for implementation
of such change unless the OTS waives such time
period
WaMu
may
make such change only after the OTS provides its written nonobjection
C Management shall prepare
and submit to the Board and to the OTS
reports
regarding
the
Savings
Associations compliance
with the Business Plan including the Classified
Asset Reduction Plan on at least a quarterly
basis within thirty 30 calendar days after the close
of each
quarter starting with the first
quarter
after the Effective Date of this Memorandum Such
reports
shall 1detail actual operating
results as compared with projected results and
2provide
an explanation for any
material deviation The Boards review of the Business Plan
and related
reports
shall be
fully
documented
i
n the Board minutes
2 Capital
A The Savings
Association shall remain
i
n compliance
with the minimum capital
ratios contained
i
n the approved
Business Plan discussed in Paragraph
l which shall provide that
in no event shall Tier 1 Core capital
fall below 675 percent and Total RiskBased capital ratio
fall below 1125 percent
B The Board shall not declare a dividend or authorize
any
other capital distribution
as defined at 12 CFR 563141 without the Savings Association filing a notice with the OTS
at least thirty 30
calendar days prior to the
proposed
dividend or distribution and
receiving
the
written nonobjection of the OTS
C The Savings Association shall review and revise as appropriate
its methodology
for assuring an adequate
level of Allowance for Loan and Lease Losses ALLL and shall
2
1
3
4
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maintain such adequate levels taking into consideration the OTS findings specified i
n the OTS
D The Board shall review and approve a contingency capital plan and submit a copy
days
of the Effective Date that
specifies
how
the
Savings
Association would continue to meet the minimum capital ratios contained
i
n the
approved
Business Plan under additional stress scenarios where loss and other projections
become materially incorrect
3 Classified Asset Reduction Plan
A The Savings Association shall incorporate
into the
approved
Business Plan
discussed in
Paragraph
I a written comprehensive
Classified Asset Reduction Plan The
Classified Asset Reduction Plan shall 1 set targets acceptable to the OTS 2specify
the
manner and methods for
reducing
the Savings Associations level of classified assets to the
targets
set therein
and
3
include supporting documentation for all
assumptions
and
projections
B Management
shall
prepare
and submit to the Board and the OTS variance
reports
regarding the Savings
Associations compliance with the Classified Asset Reduction Plan as part
of its reporting required by Paragraph 1C
hereof
4 Risk Management
A Within
fortyfive 45 calendar days
of the Effective Date of this Memorandum
the Savings
Association shall
engage
an independent outside consultant
acceptable
to the OTS to
review the Savings
Associations risk management structure reporting relationships
to
Management
and the Board and related policies procedures
and practices The consultant shall
identify the
major credit market and
operational
risks ofthe Savings Association and assess the
risk
measures limits and controls for
e
a
c
h
3
1
3
5
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Within seventyfive 75
calendar days of the Effective Date of this Memorandum
d
5 Asset Quality
A Within
fortyfive 45
calendar
days
of the Effective Date of this Memorandum
the Savings Association shall
engage an independent
outside consultant to review the Savings
Associations underwriting process
for the Home Loans Group including the verification and
boarding
of customer information loan
quality goals
incentives to production staff monitoring
and addressing sources of
poor quality loans use of automated
underwriting systems
fraud
detection and elevation and correction of internallyor externally
identified
process
shortcomings
B Within
seventyfive 75
calendar
days
of the Effective Date of this Memorandum
the consultant shall
prepare
a written
report containing findings and recommendations for asset
quality practices arising out of its review required by Paragraph 5A
above and
provide a copy
of
the
report
to the Board and the OTS
6 Responses to Consultant Reports
Within
thirty 30
calendar days of receipt of the independent consultant reports required
by Paragraphs
4 and 5 of this Memorandum the Board shall provide to the OTS its
response
to
each
report including the actions proposed to be taken to address the specific
recommendations
contained therein The OTS shall determine i
n its sole discretion whether the responses are
acceptable
If the OTS determines that the
responses
are not acceptable
the OTS shall
provide
the Board with written comments Thereafter
the Board
shall
after
taking
into consideration
any
4
1
3
6
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comments received by the OTS submit a revised
response acceptable to the OTS within thirty
7
endar days
of the receipt of such
let views and SAR Ff9s
A The Board shall cause mar g meat to complete by no later than October
31
2008 its review of all look back alerts generated during the period between April 1
2006 and
April 1 2007 all steady state tail alerts
generated during the second half of 2007 and all
steady
state alerts generated during the first two
quarters
of 2008
and to file
Suspicious Activity
Reports SARs with the Financial CrimesEnforcement Network where
required by the
Currency and Foreign
Transactions Reporting Act the
Bank
Secrecy
Act or BSA 31 USC
5311 et
q
and the related BSA regulations
issued
by
the United States
Department
of the
Treasury
31 CFR Part 103
and the OTS 12 CFR 563177 The Board shall
require
that
management certify to the Board immediatelyupon completion
of all reviews and investigations
arising out of the look back and tail alerts that such reviews and
investigations
have been
completed
and that all
required
SARs have been filed The Board will
provide
to the OTS a
copy
of managements
certification within five 5days
of receipt by the Board
8 OTS Findings
The Board shall ensure that management corrects all OTS findings specified in the
Report of Examination and in the Findings
Memoranda fromthe OTS examination ofWaltMu
completed
June 30 2008 by the specified
due dates therein The Board shall receive written
reports detailing the status of the corrective actions monthly
9 Definitions
All technical words or terms used i
n this Memorandum for which meanings are not
specified or otherwise
provided by the provisions
of this Memorandum shall
insofar as
applicable
have meanings as defined i
n
Chapter
V of Title 12 of the Code of Federal
137
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an Act HOLA Federal
Deposit
Insuranc
f Fede l Re l
ons
s used
i
n this Memorandum and undef
r OTS Publications shall have mean
OTS
accordance with the best custom and
usage
in the savings and loan
industry
10 Compliance with the Memorandum
A All policies procedures
corrective
actions plans programs
and reviews
required
by this Memorandum collectively referred to as Plans and Policies shall conform to all
applicable statutes regulations and written OTS
policy
and
guidance
that has been published by
the OTS or distributed
by the OTS to OTSregulated institutions The Board shall cause
management to revise such Plans and Policies as required by the OTS The
Savings Association
shall
comply
with all Plans and Policies
required by this Memorandum including any revisions
or amendments required by the OTS or to which the OTS provided a written notice of
nonobjection
B This Memorandum requires the Savings Association to receive
approval notice of
nonobjection or notice of acceptability from the OTS for certain actions The Board affirms
that such
regulatory oversight does not derogate or supplant each individual members
continuing fiduciary duty The Board shall have the ultimate responsibility for
overseeing
the
safe and sound operation of the
Savings
Association at all times including but not limited to
compliance with this Memorandum
D The Board shall require that Board minutes and Board Committee minutes reflect
fully all matters presented to and discussed by the Board at Board and Board Committee
meetings related to this Memorandum in accordance with 12 CFR
563170c
E
By
the
fiftyfifth 55th calendar day ater the end of each calendar
quarter
beginning
with the first
quarter after the Effective Date of this Memorandum the Board shall
6
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and the Se
I
tinquiry
of relevant information
inc sensations or certifications frot
aMus
management regarding
the
Savings Associations
compliance with each provi
this
Memorandum to the best of the Boards
knowledge
and
belief during the
immediately
preceding calendar
quarter
the
Savings Association
complied with each provision of this
Memorandum
currently i
n effect except as otherwise stated If there are
any areas of
noncompliance
the
Compliance Resolution shall
1 specify in detail how i
f at all full
compliance
was found not to exist and
2identify all notices of
exemption or
nonobjection issued
by
the
OTS that were outstanding as of the date of its
adoption
In the event that one or more directors
do not
agree
with the representations set forth in a Compliance Resolution such
disagreement
shall be noted in the Board
meeting
minutes
11 Submissionof Documents
The
Savings Association shall submit
copies
of all
required documents to
Mr Darrel W Dochow Regional Director
West
Region
Office of Thrift Supervision
2001
Junipero Serra Blvd Suite 650
Daly City CA 940143897
Mr Dale R
Blackburn Assistant Director
West Region
Office of Thrift
Supervision
101 Stewart Street Suite 1414
Seattle WA 981412419
12 Miscellaneous Provisions
A
Upon receipt of a written
request by the
Savings Association the
Regional
Director
may
in the sole discretion of the
Agency extend the timeframes and deadlines set forth
in this Memorandum
by written notice of
nonobjection to the
Savings Association
7
oard shall
provide a certified
dution shall
provide that
following a diligent
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co
iscretion to be
which
i
t
i
s subject or
auowrng
the
Savtugs
appropriate i
n
ling
the
responsibilities placed upon i
t
by law
C The
provisions of this Memorandum shall remain effective
except to the extent
that and until such time
as any provision of this Memorandum
i
s modified terminated
suspended or set aside
by
the OTS acting through
the
Regional Director
D The Board shall not adopt a resolution
rescinding any obligations to
comply with
the
provisions of this Memorandum without the
prior written nonobjection of the OTS
13 Counterparts
This Memorandum
may
be executed
i
n
counterparts
Signatures
appear
on next
page
140
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IN WITNESS
WHEREOF OTS acting by and
through its Regional Director and the
Savings Association authorized and directed
by
the
Board hereby execute this Memorandum as
of the Effective Date
OFFICE OF THRIFT SUPERVISION
By
Darrel W Dochow Date
Regional Director
West
Region
WASHINGTON MUTUAL BANK
By
Stephen
E Frank Date
Chair
The undersigned Directors of
Washington Mutual Bank attest that on September 7 2008
the Board
unanimously adopted a resilution
authorizing
and
directing Stephen Frank to
execute this MOU on behalf of the
Savings Association
David Bonderman
Thomas C
Leppert
Charles M Lillis
Phillip D Matthews
gnatures continued on next page
141
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SEP 82008 254PM TEXAS PACIFIC
NO 156
IN WIT
E
S
WHEREOF OTS acting by and
through its
Regional Director and the
Savings Association authorized and directed by the
Board hereby execute this Memorandum as
ofthe Effective Date
OFFICE OF THRIFT SUPERVISION
By
Darrel W Dochow
Regional Director West
Region
Date
WASHINGTON MUTUAL LANK
By
Stephen E Frank
Chair
Date
The
undersigned Directors of
Washington Mutual Bank attest that on September 7 2008
the Board
unanimously adopted a resolution
authorizing and
directing Stephen Frank to
execute this MOU on behalf of the
Savings Association
David Bonderman
omas C
Charles M Lillis
ppertt
Phillip
D Matthews
atures continued on next
page
9
142
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2008 1149 3032091906
LONE REE
PAGE 0303
IN WITNESS WHEREOF OTS acting by and
through its Regional Director and the
of the Effe
OFFICE OF THRIFT SUPERVISION
B
y
D
a
r
r
e
l
W Dochow Date
Regional Director West
Region
WASHINGTON MUTUAL BANK
Stephen E Frank Date
Chair
am a
The undersigned Directors of
Washington
M ttual Bank attest that on
September 7 2008
the Board unanimously adopted a resolution
authorizing and
directing Stephen Frank to
execute this MOU on behalf of the Savings Association
Alan H Fishman
Stephen
David Bonderman
Thomas C
Leppert
Charles M Lillis
Philiip D Matthews
atures continued on nextna
9
1
4
3
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Sep 15 2008 544PM Cite of Dallas
214S700646
p2
IN WITNESS WHEREOF OTS acting by and through its Regional Di cto
Savings Association authori=d and directed by
the Board hereby execute this Memorai
of the Effective Date
OFFICE OFTHRIFT SUPERVISION
By
Darrel W Dochow
Regional Director
West
Region
GTON MUTUAL BANK
By
Stephen
E Frank
Chair
Date
nd the
The undersigned Directors of Washington Mutual Bank attest that on September 7 2008
the Board
unanimously adopted a resolution authorizing and
directing Stephen Frank to
execute this MOU on behalf of the
Savings
Association
Alan H Fishman
Stephen E Frank
Charles M Lillis
Phillip D Matthews
Signatures continued an next page
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Z04 311 213 0
IN WITNESS
WHEREOF OTS acting by and through its
Regional Director and the
Savings Association authorized and directed
by
the
Board hereby execute this l iemorandum as
of the Effective Date
OFFICE OF TFT SUPERVISION
By
Darrel W Dochow
Date
Regional Director
West
Region
WASHINGTON MUTUAL BANK
By
Stephen
E Frank Date
Chair
The
undersigned
Directors of
Washington Mutual Bank attest that on September 7 2008
the Board
unanimously adopted a resolution
authorizing
and
directing Stephen Frank to
execute this MOU on behalf of the Savings Association
Alan H Fishman David Bonderman
Stephen
E Frank Thomas C
Leppert
Charles M Lillis
Signatures continued on next
page
9
1
4
5
OTSWMIBKRCY00000149
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OTS HIGHLY CONFIDENTIAL
09082008 1343 FAX 509 534 3839 CENTRAL PREMIX CORP
Michael K
Murp
Stephen I Chazen
Orin CSmith
Regina T
Montoya
1
0
1
4
6
Margaret Osmer
M1cQuade
William G
Reed Jr
James H Stever
a002003
OTSWMIBKRCY00000150
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OTS HIGHLY CONFIDENTIAL
d
Stephen I Chen
Orin CSmith
Regis T
Montoya
147
nRqGrR09
apenooW Rajej
WUL = I Boca so Jas
OTSWMIBKRCY00000151
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Return
OTS HIGHLY CONFIDENTIAL
20080908 0714ai FromCPC LA President 4 CFO
Michae
Murphy
810 443 8812 7522 P003003 F223
d Jr
Orin C Smith
Regina T
Montoya
1
0
J
a
m
e
s
H Stever
148
OTSWMIBKRCY00000152
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OTS HIGHLY CONFIDENTIAL
SEF092006 1622 SIMPSON
206 224 5470 P0303
Michael K Murphy Margaret
Omer McQuade
tephen
I Chazen
Orin CSmith
Regina
T
Montoya
1
0
1
4
9
awes H Stever
TOTAL P03
OTSWMIBKRCY00000153
HIGHLY CONFIDENTIAL
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Return
OTS HIGHLY CONFIDENTIAL
p 15 08 1038a Orin Smith 1234567
Michael K
Murphy
Stephen 1 Chazen
Regina
T
Montoya
150
Margaret OsTnerMcQuade
G Reed Jr
ames H Stever
p1
OTSWMIBKRCY00000154
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OTS HIGHLY CONFIDENTIAL
Sep 08 08 0643p Jim Stever 425 392 3748
p2
I K Murphy Margaret Osmer McQuade
Stephen L Chazen
Orin C Smith
Regina
T
Montoya
WilliamG Reed Jr
OTSWMIBKRCY00000155
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OTS HIGHLY CONFIDENTIAL
09092008 1153 2148260741 WORKRiLES
Michael K
Murphy
f I Chaaen
Orin C Smith
Io
Margaret Osmer McQuade
William G
Reed Jr
ver
152
PAGE 02
OTSWMIBKRCY00000156
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OTS HIGHLY CONFIDENTIAL
Augello Frances
From
Sent
To
Cc
Subject
Fran
Jim asked me to send
Ben
Franklin Benjamin D
Thursday September 25 2008 1159 AM
Augello Frances
Hendriksen James A
FW Saleable assets
Original
MessageFrom
Freilinger Peter ea
lltopeterfreilinger wamunetj
Sent
Tuesday September 23 2008 550 AM
To Franklin Benjamin D Stearns Steve Bjorklund Bob
Cc Doperalski Cathy L Bisset John K Wu Vicky Smith Chad
Subject Re Saleable assets
Ben
Note that the
pool Robert mentioned is
actually not
particularly saleable its simply
unencumbered in other collateralized
borrowing programs The
quality of that collateral
is
generally quite poor or else documentation issues exist that would
preclude easy
sale
or transfer
Our most
easily saleable collateral
pools consist of about $2bln in MERS electronic
collateral file
registry SFR loans and the
roughly $8bin in
performing subprime loans in
WM
Specialty Mortgage Finance Steve can give you more pool level detail on those but
they would require ab out 30
days to turn around and finance
Otherwise we could sell traditional SFR loans or MF loans as long as we maintain asset
coverage at the FHLB We have some excess
capacity there
obviously loan sales would eat
into that capacity but to the extent we generate more proceeds than current haircut
levels we would increase
liquidity
It would be
possible as well to free
up the collateral associated with the WM Preferred
Funding program
This would require a regulatory order to convert the current WM
Preferred Funding series into their associated series of WMI preferred stock which is
designed typically to occur only in PCA It would also
significantly increase the net
dividend cost after tax but it would release the closed end 1st lien FELOC hybrid ARM
and option ARM collateral in the
program I believe the current balances there are around
$9 billion Vicky can get you more information on the collateral and the
program exchange
dynamics
To the exte^ there was
liquidity in the securitlies markets we could also sell CMBS our
corporate and our muri bond portfolios We use some of those for Fed
capacity but
generally do not draw on it and those portfolios in
aggregate represent around $7
bill io
is makes
sense
crrglnal message
From
Benjamin D
<penjeminfranklinotstreasgov>
To
Freilinger Peter Stearns Steve Bjorklund Bob
Cc Doperalskr Cathy L Bisset John K
<johnbissetotstreasgov>
2008
1269
OTSWMIBKRCY00000278
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return
OTS HIGHLY CONFIDENTIAL
Peter Steve Boo
Peter I understa
so I have address Steve and
on a well
to
help us
served vaca
n you absen
ion if
so bon voyage
We would ake aisting of all such assets including the current book and market
value
the likelihood that these could be sold if cant sell
explain why estimated
proceeds
i tent
sale and gnat impact this would have on
capital and
liquidity
Give me a call is
you need further details
Thanks
Ben
270
OTSWMIBKRCY00000279
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return
OTS HIGHLY CONFIDENTIAL
Augello Frances
From
Sent
To
Cc
Subject
Fran
Jim asked me to send
Ben
Franklin Benjamin D
Thursday September 25 2008 1159 AM
Augello Frances
Hendriksen James A
FW Saleable assets
Original
MessageFrom
Freilinger Peter ea
lltopeterfreilinger wamunetj
Sent
Tuesday September 23 2008 550 AM
To Franklin Benjamin D Stearns Steve Bjorklund Bob
Cc Doperalski Cathy L Bisset John K Wu Vicky Smith Chad
Subject Re Saleable assets
Ben
Note that the
pool Robert mentioned is
actually not
particularly saleable its simply
unencumbered in other collateralized
borrowing programs The
quality of that collateral
is
generally quite poor or else documentation issues exist that would
preclude easy
sale
or transfer
Our most
easily saleable collateral
pools consist of about $2bln in MERS electronic
collateral file
registry SFR loans and the
roughly $8bin in
performing subprime loans in
WM
Specialty Mortgage Finance Steve can give you more pool level detail on those but
they would require ab out 30
days to turn around and finance
Otherwise we could sell traditional SFR loans or MF loans as long as we maintain asset
coverage at the FHLB We have some excess
capacity there
obviously loan sales would eat
into that capacity but to the extent we generate more proceeds than current haircut
levels we would increase
liquidity
It would be
possible as well to free
up the collateral associated with the WM Preferred
Funding program
This would require a regulatory order to convert the current WM
Preferred Funding series into their associated series of WMI preferred stock which is
designed typically to occur only in PCA It would also
significantly increase the net
dividend cost after tax but it would release the closed end 1st lien FELOC hybrid ARM
and option ARM collateral in the
program I believe the current balances there are around
$9 billion Vicky can get you more information on the collateral and the
program exchange
dynamics
To the exte^ there was
liquidity in the securitlies markets we could also sell CMBS our
corporate and our muri bond portfolios We use some of those for Fed
capacity but
generally do not draw on it and those portfolios in
aggregate represent around $7
bill io
is makes
sense
crrglnal message
From
Benjamin D
<penjeminfranklinotstreasgov>
To
Freilinger Peter Stearns Steve Bjorklund Bob
Cc Doperalskr Cathy L Bisset John K
<johnbissetotstreasgov>
2008
1269
OTSWMIBKRCY00000278
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return
OTS HIGHLY CONFIDENTIAL
Peter Steve Boo
Peter I understa
so I have address Steve and
on a well
to
help us
served vaca
n you absen
ion if
so bon voyage
We would ake aisting of all such assets including the current book and market
value
the likelihood that these could be sold if cant sell
explain why estimated
proceeds
i tent
sale and gnat impact this would have on
capital and
liquidity
Give me a call is
you need further details
Thanks
Ben
270
OTSWMIBKRCY00000279
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return
OTS HIGHLY CONFIDENTIAL
Page I of 1
Augello Frances
From
Hendriksen James A
Sent
Thursday September 25 2008 1158 AM
To Augello Frances
Subject FW
Ending Liquidity Totals for 922
Importance High
From
Franklin Benjamin
D
Sent Monday September 22 2008 558 PM
To Reich John M Polakoff Scott M Ward Timothy T Quigley
Lori
G Dochow Darrel
W Blackburn Dale
R
Brickman Michael R Chow Edwin L
Cc
Bisset John K Rook Christopher D Hendriksen James A
Subject FW
Ending Liquidity Totals for 922
Importance High
The table below
i
s the Banks estimate of
Liquidity sources The earlier table sent out that estimated $2078
i
n
available sources was put together by George
Doerr
FDIC The difference
i
s that
George discounted the Banks
estimated available line from the FHLB SF from $85 B to $10 billion because of the
uncertainty at
present
regarding whether the FHLB will continue to advance funds We understand that WaMu
i
s still
i
n discussion with
FHLB SF
i
n this
regard and do not
yet
know how this will turn out
Ben
From
Bjorklund Bob
mailtobobbjorklundwamunet
Sent
Monday September 22 2008 537 PM
To
PatrickJLoncarsffrborg JudyPlocksffrborg Bisset John
K sfunarofdicgov Franklin Benjamin D
Rook Christopher D
Cc
Freilinger Peter Stearns Steve Doperalski Cathy L
Subject Ending Liquidity Totals for 922
Sources Friday Today
919 0922
FHLB $161 $135
DW $92 $92
Repo $4 $4
Ffds $025 $025
Cash $62 $46
Ffds 517 $08
DNs$16 $16
1MM $29 S22
Rev $00 $00
Total $322 $280
Commentary
We had $2B i
n advances settle $500mm u
down
i
n the
morning Redeemed $650 fror
morning And when you t
Please email we with al
9252008
as a reduction in capacity due to some price changes at SF We will be chasing that
I
s and left 5800mm on deposit i
n the fed account to ensure the ACH wires
get sent out i
n the
i
n ffds sold you have the drop i
n
capacity from Friday
272
OTSWMIBKRCY00000283
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
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OTS -- HIGHLY CONFIDENTIAL
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HIGHLY r.OI\lFH1FN
OTS HIGHLY CONFIDENTIAL
V1
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Return
"" ,
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Headquarter:;:
MarKet capitalb:ation
EfllIloyees 49,403
TotatAssets lmanaged) $346,313
$24,51!4
C:allfornfa
Option Arms 558,870
Florida
Prirre Horne Equity 60,962
Texas
New York
Subprime 18,617
Washington
Other 63,267
IUina!!')
Total Oregon
Multifamiti 31,754 New Jersey
Comrnercial 1,880
Georgia
Credit card (managed) 27,231
Arizooa
Goodwill &. I ntangib!es 7,675
Cobrado
Nevada
MSRs 6,278
Utah
Cash &; Securit ies 45,096
Idaho
Other Assets 24,683 Connecticut
Total Assets (managed) 1
>''''''"'''='''':'';:0-"
Source; SNL financial, FactSet
Note: M.arket data as of March 26, 2008, Financial data as of December 31, 2007
! GAAP assets of 532Sbn
0
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215
186
144
105
86
b8
64
40
37
l4
22
13
PROJECT WEST 2
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t
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Arm;
Prim? Home
Other
Total
Corrrrercial
Credit card
Goodwi[ & inta",: lb."
MSRs
Cash &: securities
Other .. ",ts .
Totalassets (managed)
common equity
Total (ammn
TeE/TA'
60,962
18,617
63,267
,716
31,754
27,231
7,675
6,278
45,096
24,683
3
23,718
4.69%
TCE/Tangible managed assets of 3.9%
$13,964
4.36%
Wholesale
FHlB
Other borrowin!,!s
Trust ore'ferred
Other Habinties'
Total.abilities
Preferred
Common
Total Habibties &
12.131
$13,517
21,192
4.22%
22,604
63,852
62,279
1,230
$321,729
3,392
21
$346,313
PROJEO WEST 3

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Line of business
Card services 165 724 540
Commerdal 462 396 315
Home loan (50) (2, 4601
0
Other 200
-I
U1
Total
I

Gl
I
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Noninterest income
T otat revenue
Provislon for loan losses $816
Total noninterest
Total expense $13,910
proHt $4,710 $309
Taxes 1,656 376
Income from contlnuing operations
,.")
Income from discontinued operations $38 $444 SO
5: Net income

u

Note: as of D;:cember 31, 2007
, 1 Includes minority interest expense
()


.,JIIIFIV11Ui !:;jIGII \.J
PROJE'CT WEST 4
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Provision
1
incomE.'
1.751
Net income to common
EPS
Common
T",noih!p comrron
TCE/TA 4.2%
51
Source: W6t management
I Midpoint of $1.8 2,0 biUkm guidance given OIl 4Q conference caU
Versus. 4.15% target TCEITA
j At 12131/07 a 4.75% refITA target required $15,211 of TCE
0
1.635
-I
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::J:
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::J:
(1.66)
'<
11
4.0% 3.8%
PROJECT WE'ST 5
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OTS-WMI-BKRCY-OOOO1D22
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OTS-WMI-BKRCY-OOOO1023
Return
Prime Home 63 3
~
if)
Prime Mortgage 55 2 2 12 22
Sub Prime 1 st lien 7 37 43
I
35 5
~
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Sub Prime 2nd lien 34 66 67 77 76
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r:;:
Total 3% 6% 23% 35%
n
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0.
Accrual rate each month
Minimum Oilvment adjusts year
Monthly payment oplUo/lS
Minimum {selected of borrowersl
Interest
{f,,<ter amortization, typically 15
Recast
Earlier of 5 years or amortization
cap
Increase in minimum can substantial

Jmentation; most ARMs limited

Preo"vmpnt: many Option ARMs have pr.ep,lyrneinl
2/3
rds

Primary risks:
.. shock at recast
.. Increased leverage
Recast
and magnitude driven
" Intra minimum payment rate and amortization
30 versus 40
iii
.. Interest rate "paths" and spreads
"
the
.. Borrower behavior
Preoilliment (refinancing, property
Limited history, in context to the current
less
environment. makes it very difficult to future
I
intro rates 1
PROJECT WE5.T 9

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Consumer mort282e
Home
f1n.tinn ARM
Other
Home 1st lien
Home EQuitv: 2nd Lien
Subnrimf' Channel
SubPrime: 1st Lien
SubPrime: 2nd lien
Totalliome Loans 8:
Sourte: West management p""""tatio"
$1
862
757
6.3%
1.5
2.0%
10.8
13.2%
28.9
, .
,
40.5
PROJECT WEST 10
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Prime MortoaQe
Total

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1 ru,sumes
, As.sumes
CAft
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13.1
21.4
..-
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, , n"', V
c --.;;..<:'
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11,700
6,417
--'.'
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if
19.2
34.5
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w
3:
,...
v
,,,
. ,
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oc

Revenue
ProvIsion
NorHnter-a.t
Minority Interest
f're-taJol incQmt
Ml'tm;;:!.X'I!e
"'"
CQI11n::l11 equity
hngiD!.f. c!}mwn equity
TCE! TA
Cllpitaldeiitiel'lty I
$14,928 515,418
15,500 5,000
a,no 8,105
lOS
)"
19,0'97) 2,008
(56A2) 51.46
S15.523 516,543
1,96(:, 9,0$4
2.74% ),26%
$tS,76a
],700
8,11)
lOS
3,650

513,117

3.92%
Revenue
"'''''''100
Noo-ifltff'1t
Mlnlty interest expens-e
Pre-till( income
Net Income
El'S
COll11ll'OO equlty
Tangible corrrron equ[ty
mlTA
$1",9lR
'1011,300
a,220
lO>
{$2.80)
$'11:.,]15
8,Hl5
)"
W'i,n8
7,<00
8,10
lOS
"0,)" / {SO.OfI)
$'14,)87 SH,563
8,758 1,074 6/.$5
.",j.<ti."" do not account for im::reased r;on-accrualloans; and Assumes no dNidend in 2008, $0.30 in. 2[){)'11 and 30% payout
ratio from to West's outstanding $3.0bn of Series R Coovertlble S.tQtm of REIT Preferred and SO.5bn of preferred would add to
TCE/TA. Assumes, 00 share buyback
I Above 4,]5% TCEJTA
PROJECT WEST 13

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1'2131/07 Tangtbte common equity
less: 2008 tosses and dividends
12/31 J08 Tangible common equity at dosing
Adjustments
Credit lmpajrment
loan reserve adjustment
Conforming LlR
Purchase Accounting
Pre-tax
($20,415)
6,631
(2,414)
r
$13,517'/
./

4,377
(1,593,
(1,326)
($11,023,
(51,646)
Park capacity is, futly utiUzed
1213112008 Total assets
Risk weighted assets at ctosing
t
Capital requIred at 8.0%
West qualifying hybrids!
Tier i needed
Hybrid capacity
Reduce Park balance sheet
Common issuances
5197,585
213,560

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OTS -- HIGHLY CONFIDENTIAL
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OTS-WMI-BKRCY-00001033
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I
Ncvada
1
2 37 63,683 36.2% 4 3 . 2 ~
New York B 235 15,691 2.3% 664 211,318 31.7%
Washington 2 1&\ 13,002 12.3% 12.4%
0
-1
Florida 5 266 11,880 3.2% 59 13 568 19.4% IJl
Texas 7 ,.9 9,062 2.5% <00 63,1.45 18.8%
Oregon J
'OS 5,696 11.9% 18.:;%
::c
~
New Jer'.ey ,2 8. 3,lOO 1.6% 8 ,64 7,052 16,4%
Gl
I
Hlinois l3 ,44 1,373 0.4% 2 :147 38,619 12,1%
':(
Ari:1;ooa 11 64 1,12-4 1.4% 236 19,187 24.0%
n
U[ah

:14 Il4S 1.9% J 14 5,159 4!LZ% 0
Georgia
'8
68 75. 0.4% 20.3%
:2
-n
Idaho 8 22 m
~
3.6% 10.0%
0
Colorado 2. 4<l 498 0.6% 5 87 3,951 17.6%
m
:2
Connecticut 42 13 166 0.2% 7 41 111.2% ;:l
ather NA 1,143 HA
;t>
r
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Source: SNl DataSourc.e (Brandl data a of 3/25108, deposit data as of 6/30(07)
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Rank
1 Bank of America 1,002 13.8% 20.7% 1.6%
2
3
4
5
2. Welts Fargo & Co. 1,030
5 Citigroup
Lo!!. Angeles-long BeachSanta Ana
San Francis.coOaktand-fremont
San Marcos
San Jose-Sunnyvaie-Santa Clara
Riverside-San Bernardino-Ontario
167
382
13.2
4.3
3.1
1.8
4.1
Source: SNl Financial (Branch data as of 3125/08; deposit data as uf 6130/07)
14.2%
5.3%
2
4
3
3
2
114,885 15.4% 5.0%
41,715 5.6% 8.5%
249 $33,258 11.1%
93 11,371 6.6% 26.5%
75 1,184 15.6% 16.9%
36 4,916 9.4% 24.0%
48 4,789 12.4% 21.1%
PROJECT WE)"f 19

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1 Sank of America 7. 12.2% $7,913 16.9%
2 WeHs Fargo &: Co. 100 16.4% 7.734 16.5%
4 UnionBanCal 60 9.9% 4,434" 9.5%
5 Wachovia 11 1.B% 2,632 5.6%
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4 (america
5 SVB fimmciat
61
13
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0.5%
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10,309 19.6%
3,579 6.8%
PROJECT WEST 10
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Miamifort Lauderdale-Pompano
2 Sank of America 665 11.6% 67.008 18.2%
Beach J 125 $8.804 5.9%
3 SunTrust Banks 562 9.8% 1l.Il8J 9.2%
Orlando-Kissimmee 5 49 1.688 5.4%
Q
4 Regions financial 4JO 7.5% 17,679 4.8%
Palm Bay-J!Aetbourne-Titusville 5 12 477 6.6%
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Port St. Lucie 13 44 JIl4 0.9%
Tampa-St. Petersburg-ClearWater 9 6 269 3.6%
I
Sebastian-Vero Beach 10
,
77 2. 1%
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3J 12 69 0.4%
'=<
Lakeland 12 10 66 1.2%
Deltona.-Dayton BeachOrmond Beach 22 2 45 0.5%
f-
Branch
Bank of America ,36
1 U.S. Bancorp
2 Welts fargo Ii Co. 12a 11.6% 5.946 11 .. %
3 U.S. Bancorp 186 9.7% 8,225 7.8%
4 KeyCorp 153 7.9% 8.00 7.6% 4 Bank 6'f 'Arrieri6i' Il8 8.0% 5.680 11. il%
5 Welts Fargo 6: Co. 159 8.3%
'.412
7.0%
5 Umpqua Holdings 70 6.3% 3.466 7.2%

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2 H5BC
'91 7.3% 70,468 10.1%
2 Bank of America 463 ... % 46,743 ,3.4%
0
3 Citigroup 259 ... % 51,425 8.2%
l Wells Fargo fr Co. 564 ',J% 28,144 ',7%
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4 Sank of America m 7,0% 37,727 5,4%
4 Banco Bilbao Vizcaya 329
.,.% 20,904 5,8%
5 Capital One Financial 285
"""
34,563 5,'" 5 Wachovia 221 J,2% 12,248 J,4%
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Banll, Of America 397 11,8% 534,l<l4 16.4%
2 Wachovia m 9.6% 28.749 13.8% Bank of America 220 4A%
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Toronto-DomInion m 9,6% 26,213 12.5% 2 Pall< 347 6,9. 38,619 tL8%
4 PNC Financial m W.O"A:\ 18,281
'.7%
] B.V..O Financial 184 3,6% 19,116 8,9%
5 Hudson City Sancorp 91 2.7% 12.732 td% 4 NatiooatCity 183 3.6% 12,982 4.'"
;AI ->",l!ilJ--, " ::" 1.4 ui .'; 5 Northern Trust
,.
0.4% 8,950 1,7%
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U.S. Households
4<1.9% 24.4% 25.1% Z3.6% 30.3% 12.4%
Households 74.8% 33.4% 4<1.3% 28.4% 58.6% 11.6%
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Total # of Branches 5.598 3.054 3.068 3.058 2.229 1.762
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5 Year Growth 3.5% 6.7% 5.5% 5.8% 6.8%
:;;:
% of Population Growth
17.7% 36.2% 26.1% 38.3% 16.8%
% of Hisoanic Growth
30.1% 47.1% 30.0% 53.7% 15.9%
.--".,---------
1 Branch count before consolidations; assuming 440 consolidations branch count would be 4,843
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Retail Banking $4,428 $1,329 $0 $1,329 30.0% 30.0%
Home Loa.ns 2,472 951 285 1,236 38.5% 50.0%
Card 1,245 370 267 637 29.7% 51.2%
Commerdal 282 60 0 60 21.3% 21.3%
Corporate/Other 475 254 0 254 53.5% 53.5%
Total
lnvestments in fA5- &. Business and Counmerdal Bankers ($472)
Netchangeln U] _ . ~ 1 ~ 1 __________________________________________________ ~ ~ ____________ .
, Total N:lE less intang.ible a.mortization and 4Q goodwtU tmpairment charge (Of'Mortgage Banking
1 iIO"i!" reaU:;;:<ed merger saving::. as of 2011
2011
PROJECT WElT 24
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11,689
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Three
in person meetings in Seattle. Extensive on-line MUlUp,e follow up conference
LOB,
credit and TaO had one on-one meetings their co,mtE!rpa

analllZed for real estate, commercial and card portfolio as well as "'Meed nnrtfnlin
Each LOB CommerCial) has a
sheet which has been combined with inputs from Treasurv. CIO
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Internal and audit
items
of its income statement and balance
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HIGHLY CONFIDENTIAL
OTS -- HIGHLY CON FIDENTIAL
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HIGHLY CONFIDENTIAL
OTS -- HIGHLY CON FlDENTIAL
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Return
WaMu Investment Review
New Investment
TPG Highlights
On April 8 2008 TPG signed a definitive agreement to invest $2
billion
i
n WaMu as the lead investor
i
n a $7 billion capital raise
Investment
i
s
representative
of TPG thesis on
premium
value
of
deposits
and culmination of 6+ month firmwide
proactive
effort
targeting
finance services assets
TPG well
positioned vs other
sponsors given
its historical
relationship
with WaMu and CEO Kerry Killinger
Experience investing i
n financial services assets and banks
specifically
allowed us to
complete diligence very quickly including
an extensive review of WaMus
mortgage portfolio
TPG value added to WaMu
Encouraged management to raise a sufficient equity capital
cushion ultimately resulting i
n $7bn raise
After
setting
the terms of the deal TPG as the sole
sponsor
marketed the deal to other investors Lead to an incredibly
successful and oversubscribed
offering
Key Transaction Terms
Committed
Capital
$20 billion
BuyIn Price $875
Common Shares 2286 million shares
Warrants 25 warrant
coverage
or 571 million warrants
Warrant strike
price
of $1006 115
of
buyin
price
Pro Forma
Ownership 13
basic ownership
Board of Directors David Bonderman to
join
Board
Larry Kellner to serve as observer
Placement Fee 25 or $50 million
Reset Provision 18 months duration triggered i
n the event of a
down round or down sale
Warrant strike price resets i
n the event of a
down round down sale
WaMU
Stock Price Performance Last Two Years
$5000
700
600
500
400
300
200
100
0
TPG BuyIn
=
$875 14 Discount
$800 21 Discount w warrants
MR
> C 5 0 Q V
> 0 C0 C
6 7 N O N 6 N
O
Q 6 7
Q n
O
Z 0 LL Q
awA
TPG Announced
Capital
Raise
I
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> 0 C
T
6 6
Q co
0
z 0 U
$
4
0
0
0
$3000
$2000
$1000
$000
0
Confidential TP000002318
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return
WaMu Investment Review
New Investment
Investment Thesis
Security Offers Compelling RiskReward Profile
25 warrant
coverage
at 115 of our common equity buyin price
offers incremental
upside
economics
18 month reset provision
14
unadjusted buyin
discount 21 discount
including
value of
warrants
Strong
Retail
Banking
Franchise in Attractive Markets
Sixth largest US bank thrift
i
n the US with over 2200 branches
Powerful
national retail
banking
brand with innovative
products
such as signature
free
checking
Attractive footprint California Florida and NYC projected to
grow
households at 16x the national
average
Significant Opportunity for Operational Improvement
Management estimates significant incremental opportunity for cost
savings i
n the nearterm
Introduction of highly complementary products could drive deeper
household
penetration
within the retail bank
David Bonderman will
rejoin
the Board of Directors and
Larry
Kellner
will take an observer seat
Attractive Valuation and Exit Multiple Upside
Need for
capital
and valueadded
partnership
created
opportunity
to
invest substantial
capital
at a significant
discount to
longterm
trading averages
WaMus strong brand and positioning i
n high growth markets make
i
t an attractive
acquisition target
for
larger
banks
Strategic
interest could
generate
exit
multiple upside
Strong Earnings Power
We believe that WaMu has the
potential
to
generate
substantial
earnings i
n a more normalized environment
Such an earnings
base would
yield an attractive valuation several
years
down the road even with conservative multiples
Experienced Management Team
Kerry Killinger CEO has 32
years
of
industry experience 26 years
at
WaMu
Killinger has significantly upgraded the ranks of his direct reports
with several individuals with over 20
years
of industry experience at
large
financial institutions
Depository Landscape
1 Bank of America $633B
2 JPMorgan Chase $440B
3 Wachovia $393B
4 Wells
Fargo $292B
5 Citigroup $209B
6
Washington
Mutual $1828
7 SunTrust $116B
8 US Bancorp $113B
Note Deposit data as of 123107
1
TP000002319
HIGHLY CONFIDENTIAL
Restricted For Use in Connection with Plan Confirmation Only
Return

097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
PERSONAL AND CONFIDENTIAL

September 15, 2008
Mr. Todd H. Baker
Executive Vice President of Corporate Strategy & Development
Washington Mutual, Inc.
1301 Second Avenue
Seattle, WA 98101
Dear Mr. Baker:
We refer to our engagement as financial advisor to Washington Mutual, Inc. (the "Company")
pursuant to the engagement letter (the Engagement Letter), dated March 30, 2008,
between Company and Goldman, Sachs & Co. ("Goldman Sachs"). The Company and
Goldman Sachs hereby agree that the Engagement Letter shall be amended and restated as
set forth herein. We are pleased to confirm the arrangements under which Goldman Sachs
is exclusively engaged by the Company as financial advisor (i) in connection with the
possible sale of all or a portion of the Company (a
Sale Transaction) and (ii) to assist the Company in its analysis and consideration of various
financial alternatives available to it, and such other matters as to which you and we may
agree during the course of our engagement. Such financial alternatives and other matters
may include [investments, [acquisitions,] divestitures, financial restructurings, liability
management transactions, public or private financings (including the offering of securities),
mergers or other business combination transactions, sale transactions involving all or a
portion of the Company, stock or debt repurchases, joint ventures, or other operations
involving the Company. This engagement is exclusive to Goldman Sachs except that it is
understood and agreed that the Company may also engage Morgan Stanley in connection
with this transaction pursuant to a separate engagement letter with comparable fee
arrangements.
During the term of our engagement, we will provide you with financial advice and assistance
in connection with this potential transaction, which may include performing financial
analyses, searching for a purchaser or investors acceptable to you, coordinating visits of
potential purchasers and investors and assisting you in negotiating the financial aspects of
the transaction.
CONFIDENTIAL WAMUBKEXAM-GS-000001
Return
Washington Mutual, Inc.
September 15, 2008
Page Two
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
At your request we also will undertake a study to enable us to render our opinion as to the
fairness from a financial point of view of the financial consideration to be received by
stockholders of the Company in connection with the sale of 50% or more of the outstanding
common stock of the Company. The nature and scope of our investigation as well as the
scope, form and substance of our opinion shall be such as we consider appropriate. If
requested our opinion will be in written form.
The fees for our engagement will depend on the outcome of this assignment. Upon
announcement of, or execution of a definitive agreement with respect to, a sale of 50% or
more of the outstanding common stock or assets (based on the book value thereof) of the
Company, the Company agrees to pay us a fee of $4,000,000 (the Initial Fee). If the
purchase of 50% or more of the outstanding common stock or the assets (based on the book
value thereof) of the Company is accomplished in one or a series of transactions, including,
but not limited to, private or open market purchases of stock, a tender offer, an exchange
offer, a merger or a sale by the Company of its stock or assets, we will charge a transaction
fee (the Sale Completion Fee) equal to the greater of (i) $18,750,000 and (ii) 0.1875% of
the aggregate consideration paid in such transactions, less, to the extent paid, the Initial Fee,
subject to a maximum transaction fee of $50.0 million. If less than 50% of the outstanding
common stock or the assets (based on the book value thereof) is acquired in the manner set
forth in the preceding sentence, will charge a transaction fee to be mutually agreed upon by
Goldman Sachs and the Company; provided, however, in the event such transaction takes
the form of a private placement of the Companys common stock, preferred securities or
other capital securities to one or more financial sponsors or investors who were contacted in
connection with the transactions referenced in the preceding sentence, we will charge a
transaction fee (the Investor Completion Fee) equal to 1.375% of the gross proceeds
received by the Company from a sale of such securities. Except as provided herein, a
transaction fee will be paid to us in cash upon consummation of each transaction.
The aggregate consideration for purposes of calculating a Sale Completion Fee shall be:
(i) in the case of the sale, exchange or purchase of the Company's equity securities, the
total consideration paid for such securities (including amounts paid, distributed or issued
to holders of options, warrants and convertible securities); provided, that for purposes of
calculating aggregate consideration pursuant to this clause (i), the consideration paid for
options and warrants shall be deemed to equal the spread value of such options or
warrants (the difference between the exercise price and the amount paid for the
underlying shares as calculated in accordance with this letter), and
(ii) in the case of a sale or disposition by the Company of assets, the total consideration paid
for such net assets, plus the net value of any current assets not sold by the Company.
CONFIDENTIAL WAMUBKEXAM-GS-000002
Return
Washington Mutual, Inc.
September 15, 2008
Page Three
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Amounts paid into escrow and contingent payments in connection with any transaction will be
included as part of the aggregate consideration. Fees on amounts paid into escrow will be
payable upon the establishment of such escrow. If the consideration in connection with any
transaction may be increased by payments related to future events, the portion of our fee
relating to such contingent payments will be calculated and paid if and when such contingent
payments are made. Aggregate consideration also shall include the aggregate amount of
any (i) dividends or other distributions declared by the Company with respect to its stock after
the date hereof, other than normal recurring cash dividends in amounts not materially greater
than currently paid, and (ii) amounts paid by the Company to repurchase any securities of the
Company outstanding on the date hereof.
In connection with a sale of 50% or more of the outstanding common stock of the Company,
the Sale Completion Fee will be payable and calculated under the definition of aggregate
consideration set forth above as though 100% of the outstanding common stock on a fully
diluted basis had been acquired for the same per share amount paid in the transaction in
which 50% or more of the Company's outstanding common stock is acquired by a purchaser
or group of affiliated purchasers. Nevertheless, our services pursuant to this letter will
continue after control is obtained to assist you with a second step merger or similar
transaction.
If any portion of the aggregate consideration is paid in the form of securities, the value of
such securities, for purposes of calculating the transaction fee, will be determined by the
average of the last sales prices for such securities on the five trading days ending five trading
days prior to the date of the consummation of the transaction. If such securities do not have
an existing public trading market, the value of the securities shall be the mutually agreed
upon fair market value on the day prior to the consummation of the transaction.
If the Company or any of its affiliates enters into an agreement with respect to a transaction
in respect of which a Sale Completion Fee would be payable upon consummation thereof
(the Agreement) and the Agreement provides for a payment at any time to the Company in
the event the transaction contemplated thereby is terminated or otherwise not consummated
(the Payment), the Company agrees to pay to Goldman Sachs a transaction fee, in cash if
and when such Payment is made to the Company, equal to the lesser of (i) 10% of such
Payment and (ii) the amount that would otherwise have been payable by the Company to
Goldman Sachs if such transaction had been consummated in accordance with its terms.
In the event that the Company determines to undertake a public or private offering of its
common stock, preferred securities or any securities linked to the Companys common stock
or preferred stock other than any transaction for which a fee is payable pursuant to
paragraph four of this letter (an Offering), the Company shall offer Goldman Sachs the right
to act (i) as the joint (with other investment banks) lead book-running manager and (ii) as the
joint (with other investment banks) lead agent in such offering, in each case with a fee of not
CONFIDENTIAL WAMUBKEXAM-GS-000003
Return
Washington Mutual, Inc.
September 15, 2008
Page Four
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
less than 2.75% of the amount of the aggregate offering price of such securities and at least
40% of the total economics. If Goldman Sachs agrees to act in such capacity, the Company
and Goldman Sachs will enter into an appropriate form of underwriting or other applicable
agreement containing customary terms and conditions, including customary fee provisions
and provisions relating to our indemnity. However, unless specifically covered by a separate
agreement setting forth such arrangement, the provisions in the attached Annex A shall apply
to each such transaction. The Company acknowledges that this letter is neither an
expressed nor an implied commitment by Goldman Sachs to act in any capacity in any such
transaction, to provide financing or to purchase or place any securities, which commitment
shall only be set forth in a separate agreement.
The above fee does not include any services Goldman Sachs may render in the future to the
Company with respect to any specific transaction of the type referred to in the first paragraph
of this letter other than a Sale Transaction or an Offering. In the event that the Company
determines to undertake a specific transaction of such type, the Company shall offer
Goldman Sachs the right to act in such transaction as (i) sole lead arranger and book-runner,
sole syndication agent and administrative agent in the case of a syndicated bank loan or
bridge loan, (ii) sole dealer manager, sole agent, sole counterparty or exclusive financial
advisor, as applicable, in the case of any exchange or tender offer, or consent solicitation
undertaken by the Company or any repurchase of debt or equity securities by the Company
including any open market repurchase, Dutch tender offer, forward purchase or accelerated
stock buyback, and (iii) exclusive financial advisor or dealer manager, as applicable, in the
case of any other transaction. If Goldman Sachs agrees to act in such capacity, the
Company and Goldman Sachs will enter into an appropriate form of agreement relating to the
type of transaction involved and containing customary terms and conditions, including
customary fee provisions and provisions relating to our indemnity. However, unless
specifically covered by a separate agreement setting forth such arrangement, the provisions
in the attached Annex A shall apply to each such transaction. In addition, the Company shall
offer Goldman Sachs the right to act as sole principal or sole counterparty in the case of any
foreign exchange or commodities transaction, currency or interest rate swap or other hedging
or derivative transaction related to the financing of any transaction referred to in the first
paragraph hereof. Where Goldman Sachs agrees to act as the principal or counterparty in a
swap, hedging, derivative, stock buyback or any other transaction with the Company, such
transactions will be based on customary documentation for such transactions and Goldman
Sachs will not be acting as an agent of or advisor to the Company with respect to such
transactions or the terms thereof. The Company acknowledges that this letter agreement is
neither an expressed nor an implied commitment by Goldman Sachs to act in any capacity in
any such transaction, to provide financing or to purchase or place any securities, which
commitment shall only be set forth in a separate agreement.
CONFIDENTIAL WAMUBKEXAM-GS-000004
Return
Washington Mutual, Inc.
September 15, 2008
Page Five
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
You also agree to reimburse us periodically, upon request, and upon consummation of the
transaction or transactions contemplated hereby or upon termination of our services pursuant
to this agreement, for our reasonable expenses, excluding expenses incurred in connection
with a public offer that is consummated, including the reasonable fees and disbursements of
our attorneys, plus any sales, use or similar taxes (including additions to such taxes, if any)
arising in connection with any matter referred to in this letter.
In order to coordinate most effectively our efforts together to effect a transaction satisfactory
to you during the term of our engagement, the Company and its management will promptly
inform us of any discussions they may have or of inquiry they may receive concerning the
availability of all or a portion of the stock or assets of the Company for purchase.
Please note that any written or oral opinion or advice provided by Goldman Sachs in
connection with our engagement is exclusively for the information of the Board of Directors
and senior management of the Company, and such opinion, such advice and the terms of
this letter may not be disclosed to any third party (other than Simpson Thacher & Bartlett LLP
and Deloitte & Touche LLP, or another of the Companys outside legal counsel or
independent accountants specified by you in writing who have been informed by you of the
confidential nature of such opinion, such advice and the terms of this letter and have agreed
to treat such information confidentially) or circulated or referred to publicly without our prior
written consent. If reference to our opinion and our firm is required to be made in a proxy
statement of the Company required to be filed under the federal securities laws, we will not
unreasonably withhold our consent thereto so long as the full text of our opinion is
reproduced therein and we have approved in advance the text of any accompanying
disclosure.
In connection with engagements such as this, it is our firm policy to receive indemnification.
The Company agrees to the provisions with respect to our indemnity and other matters set
forth in Annex A which is incorporated by reference into this letter.
As you know, Goldman Sachs is a full service securities firm engaged, either directly or
through its affiliates in various activities, including securities trading, investment banking and
financial advisory, investment management, principal investment, hedging, financing and
brokerage activities and financial planning and benefits counseling for both companies and
individuals. In the ordinary course of these activities, Goldman Sachs and its affiliates may
make or hold a broad array of investments and actively trade debt and equity securities (or
related derivative securities) and financial instruments (including bank loans) for their own
account and for the accounts of their customers and may at any time hold long and short
positions in such securities and instruments. Such investment and securities activities may
involve securities and instruments of the Company, as well as of other entities and persons
and their affiliates which may (i) be involved in transactions arising from or relating to the
engagement contemplated by this letter, (ii) be customers or competitors of the Company, or
CONFIDENTIAL WAMUBKEXAM-GS-000005
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September 15, 2008
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097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
(iii) have other relationships with the Company. In addition, Goldman Sachs and its affiliates
may provide investment banking, underwriting and financial advisory services to such other
entities and persons. Goldman Sachs and its affiliates may also co-invest with, make direct
investments in, and invest or co-invest client monies in or with funds or other investment
vehicles managed by other parties, and such funds or other investment vehicles may trade or
make investments in securities of the Company or such other entities. The engagement
contemplated by this letter may have a direct or indirect impact on the investments, securities
or instruments referred to in this paragraph.
Our services may be terminated by you or us at any time with or without cause effective upon
receipt of written notice to that effect. We will be entitled to the applicable transaction fee set
forth above in the event that at any time prior to the expiration of twelve months after such
termination (i) an agreement is entered into with respect to a sale of all or a portion of the
Company which is eventually consummated or (ii) an Agreement is entered into pursuant to
which a Payment is eventually made; provided, however, that in the event that Goldman
Sachs terminates its services hereunder without cause, the foregoing provisions of this
sentence shall not apply. The Companys obligations to offer Goldman Sachs the right to act
in the capacities set forth above in connection with an Offering shall survive any such
termination for a period of twelve months from the date of such termination.
The Company recognizes that, in providing our services pursuant to this letter, we will rely
upon and assume the accuracy and completeness of all of the financial, accounting, tax and
other information discussed with or reviewed by us for such purposes, and we do not
assume responsibility for the accuracy or completeness thereof. Goldman Sachs will have
no obligation to conduct any independent evaluation or appraisal of the assets or liabilities of
the Company or any other party or to advise or opine on any related solvency issues. It is
understood and agreed that Goldman Sachs will act under this letter as an independent
contractor with duties solely to the Company and nothing in this letter or the nature of our
services in connection with this engagement or otherwise shall be deemed to create a
fiduciary duty or fiduciary or agency relationship between us and the Company or its
stockholders, employees or creditors, and the Company agrees that it shall not make, and
hereby waives, any claim based on an assertion of such a fiduciary duty or relationship.
Except as set forth in Annex A hereto, nothing in this letter is intended to confer upon any
other person (including stockholders, employees or creditors of the Company) any rights or
remedies hereunder or by reason hereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), Goldman Sachs is required to obtain, verify and record
information that identifies its clients, including the Company, which information may include
the name and address of its clients, as well as other information that will allow Goldman
Sachs to properly identify its clients.
CONFIDENTIAL WAMUBKEXAM-GS-000006
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Washington Mutual, Inc.
September 15, 2008
Page Seven
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Goldman Sachs does not provide accounting, tax or legal advice. Notwithstanding anything
herein to the contrary, you are authorized to disclose to any person the U.S. federal and state
income tax treatment and tax structure of the potential transaction and all materials of any
kind (including tax opinions and other tax analyses) provided to you relating to that treatment
and structure, without Goldman Sachs imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply
with securities laws. For this purpose, tax structure is limited to any facts that may be
relevant to that treatment.
CONFIDENTIAL WAMUBKEXAM-GS-000007
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Washington Mutual, Inc.
September 15, 2008
Page Eight
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed copy of this letter, which shall become a binding agreement
upon our receipt. We are delighted to accept this engagement and look forward to working
with you on this assignment.
Very truly yours, Confirmed:
(GOLDMAN, SACHS & CO.)
WASHINGTON MUTUAL, INC.
By:
Name:
Title:
Date:

CONFIDENTIAL WAMUBKEXAM-GS-000008
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Washington Mutual, Inc.
September 15, 2008
Page Nine
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Annex A
In the event that Goldman Sachs becomes involved in any capacity in any action, proceeding or
investigation brought by or against any person, including stockholders of the Company, in connection
with or as a result of either our engagement or any matter referred to in this letter, the Company
periodically will reimburse Goldman Sachs for its legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith; provided, however, that if it is found in
any such action, proceeding or investigation that any loss, claim, damage or liability to any such
person has resulted from the gross negligence or bad faith of Goldman Sachs in performing the
services which are the subject this letter, Goldman Sachs shall repay such portion of the reimbursed
amounts that is attributable to expenses incurred in relation to the act or omission of Goldman Sachs
which is the subject of such finding. The Company also will indemnify and hold Goldman Sachs
harmless against any and all losses, claims, damages or liabilities to any such person in connection
with or as a result of either our engagement or any matter referred to in this letter, except to the extent
that any such loss, claim, damage or liability results from the gross negligence or bad faith of Goldman
Sachs in performing the services that are the subject of this letter. If for any reason the foregoing
indemnification is unavailable to Goldman Sachs or insufficient to hold it harmless, then the Company
shall contribute to the amount paid or payable by Goldman Sachs as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative economic interests of the
Company and its stockholders on the one hand and Goldman Sachs on the other hand in the matters
contemplated by this letter as well as the relative fault of the Company and Goldman Sachs with
respect to such loss, claim, damage or liability and any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of the Company under this paragraph shall be
in addition to any liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliate of Goldman Sachs and the partners, directors, agents, employees and
controlling persons (if any), as the case may be, of Goldman Sachs and any such affiliate, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives
of the Company, Goldman Sachs, any such affiliate and any such person. The Company shall not be
required to indemnify Goldman Sachs for any amount paid or payable by Goldman Sachs in the
settlement of any action, proceeding or investigation without the written consent of the Company,
which consent shall not be unreasonably withheld. The Company also agrees that neither Goldman
Sachs nor any of such affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either our engagement or any matter referred to in this
letter except to the extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or bad faith of Goldman Sachs in performing the services
that are the subject of this letter. Prior to entering into any agreement or arrangement with respect to,
or effecting, any proposed sale, exchange, dividend or other distribution or liquidation of all or a
significant portion of its assets in one or a series of transactions or any significant recapitalization or
reclassification of its outstanding securities that does not directly or indirectly provide for the
assumption of the obligations of the Company set forth in this Annex A, the Company will notify
Goldman Sachs in writing thereof (if not previously so notified) and, if requested by Goldman Sachs,
shall arrange in connection therewith alternative means of providing for the obligations of the
Company set forth in this paragraph, including the assumption of such obligations by another party,
insurance, surety bonds or the creation of an escrow, in each case in an amount and upon terms and
CONFIDENTIAL WAMUBKEXAM-GS-000009
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Washington Mutual, Inc.
September 15, 2008
Page Ten
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
conditions satisfactory to Goldman Sachs. Promptly after receipt by Goldman Sachs of notice of its
involvement in any action, proceeding or investigation, Goldman Sachs shall, if a claim for
indemnification in respect thereof is to be made against the Company under this Annex A, notify the
Company of such involvement. Failure by Goldman Sachs to so notify the Company shall relieve the
Company from the obligation to indemnify Goldman Sachs under this Annex A only to the extent that
the Company suffers actual prejudice as a result of such failure, but shall not relieve the Company
from its obligation to provide reimbursement and contribution to Goldman Sachs. If any person is
entitled to indemnification under this Annex A (the "Indemnified Person") with respect to any action or
proceeding brought by a third party that is also brought against the Company, the Company shall be
entitled to assume the defense of any such action or proceeding with counsel reasonably satisfactory
to the Indemnified Person. Upon assumption by the Company of the defense of any such action or
proceeding, the Indemnified Person shall have the right to participate in such action or proceeding and
to retain its own counsel but the Company shall not be liable for any legal expenses of other counsel
subsequently incurred by such Indemnified Person in connection with the defense thereof unless (i)
the Company has agreed to pay such fees and expenses, (ii) the Company shall have failed to employ
counsel reasonably satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified
Person shall have been advised by counsel that there are actual or potential conflicting interests
between the Company and the Indemnified Person, including situations in which there are one or more
legal defenses available to the Indemnified Person that are different from or additional to those
available to the Company, provided, however, that the Company shall not, in connection with any one
such action or proceeding or separate but substantially similar actions or proceedings arising out of
the same general allegations, be liable for the fees and expenses of more than one separate firm of
attorneys at any time for all Indemnified Persons, including Goldman Sachs, except to the extent that
local counsel, in addition to its regular counsel, is required in order to effectively defend against such
action or proceeding. The Company shall not consent to the terms of any compromise or settlement
of any action defended by the Company in accordance with the foregoing without the prior written
consent of the Indemnified Person. Any right to trial by jury with respect to any action or
proceeding arising in connection with or as a result of either our engagement or any matter
referred to in this letter is hereby waived by the parties hereto. The Company agrees that any
suit or proceeding arising in respect to this letter or our engagement will be tried exclusively in
the U.S. District Court for the Southern District of New York or, if that court does not have
subject matter jurisdiction, in any state court located in the City of New York, and the Company
agrees to submit to the jurisdiction of, and to venue in, such courts. The provisions of this
Annex A shall survive any termination or completion of the engagement provided by this letter
agreement, and this letter agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of laws.


CONFIDENTIAL WAMUBKEXAM-GS-000010
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CONFIDENTIAL WAMUBKEXAM-GS-000011
PERSONAL AND CONFIDENTIAL
September 24, 2008
Mr. Robert Williams
Senior Vice President and Treasurer
Washington Mutual, Inc.
Washington Mutual Bank
1301 Second Avenue
Seattle, WA 98101
Dear Mr. Williams:
GS Comments of September 24, 2008
We are pleased to confirm the arrangements under which Goldman, Sachs & Co. ("Goldman
Sachs") is engaged by Washington Mutual, Inc. (the "Company") and Washington Mutual Bank
(the "Bank") as financial advisor relating to the possible sale of all or a portion of the Company
and/or the Bank and to explore capital raising alternatives.
I. During the term of our engagement, we will provide you with financial advice and
assistance in connection with this potential transaction, which may include performing financial
analyses, searching for a purchaser or investors acceptable to you, coordinating visits of potential
purchasers and investors and assisting you in negotiating the fmancial aspects of the transaction.
2. At your request we also will undertake a study to enable us to render our opinion
as to the fairness from a financial point of view of the financial consideration to be received by
shareholders of the Company in connection with the sale of 50% or more of the outstanding
common stock of the Company. The nature and scope of our investigation as well as the scope,
form and substance of our opinion shall be such as we consider appropriate. If requested our
opinion will be in written form.
3. The fees for our engagement will depend on the outcome of this assignment.
Upon execution of the engagement letter, the Company agrees to pay us a fee of $3,000,000 for
services provided to date. Upon armouncement of, or execution of a definitive agreement with
respect to, a sale of 50% or more of the outstanding common stock or assets (based on the book
value thereof) of the Company, the Company agrees to pay us a fee of $5,000,000 (the "Initial
Fee"), less the fee paid upon execution of the engagement letter. If the purchase of50% or more
of the outstanding common stock or the assets (based on the book value thereof) of the Company
is accomplished in one or a series of transactions, including, but not limited to, private or open
market purchases of stock, a tender offer, an exchange offer, a merger or a sale by the Company
of its stock or assets, we will charge a transaction fee (the "Sale Completion Fee") equal to
$30,000,000 less, to the extent paid, the Initial Fee, subject to a maximum transaction fee of
$30,000,000 million. Ifless than 50% of the outstanding common stock or the assets (based on
the book value thereof) is acquired in the marmer set forth in the preceding sentence, we will
charge a transaction fee to be mutually agreed upon by Goldman Sachs and the Company;
provided, however, in the event such transaction takes the form of a private placement of the
Company's common stock, preferred securities or other capital securities to one or more
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CONFIDENTIAL WAMUBKEXAM-GS-000012
Washington Mutual, Inc.
September 24, 2008
Page 2
financial sponsors or investors who were contacted in connection with the transactions
referenced in the preceding sentence, we will charge a transaction fee (the "Investor Completion
Fee") equal to 1.375% of the gross proceeds received by the Company from a sale of such
securities; provided, however, that Goldman Sachs' entitlement to the Investor Completion Fee
shall be suspended following the execution of a definitive agreement for a transaction in respect
of which a Sale Completion Fee would be payable upon consummation thereof and shall
terminate upon consummation of such transaction. Except as provided herein, a transaction fee
will be paid to us in cash upon consummation of each transaction.
4. If the Company or any of its affiliates enters into an agreement with respect to a
transaction in respect of which a Sale Completion Fee would be payable upon consummation
thereof (the "Agreement') and the Agreement provides for a payment at any time to the
Company in the event the transaction contemplated thereby is terminated or otherwise not
consummated (the "Payment"), the Company agrees to pay to Goldman Sachs a transaction fee,
in cash if and when such Payment is made to the Company, equal to the lesser of (i) 10% of such
Payment and (ii) the amount that would otherwise have been payable by the Company to
Goldman Sachs if such transaction had been consummated in accordance with its terms, in each
case less, to the extent paid, the Initial Fee.
5. In the event that the Company determines to undertake a public or private offering
of its common stock, preferred securities or any securities linked to the Company's common
stock or preferred stock other than any transaction for which a fee is payable pursuant to
paragraph 3 of this letter (an "Offering"), the Company shall offer Goldman Sachs the right to
act in a non-exclusive capacity to be agreed between the Company and Goldman Sachs in such
offering, with a fee (the "Offering Fee") of not less than 1.375% of the amount of the aggregate
offering price of such securities and at least 50% of the total economics. If Goldman Sachs
agrees to act in such capacity, the Company and Goldman Sachs will enter into an appropriate
form of underwriting or other applicable agreement containing customary terms and conditions,
including customary fee provisions and provisions relating to our indemnity. However, unless
specifically covered by a separate agreement setting forth such arrangement, the provisions in the
attached Annex A shall apply to each such transaction. The Company acknowledges that this
letter is neither an expressed nor an implied commitment by Goldman Sachs to act in any
capacity in any such transaction, to provide financing or to purchase or place any securities,
which commitment shall only be set forth in a separate agreement.
6. You also agree to reimburse us periodically, upon request, and upon
consummation of the transaction or transactions contemplated hereby or upon termination of our
services pursuant to this agreement, for our reasonable expenses, excluding expenses incurred in
connection with a public offer that is consummated, including the reasonable fees and
disbursements of our attorneys, plus any sales, use or similar taxes (including additions to such
taxes, if any) arising in connection with any matter referred to in this letter.
7. In order to coordinate most effectively our efforts together to effect a transaction
satisfactory to you during the term of our engagement, the Company and its management will
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CONFIDENTIAL WAMUBKEXAM-GS-000013
Washington Mutual, Inc.
September 24, 2008
Page 3
promptly inform us of any discussions they may have or of inquiries they may receive
concerning the availability of all or a portion of the stock or assets of the Company for purchase.
8. Please note that any written or oral opinion or advice provided by Goldman Sachs
in connection with our engagement is exclusively for the information of the Board of Directors
and senior management of the Company, and such opinion, such advice and the terms of this
letter may not be disclosed to any third party (other than the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation, Simpson Thacher & Bartlett LLP and Deloitte & Touche
LLP, or another of the Company's outside legal counselor independent accountants specified by
you in writing who have been informed by you of the confidential nature of such opinion, such
advice and the terms of this letter and have agreed to treat such information confidentially) or
circulated or referred to publicly without our prior written consent. If reference to our opinion
and our firm is required to be made in a proxy statement of the Company required to be filed
under the federal securities laws, we will not unreasonably withhold our consent thereto so long
as the full text of our opinion is reproduced therein and we have approved in advance the text of
any accompanying disclosure.
9. In connection with engagements such as this, it is our firm policy to receive
indemnification. The Company, jointly and severally, and the Bank, severally and not jointly,
agree to the provisions with respect to our indemnity and other matters set forth in Annex A
which is incorporated by reference into this letter. The Bank shall not be responsible for any
obligations of the Company and this letter is not a guarantee of any obligations of the Company
by the Bank.
10. As you know, Goldman Sachs is a full service securities firm engaged, either
directly or through its affiliates in various activities, including securities trading, investment
banking and fmancial advisory, investment management, principal investment, hedging,
financing and brokerage activities and financial planning and benefits counseling for both
companies and individuals. In the ordinary course of these activities, Goldman Sachs and its
affiliates may make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers and may at any time hold long and
short positions in such securities and instruments. Such investment and securities activities may
involve securities and instruments of the Company, as well as of other entities and persons and
their affiliates which may (i) be involved in transactions arising from or relating to the
engagement contemplated by this letter, (ii) be customers or competitors of the Company, or (iii)
have other relationships with the Company. In addition, Goldman Sachs and its affiliates may
provide investment banking, underwriting and financial advisory services to such other entities
and persons. Goldman Sachs and its affiliates may also co-invest with, make direct investments
in, and invest or co-invest client monies in or with funds or other investment vehicles managed
by other parties, and such funds or other investment vehicles may trade or make investments in
securities of the Company or such other entities. The engagement contemplated by this letter
may have a direct or indirect impact on the investments, securities or instruments referred to in
this paragraph.
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CONFIDENTIAL WAMUBKEXAM-GS-000014
Washington Mutual, Inc.
September 24, 2008
Page 4
11. Our services may be terminated by you or us at any time with or without cause
effective upon receipt of written notice to that effect. We will be entitled to the applicable
transaction fee set forth above in the event that (A) none of the Sale Completion Fee, the Investor
Completion Fee or the Offering Fee has been paid prior to the time of such termination and (B)
at any time prior to the expiration of twelve months after such termination (i) an agreement is
entered into with respect to a sale of all or a portion of the Company (excluding an Offering)
which is eventually consummated or (ii) an Agreement is entered into pursuant to which a
Payment is eventually made; provided, however, that in the event that Goldman Sachs terminates
its services hereunder without cause, the foregoing provisions of this sentence shall not apply. In
the event that our services are terminated by you or us before any of the Sale Completion Fee,
the Investor Completion Fee or the Offering Fee has become payable, the Company's obligations
to offer Goldman Sachs the right to act in the capacities set forth above in connection with an
Offering shall survive for a period of twelve months following the date of such termination;
provided, however, that in the event that Goldman Sachs terminates its services hereunder
without cause, the foregoing provisions of this sentence shall not apply
12. The Company recognizes that, in providing our services pursuant to this letter, we
will rely upon and assume the accuracy and completeness of all of the fmancial, accounting, tax
and other information discussed with or reviewed by us for such purposes, and we do not assume
responsibility for the accuracy or completeness thereof. Goldman Sachs will have no obligation
to conduct any independent evaluation or appraisal of the assets or liabilities of the Company or
any other party or to advise or opine on any related solvency issues. It is understood and agreed
that Goldman Sachs will act under this letter as an independent contractor with duties solely to
the Company and nothing in this letter or the nature of our services in connection with this
engagement or otherwise shall be deemed to create a fiduciary duty or fiduciary or agency
relationship between us and the Company or its stockholders, employees or creditors, and the
Company agrees that it shall not make, and hereby waives, any claim based on an assertion of
such a fiduciary duty or relationship. Except as set forth in Annex A hereto, nothing in this letter
is intended to confer upon any other person (including stockholders, employees or creditors of
the Company) any rights or remedies hereunder or by reason hereof.
13. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001, Goldman Sachs is required to obtain, verify and
record information that identifies its clients, including the Company, which information may
include the name and address of its clients, as well as other information that will allow Goldman
Sachs to properly identify its clients.
14. Goldman Sachs does not provide accounting, tax or legal advice. Notwithstanding
anything herein to the contrary, you are authorized to disclose to any person the US. federal and
state income tax treatment and tax structure of the potential transaction and all materials of any
kind (including tax opinions and other tax analyses) provided to you relating to that treatment
and structure, without Goldman Sachs imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply with
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CONFIDENTIAL WAMUBKEXAM-GS-000015
Washington Mutual, Inc.
September 24, 2008
Page 5
securities laws. For this purpose, "tax structure" is limited to any facts that may be relevant to
that treatment.
15. This letter contains the entire agreement of the parties with respect to the
performance by Goldman Sachs of services for the Company and the Bank described herein and
supersedes any prior understandings and agreements.
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CONFIDENTIAL WAMUBKEXAM-GS-000016
Washington Mutual, Inc.
September 24, 2008
Page 6
Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed copy of this letter, which shall become a binding agreement upon
our receipt. We are delighted to accept this engagement and look forward to working with you
on this assignment.
Ve truly yours, C
r t . l . ~ ~ ~ l c..
Confirmed
(GOLDMAN, SACHS & 0.) WASHINGTON MUTUAL, INC.
By: _________ _
Name:
Title:
WASHINGTON MUTUAL BANK
By: ________ _
Name:
Title:
Date: _________ _
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CONFIDENTIAL WAMUBKEXAM-GS-000017
Washington Mutual, Inc.
September 24, 2008
Page 7
AnnexA
In the event that Goldman Sachs becomes involved in any capacity in any action, proceeding or
investigation brought by or against any person, including stockholders of the Company, in
connection with or as a result of either our engagement or any matter referred to in this letter,
the Company periodically will reimburse Goldman Sachs for its legal and other expenses
(including the cost of any investigation and preparation) incurred in connection therewith;
provided. however, that if it is found in any such action, proceeding or investigation that any
loss, claim, damage or liability to any such person has resultedfrom the gross negligence or bad
faith of Goldman Sachs in performing the services which are the subject this letter, Goldman
Sachs shall repay such portion of the reimbursed amounts that is attributable to expenses
incurred in relation to the act or omission of Goldman Sachs which is the subject of such finding.
The Company, jointly and severally, and the Bank, severally and not jointly, will indemnifY and
hold Goldman Sachs harmless against any and all losses, claims, damages or liabilities to any
such person in connection with or as a result of either our engagement or any matter referred to
in this letter, except to the extent that any such loss, claim, damage or liability results from the
gross negligence or bad faith of Goldman Sachs in performing the services that are the subject of
this letter. If for any reason the foregoing indemnification is unavailable to Goldman Sachs or
insufficient to hold it harmless, then the Company and the Bank shall contribute to the amount
paid or payable by Goldman Sachs as a result of such loss, claim, damage or liability in such
proportion as is appropriate to refiect the relative economic interests of the Company, the Bank
and their stockholders on the one hand and Goldman Sachs on the other hand in the matters
contemplated by this letter as well as the relative fault of the Company, the Bank and Goldman
Sachs with respect to such loss, claim, damage or liability and any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations of the Company
under this paragraph and the indemnity and contribution obligations of the Bank under this
paragraph shall be in addition to any liability which the Company or the Bank may otherwise
have, shall extend upon the same terms and conditions to any affiliate of Goldman Sachs and the
partners, directors, agents, employees and controlling persons (if any), as the case may be, of
Goldman Sachs and any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the Bank, Goldman
Sachs, any such affiliate and any such person. Neither the Company nor the Bank shall be
required to indemnifY Goldman Sachs for any amount paid or payable by Goldman Sachs in the
settlement of any action, proceeding or investigation without the written consent of the Company
or the Bank, as applicable, which consent shall not be unreasonably withheld. Each of the
Company and the Bank also agrees that neither Goldman Sachs nor any of such affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the
Company or the Bank or any person asserting claims on behalf of or in right of the Company or
the Bank in connection with or as a result of either our engagement or any matter referred to in
this letter except to the extent that any losses, claims, damages, liabilities or expenses incurred
by the Company or the Bank result from the gross negligence or bad faith of Goldman Sachs in
performing the services that are the subject of this letter. Prior to entering into any agreement or
arrangement with respect to, or efficting, any proposed sale, exchange, dividend or other
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CONFIDENTIAL WAMUBKEXAM-GS-000018
Washington Mutual, Inc.
September 24, 2008
Page 8
distribution or liquidation of all or a significant portion of its assets in one or a series of
transactions or any significant recapitalization or reclassification of its outstanding securities
that does not directly or indirectly provide for the assumption of the obligations of the Company
and the Bank set forth in this Annex A, the Company will notifY Goldman Sachs in writing
thereof (if not previously so notified) and, if requested by Goldman Sachs, shall arrange in
connection therewith alternative means of providing for the obligations of the Company and the
Bank set forth in this paragraph, including the assumption of such obligations by another party,
insurance, surety bonds or the creation of an escrow, in each case in an amount and upon terms
and conditions satisfactory to Goldman Sachs. Promptly after receipt by Goldman Sachs of
notice of its involvement in any action, proceeding or investigation, Goldman Sachs shall, if a
claim for indemnification in respect thereofis to be made against the Company or the Bank
under this Annex A, notifY the Company or the Bank, as applicable, of such involvement. Failure
by Goldman Sachs to so notifY the Company shall relieve the Company and the Bank, as
applicable, from the obligation to indemnifY Goldman Sachs under this Annex A only to the
extent that the Company or the Bank, as applicable, suffers actual prejudice as a result of such
failure, but shall not relieve the Company from its obligation to provide reimbursement and the
Company and the Bankfrom its obligations to provide contribution to Goldman Sachs. If any
person is entitled to indemnification under this Annex A (the "Indemnified Person ") with respect
to any action or proceeding brought by a third party that is also brought against the Company or
the Bank, the Company shall be entitled to assume the defense of any such action or proceeding
with counsel reasonably satisfactory to the Indemnified Person. Upon assumption by the
Company of the defense of any such action or proceeding, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own counsel but the Company
shall not be liable for any legal expenses of other counsel subsequently incurred by such
Indemnified Person in connection with the defense thereof unless (i) the Company has agreed to
pay such fees and expenses, (ii) the Company shall have failed to employ counsel reasonably
satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified Person shall
have been advised by counsel that there are actual or potential conjlicting interests between the
Company or the Bank and the Indemnified Person, including situations in which there are one or
more legal defenses available to the Indemnified Person that are different from or additional to
those available to the Company or the Bank, provided, however, that the Company shall not, in
connection with anyone such action or proceeding or separate but substantially similar actions
or proceedings arising out of the same general allegations, be liable for the fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified Persons, including
Goldman Sachs, except to the extent that local counsel, in addition to its regular counsel, is
required in order to effictively defend against such action or proceeding. Neither the Company
nor the Bank shall consent to the terms of any compromise or settlement of any action defended
by it in accordance with the foregoing without the prior written consent of the Indemnified
Person unless such compromise or settlement (i) includes an unconditional release of the
Indemnified Person from all liability arising out of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any
Indemnified Person. Any right to trial by jury with respect to any action or proceeding arising
in connection with or as a result of either our engagement or any matter referred to in this
Return
CONFIDENTIAL WAMUBKEXAM-GS-000019
Washington Mutual, Inc.
September 24, 2008
Page 9
letter is hereby waived by the parties hereto. The Company and the Bank agree that any suit or
proceeding arising in respect to this letter or our engagement will be tried exclusively in the
U.S. District Court for the Southern District of New York or, if that court does not have
subject matter jurisdiction, in any state court located in the City of New York and the
Company and the Bank agree to submit to the jurisdiction of, and to venue in, such courts.
The provisions of this Annex A shall survive any termination or completion of the engagement
provided by this letter agreement, and this letter agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of conflicts
of laws. The Bank shall not be responsible for any obligations of the Company and this Annex
A is not a guarantee of any obligations of the Company by the Bank.
Return

097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
PERSONAL AND CONFIDENTIAL

September 15, 2008
Mr. Todd H. Baker
Executive Vice President of Corporate Strategy & Development
Washington Mutual, Inc.
1301 Second Avenue
Seattle, WA 98101
Dear Mr. Baker:
We refer to our engagement as financial advisor to Washington Mutual, Inc. (the "Company")
pursuant to the engagement letter (the Engagement Letter), dated March 30, 2008,
between Company and Goldman, Sachs & Co. ("Goldman Sachs"). The Company and
Goldman Sachs hereby agree that the Engagement Letter shall be amended and restated as
set forth herein. We are pleased to confirm the arrangements under which Goldman Sachs
is exclusively engaged by the Company as financial advisor (i) in connection with the
possible sale of all or a portion of the Company (a
Sale Transaction) and (ii) to assist the Company in its analysis and consideration of various
financial alternatives available to it, and such other matters as to which you and we may
agree during the course of our engagement. Such financial alternatives and other matters
may include [investments, [acquisitions,] divestitures, financial restructurings, liability
management transactions, public or private financings (including the offering of securities),
mergers or other business combination transactions, sale transactions involving all or a
portion of the Company, stock or debt repurchases, joint ventures, or other operations
involving the Company. This engagement is exclusive to Goldman Sachs except that it is
understood and agreed that the Company may also engage Morgan Stanley in connection
with this transaction pursuant to a separate engagement letter with comparable fee
arrangements.
During the term of our engagement, we will provide you with financial advice and assistance
in connection with this potential transaction, which may include performing financial
analyses, searching for a purchaser or investors acceptable to you, coordinating visits of
potential purchasers and investors and assisting you in negotiating the financial aspects of
the transaction.
CONFIDENTIAL WAMUBKEXAM-GS-000001
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Washington Mutual, Inc.
September 15, 2008
Page Two
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
At your request we also will undertake a study to enable us to render our opinion as to the
fairness from a financial point of view of the financial consideration to be received by
stockholders of the Company in connection with the sale of 50% or more of the outstanding
common stock of the Company. The nature and scope of our investigation as well as the
scope, form and substance of our opinion shall be such as we consider appropriate. If
requested our opinion will be in written form.
The fees for our engagement will depend on the outcome of this assignment. Upon
announcement of, or execution of a definitive agreement with respect to, a sale of 50% or
more of the outstanding common stock or assets (based on the book value thereof) of the
Company, the Company agrees to pay us a fee of $4,000,000 (the Initial Fee). If the
purchase of 50% or more of the outstanding common stock or the assets (based on the book
value thereof) of the Company is accomplished in one or a series of transactions, including,
but not limited to, private or open market purchases of stock, a tender offer, an exchange
offer, a merger or a sale by the Company of its stock or assets, we will charge a transaction
fee (the Sale Completion Fee) equal to the greater of (i) $18,750,000 and (ii) 0.1875% of
the aggregate consideration paid in such transactions, less, to the extent paid, the Initial Fee,
subject to a maximum transaction fee of $50.0 million. If less than 50% of the outstanding
common stock or the assets (based on the book value thereof) is acquired in the manner set
forth in the preceding sentence, will charge a transaction fee to be mutually agreed upon by
Goldman Sachs and the Company; provided, however, in the event such transaction takes
the form of a private placement of the Companys common stock, preferred securities or
other capital securities to one or more financial sponsors or investors who were contacted in
connection with the transactions referenced in the preceding sentence, we will charge a
transaction fee (the Investor Completion Fee) equal to 1.375% of the gross proceeds
received by the Company from a sale of such securities. Except as provided herein, a
transaction fee will be paid to us in cash upon consummation of each transaction.
The aggregate consideration for purposes of calculating a Sale Completion Fee shall be:
(i) in the case of the sale, exchange or purchase of the Company's equity securities, the
total consideration paid for such securities (including amounts paid, distributed or issued
to holders of options, warrants and convertible securities); provided, that for purposes of
calculating aggregate consideration pursuant to this clause (i), the consideration paid for
options and warrants shall be deemed to equal the spread value of such options or
warrants (the difference between the exercise price and the amount paid for the
underlying shares as calculated in accordance with this letter), and
(ii) in the case of a sale or disposition by the Company of assets, the total consideration paid
for such net assets, plus the net value of any current assets not sold by the Company.
CONFIDENTIAL WAMUBKEXAM-GS-000002
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Washington Mutual, Inc.
September 15, 2008
Page Three
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Amounts paid into escrow and contingent payments in connection with any transaction will be
included as part of the aggregate consideration. Fees on amounts paid into escrow will be
payable upon the establishment of such escrow. If the consideration in connection with any
transaction may be increased by payments related to future events, the portion of our fee
relating to such contingent payments will be calculated and paid if and when such contingent
payments are made. Aggregate consideration also shall include the aggregate amount of
any (i) dividends or other distributions declared by the Company with respect to its stock after
the date hereof, other than normal recurring cash dividends in amounts not materially greater
than currently paid, and (ii) amounts paid by the Company to repurchase any securities of the
Company outstanding on the date hereof.
In connection with a sale of 50% or more of the outstanding common stock of the Company,
the Sale Completion Fee will be payable and calculated under the definition of aggregate
consideration set forth above as though 100% of the outstanding common stock on a fully
diluted basis had been acquired for the same per share amount paid in the transaction in
which 50% or more of the Company's outstanding common stock is acquired by a purchaser
or group of affiliated purchasers. Nevertheless, our services pursuant to this letter will
continue after control is obtained to assist you with a second step merger or similar
transaction.
If any portion of the aggregate consideration is paid in the form of securities, the value of
such securities, for purposes of calculating the transaction fee, will be determined by the
average of the last sales prices for such securities on the five trading days ending five trading
days prior to the date of the consummation of the transaction. If such securities do not have
an existing public trading market, the value of the securities shall be the mutually agreed
upon fair market value on the day prior to the consummation of the transaction.
If the Company or any of its affiliates enters into an agreement with respect to a transaction
in respect of which a Sale Completion Fee would be payable upon consummation thereof
(the Agreement) and the Agreement provides for a payment at any time to the Company in
the event the transaction contemplated thereby is terminated or otherwise not consummated
(the Payment), the Company agrees to pay to Goldman Sachs a transaction fee, in cash if
and when such Payment is made to the Company, equal to the lesser of (i) 10% of such
Payment and (ii) the amount that would otherwise have been payable by the Company to
Goldman Sachs if such transaction had been consummated in accordance with its terms.
In the event that the Company determines to undertake a public or private offering of its
common stock, preferred securities or any securities linked to the Companys common stock
or preferred stock other than any transaction for which a fee is payable pursuant to
paragraph four of this letter (an Offering), the Company shall offer Goldman Sachs the right
to act (i) as the joint (with other investment banks) lead book-running manager and (ii) as the
joint (with other investment banks) lead agent in such offering, in each case with a fee of not
CONFIDENTIAL WAMUBKEXAM-GS-000003
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Washington Mutual, Inc.
September 15, 2008
Page Four
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
less than 2.75% of the amount of the aggregate offering price of such securities and at least
40% of the total economics. If Goldman Sachs agrees to act in such capacity, the Company
and Goldman Sachs will enter into an appropriate form of underwriting or other applicable
agreement containing customary terms and conditions, including customary fee provisions
and provisions relating to our indemnity. However, unless specifically covered by a separate
agreement setting forth such arrangement, the provisions in the attached Annex A shall apply
to each such transaction. The Company acknowledges that this letter is neither an
expressed nor an implied commitment by Goldman Sachs to act in any capacity in any such
transaction, to provide financing or to purchase or place any securities, which commitment
shall only be set forth in a separate agreement.
The above fee does not include any services Goldman Sachs may render in the future to the
Company with respect to any specific transaction of the type referred to in the first paragraph
of this letter other than a Sale Transaction or an Offering. In the event that the Company
determines to undertake a specific transaction of such type, the Company shall offer
Goldman Sachs the right to act in such transaction as (i) sole lead arranger and book-runner,
sole syndication agent and administrative agent in the case of a syndicated bank loan or
bridge loan, (ii) sole dealer manager, sole agent, sole counterparty or exclusive financial
advisor, as applicable, in the case of any exchange or tender offer, or consent solicitation
undertaken by the Company or any repurchase of debt or equity securities by the Company
including any open market repurchase, Dutch tender offer, forward purchase or accelerated
stock buyback, and (iii) exclusive financial advisor or dealer manager, as applicable, in the
case of any other transaction. If Goldman Sachs agrees to act in such capacity, the
Company and Goldman Sachs will enter into an appropriate form of agreement relating to the
type of transaction involved and containing customary terms and conditions, including
customary fee provisions and provisions relating to our indemnity. However, unless
specifically covered by a separate agreement setting forth such arrangement, the provisions
in the attached Annex A shall apply to each such transaction. In addition, the Company shall
offer Goldman Sachs the right to act as sole principal or sole counterparty in the case of any
foreign exchange or commodities transaction, currency or interest rate swap or other hedging
or derivative transaction related to the financing of any transaction referred to in the first
paragraph hereof. Where Goldman Sachs agrees to act as the principal or counterparty in a
swap, hedging, derivative, stock buyback or any other transaction with the Company, such
transactions will be based on customary documentation for such transactions and Goldman
Sachs will not be acting as an agent of or advisor to the Company with respect to such
transactions or the terms thereof. The Company acknowledges that this letter agreement is
neither an expressed nor an implied commitment by Goldman Sachs to act in any capacity in
any such transaction, to provide financing or to purchase or place any securities, which
commitment shall only be set forth in a separate agreement.
CONFIDENTIAL WAMUBKEXAM-GS-000004
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Washington Mutual, Inc.
September 15, 2008
Page Five
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
You also agree to reimburse us periodically, upon request, and upon consummation of the
transaction or transactions contemplated hereby or upon termination of our services pursuant
to this agreement, for our reasonable expenses, excluding expenses incurred in connection
with a public offer that is consummated, including the reasonable fees and disbursements of
our attorneys, plus any sales, use or similar taxes (including additions to such taxes, if any)
arising in connection with any matter referred to in this letter.
In order to coordinate most effectively our efforts together to effect a transaction satisfactory
to you during the term of our engagement, the Company and its management will promptly
inform us of any discussions they may have or of inquiry they may receive concerning the
availability of all or a portion of the stock or assets of the Company for purchase.
Please note that any written or oral opinion or advice provided by Goldman Sachs in
connection with our engagement is exclusively for the information of the Board of Directors
and senior management of the Company, and such opinion, such advice and the terms of
this letter may not be disclosed to any third party (other than Simpson Thacher & Bartlett LLP
and Deloitte & Touche LLP, or another of the Companys outside legal counsel or
independent accountants specified by you in writing who have been informed by you of the
confidential nature of such opinion, such advice and the terms of this letter and have agreed
to treat such information confidentially) or circulated or referred to publicly without our prior
written consent. If reference to our opinion and our firm is required to be made in a proxy
statement of the Company required to be filed under the federal securities laws, we will not
unreasonably withhold our consent thereto so long as the full text of our opinion is
reproduced therein and we have approved in advance the text of any accompanying
disclosure.
In connection with engagements such as this, it is our firm policy to receive indemnification.
The Company agrees to the provisions with respect to our indemnity and other matters set
forth in Annex A which is incorporated by reference into this letter.
As you know, Goldman Sachs is a full service securities firm engaged, either directly or
through its affiliates in various activities, including securities trading, investment banking and
financial advisory, investment management, principal investment, hedging, financing and
brokerage activities and financial planning and benefits counseling for both companies and
individuals. In the ordinary course of these activities, Goldman Sachs and its affiliates may
make or hold a broad array of investments and actively trade debt and equity securities (or
related derivative securities) and financial instruments (including bank loans) for their own
account and for the accounts of their customers and may at any time hold long and short
positions in such securities and instruments. Such investment and securities activities may
involve securities and instruments of the Company, as well as of other entities and persons
and their affiliates which may (i) be involved in transactions arising from or relating to the
engagement contemplated by this letter, (ii) be customers or competitors of the Company, or
CONFIDENTIAL WAMUBKEXAM-GS-000005
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Washington Mutual, Inc.
September 15, 2008
Page Six
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
(iii) have other relationships with the Company. In addition, Goldman Sachs and its affiliates
may provide investment banking, underwriting and financial advisory services to such other
entities and persons. Goldman Sachs and its affiliates may also co-invest with, make direct
investments in, and invest or co-invest client monies in or with funds or other investment
vehicles managed by other parties, and such funds or other investment vehicles may trade or
make investments in securities of the Company or such other entities. The engagement
contemplated by this letter may have a direct or indirect impact on the investments, securities
or instruments referred to in this paragraph.
Our services may be terminated by you or us at any time with or without cause effective upon
receipt of written notice to that effect. We will be entitled to the applicable transaction fee set
forth above in the event that at any time prior to the expiration of twelve months after such
termination (i) an agreement is entered into with respect to a sale of all or a portion of the
Company which is eventually consummated or (ii) an Agreement is entered into pursuant to
which a Payment is eventually made; provided, however, that in the event that Goldman
Sachs terminates its services hereunder without cause, the foregoing provisions of this
sentence shall not apply. The Companys obligations to offer Goldman Sachs the right to act
in the capacities set forth above in connection with an Offering shall survive any such
termination for a period of twelve months from the date of such termination.
The Company recognizes that, in providing our services pursuant to this letter, we will rely
upon and assume the accuracy and completeness of all of the financial, accounting, tax and
other information discussed with or reviewed by us for such purposes, and we do not
assume responsibility for the accuracy or completeness thereof. Goldman Sachs will have
no obligation to conduct any independent evaluation or appraisal of the assets or liabilities of
the Company or any other party or to advise or opine on any related solvency issues. It is
understood and agreed that Goldman Sachs will act under this letter as an independent
contractor with duties solely to the Company and nothing in this letter or the nature of our
services in connection with this engagement or otherwise shall be deemed to create a
fiduciary duty or fiduciary or agency relationship between us and the Company or its
stockholders, employees or creditors, and the Company agrees that it shall not make, and
hereby waives, any claim based on an assertion of such a fiduciary duty or relationship.
Except as set forth in Annex A hereto, nothing in this letter is intended to confer upon any
other person (including stockholders, employees or creditors of the Company) any rights or
remedies hereunder or by reason hereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)), Goldman Sachs is required to obtain, verify and record
information that identifies its clients, including the Company, which information may include
the name and address of its clients, as well as other information that will allow Goldman
Sachs to properly identify its clients.
CONFIDENTIAL WAMUBKEXAM-GS-000006
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Washington Mutual, Inc.
September 15, 2008
Page Seven
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Goldman Sachs does not provide accounting, tax or legal advice. Notwithstanding anything
herein to the contrary, you are authorized to disclose to any person the U.S. federal and state
income tax treatment and tax structure of the potential transaction and all materials of any
kind (including tax opinions and other tax analyses) provided to you relating to that treatment
and structure, without Goldman Sachs imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply
with securities laws. For this purpose, tax structure is limited to any facts that may be
relevant to that treatment.
CONFIDENTIAL WAMUBKEXAM-GS-000007
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Washington Mutual, Inc.
September 15, 2008
Page Eight
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed copy of this letter, which shall become a binding agreement
upon our receipt. We are delighted to accept this engagement and look forward to working
with you on this assignment.
Very truly yours, Confirmed:
(GOLDMAN, SACHS & CO.)
WASHINGTON MUTUAL, INC.
By:
Name:
Title:
Date:

CONFIDENTIAL WAMUBKEXAM-GS-000008
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Washington Mutual, Inc.
September 15, 2008
Page Nine
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
Annex A
In the event that Goldman Sachs becomes involved in any capacity in any action, proceeding or
investigation brought by or against any person, including stockholders of the Company, in connection
with or as a result of either our engagement or any matter referred to in this letter, the Company
periodically will reimburse Goldman Sachs for its legal and other expenses (including the cost of any
investigation and preparation) incurred in connection therewith; provided, however, that if it is found in
any such action, proceeding or investigation that any loss, claim, damage or liability to any such
person has resulted from the gross negligence or bad faith of Goldman Sachs in performing the
services which are the subject this letter, Goldman Sachs shall repay such portion of the reimbursed
amounts that is attributable to expenses incurred in relation to the act or omission of Goldman Sachs
which is the subject of such finding. The Company also will indemnify and hold Goldman Sachs
harmless against any and all losses, claims, damages or liabilities to any such person in connection
with or as a result of either our engagement or any matter referred to in this letter, except to the extent
that any such loss, claim, damage or liability results from the gross negligence or bad faith of Goldman
Sachs in performing the services that are the subject of this letter. If for any reason the foregoing
indemnification is unavailable to Goldman Sachs or insufficient to hold it harmless, then the Company
shall contribute to the amount paid or payable by Goldman Sachs as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect the relative economic interests of the
Company and its stockholders on the one hand and Goldman Sachs on the other hand in the matters
contemplated by this letter as well as the relative fault of the Company and Goldman Sachs with
respect to such loss, claim, damage or liability and any other relevant equitable considerations. The
reimbursement, indemnity and contribution obligations of the Company under this paragraph shall be
in addition to any liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliate of Goldman Sachs and the partners, directors, agents, employees and
controlling persons (if any), as the case may be, of Goldman Sachs and any such affiliate, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives
of the Company, Goldman Sachs, any such affiliate and any such person. The Company shall not be
required to indemnify Goldman Sachs for any amount paid or payable by Goldman Sachs in the
settlement of any action, proceeding or investigation without the written consent of the Company,
which consent shall not be unreasonably withheld. The Company also agrees that neither Goldman
Sachs nor any of such affiliates, partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either our engagement or any matter referred to in this
letter except to the extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or bad faith of Goldman Sachs in performing the services
that are the subject of this letter. Prior to entering into any agreement or arrangement with respect to,
or effecting, any proposed sale, exchange, dividend or other distribution or liquidation of all or a
significant portion of its assets in one or a series of transactions or any significant recapitalization or
reclassification of its outstanding securities that does not directly or indirectly provide for the
assumption of the obligations of the Company set forth in this Annex A, the Company will notify
Goldman Sachs in writing thereof (if not previously so notified) and, if requested by Goldman Sachs,
shall arrange in connection therewith alternative means of providing for the obligations of the
Company set forth in this paragraph, including the assumption of such obligations by another party,
insurance, surety bonds or the creation of an escrow, in each case in an amount and upon terms and
CONFIDENTIAL WAMUBKEXAM-GS-000009
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Washington Mutual, Inc.
September 15, 2008
Page Ten
097471-0033-10033-NY02.2652717.3 09/19/2008 2:27 AM
conditions satisfactory to Goldman Sachs. Promptly after receipt by Goldman Sachs of notice of its
involvement in any action, proceeding or investigation, Goldman Sachs shall, if a claim for
indemnification in respect thereof is to be made against the Company under this Annex A, notify the
Company of such involvement. Failure by Goldman Sachs to so notify the Company shall relieve the
Company from the obligation to indemnify Goldman Sachs under this Annex A only to the extent that
the Company suffers actual prejudice as a result of such failure, but shall not relieve the Company
from its obligation to provide reimbursement and contribution to Goldman Sachs. If any person is
entitled to indemnification under this Annex A (the "Indemnified Person") with respect to any action or
proceeding brought by a third party that is also brought against the Company, the Company shall be
entitled to assume the defense of any such action or proceeding with counsel reasonably satisfactory
to the Indemnified Person. Upon assumption by the Company of the defense of any such action or
proceeding, the Indemnified Person shall have the right to participate in such action or proceeding and
to retain its own counsel but the Company shall not be liable for any legal expenses of other counsel
subsequently incurred by such Indemnified Person in connection with the defense thereof unless (i)
the Company has agreed to pay such fees and expenses, (ii) the Company shall have failed to employ
counsel reasonably satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified
Person shall have been advised by counsel that there are actual or potential conflicting interests
between the Company and the Indemnified Person, including situations in which there are one or more
legal defenses available to the Indemnified Person that are different from or additional to those
available to the Company, provided, however, that the Company shall not, in connection with any one
such action or proceeding or separate but substantially similar actions or proceedings arising out of
the same general allegations, be liable for the fees and expenses of more than one separate firm of
attorneys at any time for all Indemnified Persons, including Goldman Sachs, except to the extent that
local counsel, in addition to its regular counsel, is required in order to effectively defend against such
action or proceeding. The Company shall not consent to the terms of any compromise or settlement
of any action defended by the Company in accordance with the foregoing without the prior written
consent of the Indemnified Person. Any right to trial by jury with respect to any action or
proceeding arising in connection with or as a result of either our engagement or any matter
referred to in this letter is hereby waived by the parties hereto. The Company agrees that any
suit or proceeding arising in respect to this letter or our engagement will be tried exclusively in
the U.S. District Court for the Southern District of New York or, if that court does not have
subject matter jurisdiction, in any state court located in the City of New York, and the Company
agrees to submit to the jurisdiction of, and to venue in, such courts. The provisions of this
Annex A shall survive any termination or completion of the engagement provided by this letter
agreement, and this letter agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of laws.


CONFIDENTIAL WAMUBKEXAM-GS-000010
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CONFIDENTIAL WAMUBKEXAM-GS-000011
PERSONAL AND CONFIDENTIAL
September 24, 2008
Mr. Robert Williams
Senior Vice President and Treasurer
Washington Mutual, Inc.
Washington Mutual Bank
1301 Second Avenue
Seattle, WA 98101
Dear Mr. Williams:
GS Comments of September 24, 2008
We are pleased to confirm the arrangements under which Goldman, Sachs & Co. ("Goldman
Sachs") is engaged by Washington Mutual, Inc. (the "Company") and Washington Mutual Bank
(the "Bank") as financial advisor relating to the possible sale of all or a portion of the Company
and/or the Bank and to explore capital raising alternatives.
I. During the term of our engagement, we will provide you with financial advice and
assistance in connection with this potential transaction, which may include performing financial
analyses, searching for a purchaser or investors acceptable to you, coordinating visits of potential
purchasers and investors and assisting you in negotiating the fmancial aspects of the transaction.
2. At your request we also will undertake a study to enable us to render our opinion
as to the fairness from a financial point of view of the financial consideration to be received by
shareholders of the Company in connection with the sale of 50% or more of the outstanding
common stock of the Company. The nature and scope of our investigation as well as the scope,
form and substance of our opinion shall be such as we consider appropriate. If requested our
opinion will be in written form.
3. The fees for our engagement will depend on the outcome of this assignment.
Upon execution of the engagement letter, the Company agrees to pay us a fee of $3,000,000 for
services provided to date. Upon armouncement of, or execution of a definitive agreement with
respect to, a sale of 50% or more of the outstanding common stock or assets (based on the book
value thereof) of the Company, the Company agrees to pay us a fee of $5,000,000 (the "Initial
Fee"), less the fee paid upon execution of the engagement letter. If the purchase of50% or more
of the outstanding common stock or the assets (based on the book value thereof) of the Company
is accomplished in one or a series of transactions, including, but not limited to, private or open
market purchases of stock, a tender offer, an exchange offer, a merger or a sale by the Company
of its stock or assets, we will charge a transaction fee (the "Sale Completion Fee") equal to
$30,000,000 less, to the extent paid, the Initial Fee, subject to a maximum transaction fee of
$30,000,000 million. Ifless than 50% of the outstanding common stock or the assets (based on
the book value thereof) is acquired in the marmer set forth in the preceding sentence, we will
charge a transaction fee to be mutually agreed upon by Goldman Sachs and the Company;
provided, however, in the event such transaction takes the form of a private placement of the
Company's common stock, preferred securities or other capital securities to one or more
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CONFIDENTIAL WAMUBKEXAM-GS-000012
Washington Mutual, Inc.
September 24, 2008
Page 2
financial sponsors or investors who were contacted in connection with the transactions
referenced in the preceding sentence, we will charge a transaction fee (the "Investor Completion
Fee") equal to 1.375% of the gross proceeds received by the Company from a sale of such
securities; provided, however, that Goldman Sachs' entitlement to the Investor Completion Fee
shall be suspended following the execution of a definitive agreement for a transaction in respect
of which a Sale Completion Fee would be payable upon consummation thereof and shall
terminate upon consummation of such transaction. Except as provided herein, a transaction fee
will be paid to us in cash upon consummation of each transaction.
4. If the Company or any of its affiliates enters into an agreement with respect to a
transaction in respect of which a Sale Completion Fee would be payable upon consummation
thereof (the "Agreement') and the Agreement provides for a payment at any time to the
Company in the event the transaction contemplated thereby is terminated or otherwise not
consummated (the "Payment"), the Company agrees to pay to Goldman Sachs a transaction fee,
in cash if and when such Payment is made to the Company, equal to the lesser of (i) 10% of such
Payment and (ii) the amount that would otherwise have been payable by the Company to
Goldman Sachs if such transaction had been consummated in accordance with its terms, in each
case less, to the extent paid, the Initial Fee.
5. In the event that the Company determines to undertake a public or private offering
of its common stock, preferred securities or any securities linked to the Company's common
stock or preferred stock other than any transaction for which a fee is payable pursuant to
paragraph 3 of this letter (an "Offering"), the Company shall offer Goldman Sachs the right to
act in a non-exclusive capacity to be agreed between the Company and Goldman Sachs in such
offering, with a fee (the "Offering Fee") of not less than 1.375% of the amount of the aggregate
offering price of such securities and at least 50% of the total economics. If Goldman Sachs
agrees to act in such capacity, the Company and Goldman Sachs will enter into an appropriate
form of underwriting or other applicable agreement containing customary terms and conditions,
including customary fee provisions and provisions relating to our indemnity. However, unless
specifically covered by a separate agreement setting forth such arrangement, the provisions in the
attached Annex A shall apply to each such transaction. The Company acknowledges that this
letter is neither an expressed nor an implied commitment by Goldman Sachs to act in any
capacity in any such transaction, to provide financing or to purchase or place any securities,
which commitment shall only be set forth in a separate agreement.
6. You also agree to reimburse us periodically, upon request, and upon
consummation of the transaction or transactions contemplated hereby or upon termination of our
services pursuant to this agreement, for our reasonable expenses, excluding expenses incurred in
connection with a public offer that is consummated, including the reasonable fees and
disbursements of our attorneys, plus any sales, use or similar taxes (including additions to such
taxes, if any) arising in connection with any matter referred to in this letter.
7. In order to coordinate most effectively our efforts together to effect a transaction
satisfactory to you during the term of our engagement, the Company and its management will
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CONFIDENTIAL WAMUBKEXAM-GS-000013
Washington Mutual, Inc.
September 24, 2008
Page 3
promptly inform us of any discussions they may have or of inquiries they may receive
concerning the availability of all or a portion of the stock or assets of the Company for purchase.
8. Please note that any written or oral opinion or advice provided by Goldman Sachs
in connection with our engagement is exclusively for the information of the Board of Directors
and senior management of the Company, and such opinion, such advice and the terms of this
letter may not be disclosed to any third party (other than the Office of Thrift Supervision, the
Federal Deposit Insurance Corporation, Simpson Thacher & Bartlett LLP and Deloitte & Touche
LLP, or another of the Company's outside legal counselor independent accountants specified by
you in writing who have been informed by you of the confidential nature of such opinion, such
advice and the terms of this letter and have agreed to treat such information confidentially) or
circulated or referred to publicly without our prior written consent. If reference to our opinion
and our firm is required to be made in a proxy statement of the Company required to be filed
under the federal securities laws, we will not unreasonably withhold our consent thereto so long
as the full text of our opinion is reproduced therein and we have approved in advance the text of
any accompanying disclosure.
9. In connection with engagements such as this, it is our firm policy to receive
indemnification. The Company, jointly and severally, and the Bank, severally and not jointly,
agree to the provisions with respect to our indemnity and other matters set forth in Annex A
which is incorporated by reference into this letter. The Bank shall not be responsible for any
obligations of the Company and this letter is not a guarantee of any obligations of the Company
by the Bank.
10. As you know, Goldman Sachs is a full service securities firm engaged, either
directly or through its affiliates in various activities, including securities trading, investment
banking and fmancial advisory, investment management, principal investment, hedging,
financing and brokerage activities and financial planning and benefits counseling for both
companies and individuals. In the ordinary course of these activities, Goldman Sachs and its
affiliates may make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers and may at any time hold long and
short positions in such securities and instruments. Such investment and securities activities may
involve securities and instruments of the Company, as well as of other entities and persons and
their affiliates which may (i) be involved in transactions arising from or relating to the
engagement contemplated by this letter, (ii) be customers or competitors of the Company, or (iii)
have other relationships with the Company. In addition, Goldman Sachs and its affiliates may
provide investment banking, underwriting and financial advisory services to such other entities
and persons. Goldman Sachs and its affiliates may also co-invest with, make direct investments
in, and invest or co-invest client monies in or with funds or other investment vehicles managed
by other parties, and such funds or other investment vehicles may trade or make investments in
securities of the Company or such other entities. The engagement contemplated by this letter
may have a direct or indirect impact on the investments, securities or instruments referred to in
this paragraph.
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CONFIDENTIAL WAMUBKEXAM-GS-000014
Washington Mutual, Inc.
September 24, 2008
Page 4
11. Our services may be terminated by you or us at any time with or without cause
effective upon receipt of written notice to that effect. We will be entitled to the applicable
transaction fee set forth above in the event that (A) none of the Sale Completion Fee, the Investor
Completion Fee or the Offering Fee has been paid prior to the time of such termination and (B)
at any time prior to the expiration of twelve months after such termination (i) an agreement is
entered into with respect to a sale of all or a portion of the Company (excluding an Offering)
which is eventually consummated or (ii) an Agreement is entered into pursuant to which a
Payment is eventually made; provided, however, that in the event that Goldman Sachs terminates
its services hereunder without cause, the foregoing provisions of this sentence shall not apply. In
the event that our services are terminated by you or us before any of the Sale Completion Fee,
the Investor Completion Fee or the Offering Fee has become payable, the Company's obligations
to offer Goldman Sachs the right to act in the capacities set forth above in connection with an
Offering shall survive for a period of twelve months following the date of such termination;
provided, however, that in the event that Goldman Sachs terminates its services hereunder
without cause, the foregoing provisions of this sentence shall not apply
12. The Company recognizes that, in providing our services pursuant to this letter, we
will rely upon and assume the accuracy and completeness of all of the fmancial, accounting, tax
and other information discussed with or reviewed by us for such purposes, and we do not assume
responsibility for the accuracy or completeness thereof. Goldman Sachs will have no obligation
to conduct any independent evaluation or appraisal of the assets or liabilities of the Company or
any other party or to advise or opine on any related solvency issues. It is understood and agreed
that Goldman Sachs will act under this letter as an independent contractor with duties solely to
the Company and nothing in this letter or the nature of our services in connection with this
engagement or otherwise shall be deemed to create a fiduciary duty or fiduciary or agency
relationship between us and the Company or its stockholders, employees or creditors, and the
Company agrees that it shall not make, and hereby waives, any claim based on an assertion of
such a fiduciary duty or relationship. Except as set forth in Annex A hereto, nothing in this letter
is intended to confer upon any other person (including stockholders, employees or creditors of
the Company) any rights or remedies hereunder or by reason hereof.
13. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001, Goldman Sachs is required to obtain, verify and
record information that identifies its clients, including the Company, which information may
include the name and address of its clients, as well as other information that will allow Goldman
Sachs to properly identify its clients.
14. Goldman Sachs does not provide accounting, tax or legal advice. Notwithstanding
anything herein to the contrary, you are authorized to disclose to any person the US. federal and
state income tax treatment and tax structure of the potential transaction and all materials of any
kind (including tax opinions and other tax analyses) provided to you relating to that treatment
and structure, without Goldman Sachs imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply with
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CONFIDENTIAL WAMUBKEXAM-GS-000015
Washington Mutual, Inc.
September 24, 2008
Page 5
securities laws. For this purpose, "tax structure" is limited to any facts that may be relevant to
that treatment.
15. This letter contains the entire agreement of the parties with respect to the
performance by Goldman Sachs of services for the Company and the Bank described herein and
supersedes any prior understandings and agreements.
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CONFIDENTIAL WAMUBKEXAM-GS-000016
Washington Mutual, Inc.
September 24, 2008
Page 6
Please confirm that the foregoing is in accordance with your understanding by signing and
returning to us the enclosed copy of this letter, which shall become a binding agreement upon
our receipt. We are delighted to accept this engagement and look forward to working with you
on this assignment.
Ve truly yours, C
r t . l . ~ ~ ~ l c..
Confirmed
(GOLDMAN, SACHS & 0.) WASHINGTON MUTUAL, INC.
By: _________ _
Name:
Title:
WASHINGTON MUTUAL BANK
By: ________ _
Name:
Title:
Date: _________ _
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CONFIDENTIAL WAMUBKEXAM-GS-000017
Washington Mutual, Inc.
September 24, 2008
Page 7
AnnexA
In the event that Goldman Sachs becomes involved in any capacity in any action, proceeding or
investigation brought by or against any person, including stockholders of the Company, in
connection with or as a result of either our engagement or any matter referred to in this letter,
the Company periodically will reimburse Goldman Sachs for its legal and other expenses
(including the cost of any investigation and preparation) incurred in connection therewith;
provided. however, that if it is found in any such action, proceeding or investigation that any
loss, claim, damage or liability to any such person has resultedfrom the gross negligence or bad
faith of Goldman Sachs in performing the services which are the subject this letter, Goldman
Sachs shall repay such portion of the reimbursed amounts that is attributable to expenses
incurred in relation to the act or omission of Goldman Sachs which is the subject of such finding.
The Company, jointly and severally, and the Bank, severally and not jointly, will indemnifY and
hold Goldman Sachs harmless against any and all losses, claims, damages or liabilities to any
such person in connection with or as a result of either our engagement or any matter referred to
in this letter, except to the extent that any such loss, claim, damage or liability results from the
gross negligence or bad faith of Goldman Sachs in performing the services that are the subject of
this letter. If for any reason the foregoing indemnification is unavailable to Goldman Sachs or
insufficient to hold it harmless, then the Company and the Bank shall contribute to the amount
paid or payable by Goldman Sachs as a result of such loss, claim, damage or liability in such
proportion as is appropriate to refiect the relative economic interests of the Company, the Bank
and their stockholders on the one hand and Goldman Sachs on the other hand in the matters
contemplated by this letter as well as the relative fault of the Company, the Bank and Goldman
Sachs with respect to such loss, claim, damage or liability and any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations of the Company
under this paragraph and the indemnity and contribution obligations of the Bank under this
paragraph shall be in addition to any liability which the Company or the Bank may otherwise
have, shall extend upon the same terms and conditions to any affiliate of Goldman Sachs and the
partners, directors, agents, employees and controlling persons (if any), as the case may be, of
Goldman Sachs and any such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the Bank, Goldman
Sachs, any such affiliate and any such person. Neither the Company nor the Bank shall be
required to indemnifY Goldman Sachs for any amount paid or payable by Goldman Sachs in the
settlement of any action, proceeding or investigation without the written consent of the Company
or the Bank, as applicable, which consent shall not be unreasonably withheld. Each of the
Company and the Bank also agrees that neither Goldman Sachs nor any of such affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the
Company or the Bank or any person asserting claims on behalf of or in right of the Company or
the Bank in connection with or as a result of either our engagement or any matter referred to in
this letter except to the extent that any losses, claims, damages, liabilities or expenses incurred
by the Company or the Bank result from the gross negligence or bad faith of Goldman Sachs in
performing the services that are the subject of this letter. Prior to entering into any agreement or
arrangement with respect to, or efficting, any proposed sale, exchange, dividend or other
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CONFIDENTIAL WAMUBKEXAM-GS-000018
Washington Mutual, Inc.
September 24, 2008
Page 8
distribution or liquidation of all or a significant portion of its assets in one or a series of
transactions or any significant recapitalization or reclassification of its outstanding securities
that does not directly or indirectly provide for the assumption of the obligations of the Company
and the Bank set forth in this Annex A, the Company will notifY Goldman Sachs in writing
thereof (if not previously so notified) and, if requested by Goldman Sachs, shall arrange in
connection therewith alternative means of providing for the obligations of the Company and the
Bank set forth in this paragraph, including the assumption of such obligations by another party,
insurance, surety bonds or the creation of an escrow, in each case in an amount and upon terms
and conditions satisfactory to Goldman Sachs. Promptly after receipt by Goldman Sachs of
notice of its involvement in any action, proceeding or investigation, Goldman Sachs shall, if a
claim for indemnification in respect thereofis to be made against the Company or the Bank
under this Annex A, notifY the Company or the Bank, as applicable, of such involvement. Failure
by Goldman Sachs to so notifY the Company shall relieve the Company and the Bank, as
applicable, from the obligation to indemnifY Goldman Sachs under this Annex A only to the
extent that the Company or the Bank, as applicable, suffers actual prejudice as a result of such
failure, but shall not relieve the Company from its obligation to provide reimbursement and the
Company and the Bankfrom its obligations to provide contribution to Goldman Sachs. If any
person is entitled to indemnification under this Annex A (the "Indemnified Person ") with respect
to any action or proceeding brought by a third party that is also brought against the Company or
the Bank, the Company shall be entitled to assume the defense of any such action or proceeding
with counsel reasonably satisfactory to the Indemnified Person. Upon assumption by the
Company of the defense of any such action or proceeding, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own counsel but the Company
shall not be liable for any legal expenses of other counsel subsequently incurred by such
Indemnified Person in connection with the defense thereof unless (i) the Company has agreed to
pay such fees and expenses, (ii) the Company shall have failed to employ counsel reasonably
satisfactory to the Indemnified Person in a timely manner, or (iii) the Indemnified Person shall
have been advised by counsel that there are actual or potential conjlicting interests between the
Company or the Bank and the Indemnified Person, including situations in which there are one or
more legal defenses available to the Indemnified Person that are different from or additional to
those available to the Company or the Bank, provided, however, that the Company shall not, in
connection with anyone such action or proceeding or separate but substantially similar actions
or proceedings arising out of the same general allegations, be liable for the fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified Persons, including
Goldman Sachs, except to the extent that local counsel, in addition to its regular counsel, is
required in order to effictively defend against such action or proceeding. Neither the Company
nor the Bank shall consent to the terms of any compromise or settlement of any action defended
by it in accordance with the foregoing without the prior written consent of the Indemnified
Person unless such compromise or settlement (i) includes an unconditional release of the
Indemnified Person from all liability arising out of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any
Indemnified Person. Any right to trial by jury with respect to any action or proceeding arising
in connection with or as a result of either our engagement or any matter referred to in this
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CONFIDENTIAL WAMUBKEXAM-GS-000019
Washington Mutual, Inc.
September 24, 2008
Page 9
letter is hereby waived by the parties hereto. The Company and the Bank agree that any suit or
proceeding arising in respect to this letter or our engagement will be tried exclusively in the
U.S. District Court for the Southern District of New York or, if that court does not have
subject matter jurisdiction, in any state court located in the City of New York and the
Company and the Bank agree to submit to the jurisdiction of, and to venue in, such courts.
The provisions of this Annex A shall survive any termination or completion of the engagement
provided by this letter agreement, and this letter agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to principles of conflicts
of laws. The Bank shall not be responsible for any obligations of the Company and this Annex
A is not a guarantee of any obligations of the Company by the Bank.
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1
Discussion Materials for




Goldman, Sachs & Co.
August 11, 2008



CONFIDENTIAL WAMUBKEXAM-GS-000020
QUP Washington Mutual
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2
Table of Contents


I. Process Discussion
II. Mark-to-Market Discussion
III. Merger Analysis
IV. Structural Alternatives
Appendix A: Merger Analysis: Company Stress Loss Scenario
Appendix B: Selected Merger Analysis: Moodys Stress Loss Scenario
Appendix C: BAC / CFC Mark Case Study


CONFIDENTIAL WAMUBKEXAM-GS-000021
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3
I. Process Discussion
CONFIDENTIAL WAMUBKEXAM-GS-000022
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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)

CONFIDENTIAL WAMUBKEXAM-GS-000023
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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 Partners
Confidentiality Agreement
Management Meetings
Preliminary Indications of Interest
Due Diligence
Negotiate Terms
Announce Transaction
CONFIDENTIAL WAMUBKEXAM-GS-000024
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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 Ratio
Commentary


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 Senz 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 Gonzlez Rodrguez
67.1 (34.6) 6.7 2.6 4.7 7.9
Continued interest in growing U.S.
franchise
WM footprint highly complementary
to BBVAs 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
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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

WaMus debt and preferred outstandings are currently trading at a significant
discount to par
Aggregate discount of approximately $10.0 billion on $24.0 billion liability /
preferred base
Capturing this discount in some fashion prior to executing a strategic transaction
would potentially improve the ability to pay of a potential partner due to decreased
goodwill creation / capital needed
Transaction contingent on exchange / tender of debt / preferred may also be
structured
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8
II. Mark-to-Market Discussion
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9
Cumulative Loss Roll-Forward
Company High Stress Case vs. Moodys Stress Case
($ 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
Remaining
Cum Loss 3Q NCOs 4Q NCOs
Losses
Left
Remaining
Cum 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


Moodys Stress (July 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
Remaining
Cum Loss 3Q NCOs 4Q NCOs
Losses
Left
Remaining
Cum 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


CONFIDENTIAL WAMUBKEXAM-GS-000028
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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 Case
Balance Moody's Company CPR Coupon Rate 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 Mark
on 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
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11
Other Assets & Liabilities
Estimated Mark-to-Market
($ in millions)
Other Assets Other Liabilities
Jun Balance % Loss
Mark-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 receivable 3,456 0% 0
Investment in bank-owned life insurance 5,523 5% 276
Premises and equipment 2,914 0% 0
Accrued interest receivable 1,930 0% 0
Derivatives 3,035 0% 0
Identifiable intangible assets 378 0% 0
Foreclosed Assets 1,462 20% 292
Other 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.
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12
Estimated ALLL Roll-Forward
2008
($ in millions)
1,429
3,511
5,913
3,908
3,126
(747)
(1,368)
(2,171)
(2,605)
(3,126)
1,889
2,571
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


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


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14
III. Merger Analysis

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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
Moodys 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 SMBC
WM 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 10.0
Card Services 1,149 30.0 20.0 15.0 20.0 20.0 10.0 10.0 10.0
Corporate 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 40.0
Total 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 $ 810
As % of NIE 37.8 % 42.9 % 18.1 % 34.1 % 10.9 % 9.5 % 15.1 % 9.5 %

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Overview of Selected Buyers
Selected Transaction Metrics Company Stress Case ($14.4 bn pre-tax mark)
($ in millions)
JPMorgan Wells Fargo TD US Bancorp Barclays Santander BBVA SMBC
0 0 0 0 0 0 0 0
Market Data: 0 0 0 0 0 0 0 0
0 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 x
0 0 0 0 0 0 0 0
Transaction Summary: 0 0 0 0 0 0 0 0
0 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 6.73
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity Raised to Recapitalize $ 5,218 $ 11,643 $ 8,880 $ 11,860 $ 8,376 $ 7,193 $ 8,753 $ 7,252
As a Percentage of Market Cap 3.70 % 11.69 % 18.69 % 21.65 % 14.63 % 6.32 % 13.04 % 14.41 %
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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


CONFIDENTIAL WAMUBKEXAM-GS-000035
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17
Overview of Selected Buyers
Selected Transaction Metrics Moodys Stress Case ($18.5 bn pre-tax mark)
($ in millions)
JPMorgan Wells Fargo TD US Bancorp Barclays Santander BBVA SMBC
0 0 0 0 0 0 0 0
Market Data: 0 0 0 0 0 0 0 0
0 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 x
0 0 0 0 0 0 0 0
Transaction Summary: 0 0 0 0 0 0 0 0
0 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 6.73
0.00 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 Entity
1

($ 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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
s

Tier 1 Target at Close
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
s


1
Assumes all-stock transaction and does not include capital raised for transaction or make-whole
CONFIDENTIAL WAMUBKEXAM-GS-000037
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19
Sensitivity Analyses
Equity Issued to Recapitalize Pro-Forma Entity
1

($ 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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
s

Tier 1 Target at Close
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
s

Tier 1 Target at Close
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
1
2
/
3
1
/
0
8

M
T
M

L
o
s
s


1
Assumes all-stock transaction and does not include capital raised for transaction or make-whole
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20
IV. Structural Alternatives
CONFIDENTIAL WAMUBKEXAM-GS-000039
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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 Moodys 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 each
1

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 Acquirors 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 Value
divided 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 Acquirors consolidated balance sheet at inception of the transaction as calculated on the
Conversion 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 of
expected 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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Contingent Value Securities
Summary Term Sheet

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 succeeding
Dividend 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 the
Securities 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 on
the 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 or
redeem 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 and
Remaining Expected Losses (and related definitions used in computing defined amounts) in accordance with the definitions of
those 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 the
core 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 Stress
Gain / (Loss) on Marked Portfolio $ 0.0 $ 0.0 $ 0.0
Gain / (Loss) on CVS 0.0 0.0 0.0
Value of CVS 4,000 4,000 4,000
Wells Fargo Stock Price $ 32.57 $ 42.02 $ 45.28
Number of Shares Issued 122.8 95.2 88.4
Accretion / Dilution 34.3 % 36.6 % 36.3 %
Stronger Performance: Company Stress
Gain / (Loss) on Marked Portfolio $ 276.1 $ 276.1 $ 276.1
Gain / (Loss) on CVS (276.1) (276.1) (276.1)
Value of CVS 4,276 4,552 4,828
Wells Fargo Stock Price $ 32.57 $ 42.02 $ 45.28
Number of Shares Issued 131.3 108.3 106.6
Accretion / Dilution 34.1 % 36.1 % 35.7 %



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

Washington Mutuals 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
Price
Repurchase
Price % Exchanged
Notional
Debt Retired
Equity
Issued
Discount
Captured Tax Leakage
Net Increase
in Equity
Capital
ADP I (Cayman) $ 750 33.5 % 43.5 % 50.0 % $ 375 $ 163 $ 212 $ 0 $ 375
ADP I (Delaware) 1,250 28.0 38.0 50.0 625 238 388 0 625
ADP II 500 31.0 41.0 50.0 250 103 148 0 250
ADP III 500 30.0 40.0 50.0 250 100 150 0 250
ADP IV 1,000 47.0 57.0 50.0 500 285 215 0 500
DRD Preferred (Series K) 500 32.0 42.0 50.0 250 105 145 0 250
Conv Preferred (Series R) 3,000 48.9 58.9 50.0 1,500 884 617 0 1,500
PIERS 1,150 40.0 50.0 50.0 575 288 288 101 474
Total $ 8,650 40.0 % 50.0 % 50.0 % $ 4,325 $ 2,164 $ 2,161 $ 101 $ 4,224
Holdco Senior
5.25% '17 $ 750 70.0 % 80.0 % 45.0 % $ 338 $ 270 $ 68 $ 24 $ 314
4.20% '10 600 75.0 85.0 30.0 180 153 27 9 171
L+14 '09 500 75.0 85.0 30.0 150 128 23 8 142
L+40 '12 500 75.0 85.0 35.0 175 149 26 9 166
L+30 '12 450 75.0 85.0 35.0 158 134 24 8 149
5.5% '11 400 75.0 85.0 35.0 140 119 21 7 133
5.0% '12 400 70.0 80.0 35.0 140 112 28 10 130
L+30 '10 250 80.0 90.0 30.0 75 68 8 3 72
4.0% '09 1,000 85.0 95.0 30.0 300 285 15 5 295
L+9 '09 1,000 85.0 95.0 30.0 300 285 15 5 295
Total $ 5,850 77.6 % 87.6 % 33.4 % $ 1,955 $ 1,702 $ 253 $ 89 $ 1,866
Bank Senior
L+15 '10 $ 750 75.0 % 85.0 % 30.0 % $ 225 $ 191 $ 34 $ 12 $ 213
5.55% '10 250 80.0 90.0 30.0 75 68 8 3 72
L+10 '08 1,000 95.0 105.0 30.0 300 315 (15) (5) 305
4.5% '08 250 95.0 105.0 30.0 75 79 (4) (1) 76
L+20 '11 1,000 80.0 90.0 35.0 350 315 35 12 338
6.75% '36 300 75.0 85.0 50.0 150 128 23 8 142
L+42 '13 600 70.0 80.0 35.0 210 168 42 15 195
5.95% '13 350 70.0 80.0 35.0 123 98 25 9 114
Total $ 4,500 80.9 % 90.9 % 33.5 % $ 1,508 $ 1,361 $ 147 $ 51 $ 1,456
Holdco Sub
4.625% '14 $ 750 45.0 % 55.0 % 40.0 % $ 300 $ 165 $ 135 $ 47 $ 253
7.25% '17 500 45.0 55.0 40.0 200 110 90 32 169
8.25% '10 500 45.0 55.0 30.0 150 83 68 24 126
Total $ 1,750 45.0 % 55.0 % 37.1 % $ 650 $ 358 $ 293 $ 102 $ 548
Bank Sub
5.65% '14 $ 1,000 45.0 % 55.0 % 35.0 % $ 350 $ 193 $ 158 $ 55 $ 295
5.50% '13 750 45.0 55.0 35.0 263 144 118 41 221
6.875% '11 1 45.0 55.0 30.0 0 0 0 0 0
5.125% '15 1,000 45.0 55.0 35.0 350 193 158 55 295
L+65 '15 500 45.0 55.0 35.0 175 96 79 28 147
Total $ 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


CONFIDENTIAL WAMUBKEXAM-GS-000046
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28
Debt for Equity Exchange
Impact on Key Ratios

Repurchase Only Outstanding Debt Repurchase Only Outstanding Preferreds Repurchase All Outstanding Debt / Preferred
6/30/08
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
CONFIDENTIAL WAMUBKEXAM-GS-000047
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29
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




CONFIDENTIAL WAMUBKEXAM-GS-000048
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30
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 APEX
Mandatory Converts TPS ETPS
$ 101,043
$ 44,672 $ 22,285
WM JPM WFC
15% Restricted Elements Limit
(remaining capacity) $(1,637) $(831) $(234)
25% Restricted Elements Limit
(remaining capacity) 2,753 13,362 2,614

CONFIDENTIAL WAMUBKEXAM-GS-000049
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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
Unrestricted Equity Capital Minority Interest Cumulative Perpetual Preferred
Non Cumulative Perpetual Preferred REIT APEX
Mandatory Converts TPS ETPS
$ 117,184 $ 63,594
JPM / WM WFC / WM
15% Restricted Elements Limit
(remaining capacity) $(3,552) $(2,464)
25% Restricted Elements Limit
(remaining capacity) 15,151 4,840

CONFIDENTIAL WAMUBKEXAM-GS-000050
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32
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:
Total Consideration $ 9,919
(-) 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
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:
Total Consideration $ 9,919
(-) Tangible Book Value At Close (12,996)
(+) After-Tax Writedown 9,343
(-) Identifiable Intangibles Created (3,207)
(+) DTL Created 854
(-) Incremental Writedown of Other Assets 0
Goodwill $ 3,913
Equity Issued To Recapitalize Entity $ 11,643
As a Percentage of Acquiror Market Cap 11.7 %

CONFIDENTIAL WAMUBKEXAM-GS-000052
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34
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 Income $ 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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35
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 4.8
P / 2010E Adjusted EPS
2.53 2.9 3.2 3.5 3.8 4.1
P / TBVPS
8.88 0.8 0.9 1.0 1.1 1.2
P / Adjusted TBVPS (at closing)
2.15 3.4 3.8 4.1 4.5 4.9
Transaction 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
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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 Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,289 839 1,109 521 0
Accretion of Interest Rate Mark 785 687 587 549 389
Pro-forma Net Income $ 3,701 $ 4,304 $ 4,125 $ 4,244 $ 3,881
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash 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 $ 5,879
WM Capital
Beginning 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 1 $ 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 Flows
Purchase Price $ (9,919)
Additional Equity Issued (5,218)
Excess / (Infusion) $ 3,041 $ 6,217 $ 6,812 $ 6,112
Terminal 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
CONFIDENTIAL WAMUBKEXAM-GS-000055
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37
Wells Fargo Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
Wells Fargo Beginning Tangible Common Equity $ 30,159 $ 44,657 $ 46,194
(+) Equity Issued to Finance Purchase 8,356
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 11,643
(-) Equity Repurchased (305) (5,383) (6,502)
(-) Restructuring Charges (1,182) (1,182) (1,182)
(-) Transaction Identifiable Intangibles (3,207) 0 0
(-) Transaction Goodwill (3,772) 0 0
(+) 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
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 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
Pro-Forma Tier 1 RBC Ratio 8.24 % 8.24 % 8.24 %
Pro-Forma Tier 1 Leverage Ratio 7.36 7.45 7.48

2008 2009 2010 2011
Wells Fargo Net Income $ 7,113 $ 7,691 $ 9,758 $ 10,474
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 (209) (209) (209)
(+) Return on Cash From New Equity Issuance 0 420 420 420
(-) Lost Investment Income on Share Repurchases 0 (185) (396) (639)
(-) Lost Yield on Restructuring Charge 0 (77) (115) (115)
(+) Net Synergies 0 1,182 1,773 1,950
Pro Forma Operating Net Income $ 7,113 $ 12,592 $ 15,591 $ 16,055
Wells Fargo Beginning Diluted Shares Outstanding 3,303 4,031 3,866 3,711
New Shares Issued to Finance Purchase 272
New Shares Issued to Make-Whole Investors 46
New Shares Issed to Recapitalize Entity 420
Shares Repurchased (10) (165) (155) (165)
Total Pro Forma Shares Outstanding 4,031 3,866 3,711 3,546
Wells Fargo Standalone EPS $ 2.15 $ 2.35 $ 3.00 $ 3.24
Pro Forma EPS 2.15 3.26 4.20 4.53
Accretion / Dilution ($) $ 0.00 $ 0.91 $ 1.20 $ 1.29
Accretion / Dilution (%) 0.0% 38.6% 40.1% 39.7%


1
Assumes restructuring charges excluded from operating EPS.
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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
Implied Price Per Share (Inc. Make-Whole) 4.28 5.06 5.84 6.61 7.39
Purchase Price $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419
Equity Issued to Recapitalize Entity 11,643 11,643 11,643 11,643 11,643
Aggregate Deal Value $ 18,782 $ 20,102 $ 21,422 $ 22,742 $ 24,062
% 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 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 6.5
P / 2010E Adjusted EPS
2.53 4.4 4.7 5.0 5.3 5.6
P / TBVPS
8.88 1.2 1.3 1.4 1.5 1.6
P / Adjusted TBVPS (at closing)
2.15 5.1 5.5 5.9 6.2 6.6
Transaction 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
Accretion / Dilution
2009 EPS
41.6 % 40.1 % 38.6 % 37.2 % 35.7 %
2010 EPS 43.1 41.6 40.1 38.6 37.1
CONFIDENTIAL WAMUBKEXAM-GS-000057
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,289 839 1,109 521 0
Accretion of Interest Rate Mark 785 687 587 549 389
Pro-forma Net Income $ 3,701 $ 4,304 $ 4,125 $ 4,244 $ 3,881
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 3,769 4,361 4,173 4,282 3,919
Transaction Adjustments (AT)
(+) Cost Synergies $ 1,182 $ 1,773 $ 1,950 $ 2,145 $ 2,360
(+) Cost of Funds (Restructuring Reserve) (77) (115) (115) (115) (115)
(+) Return on Cash From New Equity Issuance 420 420 420 420 420
(+) Transaction Intangible Amortization (209) (209) (209) (209) (209)
Total Adjustments $ 1,317 $ 1,869 $ 2,047 $ 2,242 $ 2,456
Pro Forma Net Income $ 5,086 $ 6,230 $ 6,220 $ 6,523 $ 6,375
WM Capital
Beginning 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 1 $ 32,932 $ 18,644 $ 18,335 $ 18,323 $ 19,189
Risk-Weighted Assets $ 236,442 $ 226,260 $ 222,513 $ 222,368 $ 232,876
Tier 1 Ratio 13.93 % 8.24 % 8.24 % 8.24 % 8.24 %
Cash Flows
Purchase Price $ (9,779)
Additional Equity Issued (11,643)
Excess / (Infusion) $ 9,396 $ 5,877 $ 6,680 $ 6,074
Terminal Value (8.0 x) Earnings 50,999
Cash flow to Wells Fargo $ (21,422) $ 9,396 $ 5,877 $ 6,680 $ 57,073
Internal Rate of Return (@ 31-Dec-08) 59.8 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
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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 Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 8,880
(-) Equity Repurchased 0 (5,540) (5,473)
(-) Restructuring Charges (477) (477) (477)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (3,530) 0 0
(+) Amortization 78 446 427
(+) 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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 289,321 $ 276,880
(+) Asset Growth (12,802) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 289,321 $ 276,880 $ 272,302
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
Pro-Forma Tier 1 RBC Ratio 8.50 % 8.50 % 8.50 %
Pro-Forma Tier 1 Leverage Ratio 4.80 4.75 4.72

2008 2009 2010 2011
TD Net Income $ 4,093 $ 4,778 $ 4,895 $ 5,350
Olympic Standalone Net Income (685) 628 2,778 2,430
(+) Post-Tax Provision Benefit 0 2,183 800 1,058
(+) Accretion of Interest-Rate Mark 0 748 655 560
Olympic Pro Forma Net Income (685) 3,559 4,233 4,047
(-) Debt Interest Expense 0 0 0 0
(+) Olympic Amortization Expense 0 68 57 48
(-) Additional Amortization Expense 0 (200) (200) (200)
(+) Return on Cash From New Equity Issuance 0 306 306 306
(-) Lost Investment Income on Share Repurchases 0 (172) (341) (518)
(-) Lost Yield on Restructuring Charge 0 (30) (44) (44)
(+) Net Synergies 0 477 716 787
Pro Forma Operating Net Income $ 4,093 $ 8,756 $ 9,621 $ 9,776
TD Beginning Diluted Shares Outstanding 805 1,133 1,066 1,008
New Shares Issued to Finance Purchase 141
New Shares Issued to Make-Whole Investors 24
New Shares Issed to Recapitalize Entity 163
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
Accretion / Dilution ($) $ 0.00 $ 2.28 $ 3.46 $ 3.62
Accretion / Dilution (%) 0.0% 38.5% 57.0% 54.5%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000059
Return
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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
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 8,880 8,880 8,880 8,880 8,880
Aggregate Deal Value $ 16,159 $ 17,479 $ 18,799 $ 20,119 $ 21,440
% 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 5.4 x 5.8 x 6.3 x 6.7 x 7.2 x
P / 2009E Adjusted EPS
2.09 4.5 4.9 5.3 5.7 6.0
P / 2010E Adjusted EPS
2.49 3.8 4.1 4.4 4.8 5.1
P / TBVPS
8.88 1.1 1.2 1.2 1.3 1.4
P / Adjusted TBVPS (at closing)
2.15 4.4 4.8 5.1 5.5 5.9
Transaction IRR (8.0x Terminal)
62.0 % 56.5 % 51.8 % 47.6 % 43.9 %
Core Deposit Premium
1.9 2.8 3.6 4.4 5.2
Accretion / Dilution
2009 EPS
44.1 % 41.2 % 38.5 % 35.9 % 33.3 %
2010 EPS 63.3 60.1 57.0 54.0 51.2
CONFIDENTIAL WAMUBKEXAM-GS-000060
Return
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,183 800 1,058 497 0
Accretion of Interest Rate Mark 748 655 560 523 371
Pro-forma Net Income $ 3,559 $ 4,233 $ 4,047 $ 4,195 $ 3,863
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 3,627 4,290 4,095 4,233 3,901
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 $ 4,915
WM Capital
Beginning 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 1 $ 30,874 $ 19,262 $ 18,944 $ 18,931 $ 19,824
Risk-Weighted Assets $ 236,795 $ 226,613 $ 222,866 $ 222,721 $ 233,229
Tier 1 Ratio 13.04 % 8.50 % 8.50 % 8.50 % 8.50 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (8,880)
Excess / (Infusion) $ 6,850 $ 5,335 $ 5,369 $ 4,670
Terminal Value (8.0 x) Earnings 39,316
Cash flow to TD $ (18,799) $ 6,850 $ 5,335 $ 5,369 $ 43,986
Internal Rate of Return (@ 31-Dec-08) 51.8 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000061
Return
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DRAFT

43
USB Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
US Bancorp Beginning Tangible Common Equity $ 10,895 $ 24,745 $ 24,305
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 11,860
(-) Equity Repurchased (476) (5,407) (5,741)
(-) Restructuring Charges (943) (943) (943)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (3,888) 0 0
(+) Amortization 166 610 547
(+) 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
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 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
Pro-Forma Tier 1 RBC Ratio 8.50 % 8.50 % 8.50 %
Pro-Forma Tier 1 Leverage Ratio 7.73 7.70 7.77

2008 2009 2010 2011
US Bancorp Net Income $ 3,943 $ 4,155 $ 4,898 $ 5,147
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 0 428 428 428
(-) Lost Investment Income on Share Repurchases 0 (191) (378) (583)
(-) Lost Yield on Restructuring Charge 0 (61) (92) (92)
(+) Net Synergies 0 943 1,414 1,555
Pro Forma Operating Net Income $ 3,943 $ 8,833 $ 10,421 $ 10,419
US Bancorp Beginning Diluted Shares Outstanding 1,741 2,448 2,306 2,186
New Shares Issued to Finance Purchase 265
New Shares Issued to Make-Whole Investors 44
New Shares Issed to Recapitalize Entity 412
Shares Repurchased (15) (141) (120) (125)
Total Pro Forma Shares Outstanding 2,448 2,306 2,186 2,061
US Bancorp Standalone EPS $ 2.27 $ 2.45 $ 2.94 $ 3.15
Pro Forma EPS 2.27 3.83 4.77 5.06
Accretion / Dilution ($) $ 0.00 $ 1.38 $ 1.83 $ 1.91
Accretion / Dilution (%) 0.0% 56.3% 62.2% 60.7%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000062
Return
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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
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 11,860 11,860 11,860 11,860 11,860
Aggregate Deal Value $ 19,139 $ 20,459 $ 21,779 $ 23,099 $ 24,419
% 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 6.4 x 6.8 x 7.3 x 7.7 x 8.2 x
P / 2009E Adjusted EPS
2.18 5.2 5.5 5.9 6.2 6.6
P / 2010E Adjusted EPS
2.53 4.4 4.8 5.1 5.4 5.7
P / TBVPS
8.88 1.3 1.4 1.4 1.5 1.6
P / Adjusted TBVPS (at closing)
2.15 5.2 5.6 6.0 6.3 6.7
Transaction IRR (8.0x Terminal)
65.4 % 60.4 % 56.0 % 52.1 % 48.6 %
Core Deposit Premium
3.8 4.6 5.4 6.2 7.0
Accretion / Dilution
2009 EPS
61.8 % 59.0 % 56.3 % 53.7 % 51.2 %
2010 EPS 67.8 64.9 62.2 59.5 56.9
CONFIDENTIAL WAMUBKEXAM-GS-000063
Return
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,289 839 1,109 521 0
Accretion of Interest Rate Mark 785 687 587 549 389
Pro-forma Net Income $ 3,701 $ 4,304 $ 4,125 $ 4,244 $ 3,881
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 3,769 4,361 4,173 4,282 3,919
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)
Total Adjustments $ 1,100 $ 1,540 $ 1,682 $ 1,837 $ 2,008
Pro Forma Net Income $ 4,869 $ 5,901 $ 5,855 $ 6,119 $ 5,927
WM Capital
Beginning Tier 1 $ 33,388 $ 19,232 $ 18,914 $ 18,901
(+) Net Income 4,869 5,901 5,855 6,119
(-) Post-Tax Writedown (9,343)
(+) Amortization 610 547 495 451
(-) Restructuring Charge (943) (943) (943)
(Excess) / Infusion (9,349) (5,824) (6,363) (5,677)
Ending Tier 1 $ 33,388 $ 19,232 $ 18,914 $ 18,901 $ 19,794
Risk-Weighted Assets $ 236,442 $ 226,260 $ 222,513 $ 222,368 $ 232,876
Tier 1 Ratio 14.12 % 8.50 % 8.50 % 8.50 % 8.50 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (11,860)
Excess / (Infusion) $ 9,349 $ 5,824 $ 6,363 $ 5,677
Terminal Value (8.0 x) Earnings 47,417
Cash flow to US Bancorp $ (21,779) $ 9,349 $ 5,824 $ 6,363 $ 53,094
Internal Rate of Return (@ 31-Dec-08) 56.0 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000064
Return
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DRAFT

46
Barclays Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
Barclays Beginning Tangible Common Equity $ 35,786 $ 46,771 $ 48,572
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 8,376
(-) Equity Repurchased 0 (5,986) (6,087)
(-) Restructuring Charges (333) (333) (333)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (4,723) 0 0
(+) Amortization 40 386 377
(+) 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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 287,884 $ 275,443
(+) Asset Growth (14,239) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 287,884 $ 275,443 $ 270,865
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
Pro-Forma Tier 1 RBC Ratio 8.50 % 8.50 % 8.50 %
Pro-Forma Tier 1 Leverage Ratio 2.72 2.73 2.71

2008 2009 2010 2011
Barclays Net Income $ 6,888 $ 8,592 $ 9,529 $ 10,292
Olympic Standalone Net Income (685) 628 2,778 2,430
(+) Post-Tax Provision Benefit 0 2,535 929 1,228
(+) Accretion of Interest-Rate Mark 0 869 761 650
Olympic Pro Forma Net Income (685) 4,032 4,468 4,308
(-) Debt Interest Expense 0 0 0 0
(+) Olympic Amortization Expense 0 68 57 48
(-) Additional Amortization Expense 0 (233) (233) (233)
(+) Return on Cash From New Equity Issuance 0 335 335 335
(-) Lost Investment Income on Share Repurchases 0 (215) (435) (659)
(-) Lost Yield on Restructuring Charge 0 (24) (36) (36)
(+) Net Synergies 0 333 499 549
Pro Forma Operating Net Income $ 6,888 $ 12,888 $ 14,185 $ 14,604
Barclays Beginning Diluted Shares Outstanding 8,144 10,826 10,345 9,919
New Shares Issued to Finance Purchase 1,185
New Shares Issued to Make-Whole Investors 198
New Shares Issed to Recapitalize Entity 1,298
Shares Repurchased 0 (480) (426) (406)
Total Pro Forma Shares Outstanding 10,826 10,345 9,919 9,513
Barclays Standalone EPS $ 0.96 $ 1.05 $ 1.17 $ 1.26
Pro Forma EPS 0.96 1.25 1.43 1.54
Accretion / Dilution ($) $ 0.00 $ 0.19 $ 0.26 $ 0.27
Accretion / Dilution (%) 0.0% 18.1% 22.2% 21.5%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000065
Return
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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
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 8,376 8,376 8,376 8,376 8,376
Aggregate Deal Value $ 15,655 $ 16,975 $ 18,295 $ 19,615 $ 20,935
% 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 5.2 x 5.7 x 6.1 x 6.6 x 7.0 x
P / 2009E Adjusted EPS
2.37 3.9 4.2 4.5 4.9 5.2
P / 2010E Adjusted EPS
2.63 3.5 3.8 4.1 4.4 4.7
P / TBVPS
8.88 1.0 1.1 1.2 1.3 1.4
P / Adjusted TBVPS (at closing)
2.15 4.3 4.6 5.0 5.4 5.7
Transaction IRR (8.0x Terminal)
58.7 % 53.5 % 49.0 % 44.9 % 41.4 %
Core Deposit Premium
1.6 2.4 3.3 4.1 4.9
Accretion / Dilution
2009 EPS
22.2 % 20.1 % 18.1 % 16.1 % 14.2 %
2010 EPS 26.5 24.3 22.2 20.2 18.2
CONFIDENTIAL WAMUBKEXAM-GS-000066
Return
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,535 929 1,228 577 0
Accretion of Interest Rate Mark 869 761 650 608 431
Pro-forma Net Income $ 4,032 $ 4,468 $ 4,308 $ 4,359 $ 3,923
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 4,100 4,525 4,356 4,397 3,961
Transaction Adjustments (AT)
(+) Cost Synergies $ 333 $ 499 $ 549 $ 604 $ 665
(+) Cost of Funds (Restructuring Reserve) (24) (36) (36) (36) (36)
(+) Return on Cash From New Equity Issuance 335 335 335 335 335
(+) Transaction Intangible Amortization (233) (233) (233) (233) (233)
Total Adjustments $ 411 $ 566 $ 616 $ 671 $ 731
Pro Forma Net Income $ 4,512 $ 5,091 $ 4,972 $ 5,068 $ 4,692
WM Capital
Beginning Tier 1 $ 30,514 $ 19,162 $ 18,844 $ 18,831
(+) Net Income 4,512 5,091 4,972 5,068
(-) Post-Tax Writedown (10,349)
(+) Amortization 386 377 369 364
(-) Restructuring Charge (333) (333) (333)
(Excess) / Infusion (5,568) (5,453) (5,353) (4,539)
Ending Tier 1 $ 30,514 $ 19,162 $ 18,844 $ 18,831 $ 19,724
Risk-Weighted Assets $ 235,619 $ 225,436 $ 221,690 $ 221,545 $ 232,053
Tier 1 Ratio 12.95 % 8.50 % 8.50 % 8.50 % 8.50 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (8,376)
Excess / (Infusion) $ 5,568 $ 5,453 $ 5,353 $ 4,539
Terminal Value (8.0 x) Earnings 37,535
Cash flow to Barclays $ (18,295) $ 5,568 $ 5,453 $ 5,353 $ 42,074
Internal Rate of Return (@ 31-Dec-08) 49.0 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000067
Return
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DRAFT

49
Santander Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
Santander Beginning Tangible Common Equity $ 63,744 $ 75,740 $ 76,824
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 7,193
(-) Equity Repurchased 0 (11,289) (11,718)
(-) Restructuring Charges (316) (316) (316)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (5,439) 0 0
(+) 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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 287,021 $ 274,580
(+) Asset Growth (15,102) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 287,021 $ 274,580 $ 270,002
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
Pro-Forma Tier 1 RBC Ratio 7.75 % 7.75 % 7.75 %
Pro-Forma Tier 1 Leverage Ratio 4.49 4.50 4.50

2008 2009 2010 2011
Santander Net Income $ 13,875 $ 15,042 $ 16,923 $ 18,214
Olympic Standalone Net Income (685) 628 2,778 2,430
(+) Post-Tax Provision Benefit 0 2,746 1,006 1,331
(+) Accretion of Interest-Rate Mark 0 942 824 704
Olympic Pro Forma Net Income (685) 4,316 4,609 4,465
(-) Debt Interest Expense 0 0 0 0
(+) Olympic Amortization Expense 0 68 57 48
(-) Additional Amortization Expense 0 (252) (252) (252)
(+) Return on Cash From New Equity Issuance 0 312 312 312
(-) Lost Investment Income on Share Repurchases 0 (440) (897) (1,367)
(-) Lost Yield on Restructuring Charge 0 (25) (37) (37)
(+) Net Synergies 0 316 474 521
Pro Forma Operating Net Income $ 13,875 $ 19,337 $ 21,187 $ 21,904
Santander Beginning Diluted Shares Outstanding 6,254 7,220 6,822 6,464
New Shares Issued to Finance Purchase 458
New Shares Issued to Make-Whole Investors 77
New Shares Issed to Recapitalize Entity 431
Shares Repurchased 0 (398) (358) (337)
Total Pro Forma Shares Outstanding 7,220 6,822 6,464 6,127
Santander Standalone EPS $ 2.21 $ 2.41 $ 2.71 $ 2.91
Pro Forma EPS 2.21 2.83 3.28 3.57
Accretion / Dilution ($) $ 0.00 $ 0.43 $ 0.57 $ 0.66
Accretion / Dilution (%) 0.0% 17.9% 21.1% 22.7%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000068
Return
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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 $ 7.00
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 7,193 7,193 7,193 7,193 7,193
Aggregate Deal Value $ 14,472 $ 15,792 $ 17,112 $ 18,432 $ 19,752
% 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 4.8 x 5.3 x 5.7 x 6.2 x 6.6 x
P / 2009E Adjusted EPS
2.54 3.4 3.7 4.0 4.3 4.6
P / 2010E Adjusted EPS
2.71 3.1 3.4 3.7 4.0 4.3
P / TBVPS
8.88 1.0 1.0 1.1 1.2 1.3
P / Adjusted TBVPS (at closing)
2.15 4.0 4.3 4.7 5.0 5.4
Transaction IRR (8.0x Terminal)
69.4 % 62.9 % 57.3 % 52.4 % 48.1 %
Core Deposit Premium
0.9 1.7 2.5 3.3 4.2
Accretion / Dilution
2009 EPS
20.2 % 19.0 % 17.9 % 16.7 % 15.6 %
2010 EPS 23.6 22.3 21.1 20.0 18.8
CONFIDENTIAL WAMUBKEXAM-GS-000069
Return
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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 Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,746 1,006 1,331 626 0
Accretion of Interest Rate Mark 942 824 704 658 467
Pro-forma Net Income $ 4,316 $ 4,609 $ 4,465 $ 4,458 $ 3,959
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 4,384 4,666 4,513 4,496 3,997
Transaction Adjustments (AT)
(+) Cost Synergies $ 316 $ 474 $ 521 $ 573 $ 631
(+) Cost of Funds (Restructuring Reserve) (25) (37) (37) (37) (37)
(+) Return on Cash From New Equity Issuance 312 312 312 312 312
(+) Transaction Intangible Amortization (252) (252) (252) (252) (252)
Total Adjustments $ 351 $ 496 $ 544 $ 596 $ 653
Pro Forma Net Income $ 4,735 $ 5,162 $ 5,056 $ 5,092 $ 4,650
WM Capital
Beginning 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 1 $ 29,348 $ 17,417 $ 17,126 $ 17,115 $ 17,929
Risk-Weighted Assets $ 234,913 $ 224,731 $ 220,984 $ 220,839 $ 231,347
Tier 1 Ratio 12.49 % 7.75 % 7.75 % 7.75 % 7.75 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (7,193)
Excess / (Infusion) $ 6,225 $ 6,104 $ 5,948 $ 5,097
Terminal Value (8.0 x) Earnings 37,200
Cash flow to Santander $ (17,112) $ 6,225 $ 6,104 $ 5,948 $ 42,297
Internal Rate of Return (@ 31-Dec-08) 57.3 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000070
Return
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DRAFT

52
BBVA Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
BBVA Beginning Tangible Common Equity $ 26,130 $ 38,797 $ 39,651
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 8,753
(-) Equity Repurchased 0 (7,761) (8,133)
(-) Restructuring Charges (471) (471) (471)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (4,890) 0 0
(+) Amortization 53 407 394
(+) 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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 287,682 $ 275,241
(+) Asset Growth (14,441) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 287,682 $ 275,241 $ 270,663
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
Pro-Forma Tier 1 RBC Ratio 7.70 % 7.70 % 7.70 %
Pro-Forma Tier 1 Leverage Ratio 4.89 4.91 4.89

2008 2009 2010 2011
BBVA Net Income $ 9,190 $ 10,028 $ 11,324 $ 12,287
Olympic Standalone Net Income (685) 628 2,778 2,430
(+) Post-Tax Provision Benefit 0 2,584 947 1,252
(+) Accretion of Interest-Rate Mark 0 886 775 663
Olympic Pro Forma Net Income (685) 4,098 4,501 4,345
(-) Debt Interest Expense 0 0 0 0
(+) Olympic Amortization Expense 0 68 57 48
(-) Additional Amortization Expense 0 (237) (237) (237)
(+) Return on Cash From New Equity Issuance 0 357 357 357
(-) Lost Investment Income on Share Repurchases 0 (285) (583) (898)
(-) Lost Yield on Restructuring Charge 0 (35) (52) (52)
(+) Net Synergies 0 471 707 778
Pro Forma Operating Net Income $ 9,190 $ 14,466 $ 16,073 $ 16,627
BBVA Beginning Diluted Shares Outstanding 3,748 4,822 4,577 4,356
New Shares Issued to Finance Purchase 465
New Shares Issued to Make-Whole Investors 78
New Shares Issed to Recapitalize Entity 532
Shares Repurchased 0 (246) (220) (213)
Total Pro Forma Shares Outstanding 4,822 4,577 4,356 4,143
BBVA Standalone EPS $ 2.47 $ 2.68 $ 3.02 $ 3.28
Pro Forma EPS 2.47 3.16 3.69 4.01
Accretion / Dilution ($) $ 0.00 $ 0.49 $ 0.67 $ 0.74
Accretion / Dilution (%) 0.0% 18.1% 22.1% 22.4%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000071
Return
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DRAFT

53
BBVA 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 8,753 8,753 8,753 8,753 8,753
Aggregate Deal Value $ 16,032 $ 17,352 $ 18,672 $ 19,992 $ 21,312
% 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 5.4 x 5.8 x 6.2 x 6.7 x 7.1 x
P / 2009E Adjusted EPS
2.41 3.9 4.2 4.6 4.9 5.2
P / 2010E Adjusted EPS
2.65 3.6 3.9 4.1 4.4 4.7
P / TBVPS
8.88 1.1 1.2 1.2 1.3 1.4
P / Adjusted TBVPS (at closing)
2.15 4.4 4.7 5.1 5.5 5.8
Transaction IRR (8.0x Terminal)
66.3 % 60.4 % 55.3 % 50.9 % 46.9 %
Core Deposit Premium
1.9 2.7 3.5 4.3 5.1
Accretion / Dilution
2009 EPS
21.8 % 19.9 % 18.1 % 16.4 % 14.7 %
2010 EPS 25.9 24.0 22.1 20.3 18.6
CONFIDENTIAL WAMUBKEXAM-GS-000072
Return
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,584 947 1,252 589 0
Accretion of Interest Rate Mark 886 775 663 619 440
Pro-forma Net Income $ 4,098 $ 4,501 $ 4,345 $ 4,382 $ 3,931
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 4,166 4,558 4,393 4,420 3,969
Transaction Adjustments (AT)
(+) Cost Synergies $ 471 $ 707 $ 778 $ 856 $ 941
(+) Cost of Funds (Restructuring Reserve) (35) (52) (52) (52) (52)
(+) Return on Cash From New Equity Issuance 357 357 357 357 357
(+) Transaction Intangible Amortization (237) (237) (237) (237) (237)
Total Adjustments $ 557 $ 775 $ 846 $ 924 $ 1,009
Pro Forma Net Income $ 4,723 $ 5,333 $ 5,238 $ 5,344 $ 4,978
WM Capital
Beginning Tier 1 $ 30,753 $ 17,346 $ 17,057 $ 17,046
(+) Net Income 4,723 5,333 5,238 5,344
(-) Post-Tax Writedown (10,551)
(+) Amortization 407 394 384 378
(-) Restructuring Charge (471) (471) (471)
(Excess) / Infusion (7,514) (5,543) (5,634) (4,912)
Ending Tier 1 $ 30,753 $ 17,346 $ 17,057 $ 17,046 $ 17,855
Risk-Weighted Assets $ 235,454 $ 225,272 $ 221,525 $ 221,380 $ 231,888
Tier 1 Ratio 13.06 % 7.70 % 7.70 % 7.70 % 7.70 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (8,753)
Excess / (Infusion) $ 7,514 $ 5,543 $ 5,634 $ 4,912
Terminal Value (8.0 x) Earnings 39,827
Cash flow to BBVA $ (18,672) $ 7,514 $ 5,543 $ 5,634 $ 44,739
Internal Rate of Return (@ 31-Dec-08) 55.3 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000073
Return
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DRAFT

55
SMBC Acquires Washington Mutual
Assumes $14.4bn Mark at Close (Company Stress Case)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
SMBC Beginning Tangible Common Equity $ 24,970 $ 36,338 $ 38,789
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 7,252
(-) Equity Repurchased 0 (2,773) (2,616)
(-) Restructuring Charges (279) (279) (279)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (4,365) 0 0
(+) Amortization 0 323 323
(+) 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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 288,315 $ 275,874
(+) Asset Growth (13,808) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 288,315 $ 275,874 $ 271,296
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
Pro-Forma Tier 1 RBC Ratio 6.73 % 6.73 % 6.73 %
Pro-Forma Tier 1 Leverage Ratio 4.27 4.34 4.33

2008 2009 2010 2011
SMBC Net Income $ 4,394 $ 4,457 $ 4,774 $ 5,394
Olympic Standalone Net Income (685) 628 2,778 2,430
(+) Post-Tax Provision Benefit 0 2,429 890 1,177
(+) Accretion of Interest-Rate Mark 0 833 729 623
Olympic Pro Forma Net Income (685) 3,890 4,397 4,230
(-) Debt Interest Expense 0 0 0 0
(+) Olympic Amortization Expense 0 68 57 48
(-) Additional Amortization Expense 0 (223) (223) (223)
(+) Return on Cash From New Equity Issuance 0 278 278 278
(-) Lost Investment Income on Share Repurchases 0 (96) (186) (277)
(-) Lost Yield on Restructuring Charge 0 (19) (29) (29)
(+) Net Synergies 0 279 419 461
Pro Forma Operating Net Income $ 4,394 $ 8,635 $ 9,487 $ 9,882
SMBC Beginning Diluted Shares Outstanding 7,890 10,620 10,290 10,013
New Shares Issued to Finance Purchase 1,290
New Shares Issued to Make-Whole Investors 216
New Shares Issed to Recapitalize Entity 1,224
Shares Repurchased 0 (330) (276) (260)
Total Pro Forma Shares Outstanding 10,620 10,290 10,013 9,753
SMBC Standalone EPS $ 0.56 $ 0.56 $ 0.61 $ 0.68
Pro Forma EPS 0.56 0.84 0.95 1.01
Accretion / Dilution ($) $ 0.00 $ 0.27 $ 0.34 $ 0.33
Accretion / Dilution (%) 0.0% 48.6% 56.6% 48.2%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000074
Return
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DRAFT

56
SMBC 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 7,252 7,252 7,252 7,252 7,252
Aggregate Deal Value $ 14,531 $ 15,851 $ 17,171 $ 18,491 $ 19,811
% 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 4.9 x 5.3 x 5.7 x 6.2 x 6.6 x
P / 2009E Adjusted EPS
2.29 3.7 4.1 4.4 4.8 5.1
P / 2010E Adjusted EPS
2.59 3.3 3.6 3.9 4.2 4.5
P / TBVPS
8.88 1.0 1.1 1.1 1.2 1.3
P / Adjusted TBVPS (at closing)
2.15 4.0 4.3 4.7 5.1 5.4
Transaction IRR (8.0x Terminal)
75.1 % 67.4 % 61.0 % 55.4 % 50.6 %
Core Deposit Premium
0.9 1.8 2.6 3.4 4.2
Accretion / Dilution
2009 EPS
54.4 % 51.4 % 48.6 % 45.8 % 43.1 %
2010 EPS 62.7 59.6 56.6 53.7 50.9
CONFIDENTIAL WAMUBKEXAM-GS-000075
Return
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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
WM Earnings
Standalone Net Income $ 628 $ 2,778 $ 2,430 $ 3,174 $ 3,492
(+) Post-Tax Provision Benefit 2,429 890 1,177 553 0
Accretion of Interest Rate Mark 833 729 623 582 413
Pro-forma Net Income $ 3,890 $ 4,397 $ 4,230 $ 4,310 $ 3,905
Add-Back Existing Intangible Amortization $ 68 $ 57 $ 48 $ 38 $ 38
Cash Net Income 3,958 4,454 4,278 4,348 3,943
Transaction Adjustments (AT)
(+) Cost Synergies $ 279 $ 419 $ 461 $ 507 $ 558
(+) Cost of Funds (Restructuring Reserve) (19) (29) (29) (29) (29)
(+) Return on Cash From New Equity Issuance 278 278 278 278 278
(+) Transaction Intangible Amortization (223) (223) (223) (223) (223)
Total Adjustments $ 315 $ 445 $ 487 $ 533 $ 584
Pro Forma Net Income $ 4,273 $ 4,900 $ 4,765 $ 4,881 $ 4,527
WM Capital
Beginning Tier 1 $ 29,443 $ 15,196 $ 14,944 $ 14,934
(+) Net Income 4,273 4,900 4,765 4,881
(-) Post-Tax Writedown (9,918)
(+) Amortization 323 323 323 323
(-) Restructuring Charge (279) (279) (279)
(Excess) / Infusion (8,647) (5,196) (5,098) (4,497)
Ending Tier 1 $ 29,443 $ 15,196 $ 14,944 $ 14,934 $ 15,641
Risk-Weighted Assets $ 235,972 $ 225,789 $ 222,043 $ 221,898 $ 232,406
Tier 1 Ratio 12.48 % 6.73 % 6.73 % 6.73 % 6.73 %
Cash Flows
Purchase Price $ (9,919)
Additional Equity Issued (7,252)
Excess / (Infusion) $ 8,647 $ 5,196 $ 5,098 $ 4,497
Terminal Value (8.0 x) Earnings 36,214
Cash flow to SMBC $ (17,171) $ 8,647 $ 5,196 $ 5,098 $ 40,711
Internal Rate of Return (@ 31-Dec-08) 61.0 %


Note: Assumes WM targets same Tier 1 target as acquiror.
1
Pro forma for equity raised to recapitalize entity and restructuring charge
CONFIDENTIAL WAMUBKEXAM-GS-000076
Return
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DRAFT

58
Appendix B: Selected Merger Analysis: Moodys Stress
Loss Scenario
CONFIDENTIAL WAMUBKEXAM-GS-000077
Return
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DRAFT

59
Overview of Mark-to-Market Purchase Accounting
Assumes $18.6bn Mark at Close (Moodys Stress Loss)
($ in millions)
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:
Total Consideration $ 9,919
(-) Tangible Book Value At Close (12,996)
(+) After-Tax Writedown 12,027
(-) Identifiable Intangibles Created (3,232)
(+) DTL Created 854
(-) Incremental Writedown of Other Assets 0
Goodwill $ 6,572
Equity Issued To Recapitalize Entity $ 7,715
As a Percentage of Acquiror Market Cap 5.5 %

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:
Total Consideration $ 9,919
(-) Tangible Book Value At Close (12,996)
(+) After-Tax Writedown 12,027
(-) Identifiable Intangibles Created (3,207)
(+) DTL Created 854
(-) Incremental Writedown of Other Assets 0
Goodwill $ 6,597
Equity Issued To Recapitalize Entity $ 14,146
As a Percentage of Acquiror Market Cap 14.2 %

CONFIDENTIAL WAMUBKEXAM-GS-000078
Return
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DRAFT

60
JPMorgan Acquires Washington Mutual
Assumes $18.6bn Mark at Close (Moodys Stress Loss)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
JPMorgan Beginning Tangible Common Equity $ 77,508 $ 86,550 $ 89,224
(+) Equity Issued to Finance Purchase 8,497
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 7,715
(-) Equity Repurchased (415) (7,118) (9,493)
(-) Restructuring Charges (1,044) (1,044) (1,044)
(-) Transaction Identifiable Intangibles (3,232) 0 0
(-) Transaction Goodwill (6,572) 0 0
(+) Amortization 616 1,290 1,139
(+) Net Income 4,594 15,909 21,252
(-) Dividends (2,541) (6,364) (8,501)
JPMorgan Ending Tangible Common Equity $ 86,550 $ 89,224 $ 92,578
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 $ 286,206 $ 273,765
(+) Asset Growth (15,917) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 286,206 $ 273,765 $ 269,187
Pro Forma JPMorgan Ending Tangible Assets $ 2,055,628 $ 2,109,540 $ 2,173,804
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 5.69 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 0 279 279 279
(-) Lost Investment Income on Share Repurchases 0 (245) (553) (894)
(-) Lost Yield on Restructuring Charge 0 (68) (102) (102)
(+) Net Synergies 0 1,044 1,565 1,722
Pro Forma Operating Net Income $ 8,970 $ 15,909 $ 21,252 $ 22,053
JPMorgan Beginning Diluted Shares Outstanding 3,436 3,867 3,702 3,543
New Shares Issued to Finance Purchase 203
New Shares Issued to Make-Whole Investors 34
New Shares Issed to Recapitalize Entity 205
Shares Repurchased (10) (166) (158) (160)
Total Pro Forma Shares Outstanding 3,867 3,702 3,543 3,383
JPMorgan Standalone EPS $ 2.56 $ 3.33 $ 4.70 $ 5.08
Pro Forma EPS 2.56 4.30 6.00 6.52
Accretion / Dilution ($) $ 0.00 $ 0.97 $ 1.30 $ 1.44
Accretion / Dilution (%) 0.0% 29.1% 27.6% 28.4%


1
Assumes restructuring charges excluded from operating EPS.
CONFIDENTIAL WAMUBKEXAM-GS-000079
Return
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DRAFT

61
JPMorgan Acquires Washington Mutual
Analysis at Various Prices, Assuming $18.6bn Mark at Close (Moodys Stress Case)
($ 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 7,715 7,715 7,715 7,715 7,715
Aggregate Deal Value $ 14,994 $ 16,314 $ 17,635 $ 18,955 $ 20,275
% 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 5.0 x 5.5 x 5.9 x 6.3 x 6.8 x
P / 2009E Adjusted EPS
2.18 4.1 4.4 4.8 5.1 5.5
P / 2010E Adjusted EPS
2.53 3.5 3.8 4.1 4.4 4.7
P / TBVPS
8.88 1.0 1.1 1.2 1.3 1.3
P / Adjusted TBVPS (at closing)
0.57 15.5 16.8 18.2 19.6 20.9
Transaction IRR (8.0x Terminal)
64.7 % 59.6 % 55.2 % 51.3 % 47.8 %
Core Deposit Premium
1.2 2.0 2.9 3.7 4.5
Accretion / Dilution
2009 EPS
31.2 % 30.1 % 29.1 % 28.0 % 27.0 %
2010 EPS 29.7 28.7 27.6 26.6 25.6
CONFIDENTIAL WAMUBKEXAM-GS-000080
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DRAFT

62
Wells Fargo Acquires Washington Mutual
Assumes $18.6bn Mark at Close (Moodys Stress Loss)
($ in millions)
Pro Forma Capital Position Pro Forma Profitability
2008 2009 2010
Wells Fargo Beginning Tangible Common Equity $ 30,159 $ 44,476 $ 46,013
(+) Equity Issued to Finance Purchase 8,356
(+) Equity Issued to Make-Whole Investors 1,422
(+) Equity Issued to Recapitalize Entity 14,146
(-) Equity Repurchased (305) (5,436) (6,554)
(-) Restructuring Charges (1,182) (1,182) (1,182)
(-) Transaction Identifiable Intangibles (3,207) 0 0
(-) Transaction Goodwill (6,456) 0 0
(+) Amortization 128 547 521
(+) Net Income 3,361 12,680 15,678
(-) Dividends (1,947) (5,072) (6,271)
Wells Fargo Ending Tangible Common Equity $ 44,476 $ 46,013 $ 48,205
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
Standalone Olympic Beginning Tangible Assets $ 302,123 $ 286,206 $ 273,765
(+) Asset Growth (15,917) (12,441) (4,578)
Standalone Olympic Ending Tangible Assets $ 286,206 $ 273,765 $ 269,187
Pro Forma Wells Fargo Ending Tangible Assets $ 899,099 $ 918,835 $ 948,123
Pro Forma TE / TA 5.84 % 5.88 % 5.93 %
Pro Forma TCE / TA 4.95 5.01 5.08
Pro-Forma Tier 1 RBC Ratio 8.24 % 8.24 % 8.24 %
Pro-Forma Tier 1 Leverage Ratio 7.36 7.45 7.49

2008 2009 2010 2011
Wells Fargo Net Income $ 7,113 $ 7,691 $ 9,758 $ 10,474
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 (209) (209) (209)
(+) Return on Cash From New Equity Issuance 0 511 511 511
(-) Lost Investment Income on Share Repurchases 0 (187) (400) (644)
(-) Lost Yield on Restructuring Charge 0 (77) (115) (115)
(+) Net Synergies 0 1,182 1,773 1,950
Pro Forma Operating Net Income $ 7,113 $ 12,680 $ 15,678 $ 16,140
Wells Fargo Beginning Diluted Shares Outstanding 3,303 4,121 3,952 3,793
New Shares Issued to Finance Purchase 272
New Shares Issued to Make-Whole Investors 46
New Shares Issed to Recapitalize Entity 511
Shares Repurchased (10) (169) (159) (169)
Total Pro Forma Shares Outstanding 4,121 3,952 3,793 3,624
Wells Fargo Standalone EPS $ 2.15 $ 2.35 $ 3.00 $ 3.24
Pro Forma EPS 2.15 3.21 4.13 4.45
Accretion / Dilution ($) $ 0.00 $ 0.86 $ 1.13 $ 1.21
Accretion / Dilution (%) 0.0% 36.5% 37.8% 37.4%


1
Assumes restructuring charges excluded from operating EPS.
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63
Wells Fargo Acquires Washington Mutual
Analysis at Various Prices, Assuming $18.6bn Mark at Close (Moodys Stress Case)
($ 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 $ 7,139 $ 8,459 $ 9,779 $ 11,099 $ 12,419
Equity Issued to Recapitalize Entity 14,146 14,146 14,146 14,146 14,146
Aggregate Deal Value $ 21,285 $ 22,605 $ 23,925 $ 25,245 $ 26,565
% 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 7.1 x 7.6 x 8.0 x 8.4 x 8.9 x
P / 2009E Adjusted EPS
2.18 5.8 6.1 6.5 6.8 7.2
P / 2010E Adjusted EPS
2.53 4.9 5.3 5.6 5.9 6.2
P / TBVPS
8.88 1.4 1.5 1.6 1.7 1.8
P / Adjusted TBVPS (at closing)
0.57 22.0 23.3 24.7 26.0 27.4
Transaction IRR (8.0x Terminal)
61.2 % 57.0 % 53.2 % 49.8 % 46.7 %
Core Deposit Premium
5.1 5.9 6.7 7.5 8.3
Accretion / Dilution
2009 EPS
39.4 % 38.0 % 36.5 % 35.1 % 33.8 %
2010 EPS 40.7 39.2 37.8 36.4 35.0

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64
Appendix C: BAC / CFC Mark Case Study
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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 WMs performance is dramatically better than CFCs, although higher proportion of subprime loans
increases loss content
WM 2Q08 Asset Quality Statistics CFC 2Q08 Asset Quality Statistics
Balance 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 2.7
Subprime Mortgage Channel 16.1 13.4 18.7 2.4 15.0 26.7
Home Construction 1.9 0.4 4.2
Multi-family 33.1 0.0 0.5
Other Real Estate 10.5 0.0 0.8
Other
Consumer 0.0
Credit Card 10.6 6.5
Other 0.2 4.4
Commercial 1.9 9.2 3.0
Total $ 239.6 3.6 % 4.7 % $ 91.8 4.1 % 7.4 %

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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 stock
1
$38.73
Total Purchase Price $4.1

Preliminary Allocation of the Purchase Price
Countrywide stockholder's equity
2
8.4
Pretax adjustments to reflect assets acquired and liabilities
assumed at fair value
3


Loans
4
(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 $1.1 billion of loss exposure for non-impaired loans that will flow through consolidated
earnings over time, if incurred.
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67
Mark-to-Market Valuation
Comparison to CFC Mark
($ in billions)
Countrywide
Mark-to-Market
Balance NPL (%) (%) ($)
Prime First $ 29.6 6.3 % 7.0 % $ 2.1
Prime Pay Option 26.4 12.7 15.0 4.0
HELOC 14.5 3.5 23.0 3.3
Fixed Rate Second 18.9 2.1 23.0 4.3
Subprime 2.4 26.2 25.0 0.6
Total $ 91.8 15.6 % $ 14.3
Washington Mutual
Mark-to-Market
Balance NPL (%) (%) ($)
Prime First $ 52.1 3.0 % 5.0 % $ 2.6
Prime Pay Option 52.9 6.0 10.0 5.3
HELOC / Fixed-Rate Second 61.4 7.0 20.0 12.3
Subprime 16.1 18.0 25.0 4.0
Total $ 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.
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1
Discussion Materials for




Goldman, Sachs & Co.
August 14, 2008



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1
Discussion Materials for




Goldman, Sachs & Co.
August 11, 2008



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2
Table of Contents


I. Process Discussion
II. Mark-to-Market Discussion
III. Merger Analysis
IV. Structural Alternatives
Appendix A: Merger Analysis: Company Stress Loss Scenario
Appendix B: Selected Merger Analysis: Moodys Stress Loss Scenario
Appendix C: BAC / CFC Mark Case Study


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3
I. Process Discussion
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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)

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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 Partners
Confidentiality Agreement
Management Meetings
Preliminary Indications of Interest
Due Diligence
Negotiate Terms
Announce Transaction
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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 Ratio
Commentary


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 Senz 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 Gonzlez Rodrguez
67.1 (34.6) 6.7 2.6 4.7 7.9
Continued interest in growing U.S.
franchise
WM footprint highly complementary
to BBVAs 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
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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

WaMus debt and preferred outstandings are currently trading at a significant
discount to par
Aggregate discount of approximately $10.0 billion on $24.0 billion liability /
preferred base
Capturing this discount in some fashion prior to executing a strategic transaction
would potentially improve the ability to pay of a potential partner due to decreased
goodwill creation / capital needed
Transaction contingent on exchange / tender of debt / preferred may also be
structured
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8
II. Mark-to-Market Discussion
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9
Cumulative Loss Roll-Forward
Company High Stress Case vs. Moodys Stress Case
($ 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
Remaining
Cum Loss 3Q NCOs 4Q NCOs
Losses
Left
Remaining
Cum 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


Moodys Stress (July 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
Remaining
Cum Loss 3Q NCOs 4Q NCOs
Losses
Left
Remaining
Cum 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


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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 Case
Balance Moody's Company CPR Coupon Rate 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 Mark
on 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
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11
Other Assets & Liabilities
Estimated Mark-to-Market
($ in millions)
Other Assets Other Liabilities
Jun Balance % Loss
Mark-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 receivable 3,456 0% 0
Investment in bank-owned life insurance 5,523 5% 276
Premises and equipment 2,914 0% 0
Accrued interest receivable 1,930 0% 0
Derivatives 3,035 0% 0
Identifiable intangible assets 378 0% 0
Foreclosed Assets 1,462 20% 292
Other 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.
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12
Estimated ALLL Roll-Forward
2008
($ in millions)
1,429
3,511
5,913
3,908
3,126
(747)
(1,368)
(2,171)
(2,605)
(3,126)
1,889
2,571
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


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


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III. Merger Analysis

CONFIDENTIAL WAMUBKEXAM-GS-000033
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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
Moodys 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 SMBC
WM 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 10.0
Card Services 1,149 30.0 20.0 15.0 20.0 20.0 10.0 10.0 10.0
Corporate 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 40.0
Total 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 $ 810
As % of NIE 37.8 % 42.9 % 18.1 % 34.1 % 10.9 % 9.5 % 15.1 % 9.5 %

CONFIDENTIAL WAMUBKEXAM-GS-000034
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Overview of Selected Buyers
Selected Transaction Metrics Company Stress Case ($14.4 bn pre-tax mark)
($ in millions)
JPMorgan Wells Fargo TD US Bancorp Barclays Santander BBVA SMBC
0 0 0 0 0 0 0 0
Market Data: 0 0 0 0 0 0 0 0
0 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 x
0 0 0 0 0 0 0 0
Transaction Summary: 0 0 0 0 0 0 0 0
0 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 6.73
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity Raised to Recapitalize $ 5,218 $ 11,643 $ 8,880 $ 11,860 $ 8,376 $ 7,193 $ 8,753 $ 7,252
As a Percentage of Market Cap 3.70 % 11.69 % 18.69 % 21.65 % 14.63 % 6.32 % 13.04 % 14.41 %
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
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


CONFIDENTIAL WAMUBKEXAM-GS-000035
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