Washington Mutual Reports First Quarter 2006 Earnings Per Share of 98 Cents; Board of Directors Increases Cash Dividend to 51 Cents; WaMu Free Checking™ Account Fuels Record Account Growth

Business Wire, April 18, 2006

SEATTLE -- Card Services Drives Strong Cross-Sell Results

Washington Mutual, Inc. (NYSE: WM) today reported first quarter 2006 net income of $985 million, or $0.98 per diluted share, compared with net income of $902 million, or $1.01 per diluted share, in the first quarter of 2005.

Washington Mutual's Board of Directors declared a cash dividend of 51 cents per share on the company's common stock, up from 50 cents per share in the previous quarter. Dividends on the common stock are payable on May 15, 2006 to shareholders of record as of April 28, 2006.

"We are very pleased with our first quarter results," said Kerry Killinger, Washington Mutual chairman and chief executive officer. "The company's strong performance demonstrates the benefits of our continued diversification and enhanced operational focus. This past quarter we had particularly strong results in Retail Banking and Card Services."

"These businesses added customers at a record pace and delivered significant revenue and earnings even in this difficult interest rate environment," Killinger added.

Earnings Highlights                          Three Months Ended
                                    ----------------------------------
                                     March 31, December 31,  March 31,
 (In millions, except per share          2006         2005       2005
  data)                             ---------    ---------  ---------
 Total revenue                      $   3,842    $   3,843  $   3,298
 Net income                               985          865        902
 Diluted earnings per common share       0.98         0.85       1.01

 Total assets, end of period        $ 348,667    $ 343,839  $ 319,696

--WaMu Free Checking(TM) account generates record level of new accounts. New product redefines free checking and adds more power to the company's very effective Retail Banking model. Supported by a new national advertising campaign, response to the product has contributed to record account growth. Net new checking account growth of 340,000 represents a 68 percent increase in account growth from a year ago.

--Card Services drives strong customer growth. The growth in both the number of customers and in average balances was fueled by successfully cross-selling credit cards to WaMu retail customers. During the quarter, Card Services opened 256,000 WaMu retail credit card accounts for a total of 417,000 new WaMu accounts since the company added Card Services in October.

--Strong credit quality results in lower provisioning. The company's credit performance continued to reflect the favorable consumer and housing environment. The credit card portfolio, in particular, demonstrated very low loss levels and stable delinquency rates. The change in bankruptcy law during last year's fourth quarter precipitated a spike in filings in that quarter which led to an unusually low level of charge-offs this quarter and contributed to a much lower provision for Card Services during the quarter.

--Expense management focused on driving improved productivity to fund company growth. The company's expense management is not just focused on cutting costs, it is focused on driving improved productivity so the company can fund its growth, as well as achieve its efficiency target. During the quarter, the efficiency ratio improved to 57.54 percent from 59.27 percent.

FIRST QUARTER FINANCIAL SUMMARY

Financial Summary                            Three Months Ended
                                      --------------------------------
                                      March 31, December 31, March 31,
 (In millions)                            2006         2005      2005
 Income Statement                     --------     --------  --------
 Net interest income                  $  2,117     $  2,241  $  1,963
 Provision for loan and lease losses        82          217        16
 Noninterest income                      1,725        1,602     1,335
 Noninterest expense                     2,211        2,278     1,839
 Income taxes                              564          483       541
                                      --------     --------  --------
 Net income                           $    985     $    865  $    902
                                      ========     ========  ========
 Balance Sheet
 Average total assets                 $344,562     $349,931  $308,172
 Average total deposits                191,034      196,799   175,185

 Profitability Ratios
 Return on average common equity         14.18%       12.49%    16.63%
 Net interest margin                      2.75         2.88      2.83
 Efficiency ratio                        57.54        59.27     55.77
 Nonperforming assets/total assets        0.59         0.57      0.57
 Tangible equity/total tangible assets    5.85         5.72      5.03

EARNINGS PERFORMANCE

--Net interest income impacted by rising short-term interest rates. Net interest income in the first quarter was down on a linked quarter basis as short-term interest rates increased and the yield curve continued to flatten. Compared with the first quarter a year ago, net interest income was up 8 percent, which reflected a 12 percent increase in average assets including the addition of Card Services' higher-yielding credit card portfolio. Contributing to the 13 basis points decline in the net interest margin on a linked quarter basis was the impact of higher interest rates and the securitization of high yielding credit card loans. The decline in the net interest margin compared with a year ago reflected the tightening of Fed Funds by 200 basis points to 4.75 percent. In addition, in the first quarter of this year, the company adjusted its reporting for loan prepayment fees. The result of reclassifying these fees from noninterest income to interest income was an increase in the net interest margin of approximately 10 basis points for all prior periods, plus an additional 2 basis point decrease in the margin for the first quarter as prepayments slowed.