j. k. dietrich - fbe 524 - fall, 2005 deposit-taking institutions week 2 – august 31, 2005

J. K. Dietrich - FBE 524 - Fall, 2005

Deposit-Taking Institutions

Week 2 – August 31, 2005


Types of Financial Institutions

Deposit-taking– Commercial banks– Thrifts

Insurance type– Insurance companies– Pension funds

Managed assets - mutual funds, trusts, etc. Securities firms and pool operators


Classification of Deposit Firms

Deposit-taking– Commercial banks– Savings institutions or thrifts (savings and loans

and savings banks)– Credit unions (also included among thrifts)– Some finance companies

Banks are largest Assets differ between thrifts


Deposit Institutions: 1970-2004

Total Financial Assets (billions) 1970 2004

U.S. Chartered Banks $ 489.7 $ 6,398.1Foreign Bank Offices 9.0 569.7Savings Institutions 252.6 1,691.2Credit Unions 17.7 654.7

Banks have maintained relative share at 69% of deposit-taking institution assets

Effects of thrift crisis and deregulation


Commercial Banks

Bank charters are licenses to operate (take deposits)– National banks– State-chartered banks– Dual banking in the U.S. versus other countries– National versus domiciled nation treatment

Membership in the Federal Reserve system Deposit insurance with Federal Deposit

Insurance Corporation (FDIC)


Banks and Branches 1997


Banks and Branches 2003Number of Operating Commercial Banks in the U.S.

at Year-end 2003


Other Deposit-Taking Institutions

Charters– Savings and loan– Mutual savings bank– Savings banks– Industrial loan or thrift and loan– Credit unions

State charters versus federal charters– Office of Thrift Supervision (OTS) and history– National Credit Union Administration (NCUA)


Thrift Activities

Savings and loans, mutual savings associations and savings banks– Concentrate in small savers’ deposits– Concentrated until 1980 in home loans– Tax advantaged in terms of home mortgages

Credit unions– “Promote thrift and affordable source of credit”– Charters and deposit insurance issues– Tax advantages


Savings and Loans


The Credit Union Movement


Credit Unions


Bank and Thrift Balance Sheets

Short-term funds– Transactions accounts– Small savings accounts– Time and certificates of deposit

Demand for deposit assets– Households– Corporations

Assets - Securities and Loans


Deposit Firms’ Income Revenue: Interest income

– Loans and leases

– Investments

Fee income– Deposit charges and loan fees

– Other fees

Credit Losses Expenses: Interest expense

Non-interest expense– Labor and related expenses– Communication, fees


Bank Income Statement (WFC)WELLS FARGO & COTICKER SYMBOL: WFC SIC: 6020FINANCIAL SERVICES ($ MILLIONS, EXCEPT

Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95

Total Interest Income 20,967.00 19,418.00 18,459.00 19,201.00 18,725.00 14,375.00 14,055.00 6,697.40 6,318.30 5,717.30

Total Interest Expense 3,817.00 3,411.00 3,977.00 6,741.00 7,860.00 5,020.00 5,065.00 2,664.00 2,617.00 2,448.00

Net Interest Income 17,150.00 16,007.00 14,482.00 12,460.00 10,865.00 9,355.00 8,990.00 4,033.40 3,701.30 3,269.30

Provision for Loan Losses 1,717.00 1,722.00 1,684.00 1,780.00 1,329.00 1,045.00 1,545.00 524.7 394.7 312.4Net Interest Income After Provision for Loan Losses 15,433.00 14,285.00 12,798.00 10,680.00 9,536.00 8,310.00 7,445.00 3,508.70 3,306.60 2,956.90

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Other Noninterest Inc/Exp (Net) . . . . . . . . . .

Special Items -174 0 0 -1,484.00 -701 0 -1,152.00 27.3 0 0

Total Other Income . . . . . . . . . .

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Salaries, Occupancy & Equipment . . . . . . . . . .

Salaries, Depreciation 3,449.00 4,305.00 4,297.00 2,961.00 1,790.00 1,893.00 1,205.00 853.2 681.6 311.8

Total Other Expenses . . . . . . . . . .

Pretax Income 10,769.00 9,477.00 8,854.00 5,479.00 6,549.00 5,948.00 3,293.00 2,049.70 1,781.50 1,422.80

Income Taxes 3,755.00 3,275.00 3,144.00 2,056.00 2,523.00 2,201.00 1,343.00 698.7 627.6 466.8

Minority Interest C C C C C C C C C C Income Before Extraordinary Items and Discontinued Operations 7,014.00 6,202.00 5,710.00 3,423.00 4,026.00 3,747.00 1,950.00 1,351.00 1,153.90 956

Preferred Dividends 0 3 4 14 17 35 35 17.8 17.8 41.2

Available for Common 7,014.00 6,199.00 5,706.00 3,409.00 4,009.00 3,712.00 1,915.00 1,333.20 1,136.10 914.8Savings Due to Common Stock Equivalents 0 0 0 0 0 0 0 0 0 0

Adjusted Available for Common 7,014.00 6,199.00 5,706.00 3,409.00 4,009.00 3,712.00 1,915.00 1,333.20 1,136.10 914.8

Extraordinary Items 0 0 -276 0 0 0 0 0 0 0

Discontinued Items 0 0 0 0 0 0 0 0 0 0

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Adjusted Net Income 7,014.00 6,199.00 5,430.00 3,409.00 4,009.00 3,712.00 1,915.00 1,333.20 1,136.10 914.8

------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------Earnins Per Share (Primary) - Excluding Extra Items & Disc Ops 4.15 3.69 3.35 1.99 2.36 2.26 1.18 1.78 3.07 2.76

------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------Earnins Per Share (Primary) - Including Extra Items & Disc Ops 4.15 3.69 3.19 1.99 2.36 2.26 1.18 1.78 3.07 2.76

------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------Earnins Per Share (Fully Diluted) - Excluding Extra Items & Disc Ops 4.09 3.65 3.32 1.97 2.33 2.23 1.17 1.75 3.07 2.73

------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------Earnins Per Share (Fully Diluted) - Including Extra Items & Disc Ops 4.09 3.65 3.16 1.97 2.33 2.23 1.17 1.75 3.07 2.73

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EPS from Operations 4.21 3.69 3.35 2.56 2.63 2.26 1.64 1.75 3.07 2.76

Source: S&P COMPUSTAT data delivered by WRDS http://wrds.wharton.upenn.edu/.


Bank Balance Sheet (WFC)

Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97

ASSETS

Cash & Due from Banks 16,526.00 18,292.00 20,994.00 19,498.00 18,576.00 14,804.00 14,248.00 5,926.10

Loans 287,586.00 253,073.00 192,478.00 172,499.00 161,124.00 119,464.00 107,994.00 54,776.60

Less: Allowance for Loan Loss 3,762.00 3,891.00 3,819.00 3,761.00 3,719.00 3,170.00 3,134.00 1,233.90

Net Loans 283,824.00 249,182.00 188,659.00 168,738.00 157,405.00 116,294.00 104,860.00 53,542.70

Net Premises and Equipment 3,850.00 3,534.00 3,688.00 3,549.00 3,415.00 2,985.00 3,130.00 1,295.50

Intangibles 18,582.00 17,277.00 15,226.00 16,900.00 16,322.00 13,701.00 12,254.00 2,774.90

Assets Held for Sale 38,674.00 36,722.00 58,014.00 35,321.00 16,479.00 16,835.00 25,265.00 12,305.30

Investment Securities 44,430.00 41,872.00 40,450.00 48,119.00 42,432.00 41,185.00 31,997.00 19,218.00

Investments at Equity . . . . . . . .

Other Assets 20,514.00 15,898.00 17,445.00 11,382.00 13,655.00 8,951.00 10,721.00 -6,522.30

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TOTAL ASSETS 427,849.00 387,798.00 349,197.00 307,569.00 272,426.00 218,102.00 202,475.00 88,540.19

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LIABILITIES

Short Term Borrowings 21,962.00 24,659.00 33,446.00 37,782.00 28,989.00 27,995.00 15,897.00 9,557.00

Total Deposits 274,858.00 247,527.00 216,916.00 187,266.00 169,559.00 132,708.00 136,788.00 55,457.10

Long Term Debt 73,580.00 63,642.00 50,205.00 38,530.00 32,981.00 24,160.00 20,494.00 12,766.70

Minority Interest C C C C C C C C

Other Liabilities 19,583.00 17,501.00 18,311.00 16,777.00 14,409.00 11,108.00 8,537.00 3,737.20

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EQUITY

Preferred Stock -19 -15 61 64 267 271 463 188

Common Stock 2,894.00 2,894.00 2,894.00 2,894.00 2,894.00 2,777.00 2,769.00 1,281.90

Capital Surplus 9,806.00 9,643.00 9,498.00 9,436.00 9,337.00 8,785.00 8,670.00 409.5

Retained Earnings 27,432.00 23,780.00 20,331.00 16,757.00 15,065.00 12,088.00 9,508.00 5,417.60

Less: Treasury Stock 2,247.00 1,833.00 2,465.00 1,937.00 1,075.00 1,790.00 651 274.8

Common Equity 37,885.00 34,484.00 30,258.00 27,150.00 26,221.00 21,860.00 20,296.00 6,834.20

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TOTAL EQUITY 37,866.00 34,469.00 30,319.00 27,214.00 26,488.00 22,131.00 20,759.00 7,022.20

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TOTAL LIABILITIES AND EQUITY 427,849.00 387,798.00 349,197.00 307,569.00 272,426.00 218,102.00 202,475.00 88,540.19


($ MILLIONS)

WELLS FARGO & COTICKER SYMBOL: WFC SIC: 6020FINANCIAL SERVICES ANNUAL BALANCE SHEET


Bank Ratio Analysis (WFC)WELLS FARGO & COTICKER SYMBOL: WFC SIC: 6020FINANCIAL SERVICES (Percentage except as


PROFITABILITY

Pretax Profit Margin 31.79 29.8 30.29 19.31 23.76 27.29 16.08 21.28 20.06 18.76

Net Profit Margin 20.7 19.5 19.54 12.06 14.6 17.19 9.52 14.03 12.99 12.61

Return on Assets 1.64 1.6 1.63 1.11 1.47 1.7 0.95 1.51 1.42 1.27

Return on Equity 18.51 17.98 18.86 12.56 15.29 16.98 9.44 19.51 19.34 18.26

Return on Investment 7.24 7.22 9 6.13 7.93 11.28 5.7 7.46 6.88 6.13

Net Interest Margin 4.89 5.08 5.53 5.36 5.35 5.66 5.79 5.74 5.63 5.58

Risk-Adjusted Capital Ratio - Total 12.08 12.21 11.44 10.45 10.4 10.5 10.9 11.01 10.42 10.18

Risk-Adjusted Capital Ratio - Tier 1 8.42 8.42 7.7 6.99 7.29 8.07 8.08 9.09 8.63 8.11

Risk-Adjusted Capital Ratio - Tier 2 3.66 3.79 3.74 3.46 3.11 2.43 2.82 1.92 1.79 2.07

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DIVIDENDS

Dividend Payout 44.91 40.76 32.83 50.16 39.14 34.83 51.28 34.63 33.94 32.42

Dividend Yield 2.99 2.55 2.35 2.3 1.62 1.94 1.75 1.59 2.41 2.73

Dividends per Share 1.86 1.5 1.1 1 0.9 0.79 0.7 0.62 1.05 0.9

One Year Total Return . -5.25 -20.41 -7.25 28.11 -27.38 -1.24 -2.97 -43.87 -24.14

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BALANCE SHEET

% of Total Assets

Reserve for Loan 0.88 1 1.09 1.22 1.37 1.45 1.55 1.39 1.3 1.27

Total Deposits 64.24 63.83 62.12 60.89 62.24 60.85 67.56 62.63 62.53 58.26

Investment Securities 10.38 10.8 11.58 15.64 15.58 18.88 15.8 21.71 21.39 22.39

Shareholder's Equity 8.85 8.89 8.68 8.85 9.72 10.15 10.25 7.93 7.56 7.36

Total Debt 22.33 22.77 23.96 24.81 22.75 23.91 17.97 25.21 25.76 30.78

Assets for Sale 9.04 9.47 16.61 11.48 6.05 7.72 12.48 13.9 11.49 13.72

Net Loans 66.34 64.26 54.03 54.86 57.78 53.32 51.79 60.47 59.25 62.51

Total Nonperforming Assets ($MM) 1,572.00 1,662.00 1,691.00 1,813.00 1,350.00 855 884 228.5 200 206

Nonperforming Assets 0.37 0.43 0.48 0.59 0.5 0.39 0.44 0.26 0.25 0.29

Total Net Charge-Offs ($MM) -1,666.00 -1,719.00 -1,725.00 -1,779.00 -1,219.00 -1,049.00 -1,617.00 -499.7 -382.4 -304.2

Net Charge-Offs -0.39 -0.44 -0.49 -0.58 -0.45 -0.48 -0.8 -0.56 -0.48 -0.42

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Other

Net Loans/Total Deposits 103.26 100.67 86.97 90.11 92.83 87.63 76.66 96.55 94.77 107.29Nonperforming Assets/Allowance for Loan Losses 41.79 42.71 44.28 48.21 36.3 26.97 28.21 18.52 19.22 22.46Nonperforming Assets/Common Equity 4.15 4.82 5.59 6.68 5.15 3.91 4.36 3.34 3.4 4.11

Nonperforming Assets/Net Loans 0.55 0.67 0.9 1.07 0.86 0.74 0.84 0.43 0.42 0.46Net Charge-Offs/Allowance for Loan Losses -44.28 -44.18 -45.17 -47.3 -32.78 -33.09 -51.6 -40.5 -36.74 -33.17

Net Charge-Offs/Net Loans -0.59 -0.69 -0.91 -1.05 -0.77 -0.9 -1.54 -0.93 -0.8 -0.67

Allowance for Loan Losses/Net Loans 1.33 1.56 2.02 2.23 2.36 2.73 2.99 2.3 2.19 2.03



Bank Affiliates

Bank holding companies– one-bank holding companies– multiple-bank holding companies– financial holding companies (new with

Gramm-Leach-Bliley Act of 1999) Separation of banking and commerce Service corporations as subsidiaries of

banks Section 24 and Edge Act subsidiaries of

banks


Thrift Income Statement (WM)WASHINGTON MUTUAL TICKER SYMBOL: WM SIC: FINANCIAL SERVICES ($ MILLIONS, EXCEPT


Total Interest Income 11,350.00 12,163.00 14,247.00 15,065.00 13,783.00 12,062.20 11,221.47 6,810.96 3,149.24 1,518.71

Total Interest Expense 4,234.00 4,534.00 5,906.00 8,189.00 9,472.00 7,610.41 6,929.74 4,154.49 1,958.23 941.08

Net Interest Income 7,116.00 7,629.00 8,341.00 6,876.00 4,311.00 4,451.79 4,291.73 2,656.47 1,191.01 577.63

Provision for Loan Losses 209 42 595 575 185 167.08 161.97 207.14 201.51 10Net Interest Income After Provision for Loan Losses 6,907.00 7,587.00 7,746.00 6,301.00 4,126.00 4,284.71 4,129.76 2,449.33 989.5 567.63

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Other Noninterest Inc/Exp (Net) . . . . . . . . . .

Special Items -237 -129 282 0 0 -95.72 -219.25 0 0 0

Total Other Income . . . . . . . . . .

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Salaries, Occupancy & Equipment . . . . . . . . . .

Salaries, Depreciation 3,169.00 3,864.00 3,206.00 1,590.00 539 400.02 313.5 222.32 85.74 24.87

Total Other Expenses . . . . . . . . . .

Pretax Income 3,984.00 6,029.00 6,154.00 4,311.00 2,984.00 2,884.16 2,369.46 901.13 223.46 292.05

Income Taxes 1,505.00 2,236.00 2,258.00 1,579.00 1,085.00 1,067.10 882.53 419.35 95.61 101.43

Minority Interest 0 0 0 0 0 0 0 0 13.57 0Income Before Extraordinary Items and Discontinued Operations 2,479.00 3,793.00 3,896.00 2,732.00 1,899.00 1,817.06 1,486.93 481.78 114.28 190.62

Preferred Dividends 0 0 5 7 0 0 15.94 21.43 18.42 18.58

Available for Common 2,479.00 3,793.00 3,891.00 2,725.00 1,899.00 1,817.06 1,470.99 460.35 95.86 172.04Savings Due to Common Stock Equivalents 0 0 0 0 0 0 0 0 0 0

Adjusted Available for Common 2,479.00 3,793.00 3,891.00 2,725.00 1,899.00 1,817.06 1,470.99 460.35 95.86 172.04

Extraordinary Items 0 0 0 382 0 0 0 0 0 0

Discontinued Items 399 87 0 0 0 0 0 0 0 0

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Adjusted Net Income 2,878.00 3,880.00 3,891.00 3,107.00 1,899.00 1,817.06 1,470.99 460.35 95.86 172.04

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-Earnins Per Share (Primary) - Excluding Extra Items & Disc Ops 2.88 4.2 4.12 3.2 3.55 3.17 2.61 1.87 0.85 2.68

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-Earnins Per Share (Primary) - Including Extra Items & Disc Ops 3.34 4.29 4.12 3.65 3.55 3.17 2.61 1.87 0.85 2.68

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-Earnins Per Share (Fully Diluted) - Excluding Extra Items & Disc Ops 2.81 4.12 4.05 3.15 3.54 3.16 2.56 1.86 0.85 2.59

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-Earnins Per Share (Fully Diluted) - Including Extra Items & Disc Ops 3.26 4.21 4.05 3.59 3.54 3.16 2.56 1.86 0.85 2.59

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EPS from Operations 3.05 4.29 3.93 3.2 3.55 3.28 2.87 1.87 0.85 2.68



Thrift Balance Sheet (WM)WASHINGTON MUTUAL TICKER SYMBOL: WM SIC: 6035FINANCIAL SERVICES ($ MILLIONS)


ASSETS

Cash & Due from Banks 4,537.00 7,037.00 9,223.00 6,044.00 2,622.00 3,040.17 2,756.97 1,560.89 831.06 428.65

Loans 207,071.00 175,644.00 147,528.00 132,991.00 119,626.00 113,745.65 107,612.20 67,127.94 30,473.88 12,680.12

Less: Allowance for Loan Loss 1,301.00 1,250.00 1,653.00 1,404.00 1,014.00 1,041.93 1,067.84 673.5 370.59 144.62

Net Loans 205,770.00 174,394.00 145,875.00 131,587.00 118,612.00 112,703.72 106,544.36 66,454.44 30,103.30 12,535.50

Net Premises and Equipment 3,140.00 3,286.00 2,862.00 1,999.00 1,568.00 1,558.65 1,421.16 937.2 482.39 190.58

Intangibles 12,297.00 12,801.00 11,922.00 8,571.00 2,101.00 1,843.04 1,470.96 572.01 133.51 161.13

Assets Held for Sale 43,004.00 20,654.00 34,332.00 24,070.00 3,557.00 992.47 2,101.32 894 337.65 31.44

Investment Securities 28,866.00 41,550.00 47,675.00 62,222.00 61,984.00 63,737.19 49,115.63 25,236.39 11,973.26 7,860.63

Investments at Equity . . . . . . . . . .

Other Assets 10,304.00 15,456.00 16,409.00 8,013.00 4,272.00 2,638.40 2,082.88 1,326.17 690.66 425.31

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TOTAL ASSETS 307,918.00 275,178.00 268,298.00 242,506.00 194,716.00 186,513.63 165,493.28 96,981.10 44,551.90 21,633.20

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LIABILITIES

Short Term Borrowings 21,588.00 21,507.00 18,958.00 35,511.00 24,265.00 31,029.37 20,002.37 15,207.32 8,887.45 4,392.40

Total Deposits 173,658.00 153,181.00 155,516.00 107,182.00 79,574.00 81,129.77 85,492.14 50,986.02 24,080.10 10,596.70

Long Term Debt 86,973.00 72,650.00 65,535.00 82,384.00 77,391.00 63,297.25 45,198.12 23,791.33 7,918.45 3,935.65

Minority Interest 0 0 0 0 0 0 0 0 0 0

Other Liabilities 4,473.00 8,098.00 8,155.00 3,264.00 3,320.00 2,004.57 5,456.25 1,687.36 1,267.97 1,116.97

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EQUITY

Preferred Stock 0 0 0 102 0 0 0 118.06 0 0

Common Stock 3,350.00 3,682.00 5,961.00 3,178.00 1,425.00 2,205.20 2,994.65 1,943.29 952.75 669.48

Capital Surplus C C C C C C C C C C

Retained Earnings 17,876.00 16,060.00 14,173.00 10,885.00 8,741.00 6,847.48 6,349.75 3,247.71 1,445.14 922.04

Less: Treasury Stock 0 0 0 0 0 0 0 0 0 0

Common Equity 21,226.00 19,742.00 20,134.00 14,063.00 10,166.00 9,052.68 9,344.40 5,191.01 2,397.89 1,591.52

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TOTAL EQUITY 21,226.00 19,742.00 20,134.00 14,165.00 10,166.00 9,052.68 9,344.40 5,309.07 2,397.89 1,591.52

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TOTAL LIABILITIES AND EQUITY 307,918.00 275,178.00 268,298.00 242,506.00 194,716.00 186,513.63 165,493.28 96,981.10 44,551.90 21,633.20



Thrift Ratio Analysis (WM)Dec-04 Dec-03 Dec-02 Dec-01 Dec-00 Dec-99 Dec-98 Dec-97 Dec-96 Dec-95

PROFITABILITY

Pretax Profit Margin 24.59 33.23 32.81 24.37 18.93 21.25 19.02 11.98 6.56 17.97

Net Profit Margin 15.3 20.91 20.77 15.44 12.04 13.39 11.94 6.4 3.35 11.73

Return on Assets 0.81 1.38 1.45 1.12 0.98 0.97 0.89 0.47 0.22 0.8

Return on Equity 11.68 19.21 19.33 19.38 18.68 20.07 15.74 8.87 4 10.81

Return on Investment 7.1 12.67 11.78 10.66 9.84 12.99 10.81 5.6 3.12 9.47

Net Interest Margin 2.82 3.11 3.48 3.32 2.38 2.63 2.88 3.03 2.89 3.05

Risk-Adjusted Capital Ratio - Total . . . . . . 12.11 11.11 11.09 11.46

Risk-Adjusted Capital Ratio - Tier 1 . . . . . . 5.76 5.78 5.76 10.59

Risk-Adjusted Capital Ratio - Tier 2 . . . . . . 6.35 5.33 5.33 0.87

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DIVIDENDS

Dividend Payout 60.91 33.59 26.24 28.4 32.96 31.4 29.64 59.47 130.37 28.52

Dividend Yield 4.12 3.49 3.07 2.74 2.15 3.79 2.14 1.66 2.08 2.67

Dividends per Share 1.74 1.4 1.06 0.9 1.14 0.98 0.82 1.06 0.9 0.77

One Year Total Return . -5.11 -13.93 -5.3 8.18 -51.24 48.31 10.86 -32.13 -33.33

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BALANCE SHEET

% of Total Assets

Reserve for Loan 0.42 0.45 0.62 0.58 0.52 0.56 0.65 0.69 0.83 0.67

Total Deposits 56.4 55.67 57.96 44.2 40.87 43.5 51.66 52.57 54.05 48.98

Investment Securities 9.37 15.1 17.77 25.66 31.83 34.17 29.68 26.02 26.87 36.34

Shareholder's Equity 6.89 7.17 7.5 5.84 5.22 4.85 5.65 5.47 5.38 7.36

Total Debt 35.26 34.22 31.49 48.62 52.21 50.57 39.4 40.21 37.72 38.5

Assets for Sale 13.97 7.51 12.8 9.93 1.83 0.53 1.27 0.92 0.76 0.15

Net Loans 66.83 63.37 54.37 54.26 60.92 60.43 64.38 68.52 67.57 57.95

Total Nonperforming Assets ($MM) 1,829.00 2,048.00 2,593.00 2,381.00 1,039.00 1,025.99 1,212.73 809.65 329.52 92.56

Nonperforming Assets 0.59 0.74 0.97 0.98 0.53 0.55 0.73 0.83 0.74 0.43

Total Net Charge-Offs ($MM) -135 -309 -411 -305 -176.78 -191.77 -175.53 -200.19 -74.42 -5.18

Net Charge-Offs -0.04 -0.11 -0.15 -0.13 -0.09 -0.1 -0.11 -0.21 -0.17 -0.02

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Other

Net Loans/Total Deposits 118.49 113.85 93.8 122.77 149.06 138.92 124.62 130.34 125.01 118.3Nonperforming Assets/Allowance for Loan Losses 140.58 163.84 156.87 169.59 102.47 98.47 113.57 120.22 88.92 64Nonperforming Assets/Common Equity 8.62 10.37 12.88 16.93 10.22 11.33 12.98 15.6 13.74 5.82

Nonperforming Assets/Net Loans 0.89 1.17 1.78 1.81 0.88 0.91 1.14 1.22 1.09 0.74Net Charge-Offs/Allowance for Loan Losses -10.38 -24.72 -24.86 -21.72 -17.43 -18.4 -16.44 -29.72 -20.08 -3.58

Net Charge-Offs/Net Loans -0.07 -0.18 -0.28 -0.23 -0.15 -0.17 -0.16 -0.3 -0.25 -0.04

Allowance for Loan Losses/Net Loans 0.63 0.72 1.13 1.07 0.85 0.92 1 1.01 1.23 1.15


WASHINGTON MUTUAL INCTICKER SYMBOL: WM SIC: 6035FINANCIAL SERVICES ANNUAL RATIO REPORT(Percentage except as noted)


Largest Banks and BHCsThe Top Banks and Bank Holding Companies in the United States

Measured by Asset Size(Ranked as of 12/31/03)


Holding Companies pre-GLB Bank holding companies

– Banks “take deposits and make loans”– Allowable activities closely related to banking

» Finance companies, mortgage and leasing companies

» Discount brokerage, etc.

Non-bank holding companies– Thrifts– Insurance companies– Securities firms


Banks with Glass-Steagall

Finance CompanyCommercial Bank

Bank HoldingCompany

Discount Broker

Securities Subsidiary(Section 24)


Financial Holding Company

Investment BankCommercial Bank

Financial HoldingCompany

Insurance Company

Thrift InstitutionAsset Management

Company


Reserves and Credit Creation


Reserves and Credit Destruction


Next class: September 14 Read Chapter 16 of Money and Capital

Markets Bring a Wall Street Journal to class every

Wednesday

j. k. dietrich - fbe 524 - fall, 2005 deposit-taking institutions week 2 – august 31, 2005

Documents

dietrich fbe

loans slide

thrift activities u

savings banks credit

deposit institutions

finance companies u

largest u assets

u securities firms