##### 









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K





|                                                           |  |                                                                                                 
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------
|(Mark One)                                                 |  |                                                                                                 
|þ                                                          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934        
|                                                          
|For the fiscal year ended December 31, 2004               
|                                                          
|or                                                        
|                                                          
|o                                                          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE
    SECURITIES EXCHANGE ACT OF 1934
|                                                          
|For the transition period
    from           to          .

Commission file number 33-93068


WFS FINANCIAL INC




|                                         |  |                    
|---------------------------------------- |  | -------------------
|California                               |  | 33-0291646         
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                        
|23 Pasteur, Irvine, California           |  | 92618-3816         
|(Address of principal executive offices) |  | (Zip Code)         

Registrants telephone number, including area code
(949) 727-1002


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Title of each class




þ o


o


þ o




Common Stock, No Par Value  $320,766,726




Common Stock, No Par Value  41,057,789


DOCUMENTS INCORPORATED BY REFERENCE












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WFS FINANCIAL INC AND SUBSIDIARIES


TABLE OF CONTENTS


|                                                         |  |                                                                                               |   |      |    | 
|-------------------------------------------------------- |  | --------------------------------------------------------------------------------------------- | - | ---- | -- | 
|                                                         |  |                                                                                               |   | Page
|                                                         |  |                                                                                               |   |     
|Forward-Looking Statements and Available
    Information |  |                                                                                               | 1 |     
|PART I                                                  
|Item 1.                                                  |  | Business                                                                                      |   |      | 2  | 
|Item 2.                                                  |  | Properties                                                                                    |   |      | 20 | 
|Item 3.                                                  |  | Legal Proceedings                                                                             |   |      | 20 | 
|Item 4.                                                  |  | Submission of Matters to a Vote of Security
    Holders                                       |   |      | 20 | 
|                                                        
|PART II                                                 
|Item 5.                                                  |  | Market for Registrants Common Equity
    and Related Stockholder Matters                     |   |      | 21 | 
|Item 6.                                                  |  | Selected Financial Data                                                                       |   |      | 22 | 
|Item 7.                                                  |  | Managements Discussion and Analysis
    of Financial Condition and Results of
    Operations |   |      | 23 | 
|Item 7A.                                                 |  | Quantitative and Qualitative Disclosure
    About Market Risk                                 |   |      | 42 | 
|Item 8.                                                  |  | Financial Statements and Supplementary
    Data                                               |   |      | 49 | 
|Item 9.                                                  |  | Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure      |   |      | 49 | 
|Item 9A.                                                 |  | Controls and Procedures                                                                       |   |      | 49 | 
|Item 9B.                                                 |  | Other Information                                                                             |   |      | 49 | 
|                                                        
|PART III                                                
|Item 10.                                                 |  | Directors and Executive Officers of the
    Registrant                                        |   |      | 50 | 
|Item 11.                                                 |  | Executive Compensation                                                                        |   |      | 50 | 
|Item 12.                                                 |  | Security Ownership of Certain Beneficial
    Owners and Management                            |   |      | 50 | 
|Item 13.                                                 |  | Certain Relationships and Related
    Transactions                                            |   |      | 50 | 
|Item 14.                                                 |  | Principal Accounting Fees and Services                                                        |   |      | 50 | 
|                                                        
|PART IV                                                 
|Item 15.                                                 |  | Financial Statement Schedules, Exhibits and
    Reports on Form 8-K                           |   |      | 51 | 



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##### 






Forward-Looking Statements










| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | changes in general economic and business conditions;                                                   
|
| |  | interest rate fluctuations, including hedging activities;                                              
|
| |  | our financial condition and liquidity, as well as future cash
    flows and earnings;                  
|
| |  | competition;                                                                                           
|
| |  | our level of operating expenses;                                                                       
|
| |  | the effect, interpretation or application of new or existing
    laws, regulations and court decisions;
|
| |  | the exercise of discretionary authority by regulatory agencies;                                        
|
| |  | a decision to change our corporate structure;                                                          
|
| |  | the availability of sources of funding;                                                                
|
| |  | the level of chargeoffs on the automobile contracts that we
    originate; and                         
|
| |  | significant litigation.                                                                                





INDUSTRY DATA




Available Information




1



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##### 






PART I







|        |         
|------- | --------
|Item 1. | Business

General










2



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##### 





|                    |              |                                 |           |           |  |      |           |           |  |   |           |           | 
|------------------- | ------------ | ------------------------------- | --------- | --------- |  | ---- | --------- | --------- |  | - | --------- | --------- | 
|                    |              | For the Year Ended December 31,
|                    |              |                                
|                    |              | 2004                            |           | 2003      |  | 2002
|                    |              |                                 |           |           |  |     
|                    |              | (Dollars in thousands)         
|New vehicles        |              | $                               | 2,273,423 |           |  | $    | 1,928,268 |           |  | $ | 1,548,372 |          
|Pre-owned vehicles  |              |                                 | 4,361,447 |           |  |      | 4,050,308 |           |  |   | 3,867,362 |          
|                    |              |                                 |           |           |  |      |           |           |  |   |           |          
|                    | Total volume |                                 | $         | 6,634,870 |  |      | $         | 5,978,576 |  |   | $         | 5,415,734 | 
|                    |              |                                 |           |           |  |      |           |           |  |   |           |          
|Prime contracts     |              | $                               | 5,324,206 |           |  | $    | 4,942,654 |           |  | $ | 4,346,212 |          
|Non-prime contracts |              |                                 | 1,310,664 |           |  |      | 1,035,922 |           |  |   | 1,069,522 |          
|                    |              |                                 |           |           |  |      |           |           |  |   |           |          
|                    | Total volume |                                 | $         | 6,634,870 |  |      | $         | 5,978,576 |  |   | $         | 5,415,734 | 
|                    |              |                                 |           |           |  |      |           |           |  |   |           |          

The History of WFS








Proposed Merger






3



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Market and Competition








4



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##### 



Our Business Strategy






| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | produce consistent growth through our strong dealer
    relationships;                                          
|
| |  | price contracts to maximize risk-adjusted returns by using
    advanced technology and experienced underwriters;
|
| |  | create operating efficiencies through technology and best
    practices;                                        
|
| |  | generate low cost liquidity through our funding sources,
    including positive operating cash flows; and       
|
| |  | record high quality earnings and maintain a conservative,
    well-capitalized balance sheet.                   



| |                                                                      
| | ---------------------------------------------------------------------
| | Produce Consistent Growth Through Our Strong Dealer
    Relationships



|                                 |  |                                       |            |      |  |      |            |      |  |      |           |   |  |   |           |   |  |   |           |  
|-------------------------------- |  | ------------------------------------- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | --------- | - |  | - | --------- | - |  | - | --------- | -
|                                 |  | At or For the Year Ended December 31,
|                                 |  |                                      
|                                 |  | 2004                                  |            | 2003 |  | 2002 |            | 2001 |  | 2000
|                                 |  |                                       |            |      |  |      |            |      |  |     
|                                 |  | (Dollars in thousands)               
|Total contract originations      |  | $                                     | 6,634,870  |      |  | $    | 5,978,576  |      |  | $    | 5,415,734 |   |  | $ | 4,863,279 |   |  | $ | 4,219,227 |  
|Percentage growth                |  |                                       | 11.0       | %    |  |      | 10.4       | %    |  |      | 11.4      | % |  |   | 15.3      | % |  |   | 26.3      | %
|Total contract portfolio managed |  | $                                     | 11,560,890 |      |  | $    | 10,596,665 |      |  | $    | 9,389,974 |   |  | $ | 8,152,882 |   |  | $ | 6,818,182 |  
|Percentage growth                |  |                                       | 9.1        | %    |  |      | 12.9       | %    |  |      | 15.2      | % |  |   | 19.6      | % |  |   | 27.3      | %





5



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##### 





| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | Price Contracts to Maximize Risk-Adjusted Returns by Using
    Advanced Technology and Experienced Underwriters







|                           |  |                                 |      |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|-------------------------- |  | ------------------------------- | ---- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | - |  |  | ----- | -
|                           |  | For the Year Ended December 31,
|                           |  |                                
|                           |  | 2004                            |      | 2003 |  | 2002 |       | 2001 |  | 2000
|                           |  |                                 |      |      |  |      |       |      |  |     
|Weighted average coupon(1) |  |                                 | 9.88 | %    |  |      | 10.03 | %    |  |      | 11.35 | % |  |  | 12.74 | % |  |  | 13.95 | %
|Interest on borrowings(1)  |  |                                 | 3.17 |      |  |      | 2.70  |      |  |      | 3.74  |   |  |  | 5.37  |   |  |  | 6.74  |  
|                           |  |                                 |      |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Net interest margins       |  |                                 | 6.71 |      |  |      | 7.33  |      |  |      | 7.61  |   |  |  | 7.37  |   |  |  | 7.21  |  
|Credit losses(2)           |  |                                 | 1.99 |      |  |      | 2.60  |      |  |      | 2.77  |   |  |  | 2.27  |   |  |  | 1.91  |  
|                           |  |                                 |      |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  
|Risk-adjusted margins      |  |                                 | 4.72 | %    |  |      | 4.73  | %    |  |      | 4.84  | % |  |  | 5.10  | % |  |  | 5.30  | %
|                           |  |                                 |      |      |  |      |       |      |  |      |       |   |  |  |       |   |  |  |       |  






|    |                                                                              
|--- | -----------------------------------------------------------------------------
|(1) | Represents the rate on contracts originated during the periods
    indicated.
|   
|(2) | Represents the rate on managed contracts during the periods
    indicated.   



| |                                                                        
| | -----------------------------------------------------------------------
| | Create Operating Efficiencies Through Technology and Best
    Practices





| |   |                                                                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | automated front-end loan origination system that calculates
    borrower ratios, maintains lending parameters and approval
    limits, accepts electronic applications and directs applications
    to the appropriate credit analyst, all of which have reduced the
    cost of receiving, underwriting and funding contracts;
|
| |  | custom designed proprietary scoring models that rank order the
    risk of loss occurring on a particular contract;                                                                                                                                                                                                            
|
| |  | behavioral delinquency management system, which improves our
    ability to queue accounts according to the level of risk,
    monitor collector performance and track delinquent automobile
    accounts;                                                                                                                     
|
| |  | centralized and upgraded borrower services department, which
    includes remittance processing, interactive voice response
    technology and direct debit services;                                                                                                                                                          
|
| |  | centralized imaging system that provides for the electronic
    retention and retrieval of account records; and                                                                                                                                                                                                                
|
| |  | data warehouse that provides analytical tools necessary to
    evaluate performance of our portfolio by multiple dimensions.                                                                                                                                                                                                   



6



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##### 





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | Generate Low Cost Liquidity Through Our Funding Sources,
    Including Positive Operating Cash Flows





| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | Record High Quality Earnings and Maintain a Conservative,
    Well-Capitalized Balance Sheet









Operations




| |          
| | ---------
| | Locations





| |                     
| | --------------------
| | Business Development



7



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| |                                         
| | ----------------------------------------
| | Underwriting and Purchasing of Contracts









8



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9



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|               |       |                                 |           |                      |  |      |           |                   |  |                      |           |           |  |   |           |            |  |  |       |        | 
|-------------- | ----- | ------------------------------- | --------- | -------------------- |  | ---- | --------- | ----------------- |  | -------------------- | --------- | --------- |  | - | --------- | ---------- |  |  | ----- | ------ | 
|               |       | Contracts Originated            |           |                     
|               |       | For the Year Ended December 31, |           | At December 31, 2004
|               |       |                                 |           |                     
|State          |       | 2004                            |           | 2003                 |  | 2002 |           | Managed Portfolio |  | Number of Dealers(1)
|               |       |                                 |           |                      |  |      |           |                   |  |                     
|               |       | (Dollars in thousands)         
|California     |       | $                               | 2,569,659 |                      |  | $    | 2,228,877 |                   |  | $                    | 2,091,347 |           |  | $ | 4,298,323 |            |  |  | 2,973 |       
|Washington     |       |                                 | 393,675   |                      |  |      | 373,111   |                   |  |                      | 310,189   |           |  |   | 649,237   |            |  |  | 517   |       
|Arizona        |       |                                 | 337,670   |                      |  |      | 299,918   |                   |  |                      | 283,528   |           |  |   | 605,388   |            |  |  | 473   |       
|Texas          |       |                                 | 244,456   |                      |  |      | 204,065   |                   |  |                      | 171,761   |           |  |   | 427,999   |            |  |  | 760   |       
|Oregon         |       |                                 | 219,666   |                      |  |      | 206,875   |                   |  |                      | 214,683   |           |  |   | 373,529   |            |  |  | 476   |       
|Virginia       |       |                                 | 215,054   |                      |  |      | 162,148   |                   |  |                      | 123,403   |           |  |   | 339,472   |            |  |  | 449   |       
|New York       |       |                                 | 174,508   |                      |  |      | 117,377   |                   |  |                      | 63,519    |           |  |   | 255,041   |            |  |  | 360   |       
|Nevada         |       |                                 | 172,531   |                      |  |      | 142,957   |                   |  |                      | 131,094   |           |  |   | 269,562   |            |  |  | 155   |       
|Illinois       |       |                                 | 167,334   |                      |  |      | 147,635   |                   |  |                      | 104,576   |           |  |   | 274,709   |            |  |  | 508   |       
|Ohio           |       |                                 | 162,936   |                      |  |      | 161,846   |                   |  |                      | 171,109   |           |  |   | 350,790   |            |  |  | 741   |       
|Florida        |       |                                 | 162,866   |                      |  |      | 132,238   |                   |  |                      | 147,931   |           |  |   | 304,737   |            |  |  | 693   |       
|Colorado       |       |                                 | 161,998   |                      |  |      | 248,667   |                   |  |                      | 200,153   |           |  |   | 356,970   |            |  |  | 316   |       
|North Carolina |       |                                 | 142,731   |                      |  |      | 148,786   |                   |  |                      | 144,859   |           |  |   | 293,720   |            |  |  | 524   |       
|Idaho          |       |                                 | 142,336   |                      |  |      | 129,838   |                   |  |                      | 102,475   |           |  |   | 233,440   |            |  |  | 192   |       
|Georgia        |       |                                 | 134,693   |                      |  |      | 98,224    |                   |  |                      | 77,294    |           |  |   | 224,316   |            |  |  | 424   |       
|Michigan       |       |                                 | 122,840   |                      |  |      | 109,323   |                   |  |                      | 82,542    |           |  |   | 214,502   |            |  |  | 378   |       
|Maryland       |       |                                 | 118,727   |                      |  |      | 100,620   |                   |  |                      | 62,145    |           |  |   | 189,374   |            |  |  | 251   |       
|Missouri       |       |                                 | 88,989    |                      |  |      | 77,273    |                   |  |                      | 70,070    |           |  |   | 154,782   |            |  |  | 324   |       
|Tennessee      |       |                                 | 84,568    |                      |  |      | 90,156    |                   |  |                      | 86,228    |           |  |   | 177,107   |            |  |  | 309   |       
|South Carolina |       |                                 | 76,478    |                      |  |      | 88,511    |                   |  |                      | 145,892   |           |  |   | 204,316   |            |  |  | 300   |       
|Utah           |       |                                 | 75,011    |                      |  |      | 74,993    |                   |  |                      | 84,897    |           |  |   | 139,617   |            |  |  | 291   |       
|New Jersey     |       |                                 | 70,799    |                      |  |      | 60,255    |                   |  |                      | 42,210    |           |  |   | 119,819   |            |  |  | 210   |       
|Massachusetts  |       |                                 | 69,999    |                      |  |      | 69,343    |                   |  |                      | 39,086    |           |  |   | 117,625   |            |  |  | 185   |       
|Wisconsin      |       |                                 | 59,387    |                      |  |      | 52,304    |                   |  |                      | 44,318    |           |  |   | 98,792    |            |  |  | 220   |       
|Pennsylvania   |       |                                 | 56,202    |                      |  |      | 47,813    |                   |  |                      | 50,699    |           |  |   | 104,689   |            |  |  | 327   |       
|Minnesota      |       |                                 | 50,056    |                      |  |      | 46,398    |                   |  |                      | 29,708    |           |  |   | 78,686    |            |  |  | 131   |       
|New Mexico     |       |                                 | 47,519    |                      |  |      | 34,010    |                   |  |                      | 23,930    |           |  |   | 70,959    |            |  |  | 91    |       
|Connecticut    |       |                                 | 45,291    |                      |  |      | 35,183    |                   |  |                      | 22,928    |           |  |   | 72,337    |            |  |  | 109   |       
|Alabama        |       |                                 | 38,027    |                      |  |      | 43,343    |                   |  |                      | 36,570    |           |  |   | 82,461    |            |  |  | 183   |       
|Kentucky       |       |                                 | 37,242    |                      |  |      | 23,112    |                   |  |                      | 41,754    |           |  |   | 70,836    |            |  |  | 187   |       
|Indiana        |       |                                 | 30,191    |                      |  |      | 46,530    |                   |  |                      | 37,904    |           |  |   | 76,809    |            |  |  | 227   |       
|Delaware       |       |                                 | 29,195    |                      |  |      | 32,750    |                   |  |                      | 26,697    |           |  |   | 62,396    |            |  |  | 74    |       
|New Hampshire  |       |                                 | 27,382    |                      |  |      | 32,619    |                   |  |                      | 24,275    |           |  |   | 52,049    |            |  |  | 91    |       
|Kansas         |       |                                 | 26,386    |                      |  |      | 26,398    |                   |  |                      | 19,448    |           |  |   | 48,139    |            |  |  | 123   |       
|Iowa           |       |                                 | 21,899    |                      |  |      | 20,712    |                   |  |                      | 20,552    |           |  |   | 37,948    |            |  |  | 97    |       
|Mississippi    |       |                                 | 10,402    |                      |  |      | 10,245    |                   |  |                      | 18,051    |           |  |   | 29,142    |            |  |  | 93    |       
|Rhode Island   |       |                                 | 7,126     |                      |  |      | 5,170     |                   |  |                      | 4,385     |           |  |   | 11,204    |            |  |  | 33    |       
|Wyoming        |       |                                 | 6,848     |                      |  |      | 8,105     |                   |  |                      | 12,507    |           |  |   | 14,884    |            |  |  | 37    |       
|Nebraska       |       |                                 | 6,839     |                      |  |      | 8,165     |                   |  |                      | 9,824     |           |  |   | 14,471    |            |  |  | 57    |       
|Montana        |       |                                 | 5,684     |                      |  |      | 3,590     |                   |  |                      |           |           |  |   | 7,085     |            |  |  | 6     |       
|Maine          |       |                                 | 5,172     |                      |  |      | 3,782     |                   |  |                      | 492       |           |  |   | 7,138     |            |  |  | 18    |       
|Oklahoma       |       |                                 | 4,538     |                      |  |      | 12,874    |                   |  |                      | 27,390    |           |  |   | 23,186    |            |  |  | 79    |       
|South Dakota   |       |                                 | 3,553     |                      |  |      | 4,971     |                   |  |                      | 3,843     |           |  |   | 7,101     |            |  |  | 13    |       
|West Virginia  |       |                                 | 3,223     |                      |  |      | 7,111     |                   |  |                      | 9,447     |           |  |   | 13,104    |            |  |  | 82    |       
|Vermont        |       |                                 | 3,184     |                      |  |      | 355       |                   |  |                      | 21        |           |  |   | 3,071     |            |  |  | 10    |       
|Hawaii         |       |                                 |           |                      |  |      |           |                   |  |                      |           |           |  |   | 28        |            |  |  | 12    |       
|               |       |                                 |           |                      |  |      |           |                   |  |                      |           |           |  |   |           |            |  |  |       |       
|               | Total |                                 | $         | 6,634,870            |  |      | $         | 5,978,576         |  |                      | $         | 5,415,734 |  |   | $         | 11,560,890 |  |  |       | 14,109 | 
|               |       |                                 |           |                      |  |      |           |                   |  |                      |           |           |  |   |           |            |  |  |       |       






|    |                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents number of dealers from which contracts were
    originated that remain outstanding in our servicing portfolio at
    December 31, 2004.

10



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##### 



Servicing of Contracts












11



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##### 



Transactions with Related Parties


Relationship with the Bank and its Controlling
Parties




Intercompany Borrowings














12



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##### 





Short-Term Investment  Parent




Reinvestment Contracts








Whole Loan Sales




13



---



##### 





Tax Sharing Agreement




Management Agreements






Supervision and Regulation


General




14



---



##### 



Bank Operations






Automobile Lending Operations






Affiliate Transaction Restrictions




15



---



##### 



Investment Restrictions




Capital Requirements








16



---



##### 



Safety and Soundness Standards




Distributions




Subprime Lending Programs




Community Reinvestment Act




Other Consumer Protection Laws and Regulations




17



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##### 





Taxation


Federal Income Taxes




California Franchise Tax and Other State Provisions








Subsidiaries




WFS Financial Auto Loans, Inc.




18



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##### 





WFS Financial Auto Loans 2, Inc.




WFS Funding, Inc.




WFS Investments, Inc.




WFS Receivables Corporation




WFS Receivables Corporation 3




WFS Web Investments




Associates




19



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##### 








|        |           
|------- | ----------
|Item 2. | Properties










|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

Lee,
et al v. WFS Financial Inc Thompson,
et al v. WFS Financial Inc Lee, et al v. WFS
Financial Inc Thompson, et al v. WFS
Financial Inc Thompson,
et al v. WFS Financial Inc


In re WFS
Financial Shareholder Litigation









|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders



20



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##### 






PART II







|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity and Related
    Stockholder Matters

Price Range by Quarter




|               |  |      |       |      |  |      |       |     |  |   |       |  |  |   |       | 
|-------------- |  | ---- | ----- | ---- |  | ---- | ----- | --- |  | - | ----- |  |  | - | ----- | 
|               |  | 2004 |       | 2003
|               |  |      |       |     
|               |  | High |       | Low  |  | High |       | Low
|               |  |      |       |      |  |      |       |    
|First Quarter  |  | $    | 45.23 |      |  | $    | 37.90 |     |  | $ | 25.25 |  |  | $ | 16.54 | 
|Second Quarter |  |      | 50.89 |      |  |      | 40.03 |     |  |   | 33.99 |  |  |   | 18.90 | 
|Third Quarter  |  |      | 50.98 |      |  |      | 43.82 |     |  |   | 40.89 |  |  |   | 31.76 | 
|Fourth Quarter |  |      | 50.95 |      |  |      | 41.05 |     |  |   | 45.40 |  |  |   | 36.79 | 



Dividends




21



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |         | 
|---------------------------------------------------------------------------- | ----------------------------------------------------- | ------------------------------------------------ | ---------- | ------- |  | ---- | ---------- | ------- |  | ---- | ---------- | ------- |  | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                                                             |                                                       | At or For the Year Ended December 31,           
|                                                                             |                                                       |                                                 
|                                                                             |                                                       | 2004                                             |            | 2003    |  | 2002 |            | 2001    |  | 2000
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |     
|                                                                             |                                                       | (Dollars in thousands, except per share amounts)
|Consolidated Summary of Operations:                                          |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Interest income                                                              |                                                       | $                                                | 900,135    |         |  | $    | 993,004    |         |  | $    | 820,449    |         |  | $ | 545,782    |         |  | $ | 314,120    |        
|Interest expense                                                             |                                                       |                                                  | 316,324    |         |  |      | 391,401    |         |  |      | 349,512    |         |  |   | 232,776    |         |  |   | 130,578    |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|                                                                             | Net interest income                                   |                                                  |            | 583,811 |  |      |            | 601,603 |  |      |            | 470,937 |  |   |            | 313,006 |  |   |            | 183,542 | 
|Provision for credit losses                                                  |                                                       |                                                  | 192,315    |         |  |      | 233,800    |         |  |      | 249,093    |         |  |   | 144,130    |         |  |   | 68,962     |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|                                                                             | Net interest income after provision for credit losses |                                                  |            | 391,496 |  |      |            | 367,803 |  |      |            | 221,844 |  |   |            | 168,876 |  |   |            | 114,580 | 
|Noninterest income                                                           |                                                       |                                                  | 154,780    |         |  |      | 142,498    |         |  |      | 119,302    |         |  |   | 137,567    |         |  |   | 184,642    |        
|Noninterest expense                                                          |                                                       |                                                  | 245,384    |         |  |      | 241,394    |         |  |      | 212,904    |         |  |   | 205,292    |         |  |   | 188,634    |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Income before income tax                                                     |                                                       |                                                  | 300,892    |         |  |      | 268,907    |         |  |      | 128,242    |         |  |   | 101,151    |         |  |   | 110,588    |        
|Income tax                                                                   |                                                       |                                                  | 118,651    |         |  |      | 106,519    |         |  |      | 46,152     |         |  |   | 39,503     |         |  |   | 44,216     |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Net income                                                                   |                                                       | $                                                | 182,241    |         |  | $    | 162,388    |         |  | $    | 82,090     |         |  | $ | 61,648     |         |  | $ | 66,372     |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Weighted average number of shares and common share
    equivalents  diluted |                                                       |                                                  | 41,079,337 |         |  |      | 41,069,263 |         |  |      | 39,993,524 |         |  |   | 32,398,357 |         |  |   | 28,283,735 |        
|Earnings per common share  diluted                                          |                                                       | $                                                | 4.44       |         |  | $    | 3.95       |         |  | $    | 2.05       |         |  | $ | 1.90       |         |  | $ | 2.35       |        
|                                                                             |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Consolidated Summary of Financial Condition:                                 |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Contracts receivable, net                                                    |                                                       | $                                                | 9,310,592  |         |  | $    | 8,476,571  |         |  | $    | 7,747,830  |         |  | $ | 5,092,212  |         |  | $ | 2,978,341  |        
|Total assets                                                                 |                                                       |                                                  | 9,949,218  |         |  |      | 9,768,760  |         |  |      | 8,861,466  |         |  |   | 5,490,757  |         |  |   | 3,575,137  |        
|Lines of credit  parent                                                     |                                                       |                                                  | 213,741    |         |  |      | 21,811     |         |  |      | 62,048     |         |  |   | 421,175    |         |  |   | 235,984    |        
|Notes payable  parent                                                       |                                                       |                                                  | 300,000    |         |  |      | 400,820    |         |  |      | 408,010    |         |  |   | 67,500     |         |  |   | 146,219    |        
|Notes payable on automobile secured financing                                |                                                       |                                                  | 8,105,275  |         |  |      | 8,157,601  |         |  |      | 7,394,943  |         |  |   | 4,005,925  |         |  |   | 2,249,363  |        
|Total shareholders equity                                                   |                                                       |                                                  | 1,030,477  |         |  |      | 818,869    |         |  |      | 634,532    |         |  |   | 465,293    |         |  |   | 317,205    |        
|Other Selected Financial Data:                                               |                                                       |                                                  |            |         |  |      |            |         |  |      |            |         |  |   |            |         |  |   |            |        
|Average managed automobile contracts                                         |                                                       | $                                                | 11,113,411 |         |  | $    | 10,051,754 |         |  | $    | 8,845,635  |         |  | $ | 7,576,681  |         |  | $ | 6,076,814  |        
|Average shareholders equity(1)                                              |                                                       | $                                                | 951,254    |         |  | $    | 763,056    |         |  | $    | 622,808    |         |  | $ | 425,910    |         |  | $ | 278,142    |        
|Return on average shareholders equity(1)                                    |                                                       |                                                  | 19.16      | %       |  |      | 21.28      | %       |  |      | 13.18      | %       |  |   | 14.47      | %       |  |   | 23.86      | %      
|Book value per share(1)                                                      |                                                       | $                                                | 25.20      |         |  | $    | 20.76      |         |  | $    | 16.78      |         |  | $ | 14.20      |         |  | $ | 11.16      |        
|Equity to assets ratio(1)                                                    |                                                       |                                                  | 10.39      | %       |  |      | 8.72       | %       |  |      | 7.83       | %       |  |   | 9.01       | %       |  |   | 8.88       | %      
|Automobile contract originations                                             |                                                       | $                                                | 6,634,870  |         |  | $    | 5,978,576  |         |  | $    | 5,415,734  |         |  | $ | 4,863,279  |         |  | $ | 4,219,227  |        
|Interest rate spread                                                         |                                                       |                                                  | 5.88       | %       |  |      | 5.97       | %       |  |      | 6.27       | %       |  |   | 7.56       | %       |  |   | 6.64       | %      






|    |                                                                             
|--- | ----------------------------------------------------------------------------
|(1) | Accumulated other comprehensive loss excluded from
    shareholders equity.

22



---



##### 








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



Overview










| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | We produced record earnings of $182 million in net income,
    a 12% increase over 2003.                                       
|
| |  | Earnings per share increased to a record $4.44 per share.                                                                      
|
| |  | Net interest income declined 3% to $584 million while
    risk-adjusted spreads were nearly identical to 2003 at 5.88%.        
|
| |  | Credit losses declined in 2004 to 1.99% of contracts.                                                                          
|
| |  | Operating expenses represent 2.21% of average managed contracts,
    our most efficient year ever.                             
|
| |  | We originated $6.6 billion in automobile contracts through
    our relationships with 8,200 dealers throughout the country.    
|
| |  | Our portfolio of automobile contracts of $11.6 billion
    consists of more than 80% prime credit quality contracts.           
|
| |  | Delinquencies at year end were 2.24% of total outstanding
    contracts, which is 0.66% lower than a year earlier.             
|
| |  | We maintained a successful securitization program by continuing
    to offer senior/subordinated securities on a regular basis.
|
| |  | We managed $10.3 billion of automobile-backed securities
    outstanding under our securitization program.                     

Business Risks




23



---



##### 



Risks Related to the Merger




| |                                                            
| | -----------------------------------------------------------
| | Anticipated benefits of the merger may not be
    realized.





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Westcorps operating results may suffer as a result
    of purchase accounting treatment.





| |                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------
| | If the conversion and merger are not completed, Westcorp
    and our stock prices and future business and operations could be
    harmed.





| |                                                                               
| | ------------------------------------------------------------------------------
| | The completion of the merger is subject to the
    satisfaction of conditions.







| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | If the conversion and merger are not consummated, we may
    need to make significant changes in our operations or corporate
    structure.



24



---



##### 





| |                                                                    
| | -------------------------------------------------------------------
| | Regulatory Requirements May Restrict Our Ability to Do
    Business







| |                                                                                       
| | --------------------------------------------------------------------------------------
| | OTS Guidance Regarding Subprime Lending May Affect the
    Banks Capital Requirements







| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Other Regulatory and Legislative Requirements May Affect
    Our Ability to Do Business



25



---



##### 













| |                                                             
| | ------------------------------------------------------------
| | Adverse Economic Conditions May Impact Our
    Profitability



26



---



##### 







| |                                                            
| | -----------------------------------------------------------
| | Interest Rate Fluctuations May Impact Our
    Profitability





| |                                                          
| | ---------------------------------------------------------
| | Wholesale Auction Values May Impact Our
    Profitability





| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Ownership of Our Common Stock Is Concentrated, Which
    May Result in Conflicts of Interest and Actions That Are Not in
    the Best Interests of Our Other Stockholders





| |                                                                                                            
| | -----------------------------------------------------------------------------------------------------------
| | We May Not Be Able to Generate Sufficient Operating Cash
    Flows to Run Our Automobile Finance Operations





| |   |                                                                                 
| | - | --------------------------------------------------------------------------------
| |  | the rates and amounts of loan delinquencies, defaults and net
    credit losses;
|
| |  | how quickly and at what price repossessed vehicles can be resold;               
|
| |  | the ages of the contracts in the portfolio;                                     
|
| |  | levels of voluntary prepayments; and                                            

27



---



##### 





| |   |                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the terms of our securitizations, which include performance
    based triggers requiring higher levels of credit enhancements to
    the extent credit losses or delinquencies exceed certain
    thresholds. We have exceeded performance thresholds in the past
    and may do so again in the future.





| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Changes in Our Securitization Program Could Adversely
    Affect Our Liquidity and Earnings





| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | delay in the completion of a planned securitization;                                                                     
|
| |  | negative market perception of us; and                                                                                    
|
| |  | failure of the automobile contracts we intend to sell to conform
    to insurance company and rating agency requirements.





| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | We Expect Our Operating Results to Continue to Fluctuate,
    Which May Adversely Impact Our Business





| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | variations in the volume of automobile contracts originated,
    which historically tend to be lower in the first and fourth
    quarters of the year;
|
| |  | interest rate spreads;                                                                                                                                
|
| |  | the effectiveness of our hedging strategies;                                                                                                          
|
| |  | credit losses, which historically tend to be higher in the first
    and fourth quarters of the year;                                                 
|
| |  | amount and timing of whole loan sale transactions; and                                                                                                
|
| |  | operating costs.                                                                                                                                      

Critical Accounting Estimates




28



---



##### 







| |                            
| | ---------------------------
| | Allowance for Credit Losses







| |                                 
| | --------------------------------
| | Derivative Financial Instruments









| |              
| | -------------
| | Accrued Taxes





29



---



##### 





Off Balance Sheet Arrangements




Results of Operations




| |                    
| | -------------------
| | Net Interest Income



30



---



##### 





|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |       |      |  
|-------------------------------------------- | --------------------------------------- | --------------------------------------------- | ------- | --------- | --------- | ------ | ------- | ------- | ------- | -------- | ---- | ------ | ---- | ------- | ------- | --------- | --------- | ------ | ------- | ------- | ------- |  | ---- | ----- | ---- | - | ------- | --------- | --------- | - | ------- | ------- | ------- |  | ---- | ----- | ---- | -
|                                             |                                         | For the Year Ended December 31,              
|                                             |                                         |                                              
|                                             |                                         | 2004                                          |         | 2003      |           | 2002  
|                                             |                                         |                                               |         |           |           |       
|                                             |                                         | Average                                       |         |           |           | Yield/ |         | Average |         |          |      | Yield/ |      | Average |         |           |           | Yield/
|                                             |                                         | Balance                                       |         | Interest  |           | Rate   |         | Balance |         | Interest |      | Rate   |      | Balance |         | Interest  |           | Rate  
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |       
|                                             |                                         | (Dollars in thousands)                       
|Interest earning assets:                     |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Contracts receivable(1)                 |                                               | $       | 8,494,542 |           |        | $       | 888,231 |         |          |      | 10.46  | %    |         | $       | 8,721,637 |           |        | $       | 982,946 |         |  |      | 11.27 | %    |   | $       | 6,593,267 |           |   | $       | 809,663 |         |  |      | 12.28 | %   
|                                             | Investment securities                   |                                               |         | 867,372   |           |        |         | 11,904  |         |          |      | 1.37   |      |         |         | 838,285   |           |        |         | 10,058  |         |  |      | 1.20  |      |   |         | 607,504   |           |   |         | 10,786  |         |  |      | 1.78  |     
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Total interest earning assets           |                                               |         | 9,361,914 |           |        |         | 900,135 |         |          |      | 9.61   | %    |         |         | 9,559,922 |           |        |         | 993,004 |         |  |      | 10.39 | %    |   |         | 7,200,771 |           |   |         | 820,449 |         |  |      | 11.39 | %   
|Noninterest earning assets:                  |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Amounts due from trusts                 |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         | 133,973   |           |   |         |         |         |  |      |       |     
|                                             | Retained interest in securitized assets |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         | 15,888    |           |   |         |         |         |  |      |       |     
|                                             | Premises and equipment, net             |                                               |         | 30,700    |           |        |         |         |         |          |      |        |      |         |         | 30,185    |           |        |         |         |         |  |      |       |      |   |         | 32,273    |           |   |         |         |         |  |      |       |     
|                                             | Other assets                            |                                               |         | 347,338   |           |        |         |         |         |          |      |        |      |         |         | 342,156   |           |        |         |         |         |  |      |       |      |   |         | 271,761   |           |   |         |         |         |  |      |       |     
|                                             | Less: Allowance for credit losses       |                                               |         | 229,695   |           |        |         |         |         |          |      |        |      |         |         | 242,019   |           |        |         |         |         |  |      |       |      |   |         | 167,775   |           |   |         |         |         |  |      |       |     
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Total                                   |                                               | $       | 9,510,257 |           |        |         |         |         |          |      |        |      |         | $       | 9,690,244 |           |        |         |         |         |  |      |       |      |   | $       | 7,486,891 |           |   |         |         |         |  |      |       |     
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|Interest bearing liabilities:                |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Lines of credit  parent                |                                               | $       | 54,188    |           |        |         | 1,831   |         |          |      | 3.38   | %    |         | $       | 43,532    |           |        |         | 993     |         |  |      | 2.28  | %    |   | $       | 111,382   |           |   |         | 3,049   |         |  |      | 2.74  | %   
|                                             | Notes payable  parent                  |                                               |         | 356,213   |           |        |         | 35,739  |         |          |      | 10.03  |      |         |         | 402,947   |           |        |         | 39,888  |         |  |      | 9.90  |      |   |         | 335,811   |           |   |         | 32,751  |         |  |      | 9.75  |     
|                                             |                                         | Notes payable on automobile secured financing |         |           | 7,759,865 |        |         |         | 274,541 |          |      |        | 3.54 |         |         |           | 8,215,265 |        |         |         | 349,359 |  |      |       | 4.25 |   |         |           | 5,933,992 |   |         |         | 312,515 |  |      |       | 5.27 |  
|Other                                        |                                         |                                               | 299,221 |           |           |        | 4,213   |         |         |          | 1.41 |        |      |         | 189,555 |           |           |        | 1,161   |         |         |  | 0.61 |       |      |   | 444,214 |           |           |   | 1,197   |         |         |  | 0.27 |      
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             |                                         | Total interest bearing liabilities            |         |           | 8,469,487 |        |         |         | 316,324 |          |      |        | 3.73 | %       |         |           | 8,851,299 |        |         |         | 391,401 |  |      |       | 4.42 | % |         |           | 6,825,399 |   |         |         | 349,512 |  |      |       | 5.12 | %
|Noninterest bearing liabilities:             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Other liabilities                       |                                               |         | 103,865   |           |        |         |         |         |          |      |        |      |         |         | 123,137   |           |        |         |         |         |  |      |       |      |   |         | 126,802   |           |   |         |         |         |  |      |       |     
|Shareholders equity                         |                                         |                                               | 936,905 |           |           |        |         |         |         |          |      |        |      |         | 715,808 |           |           |        |         |         |         |  |      |       |      |   | 534,690 |           |           |   |         |         |         |  |      |      
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|                                             | Total                                   |                                               | $       | 9,510,257 |           |        |         |         |         |          |      |        |      |         | $       | 9,690,244 |           |        |         |         |         |  |      |       |      |   | $       | 7,486,891 |           |   |         |         |         |  |      |       |     
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|Net interest income and interest rate spread |                                         |                                               |         |           |           | $      | 583,811 |         |         |          | 5.88 | %      |      |         |         |           |           | $      | 601,603 |         |         |  | 5.97 | %     |      |   |         |           |           | $ | 470,937 |         |         |  | 6.27 | %    
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      
|Net yield on average interest earning assets |                                         |                                               |         |           |           |        |         |         |         |          | 6.24 | %      |      |         |         |           |           |        |         |         |         |  | 6.29 | %     |      |   |         |           |           |   |         |         |         |  | 6.54 | %    
|                                             |                                         |                                               |         |           |           |        |         |         |         |          |      |        |      |         |         |           |           |        |         |         |         |  |      |       |      |   |         |           |           |   |         |         |         |  |      |      






|    |                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------
|(1) | For the purpose of these computations, nonaccruing contracts are
    included in the average loan amounts outstanding.





31



---



##### 





|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |         |         | 
|------------------------------------------ | --------------------------------------------- | ------------------------ | - | ------------------------ | ------- | ----- | - | ------- | ------- | ---- | ------- | ------- | ------- | - | - | ------- | ------- |  | - | ------- | ------- | - | ------- | ------- | ------- | 
|                                           |                                               | 2004 Compared to 2003(1) |   | 2003 Compared to 2002(1)
|                                           |                                               |                          |   |                         
|                                           |                                               | Volume                   |   | Rate                     |         | Total |   | Volume  |         | Rate |         | Total  
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |        
|                                           |                                               | (Dollars in thousands)  
|Increase (decrease) in interest income:    |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|                                           | Contracts receivable                          |                          | $ | (25,189                  | )       |       | $ | (69,526 | )       |      | $       | (94,715 | )       |   | $ | 244,238 |         |  | $ | (70,955 | )       |   | $       | 173,283 |        
|                                           | Investment securities                         |                          |   | 363                      |         |       |   | 1,483   |         |      |         | 1,846   |         |   |   | 3,402   |         |  |   | (4,130  | )       |   |         | (728    | )      
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|                                           |                                               | Total interest income    |   | $                        | (24,826 | )     |   | $       | (68,043 | )    |         |         | (92,869 | ) |   | $       | 247,640 |  |   | $       | (75,085 | ) |         |         | 172,555 | 
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|Increase (decrease) in interest expense:   |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|                                           | Lines of credit  parent                      |                          | $ | 282                      |         |       | $ | 556     |         |      |         | 838     |         |   | $ | (1,612  | )       |  | $ | (444    | )       |   |         | (2,056  | )      
|                                           | Notes payable  parent                        |                          |   | (4,668                   | )       |       |   | 519     |         |      |         | (4,149  | )       |   |   | 6,627   |         |  |   | 510     |         |   |         | 7,137   |        
|                                           | Notes payable on automobile secured financing |                          |   | (18,641                  | )       |       |   | (56,177 | )       |      |         | (74,818 | )       |   |   | 105,023 |         |  |   | (68,179 | )       |   |         | 36,844  |        
|                                           | Other                                         |                          |   | 934                      |         |       |   | 2,118   |         |      |         | 3,052   |         |   |   | (957    | )       |  |   | 921     |         |   |         | (36     | )      
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|                                           |                                               | Total interest expense   |   | $                        | (22,093 | )     |   | $       | (52,984 | )    |         |         | (75,077 | ) |   | $       | 109,081 |  |   | $       | (67,192 | ) |         |         | 41,889  | 
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        
|(Decrease) increase in net interest income |                                               |                          |   |                          |         |       |   |         |         | $    | (17,792 | )       |         |   |   |         |         |  |   |         |         | $ | 130,666 |        
|                                           |                                               |                          |   |                          |         |       |   |         |         |      |         |         |         |   |   |         |         |  |   |         |         |   |         |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In the analysis of interest changes due to volume and rate, the
    changes due to the volume/rate variance (the combined effect of
    change in weighted average interest rate and change in average
    portfolio balance) were allocated proportionately based on the
    absolute value of the volume and rate variances. If there was no
    balance in the previous year, the total change was allocated to
    volume.



| |                            
| | ---------------------------
| | Provision for Credit Losses







| |                   
| | ------------------
| | Noninterest Income



| |                            
| | ---------------------------
| | Automobile Servicing Income



32



---



##### 









|                                                    |                        |                                 |        |         |  |      |        |         |  |   |         |         | 
|--------------------------------------------------- | ---------------------- | ------------------------------- | ------ | ------- |  | ---- | ------ | ------- |  | - | ------- | ------- | 
|                                                    |                        | For the Year Ended December 31,
|                                                    |                        |                                
|                                                    |                        | 2004                            |        | 2003    |  | 2002
|                                                    |                        |                                 |        |         |  |     
|                                                    |                        | (Dollars in thousands)         
|Fee income                                          |                        | $                               | 99,966 |         |  | $    | 87,234 |         |  | $ | 78,773  |        
|Contractual servicing income                        |                        |                                 | 37,627 |         |  |      | 31,781 |         |  |   | 61,830  |        
|Retained interest expense, net of RISA amortization |                        |                                 |        |         |  |      |        |         |  |   | (29,805 | )      
|                                                    |                        |                                 |        |         |  |      |        |         |  |   |         |        
|                                                    | Total servicing income |                                 | $      | 137,593 |  |      | $      | 119,015 |  |   | $       | 110,798 | 
|                                                    |                        |                                 |        |         |  |      |        |         |  |   |         |        







33



---



##### 





| |                          
| | -------------------------
| | Gain on Sale of Contracts



|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |           |           | 
|--------------------------------------------------------- | ------------------------------- | ------------------------------------------------ | - | --------- | --------- | ---- | - | --------- | --------- | ---- | - | --------- | --------- |  | - | --------- | --------- | - | - | --------- | --------- | 
|                                                          |                                 | For the Year Ended December 31,                 
|                                                          |                                 |                                                 
|                                                          |                                 | 2004                                             |   | 2003      |           | 2002 |   | 2001      |           | 2000
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |     
|                                                          |                                 | (Dollars in thousands)                          
|Contract sales and secured financings:                    |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          | Whole loan sales to Westcorp(1) |                                                  | $ | 1,477,500 |           |      | $ | 1,650,000 |           |      |   |           |           |  | $ | 1,370,000 |           |   | $ | 1,390,000 |          
|                                                          | Sales to securitization trusts  |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   | 660,000   |          
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          |                                 | Total sales                                      |   |           | 1,477,500 |      |   |           | 1,650,000 |      |   |           |           |  |   |           | 1,370,000 |   |   |           | 2,050,000 | 
|                                                          | Secured financings(2)           |                                                  |   | 4,387,500 |           |      |   | 4,239,375 |           |      | $ | 6,925,000 |           |  |   | 2,850,000 |           |   |   | 2,540,000 |          
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          |                                 | Total sales and secured financings               |   | $         | 5,865,000 |      |   | $         | 5,889,375 |      |   | $         | 6,925,000 |  |   | $         | 4,220,000 |   |   | $         | 4,590,000 | 
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|Gain on sale of contracts(3):                             |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          | Non-cash gain on sale           |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   | $ | 7,719     |          
|                                                          | Cash gain on sale               |                                                  | $ | 13,792    |           |      | $ | 18,725    |           |      |   |           |           |  | $ | 6,741     |           |   |   | 6,004     |          
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          |                                 | Total gain on sale                               |   | $         | 13,792    |      |   | $         | 18,725    |      |   |           |           |  |   | $         | 6,741     |   |   | $         | 13,723    | 
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|Hedge gain (loss) on sale of contracts(4):                |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          | Non-cash gain on sale           |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   | $ | 5,300     |          
|                                                          | Cash (loss) gain on sale        |                                                  | $ | (3,702    | )         |      | $ | 6,228     |           |      |   |           |           |  | $ | (6,700    | )         |   |   | (5,000    | )        
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          |                                 | Total hedge (loss) gain included in gain on sale |   | $         | (3,702    | )    |   | $         | 6,228     |      |   |           |           |  |   | $         | (6,700    | ) |   | $         | 300       | 
|                                                          |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|Gain on sale of contracts as a percent of total revenues: |                                 |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   |          
|                                                          | Non-cash gain on sale           |                                                  |   |           |           |      |   |           |           |      |   |           |           |  |   |           |           |   |   | 2.10      | %        
|                                                          | Cash gain on sale               |                                                  |   | 1.87      | %         |      |   | 2.52      | %         |      |   |           |           |  |   | 1.50      | %         |   |   | 1.63      | %        






|    |                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents loans sold to Westcorp and subsequently securitized
    by Westcorp.                                                                             
|   
|(2) | Information for 2002 and 2001 includes $775 million and
    $650 million, respectively, of contracts securitized in
    privately placed conduit facilities.
|   
|(3) | Net of the write-off of outstanding dealer participation
    balances and the effect of hedging activities.                                                 
|   
|(4) | Included in gain on sale of contracts.                                                                                                                      

34



---



##### 





| |                                   
| | ----------------------------------
| | Contract Sales and Securitizations



|                       |  |                 |  |          |            |                      |  |                   |              |             |  |                     |       |           |  |  |       |   |  |  |       |   |  |  |       |  
|---------------------- |  | --------------- |  | -------- | ---------- | -------------------- |  | ----------------- | ------------ | ----------- |  | ------------------- | ----- | --------- |  |  | ----- | - |  |  | ----- | - |  |  | ----- | -
|                       |  |                 |  |          |            |                      |  | Remaining         |              |             |  |                     |       |          
|                       |  |                 |  |          |            |                      |  | Balance at        |              |             |  |                     |       | Gross    
|                       |  |                 |  |          |            |                      |  | December 31, 2004 |              | Original    |  | Original            |       | Interest 
|Issue                  |  |                 |  | Original |            | Remaining Balance at |  | as a Percent of   |              | Weighted    |  | Weighted Average    |       | Rate     
|Number                 |  | Close Date      |  | Balance  |            | December 31, 2004(1) |  | Original Balance  |              | Average APR |  | Securitization Rate |       | Spread(2)
|                       |  |                 |  |          |            |                      |  |                   |              |             |  |                     |       |          
|(Dollars in thousands)
|1985-A                 |  | December, 1985  |  | $        | 110,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 18.50 | % |  |  | 8.38  | % |  |  | 10.12 | %
|1986-A                 |  | November, 1986  |  |          | 191,930    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.20 |   |  |  | 6.63  |   |  |  | 7.57  |  
|1987-A                 |  | March, 1987     |  |          | 125,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 12.42 |   |  |  | 6.75  |   |  |  | 5.67  |  
|1987-B                 |  | July, 1987      |  |          | 110,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 12.68 |   |  |  | 7.80  |   |  |  | 4.88  |  
|1988-A                 |  | February, 1988  |  |          | 155,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 13.67 |   |  |  | 7.75  |   |  |  | 5.92  |  
|1988-B                 |  | May, 1988       |  |          | 100,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.01 |   |  |  | 8.50  |   |  |  | 5.51  |  
|1988-C                 |  | July, 1988      |  |          | 100,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.41 |   |  |  | 8.50  |   |  |  | 6.91  |  
|1988-D                 |  | October, 1988   |  |          | 105,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.95 |   |  |  | 8.85  |   |  |  | 6.10  |  
|1989-A                 |  | March, 1989     |  |          | 75,000     |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.88 |   |  |  | 10.45 |   |  |  | 5.43  |  
|1989-B                 |  | June, 1989      |  |          | 100,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.96 |   |  |  | 9.15  |   |  |  | 6.81  |  
|1990-A                 |  | August, 1990    |  |          | 150,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 16.05 |   |  |  | 8.35  |   |  |  | 7.70  |  
|1990-1                 |  | November, 1990  |  |          | 150,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.56 |   |  |  | 8.50  |   |  |  | 7.06  |  
|1991-1                 |  | April, 1991     |  |          | 200,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 16.06 |   |  |  | 7.70  |   |  |  | 8.36  |  
|1991-2                 |  | May, 1991       |  |          | 200,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.75 |   |  |  | 7.30  |   |  |  | 8.45  |  
|1991-3                 |  | August, 1991    |  |          | 175,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.69 |   |  |  | 6.75  |   |  |  | 8.94  |  
|1991-4                 |  | December, 1991  |  |          | 150,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.53 |   |  |  | 5.63  |   |  |  | 9.90  |  
|1992-1                 |  | March, 1992     |  |          | 150,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.49 |   |  |  | 5.85  |   |  |  | 8.64  |  
|1992-2                 |  | June, 1992      |  |          | 165,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.94 |   |  |  | 5.50  |   |  |  | 9.44  |  
|1992-3                 |  | September, 1992 |  |          | 135,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.45 |   |  |  | 4.70  |   |  |  | 9.75  |  
|1993-1                 |  | March, 1993     |  |          | 250,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 13.90 |   |  |  | 4.45  |   |  |  | 9.45  |  
|1993-2                 |  | June, 1993      |  |          | 175,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 13.77 |   |  |  | 4.70  |   |  |  | 9.07  |  
|1993-3                 |  | September, 1993 |  |          | 187,500    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 13.97 |   |  |  | 4.25  |   |  |  | 9.72  |  
|1993-4                 |  | December, 1993  |  |          | 165,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 12.90 |   |  |  | 4.60  |   |  |  | 8.30  |  
|1994-1                 |  | March, 1994     |  |          | 200,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 13.67 |   |  |  | 5.10  |   |  |  | 8.57  |  
|1994-2                 |  | May, 1994       |  |          | 230,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.04 |   |  |  | 6.38  |   |  |  | 7.66  |  
|1994-3                 |  | August, 1994    |  |          | 200,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.59 |   |  |  | 6.65  |   |  |  | 7.94  |  
|1994-4                 |  | October, 1994   |  |          | 212,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.58 |   |  |  | 7.10  |   |  |  | 8.48  |  
|1995-1                 |  | January, 1995   |  |          | 190,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.71 |   |  |  | 8.05  |   |  |  | 7.66  |  
|1995-2                 |  | March, 1995     |  |          | 190,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 16.36 |   |  |  | 7.10  |   |  |  | 9.26  |  
|1995-3                 |  | June, 1995      |  |          | 300,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.05 |   |  |  | 6.05  |   |  |  | 9.00  |  
|1995-4                 |  | September, 1995 |  |          | 375,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.04 |   |  |  | 6.20  |   |  |  | 8.84  |  
|1995-5                 |  | December, 1995  |  |          | 425,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.35 |   |  |  | 5.88  |   |  |  | 9.47  |  
|1996-A                 |  | March, 1996     |  |          | 485,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.46 |   |  |  | 6.13  |   |  |  | 9.33  |  
|1996-B                 |  | June, 1996      |  |          | 525,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.74 |   |  |  | 6.75  |   |  |  | 8.99  |  
|1996-C                 |  | September, 1996 |  |          | 535,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.83 |   |  |  | 6.60  |   |  |  | 9.23  |  
|1996-D                 |  | December, 1996  |  |          | 545,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.43 |   |  |  | 6.17  |   |  |  | 9.26  |  
|1997-A                 |  | March, 1997     |  |          | 500,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.33 |   |  |  | 6.60  |   |  |  | 8.73  |  
|1997-B                 |  | June, 1997      |  |          | 590,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.36 |   |  |  | 6.37  |   |  |  | 8.99  |  
|1997-C                 |  | September, 1997 |  |          | 600,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.43 |   |  |  | 6.17  |   |  |  | 9.26  |  
|1997-D                 |  | December, 1997  |  |          | 500,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.19 |   |  |  | 6.34  |   |  |  | 8.85  |  
|1998-A                 |  | March, 1998     |  |          | 525,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.72 |   |  |  | 6.01  |   |  |  | 8.71  |  
|1998-B                 |  | June, 1998      |  |          | 660,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.68 |   |  |  | 6.06  |   |  |  | 8.62  |  
|1998-C                 |  | November, 1998  |  |          | 700,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.42 |   |  |  | 5.81  |   |  |  | 8.61  |  
|1999-A                 |  | January, 1999   |  |          | 1,000,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.42 |   |  |  | 5.70  |   |  |  | 8.72  |  
|1999-B                 |  | July, 1999      |  |          | 1,000,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.62 |   |  |  | 6.36  |   |  |  | 8.26  |  
|1999-C                 |  | November, 1999  |  |          | 500,000    |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.77 |   |  |  | 7.01  |   |  |  | 7.76  |  
|2000-A                 |  | March, 2000     |  |          | 1,200,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.66 |   |  |  | 7.28  |   |  |  | 7.38  |  
|2000-B                 |  | May, 2000       |  |          | 1,000,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 14.84 |   |  |  | 7.78  |   |  |  | 7.06  |  
|2000-C(3)              |  | August, 2000    |  |          | 1,390,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.04 |   |  |  | 7.32  |   |  |  | 7.72  |  
|2000-D                 |  | November, 2000  |  |          | 1,000,000  |                      |  |                   | Paid in full |             |  |                     |       |           |  |  | 15.20 |   |  |  | 6.94  |   |  |  | 8.26  |  
|2001-A                 |  | January, 2001   |  |          | 1,000,000  |                      |  | $                 | 109,157      |             |  |                     | 10.92 | %         |  |  | 14.87 |   |  |  | 5.77  |   |  |  | 9.10  |  
|2001-B(3)              |  | May, 2001       |  |          | 1,370,000  |                      |  |                   | 160,387      |             |  |                     | 11.71 |           |  |  | 14.41 |   |  |  | 4.23  |   |  |  | 10.18 |  
|2001-C                 |  | August, 2001    |  |          | 1,200,000  |                      |  |                   | 194,240      |             |  |                     | 16.19 |           |  |  | 13.90 |   |  |  | 4.50  |   |  |  | 9.40  |  
|2002-1                 |  | March, 2002     |  |          | 1,800,000  |                      |  |                   | 421,883      |             |  |                     | 23.44 |           |  |  | 13.50 |   |  |  | 4.26  |   |  |  | 9.24  |  
|2002-2                 |  | May, 2002       |  |          | 1,750,000  |                      |  |                   | 497,790      |             |  |                     | 28.45 |           |  |  | 12.51 |   |  |  | 3.89  |   |  |  | 8.62  |  
|2002-3                 |  | August, 2002    |  |          | 1,250,000  |                      |  |                   | 410,108      |             |  |                     | 32.81 |           |  |  | 12.30 |   |  |  | 3.06  |   |  |  | 9.24  |  
|2002-4                 |  | November, 2002  |  |          | 1,350,000  |                      |  |                   | 537,558      |             |  |                     | 39.82 |           |  |  | 12.18 |   |  |  | 2.66  |   |  |  | 9.52  |  
|2003-1                 |  | February, 2003  |  |          | 1,343,250  |                      |  |                   | 562,748      |             |  |                     | 41.89 |           |  |  | 11.79 |   |  |  | 2.42  |   |  |  | 9.37  |  
|2003-2                 |  | May, 2003       |  |          | 1,492,500  |                      |  |                   | 715,232      |             |  |                     | 47.92 |           |  |  | 11.57 |   |  |  | 2.13  |   |  |  | 9.44  |  
|2003-3(3)              |  | August, 2003    |  |          | 1,650,000  |                      |  |                   | 993,743      |             |  |                     | 60.23 |           |  |  | 10.59 |   |  |  | 2.66  |   |  |  | 7.93  |  
|2003-4                 |  | November, 2003  |  |          | 1,403,625  |                      |  |                   | 857,934      |             |  |                     | 61.12 |           |  |  | 10.89 |   |  |  | 2.70  |   |  |  | 8.19  |  
|2004-1(3)              |  | February, 2004  |  |          | 1,477,500  |                      |  |                   | 987,663      |             |  |                     | 66.85 |           |  |  | 10.89 |   |  |  | 2.35  |   |  |  | 8.54  |  
|2004-2                 |  | May, 2004       |  |          | 1,477,500  |                      |  |                   | 1,140,607    |             |  |                     | 77.20 |           |  |  | 10.98 |   |  |  | 3.02  |   |  |  | 7.96  |  
|2004-3                 |  | August, 2004    |  |          | 1,552,000  |                      |  |                   | 1,362,657    |             |  |                     | 87.80 |           |  |  | 10.64 |   |  |  | 3.49  |   |  |  | 7.15  |  
|2004-4                 |  | October, 2004   |  |          | 1,358,000  |                      |  |                   | 1,307,371    |             |  |                     | 96.27 |           |  |  | 11.19 |   |  |  | 3.10  |   |  |  | 8.09  |  
|2005-1                 |  | January, 2005   |  |          | 1,552,000  |                      |  |                   |              |             |  |                     |       |           |  |  | 11.25 |   |  |  | 3.66  |   |  |  | 7.59  |  
|                       |  |                 |  |          |            |                      |  |                   |              |             |  |                     |       |           |  |  |       |   |  |  |       |   |  |  |       |  
|                       |  | Total           |  | $        | 42,027,805 |                      |  | $                 | 10,259,078   |             |  |                     |       |           |  |  |       |   |  |  |       |   |  |  |       |  
|                       |  |                 |  |          |            |                      |  |                   |              |             |  |                     |       |           |  |  |       |   |  |  |       |   |  |  |       |  






|    |                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents only the note payable amounts outstanding at the date
    indicated.                                                                                                                                         
|   
|(2) | Represents the difference between the original weighted average
    annual percentage rate, also known as APR, and the estimated
    weighted average securitization rate on the closing date of the
    securitization.
|   
|(3) | Represents loans sold to Westcorp and subsequently securitized
    by Westcorp. We manage these contracts pursuant to an agreement
    with Westcorp and the securitization trust.                                      

35



---



##### 





| |                   
| | ------------------
| | Operating Expenses







| |             
| | ------------
| | Income Taxes



Financial Condition




| |         
| | --------
| | Overview





| |              
| | -------------
| | Asset Quality



| |         
| | --------
| | Overview



36



---



##### 





|                                                                                         |                 |                        |            |            |  |        |      |            |   |        |            |            |  |  |      |      |   |   |           |         |  |  |      |      |  
|---------------------------------------------------------------------------------------- | --------------- | ---------------------- | ---------- | ---------- |  | ------ | ---- | ---------- | - | ------ | ---------- | ---------- |  |  | ---- | ---- | - | - | --------- | ------- |  |  | ---- | ---- | -
|                                                                                         |                 | December 31,          
|                                                                                         |                 |                       
|                                                                                         |                 | 2004                   |            | 2003       |  | 2002  
|                                                                                         |                 |                        |            |            |  |       
|                                                                                         |                 | Amount                 |            | Percentage |  | Amount |      | Percentage |   | Amount |            | Percentage
|                                                                                         |                 |                        |            |            |  |        |      |            |   |        |            |           
|                                                                                         |                 | (Dollars in thousands)
|Contracts managed                                                                        |                 | $                      | 11,560,890 |            |  |        |      |            |   | $      | 10,596,665 |            |  |  |      |      |   | $ | 9,389,974 |         |  |  |      |     
|                                                                                         |                 |                        |            |            |  |        |      |            |   |        |            |            |  |  |      |      |   |   |           |         |  |  |      |     
|Period of delinquency:                                                                   |                 |                        |            |            |  |        |      |            |   |        |            |            |  |  |      |      |   |   |           |         |  |  |      |     
|                                                                                         | 30 - 59 days    |                        | $          | 191,001    |  |        |      | 1.65       | % |        | $          | 219,937    |  |  |      | 2.08 | % |   | $         | 238,204 |  |  |      | 2.54 | %
|                                                                                         | 60 days or more |                        |            | 67,660     |  |        |      | 0.59       |   |        |            | 87,129     |  |  |      | 0.82 |   |   |           | 90,291  |  |  |      | 0.96 |  
|                                                                                         |                 |                        |            |            |  |        |      |            |   |        |            |            |  |  |      |      |   |   |           |         |  |  |      |     
|Total contracts delinquent and delinquencies as a percentage of
    contracts managed(1) |                 | $                      | 258,661    |            |  |        | 2.24 | %          |   | $      | 307,066    |            |  |  | 2.90 | %    |   | $ | 328,495   |         |  |  | 3.50 | %   
|                                                                                         |                 |                        |            |            |  |        |      |            |   |        |            |            |  |  |      |      |   |   |           |         |  |  |      |     






|    |                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Excludes Chapter 13 bankruptcy accounts greater than
    120 days past due of $46.1 million, $45.6 million
    and $41.5 million at December 31, 2004, 2003 and 2002,
    respectively.



|                                                                                     |  |                        |         |        |  |           |            |        |  |           |         |        |  |   |            |   |  |  |         |   |  |   |           |  
|------------------------------------------------------------------------------------ |  | ---------------------- | ------- | ------ |  | --------- | ---------- | ------ |  | --------- | ------- | ------ |  | - | ---------- | - |  |  | ------- | - |  | - | --------- | -
|                                                                                     |  | December 31,          
|                                                                                     |  |                       
|                                                                                     |  | 2004                   |         | 2003   |  | 2002     
|                                                                                     |  |                        |         |        |  |          
|                                                                                     |  | Number of              |         |        |  | Number of |            |        |  | Number of |         |       
|                                                                                     |  | Contracts              |         | Amount |  | Contracts |            | Amount |  | Contracts |         | Amount
|                                                                                     |  |                        |         |        |  |           |            |        |  |           |         |       
|                                                                                     |  | (Dollars in thousands)
|Contracts managed                                                                    |  |                        | 876,695 |        |  | $         | 11,560,890 |        |  |           | 826,122 |        |  | $ | 10,596,665 |   |  |  | 757,269 |   |  | $ | 9,389,974 |  
|                                                                                     |  |                        |         |        |  |           |            |        |  |           |         |        |  |   |            |   |  |  |         |   |  |   |           |  
|Repossessed vehicles                                                                 |  |                        | 1,049   |        |  | $         | 7,982      |        |  |           | 1,522   |        |  | $ | 10,331     |   |  |  | 2,375   |   |  | $ | 16,433    |  
|                                                                                     |  |                        |         |        |  |           |            |        |  |           |         |        |  |   |            |   |  |  |         |   |  |   |           |  
|Repossessed assets as a percentage of number and amount of
    contracts outstanding |  |                        | 0.12    | %      |  |           | 0.07       | %      |  |           | 0.18    | %      |  |   | 0.10       | % |  |  | 0.31    | % |  |   | 0.18      | %



|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  
|----------------------------------------------------------------------------- |  | ------------------------------- | ---------- | ---- |  | ---- | ---------- | - |  | - | --------- | -
|                                                                              |  | For the Year Ended December 31,
|                                                                              |  |                                
|                                                                              |  | 2004                            |            | 2003 |  | 2002
|                                                                              |  |                                 |            |      |  |     
|                                                                              |  | (Dollars in thousands)         
|Contracts managed at end of period                                            |  | $                               | 11,560,890 |      |  | $    | 10,596,665 |   |  | $ | 9,389,974 |  
|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  
|Average contracts managed during period                                       |  | $                               | 11,113,411 |      |  | $    | 10,051,754 |   |  | $ | 8,845,635 |  
|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  
|Gross chargeoffs                                                              |  | $                               | 312,586    |      |  | $    | 350,714    |   |  | $ | 327,161   |  
|Recoveries                                                                    |  |                                 | 91,704     |      |  |      | 89,027     |   |  |   | 82,372    |  
|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  
|Net chargeoffs                                                                |  | $                               | 220,882    |      |  | $    | 261,687    |   |  | $ | 244,789   |  
|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  
|Net chargeoffs as a percentage of average contracts managed
    during period |  |                                 | 1.99       | %    |  |      | 2.60       | % |  |   | 2.77      | %
|                                                                              |  |                                 |            |      |  |      |            |   |  |   |           |  



37



---



##### 





Cumulative Static Pool Loss Curves


At December 31, 2004


|             |  |  |        |      |           |  |        |      |        |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|------------ |  |  | ------ | ---- | --------- |  | ------ | ---- | ------ |  | ------ | ---- | ------ |  | ------ | ---- | ------ |  | ------ | ---- | --------- |  | ------ | ---- | --------- |  | ------ | ---- | ------ |  | ------ | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|            
|Period(1)    |  |  | 2001-A |      | 2001-B(3) |  | 2001-C |      | 2002-1 |  | 2002-2 |      | 2002-3 |  | 2002-4 |      | 2003-1 |  | 2003-2 |      | 2003-3(3) |  | 2003-4 |      | 2004-1(3) |  | 2004-2 |      | 2004-3 |  | 2004-4
|            
|1            |  |  |        | 0.00 | %         |  |        | 0.00 | %      |  |        | 0.00 | %      |  |        | 0.00 | %      |  |        | 0.00 | %         |  |        | 0.00 | %         |  |        | 0.00 | %      |  |        | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
|2            |  |  |        | 0.03 | %         |  |        | 0.03 | %      |  |        | 0.04 | %      |  |        | 0.01 | %      |  |        | 0.00 | %         |  |        | 0.02 | %         |  |        | 0.02 | %      |  |        | 0.01 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.01 | % |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.02 | % |  |  | 0.00 | %
|3            |  |  |        | 0.09 | %         |  |        | 0.10 | %      |  |        | 0.09 | %      |  |        | 0.06 | %      |  |        | 0.03 | %         |  |        | 0.06 | %         |  |        | 0.07 | %      |  |        | 0.04 | % |  |  | 0.02 | % |  |  | 0.02 | % |  |  | 0.03 | % |  |  | 0.02 | % |  |  | 0.03 | % |  |  | 0.06 | % |  |  | 0.04 | %
|4            |  |  |        | 0.20 | %         |  |        | 0.21 | %      |  |        | 0.20 | %      |  |        | 0.15 | %      |  |        | 0.10 | %         |  |        | 0.14 | %         |  |        | 0.16 | %      |  |        | 0.11 | % |  |  | 0.06 | % |  |  | 0.06 | % |  |  | 0.08 | % |  |  | 0.06 | % |  |  | 0.07 | % |  |  | 0.13 | % |  |  |      |  
|5            |  |  |        | 0.33 | %         |  |        | 0.33 | %      |  |        | 0.35 | %      |  |        | 0.29 | %      |  |        | 0.18 | %         |  |        | 0.27 | %         |  |        | 0.26 | %      |  |        | 0.18 | % |  |  | 0.14 | % |  |  | 0.13 | % |  |  | 0.14 | % |  |  | 0.11 | % |  |  | 0.15 | % |  |  | 0.21 | % |  |  |      |  
|6            |  |  |        | 0.50 | %         |  |        | 0.50 | %      |  |        | 0.49 | %      |  |        | 0.43 | %      |  |        | 0.32 | %         |  |        | 0.44 | %         |  |        | 0.38 | %      |  |        | 0.29 | % |  |  | 0.25 | % |  |  | 0.23 | % |  |  | 0.21 | % |  |  | 0.19 | % |  |  | 0.24 | % |  |  |      |   |  |  |      |  
|7            |  |  |        | 0.70 | %         |  |        | 0.69 | %      |  |        | 0.65 | %      |  |        | 0.60 | %      |  |        | 0.49 | %         |  |        | 0.57 | %         |  |        | 0.50 | %      |  |        | 0.41 | % |  |  | 0.36 | % |  |  | 0.32 | % |  |  | 0.28 | % |  |  | 0.27 | % |  |  | 0.33 | % |  |  |      |   |  |  |      |  
|8            |  |  |        | 0.84 | %         |  |        | 0.87 | %      |  |        | 0.81 | %      |  |        | 0.84 | %      |  |        | 0.66 | %         |  |        | 0.70 | %         |  |        | 0.61 | %      |  |        | 0.53 | % |  |  | 0.48 | % |  |  | 0.40 | % |  |  | 0.35 | % |  |  | 0.34 | % |  |  | 0.41 | % |  |  |      |   |  |  |      |  
|9            |  |  |        | 1.04 | %         |  |        | 1.05 | %      |  |        | 0.95 | %      |  |        | 1.06 | %      |  |        | 0.82 | %         |  |        | 0.82 | %         |  |        | 0.78 | %      |  |        | 0.66 | % |  |  | 0.59 | % |  |  | 0.47 | % |  |  | 0.44 | % |  |  | 0.42 | % |  |  |      |   |  |  |      |   |  |  |      |  
|10           |  |  |        | 1.24 | %         |  |        | 1.22 | %      |  |        | 1.07 | %      |  |        | 1.28 | %      |  |        | 0.96 | %         |  |        | 0.96 | %         |  |        | 0.94 | %      |  |        | 0.80 | % |  |  | 0.70 | % |  |  | 0.55 | % |  |  | 0.54 | % |  |  | 0.52 | % |  |  |      |   |  |  |      |   |  |  |      |  
|11           |  |  |        | 1.45 | %         |  |        | 1.36 | %      |  |        | 1.20 | %      |  |        | 1.48 | %      |  |        | 1.10 | %         |  |        | 1.10 | %         |  |        | 1.08 | %      |  |        | 0.93 | % |  |  | 0.80 | % |  |  | 0.62 | % |  |  | 0.61 | % |  |  | 0.59 | % |  |  |      |   |  |  |      |   |  |  |      |  
|12           |  |  |        | 1.67 | %         |  |        | 1.53 | %      |  |        | 1.37 | %      |  |        | 1.67 | %      |  |        | 1.26 | %         |  |        | 1.24 | %         |  |        | 1.28 | %      |  |        | 1.06 | % |  |  | 0.89 | % |  |  | 0.71 | % |  |  | 0.73 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|13           |  |  |        | 1.90 | %         |  |        | 1.67 | %      |  |        | 1.55 | %      |  |        | 1.82 | %      |  |        | 1.39 | %         |  |        | 1.38 | %         |  |        | 1.43 | %      |  |        | 1.21 | % |  |  | 0.98 | % |  |  | 0.80 | % |  |  | 0.83 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|14           |  |  |        | 2.09 | %         |  |        | 1.81 | %      |  |        | 1.74 | %      |  |        | 1.99 | %      |  |        | 1.51 | %         |  |        | 1.53 | %         |  |        | 1.59 | %      |  |        | 1.31 | % |  |  | 1.08 | % |  |  | 0.88 | % |  |  | 0.93 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|15           |  |  |        | 2.25 | %         |  |        | 2.00 | %      |  |        | 1.97 | %      |  |        | 2.14 | %      |  |        | 1.68 | %         |  |        | 1.70 | %         |  |        | 1.77 | %      |  |        | 1.40 | % |  |  | 1.20 | % |  |  | 0.97 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|16           |  |  |        | 2.41 | %         |  |        | 2.19 | %      |  |        | 2.16 | %      |  |        | 2.27 | %      |  |        | 1.83 | %         |  |        | 1.88 | %         |  |        | 1.92 | %      |  |        | 1.50 | % |  |  | 1.31 | % |  |  | 1.07 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|17           |  |  |        | 2.54 | %         |  |        | 2.37 | %      |  |        | 2.36 | %      |  |        | 2.45 | %      |  |        | 1.99 | %         |  |        | 2.03 | %         |  |        | 2.05 | %      |  |        | 1.60 | % |  |  | 1.41 | % |  |  | 1.16 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|18           |  |  |        | 2.73 | %         |  |        | 2.60 | %      |  |        | 2.59 | %      |  |        | 2.62 | %      |  |        | 2.16 | %         |  |        | 2.15 | %         |  |        | 2.16 | %      |  |        | 1.70 | % |  |  | 1.53 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|19           |  |  |        | 2.93 | %         |  |        | 2.80 | %      |  |        | 2.78 | %      |  |        | 2.80 | %      |  |        | 2.31 | %         |  |        | 2.28 | %         |  |        | 2.25 | %      |  |        | 1.85 | % |  |  | 1.66 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|20           |  |  |        | 3.11 | %         |  |        | 3.01 | %      |  |        | 2.95 | %      |  |        | 2.99 | %      |  |        | 2.46 | %         |  |        | 2.41 | %         |  |        | 2.37 | %      |  |        | 1.99 | % |  |  | 1.76 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|21           |  |  |        | 3.34 | %         |  |        | 3.19 | %      |  |        | 3.14 | %      |  |        | 3.15 | %      |  |        | 2.60 | %         |  |        | 2.52 | %         |  |        | 2.49 | %      |  |        | 2.14 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|22           |  |  |        | 3.54 | %         |  |        | 3.34 | %      |  |        | 3.29 | %      |  |        | 3.31 | %      |  |        | 2.72 | %         |  |        | 2.62 | %         |  |        | 2.62 | %      |  |        | 2.27 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|23           |  |  |        | 3.72 | %         |  |        | 3.49 | %      |  |        | 3.41 | %      |  |        | 3.45 | %      |  |        | 2.86 | %         |  |        | 2.74 | %         |  |        | 2.73 | %      |  |        | 2.37 | % |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|24           |  |  |        | 3.92 | %         |  |        | 3.62 | %      |  |        | 3.57 | %      |  |        | 3.58 | %      |  |        | 2.95 | %         |  |        | 2.83 | %         |  |        | 2.84 | %      |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|25           |  |  |        | 4.10 | %         |  |        | 3.75 | %      |  |        | 3.73 | %      |  |        | 3.69 | %      |  |        | 3.03 | %         |  |        | 2.96 | %         |  |        | 2.95 | %      |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|26           |  |  |        | 4.23 | %         |  |        | 3.87 | %      |  |        | 3.88 | %      |  |        | 3.80 | %      |  |        | 3.13 | %         |  |        | 3.08 | %         |  |        | 3.06 | %      |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|27           |  |  |        | 4.36 | %         |  |        | 4.00 | %      |  |        | 4.04 | %      |  |        | 3.92 | %      |  |        | 3.22 | %         |  |        | 3.21 | %         |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|28           |  |  |        | 4.47 | %         |  |        | 4.15 | %      |  |        | 4.20 | %      |  |        | 4.02 | %      |  |        | 3.33 | %         |  |        | 3.31 | %         |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|29           |  |  |        | 4.56 | %         |  |        | 4.28 | %      |  |        | 4.35 | %      |  |        | 4.12 | %      |  |        | 3.41 | %         |  |        | 3.41 | %         |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|30           |  |  |        | 4.67 | %         |  |        | 4.40 | %      |  |        | 4.46 | %      |  |        | 4.22 | %      |  |        | 3.50 | %         |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|31           |  |  |        | 4.81 | %         |  |        | 4.52 | %      |  |        | 4.57 | %      |  |        | 4.30 | %      |  |        | 3.58 | %         |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|32           |  |  |        | 4.92 | %         |  |        | 4.64 | %      |  |        | 4.69 | %      |  |        | 4.39 | %      |  |        | 3.66 | %         |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|33           |  |  |        | 5.04 | %         |  |        | 4.73 | %      |  |        | 4.77 | %      |  |        | 4.49 | %      |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|34           |  |  |        | 5.13 | %         |  |        | 4.83 | %      |  |        | 4.85 | %      |  |        | 4.56 | %      |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|35           |  |  |        | 5.24 | %         |  |        | 4.93 | %      |  |        | 4.92 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|36           |  |  |        | 5.31 | %         |  |        | 4.99 | %      |  |        | 5.01 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|37           |  |  |        | 5.39 | %         |  |        | 5.05 | %      |  |        | 5.09 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|38           |  |  |        | 5.45 | %         |  |        | 5.11 | %      |  |        | 5.16 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|39           |  |  |        | 5.50 | %         |  |        | 5.17 | %      |  |        | 5.22 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|40           |  |  |        | 5.56 | %         |  |        | 5.24 | %      |  |        | 5.27 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|41           |  |  |        | 5.61 | %         |  |        | 5.29 | %      |  |        | 5.32 | %      |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|42           |  |  |        | 5.66 | %         |  |        | 5.33 | %      |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|43           |  |  |        | 5.70 | %         |  |        | 5.39 | %      |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|44           |  |  |        | 5.75 | %         |  |        | 5.43 | %      |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|45           |  |  |        | 5.81 | %         |  |        |      |        |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|46           |  |  |        | 5.84 | %         |  |        |      |        |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|47           |  |  |        | 5.87 | %         |  |        |      |        |  |        |      |        |  |        |      |        |  |        |      |           |  |        |      |           |  |        |      |        |  |        |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |   |  |  |      |  
|Prime Mix(2) |  |  |        | 71   | %         |  |        | 71   | %      |  |        | 76   | %      |  |        | 70   | %      |  |        | 87   | %         |  |        | 85   | %         |  |        | 80   | %      |  |        | 80   | % |  |  | 82   | % |  |  | 84   | % |  |  | 82   | % |  |  | 82   | % |  |  | 82   | % |  |  | 81   | % |  |  | 78   | %






|    |                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the number of months since the inception of the
    securitization.                                                                                                                            
|   
|(2) | Represents the original percentage of prime automobile contracts
    securitized within each pool.                                                                                                        
|   
|(3) | Represents loans sold to Westcorp in whole loan sales and
    subsequently securitized by Westcorp. We manage these contracts
    pursuant to an agreement with Westcorp and the securitization
    trust.

38



---



##### 





| |                     
| | --------------------
| | Nonperforming Assets







| |                            
| | ---------------------------
| | Allowance for Credit Losses





|                                                                                           |  |                                 |          |      |  |      |          |      |  |      |          |   |  |   |          |   |  |   |         |  
|------------------------------------------------------------------------------------------ |  | ------------------------------- | -------- | ---- |  | ---- | -------- | ---- |  | ---- | -------- | - |  | - | -------- | - |  | - | ------- | -
|                                                                                           |  | For the Year Ended December 31,
|                                                                                           |  |                                
|                                                                                           |  | 2004                            |          | 2003 |  | 2002 |          | 2001 |  | 2000
|                                                                                           |  |                                 |          |      |  |      |          |      |  |     
|                                                                                           |  | (Dollars in thousands)         
|Balance at beginning of period                                                             |  | $                               | 239,697  |      |  | $    | 227,673  |      |  | $    | 136,410  |   |  | $ | 71,308   |   |  | $ | 36,682  |  
|Chargeoffs                                                                                 |  |                                 | (254,462 | )    |  |      | (297,610 | )    |  |      | (207,713 | ) |  |   | (110,359 | ) |  |   | (47,929 | )
|Recoveries                                                                                 |  |                                 | 74,915   |      |  |      | 75,834   |      |  |      | 49,883   |   |  |   | 31,331   |   |  |   | 13,593  |  
|                                                                                           |  |                                 |          |      |  |      |          |      |  |      |          |   |  |   |          |   |  |   |         |  
|Net chargeoffs                                                                             |  |                                 | (179,547 | )    |  |      | (221,776 | )    |  |      | (157,830 | ) |  |   | (79,028  | ) |  |   | (34,336 | )
|Provision for credit losses                                                                |  |                                 | 192,315  |      |  |      | 233,800  |      |  |      | 249,093  |   |  |   | 144,130  |   |  |   | 68,962  |  
|                                                                                           |  |                                 |          |      |  |      |          |      |  |      |          |   |  |   |          |   |  |   |         |  
|Balance at end of period                                                                   |  | $                               | 252,465  |      |  | $    | 239,697  |      |  | $    | 227,673  |   |  | $ | 136,410  |   |  | $ | 71,308  |  
|                                                                                           |  |                                 |          |      |  |      |          |      |  |      |          |   |  |   |          |   |  |   |         |  
|Ratio of net chargeoffs during the period to average contracts
    owned during the period |  |                                 | 2.1      | %    |  |      | 2.5      | %    |  |      | 2.4      | % |  |   | 2.0      | % |  |   | 1.6     | %
|Ratio of allowance for credit losses to contracts at the end of
    the period             |  |                                 | 2.6      | %    |  |      | 2.8      | %    |  |      | 2.9      | % |  |   | 2.6      | % |  |   | 2.3     | %

Capital Resources and Liquidity




| |         
| | --------
| | Overview





| |                          
| | -------------------------
| | Principal Sources of Cash



| |                                   
| | ----------------------------------
| | Contract Sales and Securitizations



39



---



##### 







| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Collections of Principal and Interest from Contracts and
    Release of Cash from Spread Accounts









| |                       
| | ----------------------
| | Borrowings from Parent





40



---



##### 







| |                  
| | -----------------
| | Conduit Financing





| |                 
| | ----------------
| | Equity Offerings





| |                       
| | ----------------------
| | Principal Uses of Cash



| |                         
| | ------------------------
| | Acquisition of Contracts





| |                                                      
| | -----------------------------------------------------
| | Payments of Principal and Interest on Securitizations





| |                        
| | -----------------------
| | Amounts Paid to Dealers





| |                            
| | ---------------------------
| | Advances to Spread Accounts





| |                       
| | ----------------------
| | Operating Our Business



41



---



##### 





| |                        
| | -----------------------
| | Contractual Obligations



|                                                 |                               |                        |         |             |  |             |           |            |  |       |           |           |  |   |           |           |  |   |           |           | 
|------------------------------------------------ | ----------------------------- | ---------------------- | ------- | ----------- |  | ----------- | --------- | ---------- |  | ----- | --------- | --------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                                 |                               | At December 31, 2004  
|                                                 |                               |                       
|                                                 |                               |                        |         | More Than   |  | More Than   |           |           
|                                                 |                               |                        |         | One Year    |  | Three Years |           |           
|                                                 |                               | One Year               |         | Through     |  | Through     |           | More Than  |  |      
|                                                 |                               | or Less                |         | Three Years |  | Five Years  |           | Five Years |  | Total
|                                                 |                               |                        |         |             |  |             |           |            |  |      
|                                                 |                               | (Dollars in thousands)
|Lines of credit  parent                         |                               |                        |         |             |  |             |           |            |  | $     | 161,010   |           |  | $ | 52,731    |           |  | $ | 213,741   |          
|Notes payable on automobile secured financing(1) |                               | $                      | 235,599 |             |  | $           | 2,058,728 |            |  |       | 2,107,139 |           |  |   | 3,703,809 |           |  |   | 8,105,275 |          
|Notes payable  parent                           |                               |                        |         |             |  |             |           |            |  |       |           |           |  |   | 300,000   |           |  |   | 300,000   |          
|Contract commitments                             |                               |                        | 297,551 |             |  |             |           |            |  |       |           |           |  |   |           |           |  |   | 297,551   |          
|Operating leases                                 |                               |                        | 5,552   |             |  |             | 8,109     |            |  |       | 3,465     |           |  |   | 991       |           |  |   | 18,117    |          
|                                                 |                               |                        |         |             |  |             |           |            |  |       |           |           |  |   |           |           |  |   |           |          
|                                                 | Total contractual obligations |                        | $       | 538,702     |  |             | $         | 2,066,837  |  |       | $         | 2,271,614 |  |   | $         | 4,057,531 |  |   | $         | 8,934,684 | 
|                                                 |                               |                        |         |             |  |             |           |            |  |       |           |           |  |   |           |           |  |   |           |          






|    |                                            
|--- | -------------------------------------------
|(1) | Includes the effects of hedging activities.






|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosure About Market
    Risk







42



---



##### 











43



---



##### 





|                                                      |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           |       |   |   |            |   | 
|----------------------------------------------------- | --------------------- | ---------------------- | --------- | ---- | - | ---- | --------- | ---- | - | ---- | --------- | ---------- | - | ----- | --------- | ---------- | - | - | ------- | ---- | - | - | ------- | ----- | - | - | --------- | ----- | - | - | ---------- | - | 
|                                                      |                       | 2005                   |           | 2006 |   | 2007 |           | 2008 |   | 2009 |           | Thereafter |   | Total |           | Fair Value
|                                                      |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |           
|                                                      |                       | (Dollars in thousands)
|Rate sensitive assets:                                |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           |       |   |   |            |  
|Fixed interest rate contracts                         |                       | $                      | 3,322,406 |      |   | $    | 2,736,891 |      |   | $    | 1,866,267 |            |   | $     | 1,060,183 |            |   | $ | 510,196 |      |   | $ | 67,114  |       |   | $ | 9,563,057 |       |   | $ | 10,074,567 |  
|                                                      | Average interest rate |                        |           | 9.61 | % |      |           | 9.61 | % |      |           | 9.41       | % |       |           | 9.12       | % |   |         | 8.92 | % |   |         | 8.12  | % |   |           | 9.47  | % |   |            |   | 
|Fixed interest rate securities                        |                       | $                      | 365,512   |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   | $ | 365,512   |       |   | $ | 365,512    |  
|                                                      | Average interest rate |                        |           | 2.13 | % |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           | 2.13  | % |   |            |   | 
|Rate sensitive liabilities:                           |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           |       |   |   |            |  
|Notes payable on automobile secured financing  fixed |                       | $                      | 3,539,962 |      |   | $    | 2,333,035 |      |   | $    | 1,098,994 |            |   | $     | 627,021   |            |   |   |         |      |   |   |         |       |   | $ | 7,599,012 |       |   | $ | 7,733,057  |  
|                                                      | Average interest rate |                        |           | 2.88 | % |      |           | 3.11 | % |      |           | 3.23       | % |       |           | 3.62       | % |   |         |      |   |   |         |       |   |   |           | 3.06  | % |   |            |   | 
|Automobile secured financing  variable               |                       | $                      | 506,263   |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   | $ | 506,263   |       |   | $ | 506,263    |  
|                                                      | Average interest rate |                        |           | 2.56 | % |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           | 2.56  | % |   |            |   | 
|Notes payable  parent                                |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   | $ | 300,000 |       |   | $ | 300,000   |       |   | $ | 300,000    |  
|                                                      | Average interest rate |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         | 10.08 | % |   |           | 10.08 | % |   |            |   | 
|Lines of credit  parent                              |                       | $                      | 213,741   |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   | $ | 213,741   |       |   | $ | 213,741    |  
|                                                      | Average interest rate |                        |           | 3.66 | % |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           | 3.66  | % |   |            |   | 
|Rate sensitive derivative financial instruments:      |                       |                        |           |      |   |      |           |      |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           |       |   |   |            |  
|Interest rate swap agreements                         |                       | $                      | 133,537   |      |   | $    | (133,537  | )    |   |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           |       |   | $ | (1,738     | )
|                                                      | Average pay rate      |                        |           | 4.66 | % |      |           | 2.98 | % |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           | 4.22  | % |   |            |   | 
|                                                      | Average receive rate  |                        |           | 2.39 | % |      |           | 0.00 | % |      |           |            |   |       |           |            |   |   |         |      |   |   |         |       |   |   |           | 2.39  | % |   |            |   | 
|Euro-dollar futures contracts                         |                       | $                      | 680,323   |      |   | $    | (276,556  | )    |   | $    | (214,842  | )          |   | $     | (188,925  | )          |   |   |         |      |   |   |         |       |   |   |           |       |   |   |            |  

44



---



##### 



Glossary


































45



---



##### 





































46



---



##### 





































47



---



##### 































48



---



##### 








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures




Managements Report on Internal Control over Financial
Reporting








Changes in Internal Control over Financial Reporting









|         |                  
|-------- | -----------------
|Item 9B. | Other Information



49



---



##### 






PART III









|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant








|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services



50



---



##### 






PART IV







|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 15. | Financial Statement Schedules, Exhibits and Reports on
    Form 8-K

List of documents filed as part of this report:


Financial
Statements




| |                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following consolidated financial statements and report of
    independent registered public accounting firm for us and our
    subsidiaries are included in this report commencing on page F-2:
|
| | Managements Report on Internal Control over Financial
    Reporting                                                                                                                               
|
| | Report of Independent Registered Public Accounting Firm                                                                                                                                            
|
| | Report of Independent Registered Public Accounting Firm on
    Internal Control over Financial Reporting                                                                                           
|
| | Consolidated Statements of Financial Condition at
    December 31, 2004 and 2003                                                                                                                   
|
| | Consolidated Statements of Income for the years ended
    December 31, 2004, 2003 and 2002                                                                                                         
|
| | Consolidated Statements of Changes in Shareholders Equity
    for the years ended December 31, 2004, 2003 and 2002                                                                                
|
| | Consolidated Statements of Cash Flows for the years ended
    December 31, 2004, 2003 and 2002                                                                                                     
|
| | Notes to Consolidated Financial Statements                                                                                                                                                         

Financial
Statement Schedules




| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Schedules to the consolidated financial statements are omitted
    because the required information is inapplicable or the
    information is presented in our consolidated financial
    statements or related notes.

Exhibits


|        |    |                        |  |                                                                                                                                                   
|------- | -- | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|        | 2  | .1                     |  | Agreement and Plan of Merger and Reorganization, dated as of
    May 23, 2004, among Westcorp, Western Financial Bank and
    WFS Financial Inc(2)
|       
|        | 3  | .1                     |  | Certificate of Amendment and Restatement of Articles of
    Incorporation(7)                                                                      
|       
|        | 3  | .2                     |  | Certificate of Amendment and Restatement of Articles of
    Incorporation of WFS Financial dated April 4, 2004                                    
|       
|        | 4  |                        |  | Specimen WFS Financial Inc Common Stock Certificate(5)                                                                                            
|       
|        | 10 | .1                     |  | Westcorp 2001 Stock Option Plan(3)                                                                                                                
|       
|        | 10 | .2                     |  | 2000 Executive Deferral Plan V(12)                                                                                                                
|       
|        | 10 | .2.1                   |  | First Amendment to the Westcorp Executive Deferral Plan V, dated
    as of April 1, 2003(4)                                                       
|       
|        | 10 | .3                     |  | Amended Revolving Line of Credit Agreement between WFS Funding,
    Inc. and Western Financial Bank, dated June 1, 2002(3)                        
|       
|        | 10 | .3.1                   |  | First Amendment dated October 15, 2002, to the Revolving
    Line of Credit Agreement between WFS Funding, Inc. and Western
    Financial Bank(3) 
|       
|        | 10 | .4                     |  | Security Agreement between WFS Funding, Inc. and Western
    Financial Bank, dated March 7, 2003(7)                                               
|       
|        | 10 | .4.1                   |  | First Amendment dated August 1, 2003, to the Security
    Agreement between WFS Funding, Inc. and Western Financial Bank(7)                       
|       
|        | 10 | .5                     |  | Transfer Agreement between WFS Financial Inc and Western
    Financial Bank, F.S.B., dated May 1, 1995(1)                                         

51



---



##### 



|        |    |                        |  |                                                                                                                                                        
|------- | -- | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|       
|        | 10 | .6                     |  | Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank, dated June 15, 1999(11)                                   
|       
|        | 10 | .6.1                   |  | Amendment No. 1, dated as of August 1, 1999, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(11)
|       
|        | 10 | .6.2                   |  | Amendment No. 2, dated May 23, 2000, to the Revolving
    Line of Credit Agreement between WFS Financial Inc and Western
    Financial Bank(3)         
|       
|        | 10 | .6.3                   |  | Amendment No. 3, dated January 1, 2002, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(3)      
|       
|        | 10 | .6.4                   |  | Amendment No. 4, dated October 15, 2002, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(3)     
|       
|        | 10 | .6.5                   |  | Amendment No. 5, dated May 1, 2004, to the Revolving
    Line of Credit Agreement between WFS Financial Inc and Western
    Financial Bank             
|       
|        | 10 | .7                     |  | Security Agreement between WFS Financial Inc and Western
    Financial Bank, dated March 7, 2003(7)                                                    
|       
|        | 10 | .7.1                   |  | Restated First Amendment to the Security Agreement between WFS
    Financial Inc and Western Financial Bank, dated May 1, 2004                         
|       
|        | 10 | .8                     |  | Short Term Investment Agreement between WFS Financial Inc and
    Western Financial Bank, dated January 1, 1996(7)                                     
|       
|        | 10 | .8.1                   |  | Amendment No. 1, dated as of January 1, 2002, to the
    Short Term Investment Agreement between WFS Financial Inc and
    Western Financial Bank(7)   
|       
|        | 10 | .8.2                   |  | Amendment No. 2, dated as of May 1, 2004, to the Short
    Term Investment Agreement between WFS Financial Inc and Western
    Financial Bank          
|       
|        | 10 | .9                     |  | Master Tax Sharing Agreement between Westcorp and Subsidiaries,
    dated January 1, 2004                                                              
|       
|        | 10 | .9.1                   |  | First Amendment to the Master Tax Sharing Agreement, dated
    June 10, 2004                                                                           
|       
|        | 10 | .10                    |  | Amended and Restated WFS Reinvestment Contract between WFS
    Financial Inc and Western Financial Bank, dated January 1,
    2004                     
|       
|        | 10 | .12                    |  | Amended and Restated Master Collateral Assignment Agreement,
    dated March 1, 2000(11)                                                               
|       
|        | 10 | .13                    |  | Form of WFS Financial Inc Dealer Agreement(4)                                                                                                          
|       
|        | 10 | .14                    |  | Form of WFS Financial Inc Loan Application(4)                                                                                                          
|       
|        | 10 | .15                    |  | Amended and Restated WFS 1996 Incentive Stock Option Plan(6)                                                                                           
|       
|        | 10 | .16                    |  | Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan, dated January 1, 2001(12)                                          
|       
|        | 10 | .16.1                  |  | Amendment No. 1, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(12)        
|       
|        | 10 | .16.2                  |  | Amendment No. 2, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(12)        
|       
|        | 10 | .16.3                  |  | Amendment No. 3, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)         
|       
|        | 10 | .16.4                  |  | Amendment No. 4, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)         
|       
|        | 10 | .16.5                  |  | Amendment No. 5, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)         
|       
|        | 10 | .16.6                  |  | Amendment No. 6, effective as of November 1, 2003, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(7)        
|       
|        | 10 | .16.7                  |  | Amendment No. 7, dated as of December 1, 2003, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(7)            

52



---



##### 



|        |    |                        |  |                                                                                                                                                                     
|------- | -- | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|       
|        | 10 | .16.8                  |  | Amendment No. 8, dated as of December 30, 2004, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan                           
|       
|        | 10 | .17                    |  | Employment Agreements(8)(9)                                                                                                                                         
|       
|        | 10 | .18                    |  | Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank, F.S.B., dated August 1, 1997(10)                                                       
|       
|        | 10 | .18.1                  |  | Amendment No. 1, dated February 23, 1999, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(10)                                
|       
|        | 10 | .18.2                  |  | Amendment No. 2, dated July 30, 1999, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(10)                                    
|       
|        | 10 | .18.3                  |  | Amendment No. 3, dated January 1, 2002, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(3)                                   
|       
|        | 10 | .20                    |  | Master Allocation Agreement between Westcorp and its
    subsidiaries, dated January 1, 2004                                                                        
|       
|        | 10 | .20.1                  |  | First Amendment to the Master Allocation Agreement, dated
    December 1, 2004                                                                                      
|       
|        | 10 | .23                    |  | Amended Revolving Line of Credit Agreement between WFS
    Receivables Corporation and Western Financial Bank, dated
    June 1, 2002(3)                            
|       
|        | 10 | .23.1                  |  | Amendment No. 1, dated October 15, 2002, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation and Western Financial Bank(3)        
|       
|        | 10 | .24                    |  | Security Agreement between WFS Receivables Corporation and
    Western Financial Bank, dated March 7, 2003(7)                                                       
|       
|        | 10 | .24.1                  |  | First Amendment to the Security Agreement, dated August 1,
    2003, to the Security Agreement between WFS Receivables
    Corporation and Western Financial Bank(7)
|       
|        | 10 | .25                    |  | Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank, dated August 8,
    2002(3)                                
|       
|        | 10 | .25.1                  |  | Amendment No. 1, dated November 7, 2002, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(3)      
|       
|        | 10 | .25.2                  |  | Amendment No. 2, dated January 13, 2003, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(7)      
|       
|        | 10 | .27                    |  | Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank, dated May 3, 2002(3)                                                                   
|       
|        | 10 | .28                    |  | Customer List Agreement between Western Financial Bank, WFS
    Financial Inc, and Westfin Insurance Agency, dated May 15,
    1998(3)                              
|       
|        | 10 | .28.1                  |  | Amendment No. 1, dated September 26, 2002, to the
    Customer List Agreement between Western Financial Bank, WFS
    Financial Inc, and Westfin Insurance Agency(3)
|       
|        | 10 | .29                    |  | Interest Rate Swap Guarantee Agreement between Western Financial
    Bank, WFS Financial Inc, and WFS Receivables Corporation, dated
    August 30, 2002(3)         
|       
|        | 10 | .30                    |  | Security Agreement between WFS Receivable Corporation 2,
    WFS Financial Inc, and Western Financial Bank, dated
    March 21, 2002(3)                             
|       
|        | 10 | .31                    |  | Referral Agreement between Western Financial Bank, Westfin
    Insurance Agency and WFS Financial Inc, dated September 16,
    2002(3)                              
|       
|        | 10 | .31.1                  |  | Amendment No. 1, dated March 31, 2003, to the Referral
    Agreement between Western Financial Bank, Westfin Insurance
    Agency and WFS Financial Inc(7)          
|       
|        | 10 | .32                    |  | Future Interest Payment Hedge Guarantee and Reimbursement
    Agreement between Western Financial Bank and WFS Financial Inc,
    dated September 19, 2002(3)       
|       
|        | 10 | .33                    |  | Intellectual Property Licensing Agreement between Westcorp and
    its subsidiaries and affiliates, dated as of January 1, 2004                                     

53



---



##### 



|        |    |                        |  |                                                                                                                                                                                                                                                                                                                                  
|------- | -- | ---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|       
|        | 10 | .34                    |  | Master Travel Services Agreement between Westran Services Corp.
    and Westcorp, Western Financial Bank, WFS Financial Inc, WFS
    Receivables Corporation, Western Financial Associate Solutions
    and Westfin Insurance Agency, Inc., dated January 1, 2004                                                                
|       
|        | 10 | .34.1                  |  | Amendment No. 1, dated December 1, 2004 to the Master
    Travel Service Agreement Between Westran Services Corporation
    and Westcorp, Western Financial Bank, WFS Financial Inc, WFS
    Receivables Corporation, Western Financial Associate Solutions,
    WFS Receivables Corporation 3 and Westfin Insurance Agency, Inc.
|       
|        | 10 | .36                    |  | Sublease Agreement between WFS Financial Inc, WFS Receivable
    Corporation, WFS Receivables Corporation 2, WFS Financial
    Auto Loans, Inc., WFS Financial Auto Loans 2, Inc., Western
    Auto Investments, Inc., and WFS Funding, Inc., dated
    March 21, 2002(3)                                                        
|       
|        | 10 | .36.1                  |  | First Amendment to Sublease Agreement between WFS Financial Inc,
    WFS Receivables Corporation, WFS Receivables Corporation 2,
    WFS Financial Auto Loans, Inc., WFS Financial Auto Loans 2,
    Inc., Western Auto Investments, Inc., and WFS Funding, Inc.
    dated September 1, 2002(3)                                  
|       
|        | 10 | .36.2                  |  | Second Amendment to Sublease Agreement between WFS Financial
    Inc, WFS Receivables Corporation, WFS Receivables
    Corporation 2, WFS Financial Auto Loans, Inc., WFS
    Financial Auto Loans 2, Inc., Western Auto Investments,
    Inc., and WFS Funding, Inc. dated September 1, 2003(7)                                 
|       
|        | 10 | .36.3                  |  | Third Amendment to Sublease Agreement between WFS Financial Inc,
    and WFS Receivables Corporation, WFS Receivables
    Corporation 2, WFS Receivables Corporation 3, WFS
    Receivables Corporation 4, WFS Financial Auto Loans 2,
    Inc., Western Auto Investments, Inc., and WFS Funding, Inc.
    dated April 1, 2004   
|       
|        | 10 | .37                    |  | Collateral Protection Insurance Agreement between Westfin
    Insurance Agency and WFS Financial Inc, dated September 2002(3)                                                                                                                                                                                                    
|       
|        | 10 | .39                    |  | Security Agreement between WFS Receivables Corporation 3 and
    Western Financial Bank, dated March 7, 2003(7)                                                                                                                                                                                                                  
|       
|        | 10 | .39.1                  |  | First Amendment to the Security Agreement, dated August 1,
    2003, to the Security Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(7)                                                                                                                                                           
|       
|        | 10 | .40                    |  | Services Agreement between Western Financial Bank, WFS Financial
    Inc and Western Financial Associate Solutions, dated
    January 1, 2004                                                                                                                                                                                    
|       
|        | 10 | .41                    |  | Westcorp Executive Deferral Plan V Participation Agreement
    between Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc., WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    Corporation, dated January 1, 2004                             
|       
|        | 10 | .41.1                  |  | First Amendment to the Westcorp Executive Deferral Plan V
    Participation Agreement between Westcorp, Western Financial
    Associate Solutions, Western Financial Bank, WFS Financial Inc,
    WestFin Insurance Agency, Inc., WFS Receivables Corporation, and
    Westran Services Corporation, dated December 1, 2004      
|       
|        | 10 | .42                    |  | Westcorp Cafeteria Plan with Flexible Spending Agreement between
    Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc, WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    corporation, dated January 1, 2004                                
|       
|        | 10 | .42.1                  |  | First Amendment to the Westcorp Cafeteria Plan with Flexible
    Spending Agreement between Westcorp, Western Financial Associate
    Solutions, Western Financial Bank, WFS Financial Inc, WestFin
    Insurance Agency, Inc., WFS Receivables Corporation, and Westran
    Services Corporation, dated December 1, 2004        
|       
|        | 10 | .43                    |  | Westcorp ESOP and Salary Savings Plan between Westcorp, Western
    Financial Associate Solutions, Western Financial Bank, WFS
    Financial Inc, WestFin Insurance Agency, Inc., WFS Receivables
    Corporation, and Westran Services Corporation, dated
    January 1, 2004                                                   

54



---



##### 



|        |    |                        |  |                                                                                                                                                                                                                                                                                                       
|------- | -- | ---------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|       
|        | 10 | .43.1                  |  | First Amendment to the Westcorp ESOP and Salary Savings Plan
    between Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc, WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    Corporation, dated December 1, 2004
|       
|        | 10 | .44                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Financial Auto Loans 2, Inc. and WFS Financial Inc,
    dated July 1, 2004                                                                                                                                                    
|       
|        | 10 | .45                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Receivables Corporation and WFS Financial Inc, dated
    July 1, 2004                                                                                                                                                         
|       
|        | 10 | .46                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Receivables Corporation 3 and WFS Financial Inc, dated
    July 1, 2004                                                                                                                                                       
|       
|        | 10 | .47                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Funding, Inc. and WFS Financial Inc, dated July 1, 2004                                                                                                                                                                       
|       
|        | 10 | .48                    |  | Servicing Agreement between WFS Receivables Corporation 2 and
    WFS Financial Inc, dated August 20, 2004                                                                                                                                                                                            
|       
|        | 10 | .49                    |  | Retainer Agreement between WestFin Insurance Agency and WFS
    Financial Inc dated March 31, 2003(7)                                                                                                                                                                                                 
|       
|        | 21 | .1                     |  | Subsidiaries of WFS Financial Inc                                                                                                                                                                                                                                                                     
|       
|        | 23 | .1                     |  | Consent of Independent Auditors, Ernst & Young LLP                                                                                                                                                                                                                                                    
|       
|        | 31 | .1                     |  | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                       
|       
|        | 31 | .2                     |  | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                       
|       
|        | 32 | .1                     |  | Certification of the Chief Executive Officer pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                         
|       
|        | 32 | .2                     |  | Certification of the Chief Financial Officer pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                         






|    |                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Exhibits previously filed with WFS Financial Inc Registration
    Statement on Form S-1 (File No. 33-93068), filed
    August 8, 1995 incorporated herein by reference under
    Exhibit Number indicated                                 
|   
|(2) | Exhibit previously filed with Westcorp Registration Statement on
    Form S-4 (File No. 333-117424), filed July 16, 2004,
    incorporated herein by reference under Exhibit Number
    indicated                                         
|   
|(3) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2002
    as filed on or about March 27, 2003                                                                           
|   
|(4) | Exhibit previously filed with Westcorp Registration Statements
    on Form S-3 (File No. 333-110244) filed November 5,
    2003 and subsequently amended on November 10, 2003
    incorporated by reference under Exhibit Number indicated
|   
|(5) | Amendment No. 1, dated as of July 14, 1995 to the WFS
    Financial Inc Registration Statement on Form S-1 (File
    No. 33-93068) incorporated herein by reference under
    Exhibit Number indicated                                    
|   
|(6) | Exhibit previously filed as Exhibit 4.1 to the WFS
    Financial Inc Registration Statement on Form S-8 (File
    No. 333-40121), filed November 13, 1997, and
    incorporated herein by reference                                       
|   
|(7) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2003
    as filed on or about March 12, 2004                                                                           
|   
|(8) | Employment Agreement dated February 27, 1998 between WFS
    Financial Inc, Westcorp and Lee A. Whatcott (will be provided to
    the SEC upon request)                                                                                   
|   
|(9) | Employment Agreement, dated November 15, 1998 between WFS
    Financial Inc, Westcorp and Mark Olson (will be provided to the
    SEC upon request)                                                                                       



|     |                                                                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 1998
    (File No. 33-93068) as filed on or about March 31, 1999

55



---



##### 





|     |                                                                                                                                                                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Exhibits previously filed with WFS Financial Inc Registration
    Statements on Form S-2 (File No. 333-91277) filed
    November 19, 1999 and subsequently amended on
    January 20, 2000 incorporated by reference under
    Exhibit Number indicated
|    
|(12) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2001
    as filed on or about March 29, 2002                                                                                        



|    |                   
|--- | ------------------
|(b) | Report on Form 8-K



56



---



##### 



SIGNATURES






| |                  
| | -----------------
| | WFS FINANCIAL INC

|                      |  |                                                                                                                                                               
|--------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Dated: March 11, 2005 |  | By: /s/ Thomas A.
    Wolfe----------------------------------------------------------------------
    Thomas A. WolfePresident and
    Chief Executive Officer



|                                             |  |                                                                                                            |  |                |  | 
|-------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                                    |  | Title                                                                                                      |  | Date          
|                                             |  |                                                                                                            |  |               
|                                            
|/s/ Ernest S. RadyErnest
    S. Rady         |  | Chairman of the Board and Director                                                                         |  | March 11, 2005
|                                            
|/s/ Thomas A. WolfeThomas
    A. Wolfe       |  | President, Chief Executive Officer and Director                                                            |  | March 11, 2005
|                                            
|/s/ Judith M. BardwickJudith
    M. Bardwick |  | Director                                                                                                   |  | March 11, 2005
|                                            
|/s/ James R. DowlanJames
    R. Dowlan       |  | Director                                                                                                   |  | March 11, 2005
|                                            
|/s/ Duane A. NellesDuane
    A. Nelles       |  | Director                                                                                                   |  | March 11, 2005
|                                            
|/s/ Ronald I. SimonRonald
    I. Simon       |  | Director                                                                                                   |  | March 11, 2005
|                                            
|/s/ Fredricka TaubitzFredricka
    Taubitz   |  | Director                                                                                                   |  | March 11, 2005
|                                            
|/s/ Mark K. OlsonMark
    K. Olson           |  | Senior Vice President and
    Chief Financial Officer
    (Principal Financial and
    Accounting Officer) |  | March 11, 2005

57



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                                    |  |      |     | 
|------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                                                    |  | Page
|                                                                                                                    |  |     
|Managements Report on Internal Control over Financial
    Reporting                                                |  |      | F-2 | 
|Report of Independent Registered Public Accounting Firm                                                             |  |      | F-3 | 
|Report of Independent Registered Public Accounting Firm on
    Internal Control over Financial Reporting            |  |      | F-4 | 
|Consolidated Financial Statements:                                                                                  |  |      |     | 
|Consolidated Statements of Financial Condition at
    December 31, 2004 and 2003                                    |  |      | F-5 | 
|Consolidated Statements of Income for the years ended
    December 31, 2004, 2003 and 2002                          |  |      | F-6 | 
|Consolidated Statements of Changes in Shareholders Equity
    for the years ended December 31, 2004, 2003 and 2002 |  |      | F-7 | 
|Consolidated Statements of Cash Flows for the years ended
    December 31, 2004, 2003 and 2002                      |  |      | F-8 | 
|Notes to Consolidated Financial Statements                                                                          |  |      | F-9 | 

F-1



---



##### 



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
















|                                   | 
|---------------------------------- | 
|/s/ Ernest S. Rady                 | 
|                                   | 
|Ernest S. Rady                     | 
|Chairman of the Board and Director | 
|                                  
|/s/ Thomas A. Wolfe                | 
|                                   | 
|Thomas A. Wolfe                    | 
|President and                      | 
|Chief Executive Officer            | 
|                                  
|/s/ Mark K. Olson                  | 
|                                   | 
|Mark K. Olson                      | 
|Senior Vice President              | 
|and Chief Financial Officer        | 
|(Principal Financial               | 
|and Accounting Officer)            | 

F-2



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















| |                          
| | -------------------------
| | /s/ Ernst & Young
    LLP





F-3



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


ON INTERNAL CONTROL OVER FINANCIAL REPORTING




















| |                          
| | -------------------------
| | /s/ Ernst & Young
    LLP





F-4



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


|                                                                                                                                                  |                           |                                            |           |           |           |   |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------------------------------------------ | --------- | --------- | --------- | - | --------- | --------- | --------- | 
|                                                                                                                                                  |                           | December 31,                              
|                                                                                                                                                  |                           |                                           
|                                                                                                                                                  |                           | 2004                                       |           | 2003     
|                                                                                                                                                  |                           |                                            |           |          
|                                                                                                                                                  |                           | (Dollars in thousands)                    
|ASSETS                                                                                                                                            |                           |                                            |           |           |           |   |           |          
|Cash                                                                                                                                              |                           | $                                          | 87,963    |           |           | $ | 79,314    |          
|Other short-term investments  parent                                                                                                             |                           |                                            |           |           |           |   | 763,921   |          
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  | Cash and cash equivalents |                                            |           | 87,963    |           |   |           | 843,235   |          
|Restricted cash                                                                                                                                   |                           |                                            | 363,783   |           |           |   | 245,399   |          
|Contracts receivable                                                                                                                              |                           |                                            | 9,563,057 |           |           |   | 8,716,268 |          
|Allowance for credit losses                                                                                                                       |                           |                                            | (252,465  | )         |           |   | (239,697  | )        
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  | Contracts receivable, net |                                            |           | 9,310,592 |           |   |           | 8,476,571 |          
|Premises and equipment, net                                                                                                                       |                           |                                            | 30,820    |           |           |   | 29,206    |          
|Interest receivable                                                                                                                               |                           |                                            | 55,126    |           |           |   | 55,275    |          
|Other assets                                                                                                                                      |                           |                                            | 100,934   |           |           |   | 119,074   |          
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  |                           | TOTAL ASSETS                               |           | $         | 9,949,218 |   |           | $         | 9,768,760 | 
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                 
|LIABILITIES                                                                                                                                       |                           |                                            |           |           |           |   |           |          
|Lines of credit  parent                                                                                                                          |                           | $                                          | 213,741   |           |           | $ | 21,811    |          
|Notes payable on automobile secured financing                                                                                                     |                           |                                            | 8,105,275 |           |           |   | 8,157,601 |          
|Notes payable  parent                                                                                                                            |                           |                                            | 300,000   |           |           |   | 400,820   |          
|Amounts held on behalf of trustee                                                                                                                 |                           |                                            | 194,913   |           |           |   | 243,072   |          
|Other liabilities                                                                                                                                 |                           |                                            | 104,812   |           |           |   | 126,587   |          
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  |                           | TOTAL LIABILITIES                          |           |           | 8,918,741 |   |           |           | 8,949,891 | 
|                                                                                                                                                 
|SHAREHOLDERS EQUITY                                                                                                                              |                           |                                            |           |           |           |   |           |          
|Common stock (no par value; authorized 50,000,000 shares;
    issued and outstanding 41,038,003 shares in 2004 and
    41,033,901 shares in 2003) |                           |                                            | 338,328   |           |           |   | 338,291   |          
|Paid-in capital                                                                                                                                   |                           |                                            | 6,324     |           |           |   | 6,280     |          
|Retained earnings                                                                                                                                 |                           |                                            | 689,429   |           |           |   | 507,188   |          
|Accumulated other comprehensive loss, net of tax                                                                                                  |                           |                                            | (3,604    | )         |           |   | (32,890   | )        
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  |                           | TOTAL SHAREHOLDERS EQUITY                 |           |           | 1,030,477 |   |           |           | 818,869   | 
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          
|                                                                                                                                                  |                           | TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |           | $         | 9,949,218 |   |           | $         | 9,768,760 | 
|                                                                                                                                                  |                           |                                            |           |           |           |   |           |          



F-5



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME


|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |            |         | 
|----------------------------------------------------- | --------------------------------------------- | ------------------------------------------------ | ------- | ---------- | ------- | ---- | ------- | ---------- | ------- | - | ------- | ---------- | ------- | 
|                                                      |                                               | For the Year Ended December 31,                 
|                                                      |                                               |                                                 
|                                                      |                                               | 2004                                             |         | 2003       |         | 2002
|                                                      |                                               |                                                  |         |            |         |     
|                                                      |                                               | (Dollars in thousands, except per share amounts)
|Interest income:                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Loans, including fees                         |                                                  | $       | 888,231    |         |      | $       | 982,946    |         |   | $       | 809,663    |        
|                                                      | Other                                         |                                                  |         | 11,904     |         |      |         | 10,058     |         |   |         | 10,786     |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      |                                               | TOTAL INTEREST INCOME                            |         |            | 900,135 |      |         |            | 993,004 |   |         |            | 820,449 | 
|Interest expense:                                     |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Notes payable on automobile secured financing |                                                  |         | 274,541    |         |      |         | 349,359    |         |   |         | 312,515    |        
|                                                      | Other                                         |                                                  |         | 41,783     |         |      |         | 42,042     |         |   |         | 36,997     |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      |                                               | TOTAL INTEREST EXPENSE                           |         |            | 316,324 |      |         |            | 391,401 |   |         |            | 349,512 | 
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|NET INTEREST INCOME                                   |                                               |                                                  | 583,811 |            |         |      | 601,603 |            |         |   | 470,937 |           
|Provision for credit losses                           |                                               |                                                  | 192,315 |            |         |      | 233,800 |            |         |   | 249,093 |           
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES |                                               |                                                  | 391,496 |            |         |      | 367,803 |            |         |   | 221,844 |           
|Noninterest income:                                   |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Automobile servicing                          |                                                  |         | 137,593    |         |      |         | 119,015    |         |   |         | 110,798    |        
|                                                      | Gain on sale of contracts                     |                                                  |         | 13,792     |         |      |         | 18,725     |         |   |         |            |        
|                                                      | Other                                         |                                                  |         | 3,395      |         |      |         | 4,758      |         |   |         | 8,504      |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      |                                               | TOTAL NONINTEREST INCOME                         |         |            | 154,780 |      |         |            | 142,498 |   |         |            | 119,302 | 
|Noninterest expense:                                  |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Salaries and associate benefits               |                                                  |         | 159,571    |         |      |         | 149,829    |         |   |         | 123,821    |        
|                                                      | Credit and collections                        |                                                  |         | 32,812     |         |      |         | 35,448     |         |   |         | 35,960     |        
|                                                      | Data processing                               |                                                  |         | 16,498     |         |      |         | 16,659     |         |   |         | 17,402     |        
|                                                      | Occupancy                                     |                                                  |         | 11,423     |         |      |         | 13,383     |         |   |         | 12,995     |        
|                                                      | Other                                         |                                                  |         | 25,080     |         |      |         | 26,075     |         |   |         | 22,726     |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      |                                               | TOTAL NONINTEREST EXPENSE                        |         |            | 245,384 |      |         |            | 241,394 |   |         |            | 212,904 | 
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|INCOME BEFORE INCOME TAX                              |                                               |                                                  | 300,892 |            |         |      | 268,907 |            |         |   | 128,242 |           
|Income tax                                            |                                               |                                                  | 118,651 |            |         |      | 106,519 |            |         |   | 46,152  |           
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|NET INCOME                                            |                                               | $                                                | 182,241 |            |         | $    | 162,388 |            |         | $ | 82,090  |           
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|Earnings per common share:                            |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Basic                                         |                                                  | $       | 4.44       |         |      | $       | 3.96       |         |   | $       | 2.06       |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Diluted                                       |                                                  | $       | 4.44       |         |      | $       | 3.95       |         |   | $       | 2.05       |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|Weighted average number of common shares outstanding: |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Basic                                         |                                                  |         | 41,036,408 |         |      |         | 41,026,067 |         |   |         | 39,945,285 |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           
|                                                      | Diluted                                       |                                                  |         | 41,079,337 |         |      |         | 41,069,263 |         |   |         | 39,993,524 |        
|                                                      |                                               |                                                  |         |            |         |      |         |            |         |   |         |           



F-6



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |         |  
|---------------------------- | ---------------------------------------------------------------------------------------------------- | -------------------------------------------- | ---------- | --------- |  | ------- | ------- | -------- |  | ------------- | ----- | ----- |  | - | ------- | ------- |  | - | ------- | ------- | - | - | --------- | ------- | -
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  | Accumulated   |       |      
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  | Other         |       |      
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  | Comprehensive |       |      
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  | Income        |       |      
|                             |                                                                                                      |                                              |            | Common    |  | Paid-in |         | Retained |  | (Loss),       |       |      
|                             |                                                                                                      | Shares                                       |            | Stock     |  | Capital |         | Earnings |  | Net of Tax    |       | Total
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |      
|                             |                                                                                                      | (Dollars in thousands, except share amounts)
|Balance at January 1, 2002   |                                                                                                      |                                              | 34,820,178 |           |  | $       | 227,568 |          |  | $             | 4,337 |       |  | $ | 262,710 |         |  | $ | (29,322 | )       |   | $ | 465,293   |        
|                             | Net income                                                                                           |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         | 82,090  |  |   |         |         |   |   |           | 82,090  |  
|                             | Unrealized losses on retained interest in securitized assets,
    net of tax(1)                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | (550    | ) |   |           | (550    | )
|                             | Unrealized losses on cash flow hedges, net of tax(2)                                                 |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | (59,248 | ) |   |           | (59,248 | )
|                             | Reclassification adjustment for losses on cash flow hedges
    included in net income, net of tax(3) |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | 35,294  |   |   |           | 35,294  |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|                             | Comprehensive income                                                                                 |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           | 57,586  |  
|                             | Issuance of common stock                                                                             |                                              |            | 6,199,855 |  |         |         | 110,618  |  |               |       | 1,035 |  |   |         |         |  |   |         |         |   |   |           | 111,653 |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|Balance at December 31, 2002 |                                                                                                      |                                              | 41,020,033 |           |  |         | 338,186 |          |  |               | 5,372 |       |  |   | 344,800 |         |  |   | (53,826 | )       |   |   | 634,532   |        
|                             | Net income                                                                                           |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         | 162,388 |  |   |         |         |   |   |           | 162,388 |  
|                             | Unrealized losses on cash flow hedges, net of tax(2)                                                 |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | (13,847 | ) |   |           | (13,847 | )
|                             | Reclassification adjustment for losses on cash flow hedges
    included in net income, net of tax(3) |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | 34,783  |   |   |           | 34,783  |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|                             | Comprehensive income                                                                                 |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           | 183,324 |  
|                             | Issuance of common stock                                                                             |                                              |            | 13,868    |  |         |         | 105      |  |               |       | 908   |  |   |         |         |  |   |         |         |   |   |           | 1,013   |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|Balance at December 31, 2003 |                                                                                                      |                                              | 41,033,901 |           |  |         | 338,291 |          |  |               | 6,280 |       |  |   | 507,188 |         |  |   | (32,890 | )       |   |   | 818,869   |        
|                             | Net income                                                                                           |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         | 182,241 |  |   |         |         |   |   |           | 182,241 |  
|                             | Unrealized gains on cash flow hedges, net of tax(2)                                                  |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | 10,389  |   |   |           | 10,389  |  
|                             | Reclassification adjustment for losses on cash flow hedges
    included in net income, net of tax(3) |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         | 18,897  |   |   |           | 18,897  |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|                             | Comprehensive income                                                                                 |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           | 211,527 |  
|                             | Issuance of common stock                                                                             |                                              |            | 4,102     |  |         |         | 37       |  |               |       | 44    |  |   |         |         |  |   |         |         |   |   |           | 81      |  
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        
|Balance at December 31, 2004 |                                                                                                      |                                              | 41,038,003 |           |  | $       | 338,328 |          |  | $             | 6,324 |       |  | $ | 689,429 |         |  | $ | (3,604  | )       |   | $ | 1,030,477 |        
|                             |                                                                                                      |                                              |            |           |  |         |         |          |  |               |       |       |  |   |         |         |  |   |         |         |   |   |           |        






|    |                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The pre-tax amount of unrealized gains and losses on retained
    interest in securitized assets was $0.9 million for the
    year ended December 31, 2002.                                                                                                      
|   
|(2) | The pre-tax amount of unrealized gains on cash flow hedges was
    $17.3 million for the year ended December 31, 2004
    compared with unrealized losses of $23.1 million and
    $100 million for the years ended December 31, 2003 and
    2002, respectively.
|   
|(3) | The pre-tax amount of losses on cash flow hedges reclassified
    into earnings was $31.5 million for the year ended
    December 31, 2004 compared with $58.0 million and
    $59.8 million for the years ended December 31, 2003 and
    2002, respectively.   



F-7



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |            |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------- | ---------- | ---------- | - | ---- | ---------- | ---------- | - | - | ---------- | ---------- | -
|                                                                                      |                                                         | For the Year Ended December 31,
|                                                                                      |                                                         |                                
|                                                                                      |                                                         | 2004                            |            | 2003       |   | 2002
|                                                                                      |                                                         |                                 |            |            |   |     
|                                                                                      |                                                         | (Dollars in thousands)         
|OPERATING ACTIVITIES:                                                                 |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|Net income                                                                            |                                                         | $                               | 182,241    |            |   | $    | 162,388    |            |   | $ | 82,090     |           
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|                                                                                      | Provision for credit losses                             |                                 |            | 192,315    |   |      |            | 233,800    |   |   |            | 249,093    |  
|                                                                                      | Amortization of participation paid to dealers           |                                 |            | 94,335     |   |      |            | 94,227     |   |   |            | 74,190     |  
|                                                                                      | Amortization of losses on cash flow hedges              |                                 |            | 11,439     |   |      |            | 16,873     |   |   |            | 17,090     |  
|                                                                                      | Amortization of retained interest in securitized assets |                                 |            |            |   |      |            |            |   |   |            | 36,461     |  
|                                                                                      | Depreciation                                            |                                 |            | 8,639      |   |      |            | 9,408      |   |   |            | 10,636     |  
|                                                                                      | Gain on sale of contracts                               |                                 |            | (13,792    | ) |      |            | (18,725    | ) |   |            |            |  
|Decrease (increase) in other assets                                                   |                                                         |                                 | 48,357     |            |   |      | 83,039     |            |   |   | (63,174    | )         
|(Decrease) increase in other liabilities                                              |                                                         |                                 | (21,774    | )          |   |      | 58,148     |            |   |   | 9,117      |           
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                             |                                                         |                                 | 501,760    |            |   |      | 639,158    |            |   |   | 415,503    |           
|INVESTING ACTIVITIES:                                                                 |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|Contracts receivable:                                                                 |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|                                                                                      | Purchase of contracts                                   |                                 |            | (6,634,870 | ) |      |            | (5,978,576 | ) |   |            | (5,415,734 | )
|                                                                                      | Participation paid to dealers                           |                                 |            | (154,156   | ) |      |            | (141,079   | ) |   |            | (129,272   | )
|                                                                                      | Proceeds from contract sales, net                       |                                 |            | 1,548,432  |   |      |            | 1,699,574  |   |   |            |            |  
|                                                                                      | Contract payments and payoffs                           |                                 |            | 4,137,417  |   |      |            | 3,900,340  |   |   |            | 2,566,105  |  
|Decrease in amounts due from trust                                                    |                                                         |                                 |            |            |   |      |            |            |   |   | 83,479     |           
|Purchase of premises and equipment                                                    |                                                         |                                 | (10,376    | )          |   |      | (6,603     | )          |   |   | (8,925     | )         
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|NET CASH USED IN INVESTING ACTIVITIES                                                 |                                                         |                                 | (1,113,553 | )          |   |      | (526,344   | )          |   |   | (2,904,347 | )         
|FINANCING ACTIVITIES:                                                                 |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|Proceeds from (payments on) lines of credit, net                                      |                                                         |                                 | 191,930    |            |   |      | (40,237    | )          |   |   | (359,128   | )         
|Proceeds from notes payable on automobile secured financing                           |                                                         |                                 | 4,379,063  |            |   |      | 4,230,828  |            |   |   | 6,912,058  |           
|Payments on notes payable on automobile secured financing                             |                                                         |                                 | (4,456,124 | )          |   |      | (4,110,960 | )          |   |   | (3,549,946 | )         
|(Payments on) proceeds from notes payable  parent, net                               |                                                         |                                 | (100,820   | )          |   |      | (7,190     | )          |   |   | 340,510    |           
|(Decrease) increase in amounts held on behalf of trustee                              |                                                         |                                 | (48,159    | )          |   |      | 121,851    |            |   |   | (178,047   | )         
|Increase in restricted cash                                                           |                                                         |                                 | (118,384   | )          |   |      | (173,636   | )          |   |   | (71,763    | )         
|Proceeds from (payments on) cash flow hedges                                          |                                                         |                                 | 8,934      |            |   |      | (7,054     | )          |   |   | (30,786    | )         
|Proceeds from issuance of common stock                                                |                                                         |                                 | 81         |            |   |      | 1,012      |            |   |   | 111,653    |           
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                   |                                                         |                                 | (143,479   | )          |   |      | 14,614     |            |   |   | 3,174,551  |           
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                      |                                                         |                                 | (755,272   | )          |   |      | 127,428    |            |   |   | 685,707    |           
|Cash and cash equivalents at beginning of year                                        |                                                         |                                 | 843,235    |            |   |      | 715,807    |            |   |   | 30,100     |           
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|CASH AND CASH EQUIVALENTS AT END OF YEAR                                              |                                                         | $                               | 87,963     |            |   | $    | 843,235    |            |   | $ | 715,807    |           
|                                                                                      |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                     |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|Cash paid for:                                                                        |                                                         |                                 |            |            |   |      |            |            |   |   |            |           
|                                                                                      | Interest                                                |                                 | $          | 326,581    |   |      | $          | 388,397    |   |   | $          | 335,231    |  
|                                                                                      | Income taxes                                            |                                 |            | 120,541    |   |      |            | 104,742    |   |   |            | 82,635     |  



F-8



---



##### 



WFS FINANCIAL INC AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|         |                                           
|-------- | ------------------------------------------
|Note 1  | Summary of Significant Accounting Policies



| |                      
| | ---------------------
| | Basis of Presentation





| |                 
| | ----------------
| | Use of Estimates





| |                     
| | --------------------
| | Nature of Operations





| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |                
| | ---------------
| | Restricted Cash





| |                     
| | --------------------
| | Contracts Receivable





| |                            
| | ---------------------------
| | Allowance for Credit Losses



F-9



---



##### 















| |                     
| | --------------------
| | Nonaccrual Contracts





| |                       
| | ----------------------
| | Premises and Equipment





| |                   
| | ------------------
| | Repossessed Assets



F-10



---



##### 





| |                     
| | --------------------
| | Nonperforming Assets





| |                            
| | ---------------------------
| | Securitization Transactions









| |                               
| | ------------------------------
| | Interest Income and Fee Income







| |                 
| | ----------------
| | Interest Expense





| |             
| | ------------
| | Income Taxes





| |                                    
| | -----------------------------------
| | Fair Value of Financial Instruments



F-11



---



##### 









| |                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and cash equivalents: The carrying amounts reported
    on the Consolidated Statements of Financial Condition
    approximate those assets fair values.                                                                                                                       
|
| | Restricted cash: The carrying amounts reported on the
    Consolidated Statements of Financial Condition approximate those
    assets fair values.                                                                                                                                 
|
| | Contracts receivable: The fair values for contracts are
    estimated using discounted cash flow analysis based on interest
    rates currently being offered for contracts with similar terms
    to borrowers of similar credit quality.                                          
|
| | Interest rate swap agreements: The fair value is
    estimated by obtaining market quotes from brokers or internally
    valuing when market quotes are not readily available.                                                                                                      
|
| | Lines of credit  parent, notes payable on
    automobile secured financing and notes payable 
    parent: The fair value is estimated by using discounted cash
    flow analyses based on our current incremental borrowing rates
    for similar types of borrowing arrangements.
|
| | Amounts held on behalf of trustee: The carrying amounts
    reported on the Consolidated Statements of Financial Condition
    approximate their fair value.                                                                                                                        



| |                                 
| | --------------------------------
| | Derivative Financial Instruments







F-12



---



##### 









|         |                         
|-------- | ------------------------
|Note 2  | Net Contracts Receivable



|                                                    |                          |                        |           |           |  |   |           |           | 
|--------------------------------------------------- | ------------------------ | ---------------------- | --------- | --------- |  | - | --------- | --------- | 
|                                                    |                          | December 31,          
|                                                    |                          |                       
|                                                    |                          | 2004                   |           | 2003     
|                                                    |                          |                        |           |          
|                                                    |                          | (Dollars in thousands)
|Contracts                                           |                          | $                      | 9,438,118 |           |  | $ | 8,628,426 |          
|Unearned discounts                                  |                          |                        | (33,845   | )         |  |   | (53,137   | )        
|                                                    |                          |                        |           |           |  |   |           |          
|                                                    | Net contracts            |                        |           | 9,404,273 |  |   |           | 8,575,289 | 
|Allowance for credit losses                         |                          |                        | (252,465  | )         |  |   | (239,697  | )        
|Dealer participation, net of deferred contract fees |                          |                        | 158,784   |           |  |   | 140,979   |          
|                                                    |                          |                        |           |           |  |   |           |          
|                                                    | Net contracts receivable |                        | $         | 9,310,592 |  |   | $         | 8,476,571 | 
|                                                    |                          |                        |           |           |  |   |           |          





|         |                            
|-------- | ---------------------------
|Note 3  | Allowance for Credit Losses



|                                                                                           |                |                                 |          |          |   |      |          |          |   |   |          |          |  
|------------------------------------------------------------------------------------------ | -------------- | ------------------------------- | -------- | -------- | - | ---- | -------- | -------- | - | - | -------- | -------- | -
|                                                                                           |                | For the Year Ended December 31,
|                                                                                           |                |                                
|                                                                                           |                | 2004                            |          | 2003     |   | 2002
|                                                                                           |                |                                 |          |          |   |     
|                                                                                           |                | (Dollars in thousands)         
|Balance at beginning of period                                                             |                | $                               | 239,697  |          |   | $    | 227,673  |          |   | $ | 136,410  |         
|Chargeoffs                                                                                 |                |                                 | (254,462 | )        |   |      | (297,610 | )        |   |   | (207,713 | )       
|Recoveries                                                                                 |                |                                 | 74,915   |          |   |      | 75,834   |          |   |   | 49,883   |         
|                                                                                           |                |                                 |          |          |   |      |          |          |   |   |          |         
|                                                                                           | Net chargeoffs |                                 |          | (179,547 | ) |      |          | (221,776 | ) |   |          | (157,830 | )
|Provision for credit losses                                                                |                |                                 | 192,315  |          |   |      | 233,800  |          |   |   | 249,093  |         
|                                                                                           |                |                                 |          |          |   |      |          |          |   |   |          |         
|Balance at end of period                                                                   |                | $                               | 252,465  |          |   | $    | 239,697  |          |   | $ | 227,673  |         
|                                                                                           |                |                                 |          |          |   |      |          |          |   |   |          |         
|Ratio of net chargeoffs during the period to average contracts
    owned during the period |                |                                 | 2.1      | %        |   |      | 2.5      | %        |   |   | 2.4      | %       
|Ratio of allowance for credit losses to contracts at the end of
    the period             |                |                                 | 2.6      | %        |   |      | 2.8      | %        |   |   | 2.9      | %       

F-13



---



##### 





|         |                       
|-------- | ----------------------
|Note 4  | Premises and Equipment



|                               |  |                        |        |      |  |   |        | 
|------------------------------ |  | ---------------------- | ------ | ---- |  | - | ------ | 
|                               |  | December 31,          
|                               |  |                       
|                               |  | 2004                   |        | 2003
|                               |  |                        |        |     
|                               |  | (Dollars in thousands)
|Land                           |  | $                      | 2,017  |      |  | $ | 2,017  | 
|Buildings and improvements     |  |                        | 14,123 |      |  |   | 14,088 | 
|Computers and software         |  |                        | 55,837 |      |  |   | 56,838 | 
|Furniture and equipment        |  |                        | 11,923 |      |  |   | 12,463 | 
|Other                          |  |                        | 150    |      |  |   | 272    | 
|                               |  |                        |        |      |  |   |        | 
|                               |  |                        | 84,050 |      |  |   | 85,678 | 
|Less: Accumulated depreciation |  |                        | 53,230 |      |  |   | 56,472 | 
|                               |  |                        |        |      |  |   |        | 
|                               |  | $                      | 30,820 |      |  | $ | 29,206 | 
|                               |  |                        |        |      |  |   |        | 



|         |                        
|-------- | -----------------------
|Note 5  | Intercompany Agreements









F-14



---



##### 













|         |                                              
|-------- | ---------------------------------------------
|Note 6  | Notes Payable on Automobile Secured Financing





F-15



---



##### 





|           |  |                        |           |               |  |  |      |  
|---------- |  | ---------------------- | --------- | ------------- |  |  | ---- | -
|           |  | December 31, 2004     
|           |  |                       
|           |  |                        |           | Weighted     
|           |  |                        |           | Average      
|           |  | Amount                 |           | Interest Rate
|           |  |                        |           |              
|           |  | (Dollars in thousands)
|2005       |  | $                      | 235,599   |               |  |  | 2.03 | %
|2006       |  |                        | 1,890     |               |  |  | 4.20 |  
|2007       |  |                        | 2,056,838 |               |  |  | 2.35 |  
|2008       |  |                        | 795,802   |               |  |  | 2.72 |  
|2009       |  |                        | 1,311,337 |               |  |  | 4.01 |  
|Thereafter |  |                        | 3,703,809 |               |  |  | 3.39 |  
|           |  |                        |           |               |  |  |      |  
|           |  | $                      | 8,105,275 |               |  |  | 3.12 | %
|           |  |                        |           |               |  |  |      |  

Note 7  Whole Loan Sales




Note 8  Commitments and Contingencies




|           |  |                        |        | 
|---------- |  | ---------------------- | ------ | 
|           |  | December 31, 2004     
|           |  |                       
|           |  | (Dollars in thousands)
|2005       |  | $                      | 5,552  | 
|2006       |  |                        | 4,596  | 
|2007       |  |                        | 3,513  | 
|2008       |  |                        | 2,218  | 
|2009       |  |                        | 1,247  | 
|Thereafter |  |                        | 991    | 
|           |  |                        |        | 
|           |  | $                      | 18,117 | 
|           |  |                        |        | 





Lee, et
al v. WFS Financial Inc Thompson, et al v. WFS Financial
Inc


F-16



---



##### 



Lee, et
al v. WFS Financial Inc Thompson, et al v. WFS
Financial Inc Thompson, et al v. WFS
Financial Inc


In re WFS
Financial Shareholder Litigation




Note 9  Accumulated Other Comprehensive Loss,
Net of Tax




|                                             |  |                        |        |      |  |   |         |  
|-------------------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------- | -
|                                             |  | December 31,          
|                                             |  |                       
|                                             |  | 2004                   |        | 2003
|                                             |  |                        |        |     
|                                             |  | (Dollars in thousands)
|Unrealized loss on interest rate swaps(1)    |  | $                      | (852   | )    |  | $ | (15,692 | )
|Realized loss on settled cash flow hedges(1) |  |                        | (2,752 | )    |  |   | (17,198 | )
|                                             |  |                        |        |      |  |   |         |  
|Total accumulated other comprehensive loss   |  | $                      | (3,604 | )    |  | $ | (32,890 | )
|                                             |  |                        |        |      |  |   |         |  






|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | All cash flow hedges are structured to hedge future interest
    payments on borrowings.

F-17



---



##### 



Note 10  Comprehensive Income




|                                                                                                  |  |                                 |         |      |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                                                                  |  | For the Year Ended December 31,
|                                                                                                  |  |                                
|                                                                                                  |  | 2004                            |         | 2003 |  | 2002
|                                                                                                  |  |                                 |         |      |  |     
|                                                                                                  |  | (Dollars in thousands)         
|Net income                                                                                        |  | $                               | 182,241 |      |  | $    | 162,388 |   |  | $ | 82,090  |  
|Unrealized losses on retained interest in securitized assets,
    net of tax                      |  |                                 |         |      |  |      |         |   |  |   | (550    | )
|Unrealized gains (losses) on cash flow hedges, net of tax                                         |  |                                 | 10,389  |      |  |      | (13,847 | ) |  |   | (59,248 | )
|Reclassification adjustment for losses on cash flow hedges
    included in net income, net of tax |  |                                 | 18,897  |      |  |      | 34,783  |   |  |   | 35,294  |  
|                                                                                                  |  |                                 |         |      |  |      |         |   |  |   |         |  
|Comprehensive income                                                                              |  | $                               | 211,527 |      |  | $    | 183,324 |   |  | $ | 57,586  |  
|                                                                                                  |  |                                 |         |      |  |      |         |   |  |   |         |  

Note 11  Dividends




Note 12  Servicing Income




|                                                    |  |                                 |         |      |  |      |         |  |  |   |         |  
|--------------------------------------------------- |  | ------------------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | -
|                                                    |  | For the Year Ended December 31,
|                                                    |  |                                
|                                                    |  | 2004                            |         | 2003 |  | 2002
|                                                    |  |                                 |         |      |  |     
|                                                    |  | (Dollars in thousands)         
|Fee income                                          |  | $                               | 99,966  |      |  | $    | 87,234  |  |  | $ | 78,773  |  
|Contractual servicing income                        |  |                                 | 37,627  |      |  |      | 31,781  |  |  |   | 61,830  |  
|Retained interest expense, net of RISA amortization |  |                                 |         |      |  |      |         |  |  |   | (29,805 | )
|                                                    |  |                                 |         |      |  |      |         |  |  |   |         |  
|Total servicing income                              |  | $                               | 137,593 |      |  | $    | 119,015 |  |  | $ | 110,798 |  
|                                                    |  |                                 |         |      |  |      |         |  |  |   |         |  



Note 13  Employee Benefit Plans






F-18



---



##### 







|                     |  |                                 |       |      |  |      |       |  |  |   |       | 
|-------------------- |  | ------------------------------- | ----- | ---- |  | ---- | ----- |  |  | - | ----- | 
|                     |  | For the Year Ended December 31,
|                     |  |                                
|                     |  | 2004                            |       | 2003 |  | 2002
|                     |  |                                 |       |      |  |     
|                     |  | (Dollars in thousands)         
|Cash contribution    |  | $                               | 7,291 |      |  | $    | 5,803 |  |  | $ | 2,753 | 
|Compensation expense |  |                                 | 8,611 |      |  |      | 9,789 |  |  |   | 1,376 | 







Note 14  Income Taxes




|          |         |                                 |         |         |   |      |         |        |   |   |         |         |  
|--------- | ------- | ------------------------------- | ------- | ------- | - | ---- | ------- | ------ | - | - | ------- | ------- | -
|          |         | For the Year Ended December 31,
|          |         |                                
|          |         | 2004                            |         | 2003    |   | 2002
|          |         |                                 |         |         |   |     
|          |         | (Dollars in thousands)         
|Current:  |         |                                 |         |         |   |      |         |        |   |   |         |        
|          | Federal |                                 | $       | 101,707 |   |      | $       | 91,617 |   |   | $       | 79,048  |  
|          | State   |                                 |         | 26,508  |   |      |         | 13,766 |   |   |         | 13,551  |  
|          |         |                                 |         |         |   |      |         |        |   |   |         |        
|          |         |                                 | 128,215 |         |   |      | 105,383 |        |   |   | 92,599  |        
|         
|Deferred: |         |                                 |         |         |   |      |         |        |   |   |         |        
|          | Federal |                                 |         | (8,339  | ) |      |         | (3,950 | ) |   |         | (37,711 | )
|          | State   |                                 |         | (1,225  | ) |      |         | 5,086  |   |   |         | (8,736  | )
|          |         |                                 |         |         |   |      |         |        |   |   |         |        
|          |         |                                 | (9,564  | )       |   |      | 1,136   |        |   |   | (46,447 | )      
|          |         |                                 |         |         |   |      |         |        |   |   |         |        
|          |         | $                               | 118,651 |         |   | $    | 106,519 |        |   | $ | 46,152  |        
|          |         |                                 |         |         |   |      |         |        |   |   |         |        

F-19



---



##### 





|                                          |  |                                 |         |      |  |      |         |  |  |   |        |  
|----------------------------------------- |  | ------------------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------ | -
|                                          |  | For the Year Ended December 31,
|                                          |  |                                
|                                          |  | 2004                            |         | 2003 |  | 2002
|                                          |  |                                 |         |      |  |     
|                                          |  | (Dollars in thousands)         
|Tax at statutory rate                     |  | $                               | 105,312 |      |  | $    | 94,118  |  |  | $ | 44,885 |  
|State tax (net of federal tax benefit)(1) |  |                                 | 16,434  |      |  |      | 12,254  |  |  |   | 3,130  |  
|Other                                     |  |                                 | (3,095  | )    |  |      | 147     |  |  |   | (1,863 | )
|                                          |  |                                 |         |      |  |      |         |  |  |   |        |  
|                                          |  | $                               | 118,651 |      |  | $    | 106,519 |  |  | $ | 46,152 |  
|                                          |  |                                 |         |      |  |      |         |  |  |   |        |  






|    |                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | State tax for 2002 includes the result of a one-time benefit of
    legislation enacted by the State of California which eliminated
    the use of reserve method of accounting for bad debts for large
    banks and financial corporations for taxable income purposes for
    tax years after January 1, 2002.





|                                          |                                |                        |         |         |   |   |         |         |  
|----------------------------------------- | ------------------------------ | ---------------------- | ------- | ------- | - | - | ------- | ------- | -
|                                          |                                | December 31,          
|                                          |                                |                       
|                                          |                                | 2004                   |         | 2003   
|                                          |                                |                        |         |        
|                                          |                                | (Dollars in thousands)
|Deferred tax assets:                      |                                |                        |         |         |   |   |         |        
|Reserves for credit losses                |                                | $                      | 92,223  |         |   | $ | 84,366  |        
|State tax deferred benefit                |                                |                        | 7,751   |         |   |   | 5,030   |        
|Deferred compensation accrual             |                                |                        | 1,818   |         |   |   | 10,361  |        
|Tax basis difference  derivatives        |                                |                        | 2,403   |         |   |   | 21,927  |        
|Other assets                              |                                |                        | 11,510  |         |   |   | 11,445  |        
|                                          |                                |                        |         |         |   |   |         |        
|                                          | Total deferred tax assets      |                        |         | 115,705 |   |   |         | 133,129 |  
|Deferred tax liabilities:                 |                                |                        |         |         |   |   |         |        
|Accelerated depreciation for tax purposes |                                |                        | (9,967  | )       |   |   | (8,659  | )      
|Other liabilities                         |                                |                        | (21,178 | )       |   |   | (29,950 | )      
|                                          |                                |                        |         |         |   |   |         |        
|                                          | Total deferred tax liabilities |                        |         | (31,145 | ) |   |         | (38,609 | )
|                                          |                                |                        |         |         |   |   |         |        
|                                          | Net deferred tax assets        |                        | $       | 84,560  |   |   | $       | 94,520  |  
|                                          |                                |                        |         |         |   |   |         |        

F-20



---



##### 



Note 15  Fair Value of Financial
Instruments




|                                                 |  |                        |           |            |  |          |            |            |  |   |           |  |  |   |           | 
|------------------------------------------------ |  | ---------------------- | --------- | ---------- |  | -------- | ---------- | ---------- |  | - | --------- |  |  | - | --------- | 
|                                                 |  | December 31,          
|                                                 |  |                       
|                                                 |  | 2004                   |           | 2003      
|                                                 |  |                        |           |           
|                                                 |  | Carrying               |           |            |  | Carrying |            |           
|                                                 |  | Amounts                |           | Fair Value |  | Amounts  |            | Fair Value
|                                                 |  |                        |           |            |  |          |            |           
|                                                 |  | (Dollars in thousands)
|Financial assets:                                |  |                        |           |            |  |          |            |            |  |   |           |  |  |   |           | 
|Cash and due from banks                          |  | $                      | 87,963    |            |  | $        | 87,963     |            |  | $ | 843,235   |  |  | $ | 843,235   | 
|Restricted cash                                  |  |                        | 363,783   |            |  |          | 363,783    |            |  |   | 245,399   |  |  |   | 245,399   | 
|Contracts receivable                             |  |                        | 9,563,057 |            |  |          | 10,074,567 |            |  |   | 8,716,268 |  |  |   | 9,420,084 | 
|Financial liabilities:                           |  |                        |           |            |  |          |            |            |  |   |           |  |  |   |           | 
|Lines of credit  parent                         |  |                        | 213,741   |            |  |          | 213,741    |            |  |   | 21,811    |  |  |   | 21,811    | 
|Notes payable on automobile secured financing(1) |  |                        | 8,105,275 |            |  |          | 8,239,320  |            |  |   | 8,157,601 |  |  |   | 8,372,482 | 
|Notes payable  parent                           |  |                        | 300,000   |            |  |          | 300,000    |            |  |   | 400,820   |  |  |   | 419,218   | 
|Amounts held on behalf of trustee                |  |                        | 194,913   |            |  |          | 194,913    |            |  |   | 243,072   |  |  |   | 243,072   | 
|Other:                                           |  |                        |           |            |  |          |            |            |  |   |           |  |  |   |           | 
|Contract commitments                             |  |                        |           |            |  |          | 307,566    |            |  |   |           |  |  |   | 292,970   | 






|    |                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Included in notes payable on automobile secured financing are
    interest rate swap agreements with a carrying amount equal to
    their fair value of $1.7 million and $26.2 million at
    December 31, 2004 and 2003, respectively.



Note 16  Financial Instrument Agreements










F-21



---



##### 





Note 17  Proposed Merger






Note 18  Earnings Per Share




|                                          |  |                                                  |            |      |  |      |            |  |  |   |            | 
|----------------------------------------- |  | ------------------------------------------------ | ---------- | ---- |  | ---- | ---------- |  |  | - | ---------- | 
|                                          |  | For the Year Ended December 31,                 
|                                          |  |                                                 
|                                          |  | 2004                                             |            | 2003 |  | 2002
|                                          |  |                                                  |            |      |  |     
|                                          |  | (Dollars in thousands, except per share amounts)
|Basic:                                    |  |                                                  |            |      |  |      |            |  |  |   |            | 
|Net income                                |  | $                                                | 182,241    |      |  | $    | 162,388    |  |  | $ | 82,090     | 
|Average basic common shares outstanding   |  |                                                  | 41,036,408 |      |  |      | 41,026,067 |  |  |   | 39,945,285 | 
|Earnings per common share  basic         |  | $                                                | 4.44       |      |  | $    | 3.96       |  |  | $ | 2.06       | 
|Diluted:                                  |  |                                                  |            |      |  |      |            |  |  |   |            | 
|Net income                                |  | $                                                | 182,241    |      |  | $    | 162,388    |  |  | $ | 82,090     | 
|Average basic common shares outstanding   |  |                                                  | 41,036,408 |      |  |      | 41,026,067 |  |  |   | 39,945,285 | 
|Stock option adjustment                   |  |                                                  | 42,929     |      |  |      | 43,196     |  |  |   | 48,239     | 
|Average diluted common shares outstanding |  |                                                  | 41,079,337 |      |  |      | 41,069,263 |  |  |   | 39,993,524 | 
|Earnings per common share  diluted       |  | $                                                | 4.44       |      |  | $    | 3.95       |  |  | $ | 2.05       | 

F-22



---



##### 



Note 19  Quarterly Results of Operations
(Unaudited)




|                                    |  |                                                  |         |         |  |              |         |             |  |   |         |  |  |   |         | 
|----------------------------------- |  | ------------------------------------------------ | ------- | ------- |  | ------------ | ------- | ----------- |  | - | ------- |  |  | - | ------- | 
|                                    |  | For the Three Months Ended                      
|                                    |  |                                                 
|                                    |  | March 31                                         |         | June 30 |  | September 30 |         | December 31
|                                    |  |                                                  |         |         |  |              |         |            
|                                    |  | (Dollars in thousands, except per share amounts)
|2004                                |  |                                                  |         |         |  |              |         |             |  |   |         |  |  |   |         | 
|Interest income                     |  | $                                                | 224,008 |         |  | $            | 210,266 |             |  | $ | 227,049 |  |  | $ | 238,812 | 
|Interest expense                    |  |                                                  | 83,566  |         |  |              | 74,266  |             |  |   | 78,274  |  |  |   | 80,218  | 
|Net interest income                 |  |                                                  | 140,442 |         |  |              | 136,000 |             |  |   | 148,775 |  |  |   | 158,594 | 
|Provision for credit losses         |  |                                                  | 19,976  |         |  |              | 53,421  |             |  |   | 59,957  |  |  |   | 58,961  | 
|Income before income tax            |  |                                                  | 110,694 |         |  |              | 55,681  |             |  |   | 63,161  |  |  |   | 71,356  | 
|Income tax                          |  |                                                  | 43,786  |         |  |              | 22,135  |             |  |   | 25,057  |  |  |   | 27,673  | 
|Net income                          |  |                                                  | 66,908  |         |  |              | 33,546  |             |  |   | 38,104  |  |  |   | 43,683  | 
|Earnings per common share  basic   |  |                                                  | 1.63    |         |  |              | 0.82    |             |  |   | 0.93    |  |  |   | 1.06    | 
|Earnings per common share  diluted |  |                                                  | 1.63    |         |  |              | 0.82    |             |  |   | 0.93    |  |  |   | 1.06    | 
|                                   
|2003                                |  |                                                  |         |         |  |              |         |             |  |   |         |  |  |   |         | 
|Interest income                     |  | $                                                | 247,132 |         |  | $            | 257,232 |             |  | $ | 253,697 |  |  | $ | 234,943 | 
|Interest expense                    |  |                                                  | 105,312 |         |  |              | 102,822 |             |  |   | 96,277  |  |  |   | 86,990  | 
|Net interest income                 |  |                                                  | 141,820 |         |  |              | 154,410 |             |  |   | 157,420 |  |  |   | 147,953 | 
|Provision for credit losses         |  |                                                  | 72,795  |         |  |              | 66,876  |             |  |   | 24,551  |  |  |   | 69,578  | 
|Income before income tax            |  |                                                  | 40,856  |         |  |              | 55,417  |             |  |   | 125,161 |  |  |   | 47,473  | 
|Income tax                          |  |                                                  | 16,241  |         |  |              | 21,832  |             |  |   | 49,610  |  |  |   | 18,836  | 
|Net income                          |  |                                                  | 24,615  |         |  |              | 33,585  |             |  |   | 75,551  |  |  |   | 28,637  | 
|Earnings per common share  basic   |  |                                                  | 0.60    |         |  |              | 0.82    |             |  |   | 1.84    |  |  |   | 0.70    | 
|Earnings per common share  diluted |  |                                                  | 0.60    |         |  |              | 0.82    |             |  |   | 1.84    |  |  |   | 0.70    | 

Note 20  Subsequent Events (Unaudited)




F-23



---



##### 



EXHIBIT INDEX


|        |    |                        |  |                                                                                                                                                        
|------- | -- | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|        | 2  | .1                     |  | Agreement and Plan of Merger and Reorganization, dated as of
    May 23, 2004, among Westcorp, Western Financial Bank and
    WFS Financial Inc(2)     
|        | 3  | .1                     |  | Certificate of Amendment and Restatement of Articles of
    Incorporation(7)                                                                           
|        | 3  | .2                     |  | Certificate of Amendment and Restatement of Articles of
    Incorporation of WFS Financial dated as of April 4, 2004                                   
|        | 4  |                        |  | Specimen WFS Financial Inc Common Stock Certificate(5)                                                                                                 
|        | 10 | .1                     |  | Westcorp 2001 Stock Option Plan(3)                                                                                                                     
|        | 10 | .2                     |  | 2000 Executive Deferral Plan V(12)                                                                                                                     
|        | 10 | .2.1                   |  | First Amendment to the Westcorp Executive Deferral Plan V, dated
    as of April 1, 2003(4)                                                            
|        | 10 | .3                     |  | Amended Revolving Line of Credit Agreement between WFS Funding,
    Inc. and Western Financial Bank, dated June 1, 2002(3)                             
|        | 10 | .3.1                   |  | First Amendment dated October 15, 2002, to the Revolving
    Line of Credit Agreement between WFS Funding, Inc. and Western
    Financial Bank(3)      
|        | 10 | .4                     |  | Security Agreement between WFS Funding, Inc. and Western
    Financial Bank, dated March 7, 2003(7)                                                    
|        | 10 | .4.1                   |  | First Amendment dated August 1, 2003, to the Security
    Agreement between WFS Funding, Inc. and Western Financial Bank(7)                            
|        | 10 | .5                     |  | Transfer Agreement between WFS Financial Inc and Western
    Financial Bank, F.S.B., dated May 1, 1995(1)                                              
|        | 10 | .6                     |  | Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank, dated June 15, 1999(11)                                   
|        | 10 | .6.1                   |  | Amendment No. 1, dated as of August 1, 1999, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(11)
|        | 10 | .6.2                   |  | Amendment No. 2, dated May 23, 2000, to the Revolving
    Line of Credit Agreement between WFS Financial Inc and Western
    Financial Bank(3)         
|        | 10 | .6.3                   |  | Amendment No. 3, dated January 1, 2002, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(3)      
|        | 10 | .6.4                   |  | Amendment No. 4, dated October 15, 2002, to the
    Revolving Line of Credit Agreement between WFS Financial Inc and
    Western Financial Bank(3)     
|        | 10 | .6.5                   |  | Amendment No. 5, dated May 1, 2004, to the Revolving
    Line of Credit Agreement between WFS Financial Inc and Western
    Financial Bank             
|        | 10 | .7                     |  | Security Agreement between WFS Financial Inc and Western
    Financial Bank, dated March 7, 2003(7)                                                    
|        | 10 | .7.1                   |  | Restated First Amendment to the Security Agreement between WFS
    Financial Inc and Western Financial Bank, dated May 1, 2004                         
|        | 10 | .8                     |  | Short Term Investment Agreement between WFS Financial Inc and
    Western Financial Bank, dated January 1, 1996(7)                                     
|        | 10 | .8.1                   |  | Amendment No. 1, dated as of January 1, 2002, to the
    Short Term Investment Agreement between WFS Financial Inc and
    Western Financial Bank(7)   
|        | 10 | .8.2                   |  | Amendment No. 2, dated as of May 1, 2004, to the Short
    Term Investment Agreement between WFS Financial Inc and Western
    Financial Bank          
|        | 10 | .9                     |  | Master Tax Sharing Agreement between Westcorp and Subsidiaries,
    dated January 1, 2004                                                              
|        | 10 | .9.1                   |  | First Amendment to the Master Tax Sharing Agreement, dated
    June 10, 2004                                                                           
|        | 10 | .10                    |  | Amended and Restated WFS Reinvestment Contract between WFS
    Financial Inc and Western Financial Bank, dated January 1,
    2004                     
|        | 10 | .12                    |  | Amended and Restated Master Collateral Assignment Agreement,
    dated March 1, 2000(11)                                                               
|        | 10 | .13                    |  | Form of WFS Financial Inc Dealer Agreement(4)                                                                                                          
|        | 10 | .14                    |  | Form of WFS Financial Inc Loan Application(4)                                                                                                          



---



##### 



|        |    |                        |  |                                                                                                                                                                     
|------- | -- | ---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|        | 10 | .15                    |  | Amended and Restated WFS 1996 Incentive Stock Option Plan(6)                                                                                                        
|        | 10 | .16                    |  | Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan, dated January 1, 2001(12)                                                       
|        | 10 | .16.1                  |  | Amendment No. 1, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(12)                     
|        | 10 | .16.2                  |  | Amendment No. 2, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(12)                     
|        | 10 | .16.3                  |  | Amendment No. 3, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)                      
|        | 10 | .16.4                  |  | Amendment No. 4, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)                      
|        | 10 | .16.5                  |  | Amendment No. 5, effective as of January 1, 2001, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(4)                      
|        | 10 | .16.6                  |  | Amendment No. 6, effective as of November 1, 2003, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(7)                     
|        | 10 | .16.7                  |  | Amendment No. 7, dated as of December 1, 2003, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan(7)                         
|        | 10 | .16.8                  |  | Amendment No. 8, dated as of December 30, 2004, to
    Amended and Restated Westcorp Employee Stock Ownership and
    Salary Savings Plan                           
|        | 10 | .17                    |  | Employment Agreements(8)(9)                                                                                                                                         
|        | 10 | .18                    |  | Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank, F.S.B., dated August 1, 1997(10)                                                       
|        | 10 | .18.1                  |  | Amendment No. 1, dated February 23, 1999, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(10)                                
|        | 10 | .18.2                  |  | Amendment No. 2, dated July 30, 1999, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(10)                                    
|        | 10 | .18.3                  |  | Amendment No. 3, dated January 1, 2002, to the
    Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank(3)                                   
|        | 10 | .20                    |  | Master Allocation Agreement between Westcorp and its
    subsidiaries, dated January 1, 2004                                                                        
|        | 10 | .20.1                  |  | First Amendment to the Master Allocation Agreement, dated
    December 1, 2004                                                                                      
|        | 10 | .23                    |  | Amended Revolving Line of Credit Agreement between WFS
    Receivables Corporation and Western Financial Bank, dated
    June 1, 2002(3)                            
|        | 10 | .23.1                  |  | Amendment No. 1, dated October 15, 2002, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation and Western Financial Bank(3)        
|        | 10 | .24                    |  | Security Agreement between WFS Receivables Corporation and
    Western Financial Bank, dated March 7, 2003(7)                                                       
|        | 10 | .24.1                  |  | First Amendment to the Security Agreement, dated August 1,
    2003, to the Security Agreement between WFS Receivables
    Corporation and Western Financial Bank(7)
|        | 10 | .25                    |  | Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank, dated August 8,
    2002(3)                                
|        | 10 | .25.1                  |  | Amendment No. 1, dated November 7, 2002, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(3)      
|        | 10 | .25.2                  |  | Amendment No. 2, dated January 13, 2003, to the
    Revolving Line of Credit Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(7)      
|        | 10 | .27                    |  | Promissory Note of WFS Financial Inc in favor of Western
    Financial Bank, dated May 3, 2002(3)                                                                   
|        | 10 | .28                    |  | Customer List Agreement between Western Financial Bank, WFS
    Financial Inc, and Westfin Insurance Agency, dated May 15,
    1998(3)                              
|        | 10 | .28.1                  |  | Amendment No. 1, dated September 26, 2002, to the
    Customer List Agreement between Western Financial Bank, WFS
    Financial Inc, and Westfin Insurance Agency(3)



---



##### 



|        |    |                        |  |                                                                                                                                                                                                                                                                                                                                  
|------- | -- | ---------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|        | 10 | .29                    |  | Interest Rate Swap Guarantee Agreement between Western Financial
    Bank, WFS Financial Inc, and WFS Receivables Corporation, dated
    August 30, 2002(3)                                                                                                                                                                      
|        | 10 | .30                    |  | Security Agreement between WFS Receivable Corporation 2,
    WFS Financial Inc, and Western Financial Bank, dated
    March 21, 2002(3)                                                                                                                                                                                          
|        | 10 | .31                    |  | Referral Agreement between Western Financial Bank, Westfin
    Insurance Agency and WFS Financial Inc, dated September 16,
    2002(3)                                                                                                                                                                                           
|        | 10 | .31.1                  |  | Amendment No. 1, dated March 31, 2003, to the Referral
    Agreement between Western Financial Bank, Westfin Insurance
    Agency and WFS Financial Inc(7)                                                                                                                                                                       
|        | 10 | .32                    |  | Future Interest Payment Hedge Guarantee and Reimbursement
    Agreement between Western Financial Bank and WFS Financial Inc,
    dated September 19, 2002(3)                                                                                                                                                                    
|        | 10 | .33                    |  | Intellectual Property Licensing Agreement between Westcorp and
    its subsidiaries and affiliates, dated as of January 1, 2004                                                                                                                                                                                                  
|        | 10 | .34                    |  | Master Travel Services Agreement between Westran Services Corp.
    and Westcorp, Western Financial Bank, WFS Financial Inc, WFS
    Receivables Corporation, Western Financial Associate Solutions
    and Westfin Insurance Agency, Inc., dated January 1, 2004                                                                
|        | 10 | .34.1                  |  | Amendment No. 1, dated December 1, 2004 to the Master
    Travel Service Agreement Between Westran Services Corporation
    and Westcorp, Western Financial Bank, WFS Financial Inc, WFS
    Receivables Corporation, Western Financial Associate Solutions,
    WFS Receivables Corporation 3 and Westfin Insurance Agency, Inc.
|        | 10 | .36                    |  | Sublease Agreement between WFS Financial Inc, WFS Receivable
    Corporation, WFS Receivables Corporation 2, WFS Financial
    Auto Loans, Inc., WFS Financial Auto Loans 2, Inc., Western
    Auto Investments, Inc., and WFS Funding, Inc., dated
    March 21, 2002(3)                                                        
|        | 10 | .36.1                  |  | First Amendment to Sublease Agreement between WFS Financial Inc,
    WFS Receivables Corporation, WFS Receivables Corporation 2,
    WFS Financial Auto Loans, Inc., WFS Financial Auto Loans 2,
    Inc., Western Auto Investments, Inc., and WFS Funding, Inc.
    dated September 1, 2002(3)                                  
|        | 10 | .36.2                  |  | Second Amendment to Sublease Agreement between WFS Financial
    Inc, WFS Receivables Corporation, WFS Receivables
    Corporation 2, WFS Financial Auto Loans, Inc., WFS
    Financial Auto Loans 2, Inc., Western Auto Investments,
    Inc., and WFS Funding, Inc. dated September 1, 2003(7)                                 
|        | 10 | .36.3                  |  | Third Amendment to Sublease Agreement between WFS Financial Inc,
    WFS Receivables Corporation, WFS Receivables Corporation 2,
    WFS Receivables Corporation 3, WFS Receivables
    Corporation 4, WFS Financial Auto Loans 2, Inc.,
    Western Auto Investments, Inc., and WFS Funding, Inc. dated
    April 1, 2004       
|        | 10 | .37                    |  | Collateral Protection Insurance Agreement between Westfin
    Insurance Agency and WFS Financial Inc, dated September 2002(3)                                                                                                                                                                                                    
|        | 10 | .39                    |  | Security Agreement between WFS Receivables Corporation 3 and
    Western Financial Bank, dated March 7, 2003(7)                                                                                                                                                                                                                  
|        | 10 | .39.1                  |  | First Amendment to the Security Agreement, dated August 1,
    2003, to the Security Agreement between WFS Receivables
    Corporation 3 and Western Financial Bank(7)                                                                                                                                                           
|        | 10 | .40                    |  | Services Agreement between Western Financial Bank, WFS Financial
    Inc and Western Financial Associate Solutions, dated
    January 1, 2004                                                                                                                                                                                    
|        | 10 | .41                    |  | Westcorp Executive Deferral Plan V Participation Agreement
    between Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc., WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    Corporation, dated January 1, 2004                             
|        | 10 | .41.1                  |  | First Amendment to the Westcorp Executive Deferral Plan V
    Participation Agreement between Westcorp, Western Financial
    Associate Solutions, Western Financial Bank, WFS Financial Inc,
    WestFin Insurance Agency, Inc., WFS Receivables Corporation, and
    Westran Services Corporation, dated December 1, 2004      



---



##### 



|        |    |                        |  |                                                                                                                                                                                                                                                                                                                          
|------- | -- | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                       
|No.     |    | Description of Exhibit
|        |    |                       
|        | 10 | .42                    |  | Westcorp Cafeteria Plan with Flexible Spending Agreement between
    Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc, WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    corporation, dated January 1, 2004                        
|        | 10 | .42.1                  |  | First Amendment to the Westcorp Cafeteria Plan with Flexible
    Spending Agreement between Westcorp, Western Financial Associate
    Solutions, Western Financial Bank, WFS Financial Inc, WestFin
    Insurance Agency, Inc., WFS Receivables Corporation, and Westran
    Services Corporation, dated December 1, 2004
|        | 10 | .43                    |  | Westcorp ESOP and Salary Savings Plan between Westcorp, Western
    Financial Associate Solutions, Western Financial Bank, WFS
    Financial Inc, WestFin Insurance Agency, Inc., WFS Receivables
    Corporation, and Westran Services Corporation, dated
    January 1, 2004                                           
|        | 10 | .43.1                  |  | First Amendment to the Westcorp ESOP and Salary Savings Plan
    between Westcorp, Western Financial Associate Solutions, Western
    Financial Bank, WFS Financial Inc, WestFin Insurance Agency,
    Inc., WFS Receivables Corporation, and Westran Services
    Corporation, dated December 1, 2004                   
|        | 10 | .44                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Financial Auto Loans 2, Inc. and WFS Financial Inc,
    dated July 1, 2004                                                                                                                                                                       
|        | 10 | .45                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Receivables Corporation and WFS Financial Inc, dated
    July 1, 2004                                                                                                                                                                            
|        | 10 | .46                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Receivables Corporation 3 and WFS Financial Inc, dated
    July 1, 2004                                                                                                                                                                          
|        | 10 | .47                    |  | Collateral Assignment Agreement between Western Financial Bank,
    WFS Funding, Inc. and WFS Financial Inc, dated July 1, 2004                                                                                                                                                                                          
|        | 10 | .48                    |  | Servicing Agreement between WFS Receivables Corporation 2 and
    WFS Financial Inc, dated August 20, 2004                                                                                                                                                                                                               
|        | 10 | .49                    |  | Retainer Agreement between WestFin Insurance Agency and WFS
    Financial Inc dated March 31, 2003(7)                                                                                                                                                                                                                    
|        | 21 | .1                     |  | Subsidiaries of WFS Financial Inc                                                                                                                                                                                                                                                                                        
|        | 23 | .1                     |  | Consent of Independent Auditors, Ernst & Young LLP                                                                                                                                                                                                                                                                       
|        | 31 | .1                     |  | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                                          
|        | 31 | .2                     |  | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002                                                                                                                                                                                                                                          
|        | 32 | .1                     |  | Certification of the Chief Executive Officer pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                            
|        | 32 | .2                     |  | Certification of the Chief Financial Officer pursuant to 18
    U.S.C. Section 1350, as adopted pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                            






|    |                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Exhibits previously filed with WFS Financial Inc Registration
    Statement on Form S-1 (File No. 33-93068), filed
    August 8, 1995 incorporated herein by reference under
    Exhibit Number indicated                                     
|   
|(2) | Exhibit previously filed with Westcorp Registration Statement on
    Form S-4 (File No. 333-117424), filed July 16,
    2004, incorporated herein by reference under Exhibit Number
    indicated                                             
|   
|(3) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2002
    as filed on or about March 27, 2003                                                                               
|   
|(4) | Exhibit previously filed with Westcorp Registration Statements
    on Form S-3 (File No. 333-110244) filed
    November 5, 2003 and subsequently amended on
    November 10, 2003 incorporated by reference under
    Exhibit Number indicated
|   
|(5) | Amendment No. 1, dated as of July 14, 1995 to the WFS
    Financial Inc Registration Statement on Form S-1 (File
    No. 33-93068) incorporated herein by reference under
    Exhibit Number indicated                                        
|   
|(6) | Exhibit previously filed as Exhibit 4.1 to the WFS
    Financial Inc Registration Statement on Form S-8 (File
    No. 333-40121), filed November 13, 1997, and
    incorporated herein by reference                                           



---



##### 





|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2003
    as filed on or about March 12, 2004
|   
|(8) | Employment Agreement dated February 27, 1998 between WFS
    Financial Inc, Westcorp and Lee A. Whatcott (will be
    provided to the SEC upon request)        
|   
|(9) | Employment Agreement, dated November 15, 1998 between WFS
    Financial Inc, Westcorp and Mark Olson (will be provided to the
    SEC upon request)            



|     |                                                                                                                                                                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 1998
    (File No. 33-93068) as filed on or about March 31, 1999                                                                    
|    
|(11) | Exhibits previously filed with WFS Financial Inc Registration
    Statements on Form S-2 (File No. 333-91277) filed
    November 19, 1999 and subsequently amended on
    January 20, 2000 incorporated by reference under
    Exhibit Number indicated
|    
|(12) | Exhibits previously filed with Annual Report on Form 10-K
    of WFS Financial Inc for the year ended December 31, 2001
    as filed on or about March 29, 2002