SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-K


(Mark One)
|X|  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the fiscal year ended December 31, 2000
                                         OR
|_|  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 1-3521

                              WASHINGTON MUTUAL FINANCE CORPORATION
                     (Exact name of registrant as specified in its charter)

                DELAWARE                                    95-4128205
     (State or other jurisdiction of                     (I.R.S. Employer
     incorporation or organization)                   Identification Number)
    8900 Grand Oak Circle, Tampa, FL                        33637-1050
(Address of principal executive offices)                    (Zip Code)

                                    (813) 632-4500
                 (Registrant's telephone number, including area code)


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

                                                       Name of each exchange
             Title of each class                        on which registered

   7 3/4 % Senior Notes due June 15, 2001              New York Stock Exchange

Securities registered pursuant to Section 12 (g) of the Act:       None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

           Yes    X                             No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K:

                            Not applicable

The aggregate  market value of Common Stock held by  non-affiliates:  None

As of February 28, 2001, there were 1,000 shares of Common Stock outstanding.

Documents incorporated by reference:                  None

Registrant meets the conditions set forth in General  Instruction  (I)(1)(a) and
(b) of Form 10-K and is therefore  filing this Form with the reduced  disclosure
format.



<PAGE>


                       WASHINGTON MUTUAL FINANCE CORPORATION

                            ANNUAL REPORT ON FORM 10-K

                                 Table of Contents


                                                                            Page
                                         PART I


Item 1.        Business.......................................................3
Item 2.        Properties....................................................10
Item 3.        Legal Proceedings.............................................11
Item 4.        Submission of Matters to a Vote of Security Holders ...........*

                                         PART II

Item 5.        Market for the Registrant's Common Equity
                  and Related Stockholder Matters............................12
Item 6.        Selected Financial Data ......................................12
Item 7.        Management's Discussion and Analysis of Financial Condition
                  and Results of Operations..................................13
Item 7A        Quantitative and Qualitative Disclosures About Market Risk....22
Item 8.        Financial Statements and Supplementary Data...................25
Item 9.        Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure........................43

                                         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 ................*

                                         PART IV

Item 14.       Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K........................................44


        *    Items 4, 10, 11, 12 and 13 are not included as per conditions  met
             by Registrant set forth in General Instruction I(1)(a) and (b) of
             Form 10-K.


<PAGE> 1

                                         PART I

Item 1.  Business

General

Washington  Mutual  Finance  Corporation,  incorporated  in Delaware in 1986, as
Aristar,  Inc.,  is a holding  company  headquartered  in Tampa,  Florida  whose
subsidiaries are engaged in the consumer financial services business. Washington
Mutual Finance Corporation is an indirect, wholly-owned subsidiary of Washington
Mutual, Inc. ("Washington  Mutual").  When we refer to "we", "our", "us", or the
"Company" in this Form 10-K, we mean Washington  Mutual Finance  Corporation and
its subsidiaries,  all of which are  wholly-owned.  Effective March 1, 2000, the
Company changed its name from Aristar, Inc.

Our Company's  operations consist principally of a network of 533 branch offices
located in 25 states,  primarily in the  southeast,  southwest  and  California.
Prior to November 1999, these offices generally  operated under the names Blazer
Financial Services, City Finance Company and First Community Financial Services.
Beginning in November 1999 and continuing throughout the first half of 2000, the
office names were changed to Washington  Mutual Finance.  Our branch offices are
typically  located in small- to  medium-sized  communities  in suburban or rural
areas and are managed by individuals  who generally have  considerable  consumer
lending  experience.  The primary  market for the our consumer loans consists of
households with an annual income of up to $70,000.

We make secured and unsecured consumer loans, and purchase installment contracts
from retail  establishments.  The consumer credit transactions are primarily for
personal, family, or household purposes. From time to time, we purchase consumer
loans from national mortgage banking operations,  servicing  released,  that are
secured by real estate. We also provides consumer financial services through our
industrial banking subsidiary,  First Community Industrial Bank ("FCIB"),  which
has  branches in Colorado  and Utah.  In addition to making  consumer  loans and
purchasing retail installment  contracts,  FCIB also accepts deposits insured by
the Federal Deposit Insurance Corporation ("FDIC").

We are managed along two major lines of business:  consumer finance and consumer
banking.  The financial  performance  of these business lines is measured by our
profitability reporting processes.

<PAGE> 2

The  following  table  provides  an  analysis  by type of our  consumer  finance
receivables  (excluding  unearned finance charges and deferred loan fees) at the
dates shown:


<TABLE>


(Dollars in thousands)                                    December 31,
                                           ----------------------------------------
                                              2000           1999            1998
Notes and contracts receivable:            ----------     ----------     ----------
<S>                                        <C>            <C>            <C>
   Amount                                  $3,728,350     $3,061,757     $2,574,396
   Number of accounts                       1,016,403      1,001,302        966,048
Type:
   Real estate secured loans               $1,990,907     $1,432,841     $1,122,872
   Other installment loans                  1,401,859      1,334,350      1,159,852
   Retail installment contracts               335,584        294,566        291,672
                                           ----------     ----------     ----------
      Total                                $3,728,350     $3,061,757     $2,574,396
                                           ==========     ==========     ==========
      Number of accounts                    1,016,403      1,001,302        966,048
Type as a percent of total receivables:
   Real estate secured loans                     53.4%          46.8%          43.6%
   Other installment loans                       37.6           43.6           45.1
   Retail installment contracts                   9.0            9.6           11.3
                                           ----------     ----------     ----------
                                                100.0%         100.0%         100.0%
                                           ==========     ==========     ==========

</TABLE>

For the year ended  December 31, 2000,  real estate  secured  loans  outstanding
(excluding  unearned  finance charges and deferred loan fees)  increased  $558.1
million,  or 38.9%, as compared to an increase of $310.0 million,  or 27.6%, for
the prior  year.  Real  estate  loans are  typically  secured by first or second
mortgages and are primarily used by the customer for purchases of consumer goods
or debt  consolidation.  We have focused on  increasing  our  percentage of real
estate loans held in portfolio due to the better credit quality  inherent in the
customer base,  since the primary sources of these loans are existing  customers
that have maintained a high level of payment performance over an extended period
of time. In 2000,  approximately 88% of the real estate secured loans originated
were  made  to  customers   with  whom  we  had  a  current  or  former  lending
relationship.  In addition, the underlying security in real estate secured loans
reduces our risk of loss.  Also, the larger average balance makes this loan type
more cost effective to originate and service. At December 31, 2000 and 1999, the
average  balance of a real estate  secured  loan was  approximately  $30,400 and
$27,700.

Consumer  loans  are  typically   fixed-rate  and  are  originated  by  customer
application and periodic purchases of receivable  portfolios.  Loan originations
are a  result  of  business  development  efforts  consisting  of  direct  mail,
telemarketing and branch office sales personnel.  Consumer loans written in 2000
had original  terms ranging from 3 to 360 months and averaged 74 months.  Of the
loans originated in 2000,  approximately 70% were unsecured or secured by luxury
goods,  automobiles  or other  personal  property,  and  approximately  30% were
secured by real estate. In addition,  the Company purchases loan portfolios from
its competitors  and secondary  markets.  In 2000,  $323.3 million of loans were
purchased.  Of these,  approximately  24% were  unsecured  or  secured by luxury
goods,  automobiles  or other  personal  property,  and  approximately  76% were
secured by real  estate.  Included in this amount were $123.0  million of single
family residence loans acquired from an affiliate.

During 2000, other  installment loans  outstanding  (excluding  unearned finance
charges and deferred loan fees) increased $67.5 million, or 5.1%, as compared to
an increase of $174.5  million,  or 15.0%,  in 1999, due to our focus on growing

<PAGE> 3

the real  estate  portfolio.  Other  installment  loans are  either  secured  or
unsecured and are primarily  used by the customer to make specific  purchases of
consumer goods or undertake  personal debt  consolidation.  At December 31, 2000
and 1999, the average  balance of an other  installment  loan was  approximately
$2,360 and $2,250.

During  2000,  retail  installment  contracts  outstanding  (excluding  unearned
finance charges and deferred loan fees)  increased  $41.0 million,  or 13.9%, as
compared to an increase of $2.9  million,  or 1.0% in 1999. As this loan type is
generally  obtained as a source for new customers,  it has been  determined that
maintaining this portfolio at approximately  10% of total net outstanding  loans
is the  appropriate  portfolio mix for generating  cross-selling  opportunities,
while  minimizing  the  impact  on  yields.  Retail  installment  contracts  are
generally acquired without recourse to the originating  merchant and establish a
customer relationship for developing future loan business. Where these contracts
result from the sale of consumer  goods,  payment is  generally  secured by such
goods.   Retail  installment   contracts  are  generally  acquired  through  the
originating  merchant.  We had such  arrangements  with over 3,000  merchants at
December  31,  2000.  At December  31, 2000 and 1999,  the average  balance of a
retail installment contract was approximately $940 and $825.

As part of our  consumer  finance line of business,  we make  available,  at the
option of our customers,  credit life,  credit  accident and health,  and credit
casualty insurance products.  We do not sell insurance to non-customers.  Credit
insurance  we  sell is  written  by  unaffiliated  insurance  companies,  and we
substantially  reinsure  all of  these  policies,  which  earns  us  reinsurance
premiums thereon.

Yield Written

For the years ended December 31, 2000, 1999 and 1998 the average portfolio yield
written during the year, by loan type, was as follows:


<TABLE>

                                           2000         1999           1998
                                          -----         -----         -----
<S>                                       <C>           <C>           <C>
         Real estate secured loans        12.15%        12.53%        12.68%
         Other installment loans          24.72         24.83         25.07
         Retail installment contracts     19.08         18.94         18.99

</TABLE>


<PAGE> 4


Geographic Distribution

Geographic   diversification  of  consumer  finance   receivables   reduces  the
concentration of credit risk associated with a recession in any one region.  The
concentration  of  consumer  finance  receivables,  excluding  unearned  finance
charges and deferred loan fees, by state was as follows:


<TABLE>

(Dollars in thousands)                       December 31,
                 -----------------------------------------------------------------
                          2000                   1999                    1998
                 --------------------   ---------------------  -------------------
                    Amount    Percent     Amount     Percent      Amount   Percent
                 -----------  -------   -----------  -------  ----------   -------
<S>              <C>            <C>     <C>              <C>   <C>             <C>
California       $   388,825    10%     $   228,334     7%    $   155,095     6%
Texas                363,407    10          295,465    10         227,257     9
Tennessee            339,852     9          291,946    10         245,558     9
Colorado             328,652     9          314,677    10         240,515     9
North Carolina       292,893     8          264,909     9         230,218     9
Florida              222,010     6          190,120     6         192,366     7
South Carolina       182,669     5          166,533     5         142,562     6
Virginia             161,247     4          144,560     5         126,741     5
Louisiana            146,147     4          133,372     4         118,579     5
Mississippi          128,653     3          116,468     4          98,583     4
Other              1,173,995    32          915,373    30         796,923    31
                 -----------  -------   -----------  -------  -----------  -------
Total            $ 3,728,350   100%     $ 3,061,757   100%    $ 2,574,397   100%
                 ===========  =======   ============ =======  ===========  =======
</TABLE>


Prior  to  2000,  these  results  were  based on the  state  where  the loan was
originated or purchased. We have found that results are more meaningful if based
on the state where the customer resides.  This change in classification helps us
to more  accurately  understand  effects  caused by economic  conditions  in any
particular  region. The prior year numbers have been restated to reflect the new
classification methodology.

Credit Loss Experience

We closely monitor portfolio delinquency and loss rates in measuring the quality
of the portfolio and the potential  for ultimate  credit  losses.  An account is
considered  delinquent  when a payment is 60 days or more past due, based on the
original  terms of the contract.  Under our policy,  and in an effort to contain
risk,  non-real estate  secured  delinquent  accounts  generally are charged off
(i.e. fully reserved) when they become 180 days contractually  delinquent.  Real
estate secured,  delinquent  accounts are handled on a case-by-case  basis, with
foreclosure proceedings typically beginning when the accounts are between 60 and
90 days contractually  delinquent.  Collection efforts continue after an account
has been charged off until the customer  obligation  is satisfied or until it is
determined that the obligation is not collectible.

We attempt to control customer  delinquency  through careful  evaluation of each
borrower's  application and credit history at the time the loan is originated or

<PAGE> 5

purchased,  and through appropriate  collection activity. We also seek to reduce
our risk by  focusing on consumer  lending,  making a greater  number of smaller
loans than would be practical in commercial markets, and maintaining disciplined
control over the underwriting process.

We  maintain  an  allowance  for  credit  losses  inherent  in  the  receivables
portfolio.  The  allowance  is based on an ongoing  assessment  of the  probable
estimated losses inherent in the portfolio.  This analysis  provides a mechanism
for ensuring  that  estimated  losses  reasonably  approximate  actual  observed
losses. See discussion in "Allowance for Credit Losses" in Item 7.

Funding Composition

A  relatively  high ratio of  borrowings  to invested  capital is  customary  in
consumer  finance  activities due to the quality and term of the assets employed
by the  business.  As a result,  the spread  between the revenues  received from
loans and  interest  expense  is a  significant  factor in  determining  our net
income.

We fund our  operations  principally  through  net  cash  flows  from  operating
activities,  short-term borrowings in the commercial paper market,  issuances of
senior debt and customer deposits and borrowings from the Federal Home Loan Bank
of Topeka (the "FHLB"). We had commercial paper outstanding at December 31, 2000
and 1999 of $683.7 million and $242.2 million.  We share with Washington  Mutual
two revolving  credit  facilities:  a $1.2 billion  364-day  facility and a $600
million  four-year  facility,  which provide  back-up for our  commercial  paper
programs.  The  borrowing  capacity  is limited  to the total  amount of the two
revolving  credit  facilities,  net of the amount of combined  commercial  paper
outstanding.  At December 31, 2000, there was $841 million available under these
facilities.  There were no borrowings under these facilities at any point during
2000 or 1999.

Senior notes  outstanding  totaled  approximately  $2.20 billion at December 31,
2000 and $2.00  billion at December  31, 1999.  On March 6, 2001,  we filed a $1
billion shelf registration  statement to provide additional access to the public
debt markets.

Through  our  industrial  banking  subsidiary,  we also borrow from the FHLB and
accept customer deposits. FHLB borrowings totaled $156.8 million at December 31,
2000 and $115.9 million at December 31, 1999.  Customer  deposits totaled $189.8
million at December 31, 2000 and $189.9 million at December 31, 1999.

Employee Relations

Our  number  of  full-time   equivalent  employees  at  December  31,  2000  was
approximately  3,000,  an 11.1% increase from December 31, 1999. We believe that
we have been  successful in attracting  quality  employees and that our employee
relations are good.


<PAGE> 6


Risk Factors

In addition to the other  information  in this Annual  Report on Form 10-K,  the
following factors should be considered carefully:

A decline of  collateral  value may adversely  affect the credit  quality of our
portfolio

Approximately 53% of our consumer finance  receivables  outstanding were secured
by real estate at December 31, 2000. Any material  decline in real estate values
reduces the ability of  borrowers to use home equity to support  borrowings  and
increases the  loan-to-values  of loans previously made by us, thereby weakening
collateral  coverage and increasing the  possibility of a loss in the event of a
borrower  default.  Further,  delinquencies,  foreclosures  and losses generally
increase during economic  slowdowns or recessions.  Any sustained period of such
increased  delinquencies,  foreclosures  and losses could  adversely  affect our
results of operations and financial condition.

An  increase  in our  delinquency  rate could  adversely  affect our  results of
operations

Our  underwriting  criteria  or  collection  methods  may  not  afford  adequate
protection against the risks inherent in the loans we make to our customers.  In
the event our  portfolio  of consumer  finance  receivables  experiences  higher
delinquencies,   foreclosures  or  losses  than  anticipated,   our  results  of
operations or financial condition could be adversely affected.

Changes in  legislation  or  regulation  could  adversely  affect  our  business
operations

Our lending  activities are subject to federal consumer  protection laws such as
the  Amended  Truth-in-Lending  Act  (including  the Home  Ownership  and Equity
Protection Act of 1994), the Fair Housing Act, the Equal Credit Opportunity Act,
the Fair Credit  Reporting Act, the Real Estate  Settlement  Procedures Act, the
Home  Mortgage  Disclosure  Act and the Fair Debt  Collection  Practices Act and
regulations promulgated  thereunder.  In December 2000, amendments were proposed
to the Home  Ownership and Equity  Protection  Act of 1994  ("HOEPA") that would
lower  the  rate  and fee  triggers  defining  when  the  additional  disclosure
requirements and term restrictions of HOEPA would apply. If adopted, more of our
loans would be subject to HOEPA and the disclosure  requirements and substantive
limitations.  In addition,  the  Gramm-Leach-Bliley  Act of 1999  ("GLBA"),  and
implementing  regulations,  created  privacy  protections for our loan customers
which  require us to provide  our loan  customers  with a privacy  notice and an
opportunity to opt out of information  sharing with nonaffiliated third parties.
As of March 2001, all operating subsidiaries had in place a compliance procedure
and no further  impact is expected on our  operations  at this time. We are also
under the federal  regulatory  oversight of the Federal Trade Commission ("FTC")
which, from time to time, promulgates rules which affect our operations.

Our operating  subsidiaries  are subject to state laws and regulatory  oversight
which  laws and  regulations:  (i)  impose  licensing  obligations  on us,  (ii)
establish    eligibility   criteria   for   mortgage   loans,   (iii)   prohibit
discrimination,  (iv) provide for inspections and appraisals of properties,  (v)
require credit reports on loan applicants, (vi) regulate assessment, collection,
foreclosure and claims handling,  (vii) mandate certain  disclosures and notices


<PAGE> 7


to borrowers and (viii) in some cases,  fix maximum  interest rates,  fees, loan
amounts,  prepayment  penalties and refinancing  frequencies.  Failure to comply
with the state and federal requirements can lead to termination or suspension of
our ability to make and collect loans, certain rights of rescission for mortgage
loans,  individual  civil  liability,  class action lawsuits and  administrative
enforcement actions. Although consumer finance laws have been in effect for many
years, amending and new legislation is frequently proposed.  Currently there are
subprime lending bills pending in approximately  30 states,  including  Georgia,
Texas,  California,   Illinois,   Pennsylvania,  South  Carolina,  Virginia  and
Washington. In general the bills are aimed at lending practices considered to be
"predatory"  as they have an adverse  effect on borrowers  with weakened  credit
histories and lower prepayment abilities.  If passed,  generally the bills would
impose additional loan disclosure  requirements,  restrict prepayment penalties,
prohibit frequent loan refinancings without benefit to the borrower and increase
enforcement abilities and penalties for violations.

Additionally,  our sale of credit life,  credit accident and health,  and credit
casualty insurance to our customers is subject to state and federal statutes and
regulations.  Failure  to comply  with any of the  foregoing  state and  federal
requirements could lead to imposition of civil penalties,  class action lawsuits
and administrative  enforcement actions on us. The pending legislation regarding
subprime lending includes  provisions  further  regulating the sale of insurance
products.  If adopted,  this  legislation  could  adversely  affect our sales of
insurance products.

We have been, and will continue to be, subject to regulatory enforcement actions
and private  causes of action from time to time with  respect to our  compliance
with applicable  laws and  regulations.  Our lending  practices have in the past
been, and currently are, under regulatory  review by various state  authorities.
Additionally,   the  laws  and  regulations   described  above  are  subject  to
administrative and judicial interpretation. Where the law or regulation has been
infrequent  interpreted (or there are an insignificant number of interpretations
of recently  enacted  regulations)  ambiguity with respect to permitted  conduct
under these laws and regulations can result. Any ambiguity under the regulations
to which we are subject may lead to  regulatory  investigations  or  enforcement
actions  and  private  causes of action,  such as class  action  lawsuits,  with
respect to our compliance with the applicable laws and regulations.

Due to self-imposed  lending  guidelines,  it is believed that the pending state
bills and HOEPA  amendments  would  have  minimum  impact on our  operations  if
passed.  There  can be no  assurance  that  more  restrictive  laws,  rules  and
regulations  will not be proposed  and adopted in the future,  or that  existing
laws and regulations will not be interpreted in a more restrictive  manner. Such
occurrences could make compliance more difficult or expensive.

We may be  subject to  litigation  that could  adversely  affect our  results of
operations or financial condition

In the ordinary course of our business, we are subject to claims made against us
by borrowers  arising from, among other things,  losses that are claimed to have
been  incurred  as a  result  of  alleged  breaches  of  fiduciary  obligations;
misrepresentations,  errors and  omissions  of  employees,  officers and agents;
incomplete  documentation;  and  failures by us to comply with  various laws and


<PAGE> 8


regulations  applicable to our business.  We believe that liability with respect
to any currently  asserted  claims or legal actions is not likely to be material
to our consolidated results of operations or financial  condition.  However, any
claims  asserted in the future may result in legal expenses or liabilities  that
could have a material  adverse effect on our results of operations and financial
condition  and could  distract  members  of  management  from our  business  and
operations.

Fluctuations in interest rates may adversely affect our profitability

Our profitability  may be adversely  affected during any period of rapid changes
in interest rates, as substantially  all consumer loans  outstanding are written
at a fixed rate. A substantial  and sustained  increase in interest  rates could
adversely  affect the spread between the rate of interest  received by us on our
loans and the interest  rates payable under our debt  agreements.  Such interest
rate increases  could also affect our ability to originate  loans. A significant
decline in interest  rates could  decrease the balance of the  consumer  finance
receivables  portfolio  by  increasing  the  level  of  loan  prepayments.   See
"Asset/Liability Management" for sensitivity analysis.

Competition could adversely affect our results of operations

Competition in the consumer  finance  business is intense.  The consumer lending
market is highly  fragmented and has been serviced by commercial  banks,  credit
unions and savings institutions, as well as by other consumer finance companies.
Many of  these  competitors  have  greater  financial  resources  and  may  have
significantly lower costs of funds than we do. Even after we have made a loan to
a borrower,  our  competitors  may seek to refinance  the loan in order to offer
additional loan amounts or reduce payments.  In addition, if we expands into new
geographic  markets,  we will face  competition  from lenders  with  established
positions in these locations.  There can be no assurance that we will be able to
continue to compete successfully in these markets.


Item 2.    Properties

As of December 31, 2000, we owned our 71,000 square foot headquarters  building,
which we built in 1994 on 6 acres of land in Tampa, Florida.

An  agreement  in  principle  has been  reached for a sale and  leaseback of the
headquarters  building in Tampa,  Florida.  It is expected that this transaction
will be complete in the second  quarter of 2001.  Any gain  realized on the sale
will be recognized over the period of the lease, which is anticipated to be five
years, with a five-year renewal at the Company's option.

Our branch  offices,  located in 25 states,  are leased  typically  for terms of
three to five years with options to renew.  Typical  locations  include shopping
centers, office buildings and storefronts, and are generally of relatively small
size sufficient to accommodate a staff of four to eight employees.

We lease 50,000  square feet of space in Pensacola,  Florida,  which is used for
centralized underwriting, servicing and collections activities.

See  "Notes  to  Consolidated  Financial  Statements  -  Note  11:  Leases"  for
additional information on rental expense and lease commitments.


<PAGE> 9


Item 3.    Legal Proceedings

The Company and certain of its  subsidiaries are parties to various lawsuits and
proceedings arising in the ordinary course of business.  We have also been named
as a defendant in a number of class action suits, in which various industry-wide
practices  arising from routine  business  activities  are being  challenged and
various  damages are being  sought.  Certain of these  lawsuits and  proceedings
arise in  jurisdictions,  such as Alabama and  Mississippi,  that permit  damage
awards  disproportionate  to the actual economic  damages  incurred.  Based upon
information  presently  available,  we believe that the total  amounts that will
ultimately be paid arising from these lawsuits and  proceedings  will not have a
material adverse effect on our consolidated  results of operations and financial
condition.  However,  it  should be noted  that the  frequency  of large  damage
awards,  including large punitive damage awards, that bear little or no relation
to actual economic damages incurred by plaintiffs in jurisdictions  like Alabama
and  Mississippi  continues  to  increase  and  creates  the  potential  for  an
unpredictable judgment in any given suit.



<PAGE> 10


                                       PART II

Item 5.    Market for the Registrant's  Common Equity  and Related   Stockholder
           Matters

The Company is an indirect wholly-owned  subsidiary of Washington Mutual and the
Company's  common stock is not traded on any  national  exchange or in any other
established market.

Payment  of  dividends  is  within  the  discretion  of the  Company's  Board of
Directors.  Provisions of certain of our debt agreements restrict the payment of
dividends to a maximum prescribed portion of cumulative earnings and contributed
capital and otherwise  provide for the  maintenance  of minimum levels of equity
and maximum  leverage  ratios.  Dividends will be paid when capital  exceeds the
amount of debt to  tangible  capital  (leverage  ratio)  deemed  appropriate  by
management.   This  leverage  ratio  will  be  managed  with  the  intention  of
maintaining  the existing  credit  ratings on our  outstanding  obligations.  We
declared and paid dividends totaling $25.0 million during 2000 and $14.5 million
during 1999.


Item 6.  Selected Financial Data

The following selected financial data are taken from our consolidated  financial
statements.  The  data  should  be read in  conjunction  with  the  accompanying
consolidated  financial  statements  and related notes in Item 8.,  Management's
Discussion and Analysis in Item 7., and other financial  information included in
this Form 10-K. Per share  information is not included  because all of our stock
is owned by Washington Mutual.



<TABLE>

                                   As of, or For the Years Ended December 31,
                      --------------------------------------------------------------------
                          2000           1999          1998         1997           1996
                      ----------    -----------    ----------    ----------    -----------
                                              (Dollars in thousands)

<S>                   <C>            <C>           <C>           <C>           <C>
Net interest income   $  252,000     $  224,805    $  203,432    $  180,605    $  196,375

Noninterest income        30,421         29,501        27,147        26,555        27,205

Noninterest expense      156,002        135,594       142,992       131,129       124,062

Net income                78,889         72,992        52,887        46,287        62,518

Consumer finance
  receivables, net     3,623,763      2,961,449     2,493,903     2,254,389     2,123,103

Total assets           3,927,705      3,227,557     2,744,710     2,509,606     2,371,376

Total debt             3,036,899      2,353,963     1,987,990     1,830,404     1,750,776

Total equity             539,088        475,158       419,330       398,184       369,240

</TABLE>


<PAGE> 11


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

This document  contains  forward-looking  statements,  which are not  historical
facts  and  pertain  to our  future  operating  results.  These  forward-looking
statements are within the meaning of the Private  Securities  Litigation  Reform
Act of 1995. These  forward-looking  statements include, but are not limited to,
statements  about our plans,  objectives,  expectations and intentions and other
statements  contained in this report that are not historical facts. When used in
this report, the words "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," and similar expressions are generally intended to identify
forward-looking  statements.  These  forward-looking  statements  are inherently
subject to significant  business,  economic and  competitive  uncertainties  and
contingencies,  many of  which  are  beyond  our  control.  In  addition,  these
forward-looking  statements  are subject to  assumptions  with respect to future
business strategies and decisions that are subject to change. Actual results may
differ materially from the results discussed in these forward-looking statements
for the  reasons,  among  others,  discussed  under the  heading  "Business-Risk
Factors" included in this Form 10-K.

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  should  be read  in  conjunction  with  the  Consolidated  Financial
Statements and related notes in Item 8. and other financial  information in Item
1.

Overview

The  Company had net income of $78.9  million in 2000,  which  represents  an 8%
increase over the $73.0 million  reported in 1999 and a 49% increase over 1998's
reported net income of $52.9  million.  The following are key  highlights of our
performance:

o    Return on average  assets  ("ROA") was 2.17%  compared to 2.48% in 1999 and
     2.05% in 1998. Despite the increase in net income, average assets increased
     at a greater rate, thus resulting in a lower ROA.

o    Net consumer finance receivables increased 21.8% during 2000, demonstrating
     continued growth following an increase of 18.7% in 1999.

o    Yields earned on consumer finance receivables  declined from 16.73% in 1999
     to 15.89% in 2000. This was due primarily to a shift in product mix towards
     lower  yielding real estate  secured loans and  increased  amortization  of
     deferred loan  origination  costs.  The increased  amortization is due to a
     change in the estimate of loan  origination  costs which was implemented in
     1999.  As a result  of an  increase  in the  amount  of  origination  costs
     deferred in accordance with SFAS No. 91, "Accounting for Nonrefundable Fees
     and Costs Associated with Originating or Acquiring Loans and Initial Direct
     Costs of Leases,"  the impact on earned  yields is greater.  This is due to
     the  requirement  of this Standard to amortize the deferred  costs over the
     life of the related loan using the effective yield method, thereby reducing
     the yield as the costs are amortized.


<PAGE> 12


o    Both net interest  spread and net interest  margin  decreased  from 1999 to
     2000,  due  primarily to a shift in product mix toward lower  yielding real
     estate   secured  loans  and  increased   amortization   of  deferred  loan
     origination costs, coupled with a rising cost of funds. Net interest spread
     represents   the   difference   between   the   yield   on  the   Company's
     interest-earning  assets and the interest rate paid on its borrowings.  Net
     interest  margin  represents  the ratio of net  interest  income to average
     earning assets.

o    Operating  efficiency  is  defined  as the  ratio of  noninterest  expense,
     excluding  the  amortization  of  goodwill,  to  total  revenue,  which  is
     comprised of net interest  income  before  provision  for credit losses and
     noninterest  income.  In 2000, our operating  efficiency  ratio declined to
     38.9% from 37.1% in 1999. This  deterioration  is due to the lower interest
     margin, as well as increased  noninterest expense.  However, the efficiency
     ratio in both 2000 and 1999 experienced significant improvement compared to
     1998, which was 44.9%.

o    Delinquencies  (accounts  contractually past-due greater than 60 days) as a
     percentage  of net consumer  finance  receivables  increased  from 2.31% at
     December 31, 1999 to 2.71% at December 31, 2000. The primary source of this
     deterioration  is a  portfolio  purchased  earlier  in the  year  that  has
     experienced higher than expected delinquency rates.

o    Net credit  losses  totaled  $103.0  million in 2000,  as compared to $80.8
     million  in 1999  and  $73.9  million  in  1998.  Net  credit  losses  as a
     percentage of average  consumer  finance  receivables  (excluding  unearned
     finance charges and deferred loan fees),  however, were 3.0%, 2.9% and 3.1%
     in 2000, 1999 and 1998.

Segment Results

The Company is managed along two major segments:  consumer  finance and consumer
banking. Following is an overview of the performance of each segment in 2000:

Consumer Finance

o    Net income  increased 8.2% to $71.9 million in 2000,  from $66.5 million in
     1999. Net income totaled $47.1 million in 1998.

o    Return on assets in 2000 was 2.23% as  compared  to 2.58% and 2.06% in 1999
     and 1998.

o    The consumer finance receivables portfolio  experienced  significant growth
     during 2000, totaling $653.1 million, or 24.3%.

o    Net interest  margin  decreased as a result of yield erosion on receivables
     caused by the shift in  product  mix  toward  real  estate  secured  loans,
     coupled  with  the  impact  of  increased  amortization  of  deferred  loan
     origination costs. In addition, the cost of funds increased  significantly,
     as discussed in "Consolidated Results of Operations".


<PAGE> 13


o    The efficiency  ratio in 2000 was 38.6%,  as compared to 36.8% and 45.1% in
     1999 and 1998.  Although net  interest  income  increased  due to growth in
     interest-earning  assets, the decline in efficiency was a result of a lower
     interest  margin  coupled  with higher  personnel  and  occupancy  expenses
     associated  with an  increase  in  both  headcount  and  number  of  office
     locations.

o    Net credit losses increased over prior years. However, 2000 was also a year
     of  high  receivables  growth.  As a  percentage  of the  consumer  finance
     receivables  portfolio,  net credit  losses were 3.3%,  which is consistent
     with 1999.

Consumer Banking

o    Net income  increased  6.5% to $6.9  million in 2000,  from $6.5 million in
     1999. Net income totaled $5.8 million in 1998.

o    Return on assets in 2000  decreased  to 1.65%  from 1.78% and 2.01% in 1999
     and 1998.

o    The consumer banking receivables portfolio growth during 2000 totaled $13.5
     million, or 3.59%.

o    Net  interest  margin  decreased  as a result of slight  yield  erosion  on
     receivables,  coupled with an  increased  cost of funds due to higher rates
     paid on customer deposits and FHLB borrowings.

o    Net credit  losses  increased to $1.2 million in 2000 from $680,000 in 1999
     and $850,000 in 1998. Net credit losses as a percentage of average consumer
     banking  receivables  (excluding unearned finance charges and deferred loan
     fees), were 0.3%, 0.2% and 0.3% in 2000, 1999 and 1998.

Consolidated Results of Operations

Net Interest Income before Provision for Credit Losses

Net  interest  income  before  provision  for  credit  losses for the year ended
December 31, 2000 increased 10.4% to $359.2 million,  compared to $325.4 million
in 1999 and $283.2  million  in 1998.  Net  interest  margin for 2000 was 9.87%,
compared to 11.02% in 1999 and 11.11% in 1998.

The increase in net interest  income before  provision for credit losses in 2000
reflects  growth in average net consumer  finance  receivables to $3.46 billion,
which was $681.0 million,  or 24.6%,  greater than the average balance for 1999.
This is  primarily  a result of  management's  continued  implementation  of the
internal growth  initiative  through the branch  network,  as well as an ongoing
pursuit of strategic acquisitions. Partially offsetting this portfolio growth is
an 84 basis point  decrease in  portfolio  yield.  This yield  compression  is a
result of remixing the portfolio to a larger percentage of  lower-yielding  real
estate  secured  loans and the  increase in the  amortization  of deferred  loan
origination  costs.  Another factor adversely  impacting the portfolio yield was
the lower average  permissible  rate, due to rising average loan size, given the
structure of various state interest rate regulation thresholds.

<PAGE> 14



In order to finance the growth in consumer  finance  receivables,  average  debt
outstanding  increased by $606.3  million,  or 26.1%, to $2.92 billion for 2000.
During the latter half of 1999,  the mix of debt began to shift to longer  term,
senior debt in order to lessen the impact of higher  short-term  borrowing rates
caused by the Year 2000  liquidity  risk.  Also,  in June 2000, we issued $450.0
million of senior notes with a coupon rate of 8.25%,  maturing on June 15, 2005.
As a result of these factors, the weighted-average senior debt rate increased to
7.08%  in 2000,  compared  to 6.76% in 1999.  In  addition,  the  rates  paid on
commercial paper, FHLB borrowings and customer deposits during 2000 were 91, 112
and 35  basis  points  higher  than in 1999,  due to the  rising  interest  rate
environment during the year associated with short-term  borrowings.  As a result
of these factors, the overall cost of interest-bearing  liabilities increased 46
basis points over 1999.

The  following  table   reflects  the  average  outstanding balances and related
effective yields in 2000, 1999 and 1998, as described above:



<TABLE>

(Dollars in thousands)                                   Year Ended December 31,
                                 ---------------------------------------------------------------------
                                          2000                     1999                     1998
                                 ------------------     --------------------     ---------------------
                                    Average                 Average                 Average
                                    Balance    Rate         Balance     Rate        Balance     Rate
                                 ----------   -----      -----------  ------      -----------  ------
Interest-earning assets:
 Consumer finance receivables:
  Real estate secured
<S>                              <C>           <C>       <C>            <C>       <C>           <C>
   loans                         $ 1,781,775   12.61%    $ 1,275,932    12.59%    $ 1,045,671   12.62%
  Other installment loans          1,366,146   21.41       1,217,663    22.19       1,044,251   22.69
  Retail installment contracts       307,172   10.37         280,458    11.89         286,982   12.59
 Total consumer                  -----------  ------     -----------   ------     -----------  ------
  finance receivables              3,455,093   15.89       2,774,053    16.73       2,376,904   17.04

 Cash, cash equivalents and
  investment securities              185,184    6.63         180,005     6.01         172,251    6.65
                                 -----------  ------     -----------   ------     -----------  ------
Total interest-earning assets    $ 3,640,277   15.42%    $ 2,954,058    16.08%    $ 2,549,155   16.33%
                                 ===========  ======     ===========   ======     ===========  ======
Interest-bearing liabilities:
 Commercial  paper               $   420,215    6.63%    $   323,475     5.72%    $   368,855    5.60%
 Senior debt                       2,180,747    7.08       1,708,555     6.76       1,432,743    7.05
 FHLB advances                       142,860    6.44          90,055     5.32          32,362    5.24
 Customer deposits                   181,169    5.83         196,583     5.48         172,850    5.82
                                 -----------  ------     -----------   ------     -----------   -----
Total interest-bearing
 liabilities                     $ 2,924,991    6.91%    $ 2,318,668     6.45%    $ 2,006,810    6.65%
                                 ===========  ======     ===========   ======     ===========   ======
Net interest spread                             8.51%                    9.63%                   9.68%

Net interest margin                             9.87%                   11.02%                  11.11%

</TABLE>


<PAGE> 15


The  dollar  amounts of  interest   income   and  interest  expense    fluctuate
depending upon changes in amounts (volume) and upon changes in interest rates of
our   interest-earning   assets  and   interest-bearing   liabilities.   Changes
attributable to (i) changes in volume (changes in average  outstanding  balances
multiplied by the prior period's rate), (ii) changes in rate (changes in average
interest rate  multiplied by the prior  period's  volume),  and (iii) changes in
rate/volume  (changes  in rate  times the change in volume  that were  allocated
proportionately  to the  changes  in volume  and the  changes  in rate)  were as
follows:


<TABLE>

(Dollars in thousands)
                                      Year Ended December 31,             Year Ended December 31,
                               ----------------------------------   ---------------------------------
                                           2000 vs. 1999                       1999 vs. 1998
                                     Increase/(Decrease) Due to          Increase/(Decrease) Due to
                               ----------------------------------   ---------------------------------
                                Volume      Rate    Total Change     Volume    Rate    Total Change
Interest income:               ---------  --------  ------------    --------  -------  ------------
  Consumer finance
<S>                            <C>        <C>           <C>         <C>       <C>        <C>
    receivables                $ 121,169  $(36,296)     $ 84,873    $ 69,015  $ (9,790)  $ 59,225
  Investment securities              304     1,154         1,458         471    (1,095)     (624)
      Total interest income      121,473   (35,142)       86,331      69,486   (10,885)    58,601

Interest expense:
  Interest-bearing
    liabilities                   41,302    11,181        52,483      19,994    (3,596)    16,398
      Net interest income      $  80,171  $(46,323)     $ 33,848    $ 49,492  $(7,289)   $ 42,203

</TABLE>

Provision for Credit Losses

The  provision for credit  losses  during 2000 was $107.2  million,  compared to
$100.6  million in 1999 and $79.8  million in 1998.  In 2000,  the provision for
credit  losses  was 3.10% of average  consumer  finance  receivables  (excluding
unearned finance charges and deferred loan fees), compared to 3.63% for 1999 and
3.36% in 1998. See further discussion in "Allowance for Credit Losses."

Noninterest Income

Noninterest  income  increased 3.1% in 2000 to $30.4 million,  compared to $29.5
million in 1999 and $27.1 million in 1998.  Other operating  income is comprised
of revenue  earned from the sale of various  ancillary  products to borrowers at
the branch locations  including life insurance,  accident and health  insurance,
property and casualty insurance,  accidental death and dismemberment  insurance,
involuntary  unemployment  insurance and auto club memberships.  The increase in
2000 is related to the  increase  in the number of loans  originated  during the
year,  offset by the shift in  originations  to loans which tend to have a lower
insurance penetration.

Noninterest Expense

Noninterest expense in 2000 increased 15.1% and 9.1%, or $20.4 million and $13.0
million to $156.0  million,  compared with $135.6  million and $143.0 million in
1999 and 1998.  This  increase  is  primarily a result of higher  personnel  and
occupancy  expenses  associated with an increase in both headcount and number of
office locations  compared to 1999 and 1998. In addition,  we have renovated our
branch locations,  resulting in increased  amortization of capitalized leasehold
improvements.


<PAGE> 16


Provision for Federal and State Income Taxes

The provision for income taxes in 2000 was $47.5  million,  which  represents an
effective rate of 37.60%.  This compares to $45.7 million, or 38.51% in 1999 and
$34.7 million, or 39.62% in 1998.

Financial Condition

Allowance for Credit Losses

Activity in the Company's allowance for credit losses is as follows:


<TABLE>

                                                               Year Ended December 31,
                                                   -------------------------------------------
(Dollars in thousands)                                 2000              1999           1998
                                                   ----------       -----------      ---------
<S>              <C>                               <C>              <C>              <C>
Balance, January 1                                 $  100,308       $    80,493      $  74,323
Provision for credit losses                           107,243           100,590         79,760
Amounts charged off:
   Real estate secured loans                           (2,684)           (1,807)        (2,125)
   Other installment loans                           (104,365)          (82,438)       (73,210)
   Retail installment contracts                       (13,017)          (12,558)       (14,417)
                                                    ---------       -----------      ---------
                                                     (120,066)          (96,803)       (89,752)
Recoveries:
   Real estate secured loans                              241               398            521
   Other installment loans                             14,171            12,629         12,593
   Retail installment contracts                         2,690             3,001          2,774
                                                   ----------       -----------      ---------
                                                       17,102            16,028         15,888
                                                   ----------       -----------      ---------
Net charge offs                                      (102,964)          (80,775)       (73,864)

Allowances on notes purchased                            -                 -               274
                                                   ----------       -----------      ---------
Balance, December 31                               $  104,587       $   100,308      $  80,493
                                                   ==========       ===========      =========

Allowance for credit losses as a percentage
  of  December 31 consumer finance receivables
  (excluding unearned finance charges and
  deferred loan fees)                                    2.81%             3.28%          3.13%

Net charge offs as a percentage of average
  consumer finance receivables (excluding unearned
  finance charges and deferred loan fees)                2.98%             2.91%          3.11%

Provision for credit losses as a percentage of
  average consumer finance receivables (excluding
  unearned finance charges and deferred loan fees)       3.10%             3.63%          3.36%

</TABLE>

In order to establish  our  allowance for credit  losses,  the consumer  finance
receivables portfolio is segmented into two categories:  real estate secured and
non-real  estate  secured  (other   installment  loans  and  retail  installment


<PAGE> 17


contracts).  The  determination  of the level of the allowance for credit losses
and, correspondingly, the provision for credit losses for these homogeneous loan
pools rests upon various  judgments and  assumptions  used to determine the risk
characteristics  of each  portfolio.  These  judgments are supported by analyses
that fall into three general categories:  (i) economic conditions as they relate
to our current  customer  base and  geographic  distribution;  (ii) a predictive
analysis of the outcome of the current  portfolio  (a migration  analysis);  and
(iii) prior loan loss experience.  Additionally,  every real estate secured loan
that  reaches 60 days  delinquency  is  reviewed  by our  credit  administration
management to assess  collectibility and determine a future course of action, at
times resulting in the Company foreclosing on the property.

Management establishes the allowance for credit losses based on estimated losses
inherent in the  portfolio.  Using the analysis  techniques  described  above to
measure the adequacy of the  allowance for credit  losses,  the results of those
analyses are compared to the historical trends of the loss coverage ratio, which
represents  the ratio of the  allowance  for credit  losses to annual net charge
offs.  During 2000,  the loss coverage  ratio declined from 124% at December 31,
1999 to 102% at December 31, 2000, due to several factors. During the first half
of 2000, we purchased two portfolios that have experienced  higher than expected
delinquency  rates,  which has resulted in higher than expected  credit loss and
delinquency  results  in 2000.  Due to the  liquidation  of the  underperforming
portions of these  portfolios,  it is  anticipated  that the  ongoing  impact on
losses will be minimal.  Additionally,  we have been  remixing  our loan product
portfolio, which has resulted in a reduction in the level of unsecured loans and
an increase in the amount of real estate  secured loans.  From mid-1998  through
1999, the unsecured portfolio grew  significantly.  As a result of the unsecured
nature of this growth, credit losses increased  significantly in the latter half
of 1999 and 2000.  Conversely,  the secured nature of the growth  experienced in
2000 is  expected to result in a relative  decrease  in credit  losses for 2001.
Accordingly,  the loss  coverage  ratio at December  31, 2000 appears to be at a
level that is consistent  with the credit  quality  characteristics  of the loan
portfolio.

As a result of the analysis  performed as described  above,  the  allowance  for
credit losses as of December 31, 2000 was $104.6  million,  which is an increase
of $4.3 million, or 4.3% as compared to December 31, 1999.  Management considers
the allowance for credit  losses  adequate to cover losses  inherent in the loan
portfolio at December 31, 2000.  No assurance  can be given that we will not, in
any particular period, sustain credit losses that are sizable in relation to the
amount reserved, or that subsequent evaluation of the portfolio, in light of the
factors  then  prevailing,   including  economic   conditions  and  our  ongoing
examination  process and that of our  regulators,  will not require  significant
increases in the allowance for credit losses.

<PAGE> 18


The  following  table  sets  forth,  by loan  type,  the  amount of  receivables
delinquent  for 60 days or more, on a contractual  basis,  and the ratio of that
amount to the gross consumer finance receivables outstanding in each category:


<TABLE>

(Dollars in thousands)                                     December 31,
                                ----------------------------------------------------------------
                                        2000                   1999                    1998
                                -----------------       -----------------       ----------------
<S>                             <C>          <C>        <C>          <C>        <C>         <C>
Real estate secured loans       $  31,634    1.40%      $  9,259     0.57%      $  8,093    0.64%
Other installment loans            74,851    4.56         62,875     4.01         56,449    4.14
Retail installment contracts        9,335    2.46          9,137     2.79         10,171    3.10

Total                           $ 115,820    2.71%      $ 81,271     2.31%      $ 74,713    2.53%

</TABLE>


The increase in delinquency,  particularly in the real estate secured portfolio,
is due  primarily to higher than  expected  delinquency  rates in two  purchased
portfolios,  and thus is not  indicative  of the overall  credit  quality of the
portfolio.  Absent these two  purchased  portfolios,  the amount of  receivables
delinquent  for 60 days or more, on a contractual  basis,  would have been $95.2
million, or 2.29% of gross consumer finance receivables.

At  December  31,  2000 and 1999,  the  Company  held  foreclosed  single-family
dwellings with a carrying value of approximately  $8.9 million and $3.6 million.
These balances total 0.5% and 0.3% of the real estate secured loans  outstanding
as of December 31, 2000 and 1999.

Asset / Liability Management

Our  long-range  profitability  depends not only on the success of the  services
offered to its customers and the credit  quality of its  portfolio,  but also on
the extent to which earnings are not negatively  affected by changes in interest
rates.  Accordingly,  our philosophy is to maintain an approximate  match of the
interest rate sensitivity between our  interest-bearing  assets and liabilities.
Our consumer finance receivables are primarily fixed rate and have initial terms
ranging  from  3 to  360  months.  However,  loans  are  generally  paid  off or
refinanced  prior to  their  stated  maturity.  Therefore,  our  asset/liability
management  requires  a high  degree of  analysis  and  estimation.  We fund our
interest-bearing  assets through both internally  generated  equity and external
debt financing.

Liquidity

We fund our operations  through a variety of corporate  borrowings.  The primary
source  of these  borrowings  is  corporate  debt  securities  issued  by us. At
December 31, 2000, eleven different fixed-rate senior debt issues totaling $2.20
billion were  outstanding,  with a  weighted-average  cost of 7.04%. To meet our
short-term  funding  needs,  we  issue  commercial  paper.  The  Company  has  a
commercial  paper  program with several  investment  banks which  provides  $700
million in  borrowing  capacity.  At December  31,  2000,  twenty-two  different
commercial paper  borrowings  totaling $683.7 million were  outstanding,  with a
weighted-average cost of 7.08%.

FCIB raises funds through both customer  deposits and borrowings  with the FHLB.
At December 31, 2000, the banking  subsidiary's  outstanding debt totaled $346.6
million, with a weighted-average cost of 6.40%.

<PAGE> 19



We also share with Washington Mutual,  two revolving credit  facilities:  a $1.2
billion 364-day facility and a $600 million  four-year  facility,  which provide
back up for our commercial paper programs.  The borrowing capacity is limited to
the total amount of the two revolving  credit  facilities,  net of the amount of
combined  commercial  paper  outstanding.  At December 31, 2000,  there was $841
million available under these  facilities.  There were no borrowings under these
facilities at any point during 2000 or 1999.

The following table shows selected sources (uses) of cash:

<TABLE>

(Dollars in thousands)                             Year Ended December 31,
                                         --------------------------------------------
                                            2000             1999           1998
                                         ---------       ----------     ----------
<S>                                      <C>             <C>            <C>
Operations                               $ 150,123       $  230,737     $  170,668
Net issuances and repayments of debt       681,585          367,500        181,277
Net originations and purchases
   of consumer finance receivables        (778,120)        (573,333)      (321,992)
Dividends paid                             (25,000)         (14,500)       (36,500)

Capital Management

</TABLE>

Capital Management

We establish  equity  leverage  targets based upon the ratio of debt  (including
customer  deposits)  to tangible  equity.  The debt to tangible  equity ratio at
December 31, 2000 of 6.55:1 was intentionally  increased from 6.00:1 at December
31, 1999.  The  determination  of our dividend  payments and  resulting  capital
leverage is managed in a manner  consistent  with our desire to maintain  strong
and improved  credit  ratings.  In addition,  provisions  of certain of our debt
agreements restrict the payment of dividends to a maximum prescribed  proportion
of  cumulative   earnings  and  contributed   capital.  At  December  31,  2000,
approximately $161.7 million was available under the debt agreement  restriction
for future dividends.

In  addition,  FCIB  met  all  FDIC  requirements  to  be  categorized  as  well
capitalized at December 31, 2000.

Recently Issued Accounting Standard Adopted

We  adopted  the  provisions  of  SFAS  No.  133,   "Accounting  for  Derivative
Instruments and Hedging Activities", as amended by SFAS Nos. 137 and 138, and as
interpreted  by the  FASB  and  the  Derivatives  Implementation  Group  through
"Statement 133 Implementation Issues," as of January 1, 2000. We believe that we
have properly identified all derivative  instruments and any embedded derivative
instruments that require bifurcation.

<PAGE> 20


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

During the year, we implemented additional  methodologies for analyzing interest
rate risk.  These included  projecting net interest income based on parallel and
non-parallel  changes in the yield curve. The results of these analyses are used
as part of our overall framework for asset/liability management. Accordingly, we
have  changed  our  market  risk  analysis  from  a  tabular  presentation  to a
presentation  of net  interest  income  sensitivity.  The  tabular  data is also
presented for informational purposes.

The table below  indicates  the  sensitivity  of pretax net  interest  income to
interest rate movements.  The comparative  scenarios  assume that interest rates
rise or fall in even monthly  increments over the next twelve months for a total
increase or decrease of 200 basis points.  The interest rate  scenarios are used
for analytical  purposes and do not necessarily  represent  management's view of
future market movements.

Our net  interest  income  sensitivity  profile as of year-end  2000 and 1999 is
stated below:


<TABLE>


                                                                    Gradual Change in Rates
                                                                  -----------------------------
Net interest income change for the one-year period beginning:         -200bp         +200bp
                                                                  -----------------------------

<S>       <C>                                                          <C>            <C>
  January 1, 2001                                                      1.62%          (2.44)%
  January 1, 2000                                                      0.76%            0.45%


</TABLE>

Our  net  interest  income  at  risk  position  has  not  changed  significantly
year-over-year. Assumptions are made in modeling the sensitivity of net interest
income.  The  simulation  model  captures  expected  prepayment  behavior  under
changing  interest rate  environments.  Sensitivity of new loan volume to market
interest rate levels is included as well.

The tables below present  interest rate sensitivity in the form of a gap report,
which  indicates the difference  between assets  maturing or repricing  within a
period and total  liabilities  maturing or repricing within the same period.  In
assigning   assets  to  maturity  and   repricing   categories,   we  take  into
consideration expected prepayment speeds rather than contractual maturities. The
balances  reflect  actual  amortization  of  principal  and  do  not  take  into
consideration  reinvestment  of cash.  Principal  prepayments are the amounts of
principal reduction over and above normal amortization.  We have used prepayment
assumptions  based on market  estimates and past  experience with our portfolio.
Non-rate sensitive items such as the allowance for loan losses and deferred loan
fees (costs) are not included in the tables.


<PAGE> 21


<TABLE>

(Dollars in thousands)                                          December 31, 2000
                                 ----------------------------------------------------------------------
                                                                Projected Repricing
                                 ----------------------------------------------------------------------
                                  0-3 months    4-12 months       1-5 years   Thereafter       Total
                                 -----------    -----------     -----------   ----------    -----------
Interest Sensitive Assets
<S>                              <C>            <C>             <C>           <C>           <C>
  Adjustable-rate loans          $   147,041    $         -     $         -   $        -    $   147,041
  Fixed-rate loans                   478,553      1,184,322       1,791,659      126,775      3,581,309
  Adjustable-rate securities           7,840              -               -            -          7,840
  Fixed-rate securities                3,816          4,327         134,472       34,833        177,448
  Cash and cash equivalents           14,602              -               -            -         14,602
                                 -----------    -----------     -----------   ----------    -----------
                                 $   651,852    $ 1,188,649     $ 1,926,131   $  161,608    $ 3,928,240
                                 -----------    -----------     -----------   ----------    -----------
Interest Sensitive Liabilities
  Customer deposits              $    36,651    $   107,655     $    44,289   $    1,197    $   189,792
  Short-term & adjustable-rate
   borrowings                        747,554              -          10,000            -       757,554
  Fixed-rate borrowings               82,900        549,896       1,397,729      248,820      2,279,345
                                 -----------    -----------     -----------   ----------    -----------
                                 $   867,105    $   657,551     $ 1,452,018   $  250,017    $ 3,226,691
                                 -----------    -----------     -----------   ----------    -----------
Repricing gap                    $  (215,253)   $   531,098     $   474,113   $  (88,409)

Cumulative gap                   $  (215,253)   $   315,845     $   789,958   $  701,549

Cumulative gap as a percentage
   of assets                         (5.48%)          8.04%          20.11%       17.86%

</TABLE>



<TABLE>
(Dollars in thousands)                                          December 31, 1999
                                                                Projected Repricing
                                 ----------------------------------------------------------------------
                                 0-3 months   4-12 months      1-5 years     Thereafter       Total
                                 ---------    -----------     -----------   ------------    -----------
Interest Sensitive Assets
<S>                              <C>          <C>             <C>           <C>             <C>
  Adjustable-rate loans          $ 157,028    $         2     $         -   $          -    $   157,030
  Fixed-rate loans                 398,334        994,145       1,442,380         69,867      2,904,726
  Adjustable-rate securities         5,984              -               -              -          5,984
  Fixed-rate securities              7,194         27,097          50,056         38,633        122,980
  Cash and cash equivalents         40,008              -               -              -         40,008
                                 ---------    -----------     -----------   ------------    -----------
                                 $ 608,548    $ 1,021,244     $ 1,492,436   $    108,500    $ 3,230,728
                                 ---------    -----------     -----------   ------------    -----------
Interest Sensitive Liabilities
Customer deposits                $  34,606    $   101,847     $    45,223   $      8,258    $   189,934
Short-term & adjustable-rate
   Borrowings                      348,075              -          10,000              -        358,075
Fixed-rate borrowings                    -        249,889       1,497,396        248,603      1,995,888
                                 ---------    -----------     -----------   ------------    -----------
                                 $ 382,681    $   351,736     $ 1,552,619   $    256,861    $ 2,543,897
                                 ---------    -----------     -----------   ------------    -----------
Repricing gap                    $ 225,867    $   669,508     $   (60,183)  $   (148,361)

Cumulative gap                   $ 225,867    $   895,375     $   835,192   $    686,831

Cumulative gap as a percentage
   of assets                          7.00%         27.74%          25.88%         21.28%


</TABLE>

<PAGE> 22



The differences in the asset balances between December 31, 1999 and December 31,
2000 relate primarily to the $697.5 million increase in interest-rate  sensitive
assets  due to growth in the loan  portfolio.  The asset  maturity  profile  has
remained  relatively  consistent  with  prior  years  except  for a  significant
increase in fixed-rate loans with projected  repricing of 1 to 5 years, which is
primarily due to the growth of the real estate secured portfolio.

The differences in the maturities of liabilities  were primarily  related to the
increase of commercial paper borrowings,  which typically mature in three months
or less.

<PAGE> 23


Item 8.    Financial Statements and Supplementary Data

Independent Auditors' Report

To the Board of Directors and Stockholder of
  Washington Mutual Finance Corporation:

We have audited the accompanying  consolidated statements of financial condition
of Washington Mutual Finance  Corporation and subsidiaries (the "Company") as of
December  31,  2000  and  1999,  and  the  related  consolidated  statements  of
operations,  comprehensive income and retained earnings, and cash flows for each
of the three years in the period ended  December 31,  2000.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United State of America. Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,   the  financial  condition  of  Washington  Mutual  Finance
Corporation  and  subsidiaries as of December 31, 2000 and 1999, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December 31,  2000,  in  conformity  with  accounting  principles
generally accepted in the United States of America.




DELOITTE & TOUCHE LLP
Tampa, Florida
January 16, 2001


<PAGE> 24


WASHINGTON MUTUAL FINANCE CORPORATION and Subsidiaries
Consolidated Statements of Financial Condition


<TABLE>


(Dollars in thousands, except par value)                           December 31,
                                                       -------------------------------
                                                            2000                1999
ASSETS                                                 -----------         -----------

<S>                                                    <C>                 <C>
Consumer finance receivables, net                      $ 3,623,763         $ 2,961,449
Investment securities available for sale                   185,288             128,964
Cash and cash equivalents                                   14,602              40,008
Property, equipment and leasehold improvements, net         25,398              22,112
Goodwill, net                                               46,777              51,340
Other assets                                                31,877              23,684
                                                       -----------         -----------
    TOTAL ASSETS                                       $ 3,927,705         $ 3,227,557
                                                       ===========         ===========
LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities
Commercial paper borrowings                            $   683,654         $   242,170
Senior debt                                              2,196,445           1,995,888
Federal Home Loan Bank borrowings                          156,800             115,905
                                                       -----------         -----------
    Total debt                                           3,036,899           2,353,963
Customer deposits                                          189,793             189,934
Accounts payable and other liabilities                     161,925             208,502
                                                       -----------         -----------
    Total liabilities                                    3,388,617           2,752,399
                                                       ===========         ===========
Commitments and contingencies
  (Notes 11 and 12)

Stockholder's equity
Common stock: $1.00 par value;
  10,000 shares authorized; 1,000
  shares issued and outstanding                                  1                   1
Paid-in capital                                             57,710              48,960
Retained earnings                                          481,524             427,635
Accumulated other comprehensive loss                          (147)             (1,438)
                                                       -----------         -----------
      Total stockholder's equity                           539,088             475,158
                                                       -----------         -----------
    TOTAL LIABILITIES AND
      STOCKHOLDER'S EQUITY                             $ 3,927,705         $ 3,227,557
                                                       ===========         ===========
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE> 25



WASHINGTON MUTUAL FINANCE CORPORATION and Subsidiaries
Consolidated Statements of Operations,Comprehensive Income and Retained Earnings


<TABLE>

                                                                 Year Ended December 31,
                                                 ----------------------------------------------
(Dollars in thousands)                                2000               1999             1998
                                                 -----------       -----------      -----------
Interest income
<S>                                              <C>               <C>              <C>
 Loan interest and fee income                    $   549,052       $   464,179      $   404,954
 Investment securities income                         12,283            10,825           11,449
                                                 -----------       -----------      -----------
  Total interest income                              561,335           475,004          416,403

Interest and debt expense                            202,092           149,609          133,211
                                                 -----------       -----------      -----------
  Net interest income before
   provision for credit losses                       359,243           325,395          283,192

Provision for credit losses                          107,243           100,590           79,760

   Net interest income                               252,000           224,805          203,432

Noninterest income                                    30,421            29,501           27,147

Noninterest expense
 Personnel                                            92,818            78,259           76,664
 Occupancy                                            14,242            11,414           10,434
 Advertising                                           6,993             8,072            6,516
 Goodwill amortization                                 4,563             3,960            3,617
 Other                                                37,386            33,889           45,761
                                                 -----------       -----------      -----------
  Total noninterest expense                          156,002           135,594          142,992
                                                 -----------       -----------      -----------
Income before income taxes                           126,419           118,712           87,587

Provision for federal and state income taxes          47,530            45,720           34,700
                                                 -----------       -----------      -----------
Net income                                            78,889            72,992           52,887

Net unrealized holding gains (losses) on
   securities arising during period, net of tax        1,291            (2,664)             693
                                                 -----------       -----------      -----------
Comprehensive income                             $    80,180       $    70,328      $    53,580
                                                 ===========       ===========      ===========
Retained earnings
   Beginning of period                           $   427,635       $   369,143      $   352,756
   Net income                                         78,889            72,992           52,887
   Dividends paid                                    (25,000)          (14,500)         (36,500)
                                                 -----------       -----------      -----------
   End of period                                 $   481,524       $   427,635      $   369,143
                                                 ===========       ===========      ===========
</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE> 26


WASHINGTON MUTUAL FINANCE CORPORATION and Subsidiaries
Consolidated Statements of Cash Flows


<TABLE>

                                                                     Year Ended December 31,
                                                        ------------------------------------------
(Dollars in thousands)                                      2000              1999          1998
                                                        ----------        ---------     ----------
Operating activities
<S>                                                     <C>               <C>           <C>
   Net income                                           $   78,889        $  72,992     $   52,887
   Adjustments to reconcile net income to net
       cash provided by operating activities:
      Provision for credit losses                          107,243          100,590         79,760
      Depreciation and amortization                         19,405           12,577          8,611
      (Decrease) increase in accounts payable
         and other liabilities                             (47,221)          60,165         31,622
        Increase in other assets                            (8,193)         (15,587)        (2,212)
                                                        ----------        ---------     ----------
   Net cash provided by operating activities               150,123          230,737        170,668
                                                        ----------        ---------     ----------
Investing activities
   Investment securities purchased                         (89,136)         (46,460)       (91,477)
   Investment securities matured or sold                    34,872           64,131         96,275
   Net increase in consumer finance receivables           (778,120)        (573,333)      (321,992)
   Net increase in property, equipment and leasehold
      improvements                                          (8,480)         (12,247)        (4,583)
                                                        ----------        ---------     ----------
   Net cash used in investing activities                  (840,864)        (567,909)      (321,777)
                                                        ----------        ---------     ----------
Financing activities
   Net increase (decrease) in commercial
    paper borrowings                                       441,484         (273,652)       158,290
   Proceeds from issuance of senior debt                   449,347          896,731        199,654
   Repayments of senior debt                              (250,000)        (300,000)      (250,000)
   Net increase in Federal Home Loan Bank borrowings        40,895           42,005         49,000
   Net (decrease) increase in customer deposits               (141)           2,416         24,333
   Capital contributed by parent                             8,750           -               -
   Dividends paid                                          (25,000)         (14,500)       (36,500)
   Proceeds from affiliate transfer                          -                -              4,066
                                                        ----------        ---------     ----------
   Net cash provided by financing activities               665,335          353,000        148,843
                                                        ----------        ---------     ----------
Net (decrease) increase in cash and cash equivalents       (25,406)          15,828         (2,266)
                                                        ----------        ---------     ----------
Cash and cash equivalents
   Beginning of period                                      40,008           24,180         26,446
                                                        ----------        ---------     ----------
   End of period                                        $   14,602        $  40,008     $   24,180
                                                        ==========        =========     ==========
Supplemental disclosures of cash flow information
   Interest paid                                        $  183,376        $ 140,127     $  133,160
   Intercompany payment (net of refunds) in lieu of
      federal and state income taxes                    $   71,346        $  38,794     $   30,881


</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE> 27


WASHINGTON MUTUAL FINANCE CORPORATION and Subsidiaries
Notes to Consolidated Financial Statements

Note 1            Ownership and Operations

Washington Mutual Finance Corporation is an indirect, wholly-owned subsidiary of
Washington Mutual,  Inc.  ("Washington  Mutual").  When we refer to "we", "our",
"us" or the "Company" in these notes to the consolidated  financial  statements,
we mean Washington Mutual Finance Corporation and its subsidiaries, all of which
are wholly-owned.

The Company is engaged primarily in the consumer financial services business and
our  operations  consist  principally of a network of  approximately  530 branch
offices  located  in 25  states,  primarily  in  the  southeast,  southwest  and
California.  These offices operate under the name Washington Mutual Finance.  We
make secured and unsecured consumer  installment loans and purchase  installment
contracts from local retail  establishments.  These consumer credit transactions
are primarily for personal,  family or household purposes. From time to time, we
purchase consumer loans,  servicing  released,  that are secured by real estate,
from  national  mortgage  banking  operations.  The Company  also engages in the
industrial banking business through our subsidiary,  First Community  Industrial
Bank  ("FCIB"),  which has branches in Colorado and Utah.  In addition to making
consumer  installment loans and purchasing retail  installment  contracts,  FCIB
also takes customers'  savings deposits insured by the Federal Deposit Insurance
Corporation ("FDIC").

Note 2            Summary of Significant Accounting Policies

Principles of Consolidation.  The consolidated  financial statements include the
accounts of Washington Mutual Finance  Corporation and its subsidiaries,  all of
which are  wholly-owned,  after  elimination  of all  intercompany  balances and
transactions.  Certain amounts in prior years have been  reclassified to conform
to the current year's presentation.

Estimates.  The preparation of financial statements in conformity with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Income  Recognition  from Finance  Operations.  Unearned  finance charges on all
types of consumer finance  receivables are recognized on an accrual basis, using
the interest method.  Accrual generally is suspended when payments are more than
three months contractually overdue. Loan fees and directly related lending costs
are deferred and amortized using the interest  method over the contractual  life
of the related receivables.

Provision and Allowance  for Credit  Losses.  The allowance for credit losses is
maintained at a level sufficient to provide for estimated credit losses based on
evaluating  known  and  inherent  risks  in  the  consumer  finance  receivables
portfolio. We provide, through charges to income, an allowance for credit losses
which,  based  upon  management's  evaluation  of  numerous  factors,  including

<PAGE> 28

economic  conditions,  a  predictive  analysis  of the  outcome  of the  current
portfolio  and  prior  credit  loss  experience,  is  deemed  adequate  to cover
reasonably  expected  losses inherent in outstanding  receivables.  Our consumer
finance receivables are a large group of small-balance homogenous loans that are
collectively evaluated for impairment.  Additionally,  every real estate secured
loan  that  is 60 days  delinquent  is  reviewed  by our  credit  administration
management to assess collectibility and future course of action.

Losses on receivables  are charged to the allowance for credit losses based upon
the number of days delinquent,  or when collectibility  becomes doubtful and the
underlying  collateral,  if any, is  considered  insufficient  to liquidate  the
receivable  balance.   Non-real  estate  secured,   delinquent  receivables  are
generally  charged  off  when  they  are  180  days  contractually   delinquent.
Recoveries on previously written-off receivables are credited to the allowance.

Investment  Securities.  Debt and equity  securities are classified as available
for sale and are  reported  at fair  value,  with  unrealized  gains and  losses
excluded from earnings and reported,  net of taxes,  as a separate  component of
stockholder's  equity and comprehensive  income.  Gains and losses on investment
securities are recorded when realized on a specific  identity basis.  Investment
security transactions are recorded using trade date accounting.

Property,   Equipment  and  Leasehold  Improvements.   Property,  equipment  and
leasehold  improvements  are stated at cost,  net of  accumulated  depreciation.
Depreciation is provided for, principally,  on the straight-line method over the
estimated useful life, ranging from three to thirty years, or, if less, the term
of the lease.  At  December  31,  2000 and 1999,  accumulated  depreciation  and
amortization totaled $31.0 million and $26.3 million.

Goodwill.  The  excess of cost over the fair  value of net  assets of  companies
acquired is amortized on a straight-line  basis,  generally over periods of 6 to
25 years. The carrying value of goodwill is regularly reviewed for indicators of
impairment in value,  which,  in  management's  view, are other than  temporary,
including  unexpected or adverse  changes in the  following:  1) the economic or
competitive  environments in which we operate; 2) profitability analyses; and 3)
cash  flow  analyses.  If facts  and  circumstances  suggest  that  goodwill  is
impaired,  the Company assesses the fair value of the underlying  business based
on expected  undiscounted  net cash flows and reduces  goodwill to the estimated
fair value.  At December  31, 2000 and 1999,  accumulated  amortization  totaled
$73.8 million and $69.3 million.

Income  Taxes.  We are included in the  consolidated  Federal  income tax return
filed by Washington Mutual.  Federal income taxes are paid to Washington Mutual.
Federal  income  taxes  are  allocated   between   Washington   Mutual  and  its
subsidiaries in proportion to the respective contribution to consolidated income
or loss. State income tax expense  represents the amount of taxes either owed by
us or that we would have paid on a separate  entity basis,  when we are included
in Washington  Mutual's  consolidated state income tax returns.  Deferred income
taxes are  provided  on  elements of income or expense  that are  recognized  in
different periods for financial and tax reporting purposes.

<PAGE> 29

Taxes on income are  determined  by using the asset and liability  method.  This
approach requires the recognition of deferred tax assets and liabilities for the
expected  future tax  consequences  of events that have been  recognized  in the
Company's  financial  statements  or  tax  returns.  In  estimating  future  tax
consequences,  we consider  expected  future  events  other than  enactments  of
changes in the tax law or rates.

The Company has recorded a net deferred tax asset of  approximately  $30,319,000
at December  31,  2000.  Realization  of the asset is  dependent  on  generating
sufficient taxable income prior to expiration of loss carryforwards available to
the Company. Although realization is not assured, management believes it is more
likely  than  not that all of the  remaining  net  deferred  tax  asset  will be
realized.  The  amount  of the net  deferred  tax asset  considered  realizable,
however, could be reduced in the near term if estimates of future taxable income
during the carryforward period are reduced.

Statements of Cash Flows.  For purposes of reporting cash flows, we consider all
highly liquid investments with a maturity of three months or less when purchased
to be cash equivalents.

Fair Value  Disclosures.  Quoted market  prices are used,  where  available,  to
estimate  the fair  value of the  Company's  financial  instruments.  Because no
quoted market prices exist for a significant  portion of the Company's financial
instruments,  fair value is estimated using comparable market prices for similar
instruments or using  management's  estimates of appropriate  discount rates and
cash  flows for the  underlying  asset or  liability.  A change in  management's
assumptions  could  significantly  affect  these  estimates.   Accordingly,  the
Company's fair value estimates are not necessarily indicative of the value which
would be realized upon disposition of the financial instruments.

Note 3            Consumer Finance Receivables

Consumer  finance  receivables  at December 31, 2000 and 1999 are  summarized as
follows:


<TABLE>

(Dollars in thousands)                          2000                 1999
                                           ------------        ------------
Consumer finance receivables:
<S>                                        <C>                 <C>
  Real estate secured loans                $  2,256,044        $  1,630,496
  Other installment loans                     1,640,846           1,566,682
  Retail installment contracts                  380,073             327,914
                                           ------------        ------------
    Gross consumer finance receivables        4,276,963           3,525,092
Less:    Unearned finance charges and
          deferred loan fees                   (548,613)           (463,335)
         Allowance for credit losses           (104,587)           (100,308)
                                           ------------        ------------
Consumer finance receivables, net          $  3,623,763        $  2,961,449
                                           ============        ============

</TABLE>

The amount of gross nonaccruing  consumer finance  receivables was approximately
$85.8  million and $59.4  million at December  31, 2000 and 1999.  The amount of
interest that would have been accrued on these consumer finance  receivables was
approximately $11.5 million in 2000 and $9.5 million in 1999.

<PAGE> 30

Activity in the Company's allowance for credit losses is as follows:


<TABLE>

                                                   Year Ended December 31,
                                    ------------------------------------------
(Dollars in thousands)                 2000             1999           1998
                                    ----------       ----------      ---------
<S>              <C>                <C>              <C>             <C>
Balance, January 1                  $  100,308       $   80,493      $  74,323
Provision for credit losses            107,243          100,590         79,760
Amounts charged off:
   Real estate secured loans            (2,684)          (1,807)         (2,125)
   Other installment loans            (104,365)         (82,438)        (73,210)
   Retail installment contracts        (13,017)         (12,558)        (14,417)
                                    ----------       ----------      ----------
                                      (120,066)         (96,803)        (89,752)
Recoveries:
   Real estate secured loans               241              398            521
   Other installment loans              14,171           12,629         12,593
   Retail installment contracts          2,690            3,001          2,774
                                    ----------       ----------      ---------
                                        17,102           16,028         15,888
                                    ----------       ----------      ---------
Net charge-offs                       (102,964)         (80,775)        (73,864)

Allowances on notes purchased                -                -            274
Balance, December 31                $  104,587       $  100,308      $  80,493
                                    ==========       ==========      =========
</TABLE>


Contractual  maturities,  excluding  unearned  finance charges and deferred loan
fees, at December 31, 2000 are as follows:


<TABLE>

                                                Over 1 But
                                 Within           Within              Over
(Dollars in thousands)           1 year          5 years            5 years         Total
                                 ---------    -----------       -----------    -----------
<S>                              <C>          <C>               <C>            <C>
Real estate secured loans        $ 165,978    $   387,528       $ 1,437,401    $ 1,990,907
Other installment loans             62,203      1,330,220             9,436      1,401,859
Retail installment contracts        31,819        293,151            10,614        335,584
                                 ---------    -----------       -----------    -----------
                                 $ 260,000    $ 2,010,899       $ 1,457,451    $ 3,728,350
                                 =========    ===========       ===========    ===========
</TABLE>


The  weighted  average  contractual  term of all  consumer  finance  receivables
written  during the years ended  December 31, 2000 and 1999 was 74 months and 71
months with the majority of loans  providing  for a fixed rate of interest  over
the  contractual  life of the  loan.  Experience  has shown  that a  substantial
portion of the consumer  finance  receivables will be renewed or repaid prior to
contractual  maturity.  Therefore,  the preceding  information as to contractual
maturities should not be regarded as a forecast of future cash collections.

Because we primarily  lend to consumers,  we did not have  receivables  from any
industry  group that  comprised  10 percent  or more of total  consumer  finance
receivables at December 31, 2000. Geographic diversification of consumer finance
receivables reduces the concentration of credit risk associated with a recession
in any one region.

<PAGE> 31

The largest concentrations of net consumer finance receivables, by state were as
follows:


<TABLE>

(Dollars in thousands)                  December 31,
                     ----------------------------------------------
                               2000                     1999
                     --------------------       -------------------
                        Amount    Percent         Amount    Percent
                     ----------   -------       ---------   -------
<S>                  <C>            <C>         <C>           <C>
California           $  388,825     10%         $ 228,334      7%
Texas                   363,407     10            295,465     10
Tennessee               339,852      9            291,946     10
Colorado                328,652      9            314,677     10
North Carolina          292,893      8            264,909      9
Florida                 222,010      6            190,120      6
South Carolina          182,669      5            166,533      5
Virginia                161,247      4            144,560      5
Louisiana               146,147      4            133,372      4
Mississippi             128,653      3            116,468      4
Other                 1,173,995     32            915,373     30
                     ----------   ----         ----------   ----
Total                $3,728,350    100%        $3,061,757    100%
                     ==========   ====         ==========   ====


</TABLE>


Note 4            Investment Securities

At December 31, 2000 and 1999,  all  investment  securities  were  classified as
available-for-sale  and  reported at fair  value.  Investment  securities  as of
December 31, 2000 and 1999 are as follows:



<TABLE>
 (Dollars in thousands)                              December 31, 2000
                           -------------------------------------------------------------
                             Original     Amortized      Gross Unrealized    Approximate
                             Original     Amortized   -------------------      Fair
                              Cost           Cost        Gains     Losses      Value
                           ---------    -----------   --------  ---------    -----------
<S>                        <C>          <C>           <C>       <C>          <C>
Government obligations     $  80,403    $  80,570     $   804   $   (202)    $  81,172
Corporate obligations         69,673       70,047         123       (915)       69,255
Certificates of deposit
 and other                    35,040       34,866         113       (118)       34,861
                           ---------    ---------     -------   --------     ---------
                           $ 185,116    $ 185,483     $ 1,040   $ (1,235)    $ 185,288
                           =========    =========     =======   ========     =========

</TABLE>


<TABLE>
 (Dollars in thousands)                              December 31, 1999
                           -------------------------------------------------------------
                             Original     Amortized      Gross Unrealized    Approximate
                             Original     Amortized   -------------------      Fair
                              Cost           Cost        Gains     Losses      Value
                           ---------    -----------   --------  ---------    -----------
<S>                        <C>          <C>           <C>       <C>          <C>
Government obligations     $  37,875    $    37,887   $    28   $   (629)    $   37,286
Corporate obligations         80,392         80,756        96     (1,420)        79,432
Certificates of deposit
 and other                    12,789         12,452       114       (320)        12,246
                           ---------    -----------   -------   --------     ----------
                           $ 131,056    $   131,095   $   238   $ (2,369)    $  128,964
                           =========    ===========   =======   ========     ==========
</TABLE>


There were no significant realized gains or losses during 2000, 1999 or 1998.

<PAGE> 32

The  following  table  presents the  maturity of the  investment  securities  at
December 31, 2000:


<TABLE>

(Dollars in thousands)                                       Approximate
                                             Amortized          Fair
                                               Cost             Value
                                            ----------       ----------
<S>                                         <C>              <C>
Due in one year or less                     $   25,452       $   25,415
Due after one year through five years          134,647          134,465
Due after five years through ten years          17,762           17,729
Due after ten years                              7,622            7,679
                                            ----------       ----------
                                            $  185,483       $  185,288
                                            ==========       ==========
</TABLE>


Note 5            Commercial Paper Borrowings

Commercial  paper  borrowings at December 31, 2000, 1999 and 1998 totaled $683.7
million,  $242.2 million and $515.8 million.  Interest expense in 2000, 1999 and
1998 related to  commercial  paper was $27.7  million,  $18.5  million and $20.6
million.

Additional  information  concerning  total  commercial  paper  borrowings  is as
follows:


<TABLE>

                                              Year Ended December 31,
                                      ------------------------------------
(Dollars in thousands)                    2000        1999           1998
                                      ---------    ---------     ---------
Outstanding during the year
<S>                                   <C>          <C>           <C>
   Maximum amount at any month end    $ 683,654    $ 428,552     $ 515,823
   Average amount                       420,215      323,475       368,855
   Weighted average interest rate          6.63%        5.72%         5.60%


</TABLE>

Weighted average interest rates include the effect of commitment fees.

In August 1999,  the Company and  Washington  Mutual  entered into two revolving
credit facilities with the Chase Manhattan Bank as administrative  agent: a $600
million 364-day facility and a $600 million four-year facility,  each to provide
back-up for our commercial paper programs. In August, 2000, the 364-day facility
was replaced with a $1.20 billion 364-day  facility.  The borrowing  capacity is
limited to the total amount of the two revolving credit  facilities,  net of the
amount of combined commercial paper outstanding. At December 31, 2000, there was
$841 million  available under these  facilities.  There were no borrowings under
these  facilities  at any point  during  2000 or 1999.  These  revolving  credit
agreements have restrictive  covenants which include: a minimum consolidated net
worth  test;  a limit on senior  debt to the  borrowing  base (up to 10:1);  and
subsidiary debt (excluding  bank deposits and  intercompany  debt) not to exceed
15% of total debt.  As of December  31,  2000,  we were in  compliance  with all
restrictive covenants.

<PAGE> 33

Note 6            Senior Debt

Senior debt at December 31, 2000 and 1999 was comprised of the following:


<TABLE>

(Dollars in thousands)                              2000                1999
                                              ------------        ------------
Senior notes and debentures (unsecured)
<S>               <C> <C>                     <C>                 <C>
   6.3%, due July 15, 2000                    $    -              $     99,988
   6.125%, due December 1, 2000                    -                   149,901
   7.75%, due June 15, 2001                        149,994             149,975
   7.25%, due June 15, 2001                         99,983              99,949
   6.0%, due August 1, 2001                        199,931             199,812
   6.75%, due August 15, 2001                       99,988              99,968
   6.0%, due May 15, 2002                          149,852             149,744
   6.30%, due October 1, 2002                      149,830             149,733
   6.50%, due November 15, 2003                    149,648             149,526
   5.85%, due January 27, 2004                     199,814             199,754
   7.375%, due September 1, 2004                   299,164             298,935
   8.25%, due June 15, 2005                        449,421                 -
   7.25%, due June 15, 2006                        248,820             248,603
                                              ------------        ------------
     Total senior debt                        $  2,196,445        $  1,995,888
                                              ============        ============

</TABLE>

Aggregate maturities of senior debt at December 31, 2000 are as follows:  $549.9
millon in 2001;  $299.7 million in 2002;  $149.6 million in 2003; $499.0 million
in 2004; $449.4 million in 2005; and, $248.8 million in 2006 and thereafter.

Interest  expense related to senior debt  outstanding in 2000, 1999 and 1998 was
$154.5 million, $115.5 million, and $100.9 million.

<PAGE> 34

Note 7            Federal Home Loan Bank Borrowings

Federal Home Loan Bank  borrowings at December 31, 2000 and 1999 were  comprised
of the following:


<TABLE>

(Dollars in thousands)                                   2000          1999
Federal Home Loan Bank notes (secured)              ---------      ---------
<S>                   <C> <C>                       <C>            <C>
   5.89%, due January 24, 2000                      $    -         $  31,505
   5.96%, due March 2, 2000                              -            10,500
   6.62%, due January 16, 2001                         62,400            -
   6.70%, due January 16, 2001                         10,500            -
   6.50%, due January 29, 2001                         10,000            -
   Variable rate, due March 29, 2001 (6.34% and
     6.08% at December 31, 2000 and 1999)              60,000         60,000
   Variable rate, due May 1, 2001 (6.56% and
     5.50% at December 31, 2000 and 1999)               3,900          3,900
   Variable rate, due March 20, 2003 (6.55% and
     5.92% at December 31, 2000 and 1999)              10,000         10,000
                                                    ---------      ---------
Total Federal Home Loan Bank notes                  $ 156,800      $ 115,905
                                                    =========      =========

</TABLE>

Aggregate  maturities  of FHLB  borrowings  at December 31, 2000 are as follows:
$146.8 million in 2001 and $10 million in 2003.

Interest  expense in 2000,  1999 and 1998  related to FHLB  borrowings  was $9.2
million,  $4.8  million,  and $1.7  million.  FHLB  borrowings  are  secured  by
residential  mortgage loans with a carrying value at December 31, 2000 of $181.9
million.

Note 8            Customer Deposits

The book value of the  Company's  customer  deposits as of December 31, 2000 and
1999 are as follows:


<TABLE>

(Dollars in thousands)            2000              1999
                             ----------         ---------
<S>                          <C>                <C>
Money market accounts        $   15,835         $  13,576
Savings accounts                  1,467             1,434
Certificates of deposit
  under $100,000                150,055           153,524
Certificates of deposit
  $100,000 and over              22,436            21,400
                             ----------         ---------
                             $  189,793         $ 189,934
                             ==========         =========

</TABLE>

Maturities of time deposits are $135.9  million in 2000,  $24.5 million in 2001,
$9.2 million in 2002 and $2.9 million thereafter.

Interest  expense in 2000, 1999 and 1998 related to customer  deposits was $10.6
million, $10.8 million and $10.0 million.

<PAGE> 35

Note 9            Income Taxes

The components of income tax expense (benefit) are as follows:


<TABLE>
                                            Year Ended December 31,
                              -----------------------------------------
(Dollars in thousands)             2000          1999             1998
                              ---------      ---------       ----------
Current
<S>                           <C>            <C>             <C>
   Federal                    $  41,425      $  35,896       $   38,808
   State                         (1,085)         8,032            6,900
Deferred                          7,190          1,792          (11,008)
                              ---------      ---------       ----------
                              $  47,530      $  45,720       $   34,700
                              =========      =========       ==========

</TABLE>

The  provisions  for  income  taxes  differ  from  the  amounts   determined  by
multiplying  pre-tax income by the statutory  federal income tax rate of 35% for
2000, 1999 and 1998. A reconciliation between these amounts is as follows:


<TABLE>
                                                          Year Ended December 31,
                                      ----------------------------------------------------------
(Dollars in thousands)                         2000                1999               1998
                                      ------------------  -------------------   ----------------
                                                   % of                 % of               % of
                                                  Pretax               Pretax             Pretax
                                         Amount   Income    Amount     Income    Amount   Income
                                      ---------   ------  ---------   -------   -------   ------
<S>                                   <C>         <C>     <C>          <C>      <C>       <C>
Income taxes at statutory rates       $  44,247    35.00% $  41,549     35.00%  $ 30,655   35.00%
Increase (reduction) in taxes
   resulting from:
    State income taxes, net of
     Federal benefit                      3,280    2.59       4,172     3.52       4,025    4.60
    Other                                     3     .01          (1)    (.01)         20     .01
                                      ---------   ------  ---------   ------    --------  ------
                                      $  47,530    37.60% $  45,720     38.51%  $ 34,700   39.61%
                                      =========   ======  =========   =======   ========  ======

</TABLE>

<PAGE> 36

Deferred taxes result from temporary  differences in the  recognition of certain
items for tax and financial  reporting purposes.  The significant  components of
the Company's net deferred tax asset (liability) were as follows:


<TABLE>

                                                       December 31,
                                                ------------------------
(Dollars in thousands)                             2000           1999
                                                ---------     ----------
Deferred tax assets:
<S>                                             <C>            <C>
   Credit loss reserves                         $  29,249      $  40,970
   Unearned insurance commissions                   9,936          4,678
   Employee benefits accruals                       2,735          5,892
   State taxes                                      2,490              -
   Other                                            1,023          2,616
   Basis differences on premises and equipment          -            170
                                                ---------      ---------
     Total deferred tax assets                     45,433         54,326
                                                ---------      ---------
Deferred tax liabilities:
   Amortization of intangibles                    (12,352)       (10,877)
   Loan interest and fee income                    (1,755)        (3,471)
   Basis differences on premises and equipment       (959)             -
   Other                                              (48)          (674)
   State taxes                                          -         (2,439)
                                                ---------      ---------
     Total deferred tax liabilities               (15,114)       (17,461)
                                                ---------      ---------
Net deferred tax asset                          $  30,319      $  36,865
                                                =========      =========

</TABLE>


Note 10           Retirement and Savings Plans

Substantially  all of our employees  participate  in a  noncontributory  defined
contribution   pension  plan  maintained  by  Washington  Mutual  ("the  Plan").
Accumulated plan benefits and annual pension cost are derived from an allocation
formula based on our total participants and the Plan's total participants.

Pension cost  (benefit) for our  participants  for the years ended  December 31,
2000,  1999,  and 1998 was  $1,025,000,  $1,074,000 and  $(150,000).  Due to the
Company's participation in a multi-employer defined benefit plan, information as
to separate Company participant assets and vested benefits is not presented.

Our  employees  also  participate  in an employee  savings  plan  maintained  by
Washington  Mutual,  which  allows  employees  to defer  part of  their  pre-tax
compensation  until  retirement.   Company   contributions   equal  50%  of  the
contributions  made by  employees  up to 6% of salary plus annual  discretionary
amounts,  if any, as determined by  management.  Our cost is based on the actual
contribution  related  to  our  participating   employees.   Total  expense  was
approximately  $3.4  million,  $3.0 million and $2.5 million for the years ended
December 31, 2000, 1999 and 1998.

The Company's  employees who retired prior to July 1, 1997 also  participate  in
Washington  Mutual's  defined benefit  postretirement  plan ("the Benefit Plan")
which  covers a portion of the costs of medical and life  insurance  coverage to
eligible  employees and dependents  based on age and length of service.  Medical

<PAGE> 37

coverage options are the same as available to active employees.  The accumulated
postretirement  benefit  obligation  and related  expense  are  derived  from an
allocation  formula based on our total participants and the Benefit Plan's total
participants.

The net  postretirement  medical and life insurance  expense allocated to us for
the years ended  December 31, 2000,  1999 and 1998 was  approximately  $193,000,
($245,000) and $344,000.

Note 11           Leases

The Company leases office space,  computers,  office  equipment and automobiles,
generally for terms of five or fewer years.

We have no material capital leases.  Under operating leases that have initial or
remaining noncancelable lease terms in excess of one year, approximate aggregate
annual  minimum  rentals are $8.8 million in 2001;  $7.3  million in 2002;  $5.4
million in 2003;  $3.6 million in 2004;  and $1.4 million in 2005.  Rent expense
for the years ended December 31, 2000,  1999 and 1998 was $12.1  million,  $11.9
million and $11.3 million.

Note 12           Contingencies

The Company and certain of its  subsidiaries are parties to various lawsuits and
proceedings arising in the ordinary course of business.  We have also been named
as a defendant in a number of class action suits, in which various industry-wide
practices  arising from routine  business  activities  are being  challenged and
various  damages are being  sought.  Certain of these  lawsuits and  proceedings
arise in  jurisdictions,  such as Alabama and  Mississippi,  which permit damage
awards  disproportionate  to the actual economic  damages  incurred.  Based upon
information  presently  available,  we believe that the total  amounts that will
ultimately be paid, if any, arising from these lawsuits and proceedings will not
have a material  adverse  effect on our  consolidated  results of operations and
financial  position.  However,  it should be noted that the  frequency  of large
damage awards,  including large punitive  damage awards,  that bear little or no
relation to actual economic damages incurred by plaintiffs in jurisdictions like
Alabama and  Mississippi  continues to increase and creates the potential for an
unpredictable judgment in any given suit.

Note 13           Transactions with Related Parties

Significant   transactions  with  Washington  Mutual  or  its  subsidiaries  are
identified as follows:

o    Certain  administrative  services,   including  human  resources  and  cash
     management were provided, for which we paid management fees of $2.4 million
     in 2000, $1.7 million in 1999 and $1.1 million in 1998.

o    We made payments to Washington  Mutual,  which made payments on our behalf,
     pursuant to a tax allocation  policy and in connection  with the retirement
     and savings plans.

<PAGE> 38

o    Included  in  accounts  payable  and other  liabilities  are amounts due to
     Washington  Mutual for operating  expenses and tax remittances  paid on our
     behalf.  At December 31, 2000 and 1999, these amounts totaled $11.5 million
     and $35.8 million.

o    In March  2000,  the  Company  acquired  $123.0  million  of single  family
     residence loans from Long Beach Mortgage  Company ("Long Beach"),  a wholly
     owned subsidiary of Washington Mutual. We paid an amount which approximated
     the book value of the assets acquired. These loans are reported as consumer
     finance receivables on the Consolidated  Statements of Financial Condition.
     In  December,  2000,  $21.5  million of these  loans were sold back to Long
     Beach for an amount which approximated the book value of the assets sold.

Note 14  Lines of Business

We are managed along two major lines of business:  consumer finance and consumer
banking.  The Company provides  information on the performance of these business
segments  which  are  strategic  lines  of  business  managed  by the  Executive
Committee  under the  direction of the Chief  Executive  Officer.  The financial
performance of these business lines is measured by our  profitability  reporting
processes.

Our business segments are managed through the Executive Committee,  which is the
senior  decision  making  group  of the  Company.  The  Executive  Committee  is
comprised of eleven members including the Chairman and Chief Executive  Officer,
the President and Vice Presidents who manage key business and operational  areas
within the Company.

Both segments are managed by an executive  team that is  responsible  for sales,
marketing, sales support,  operations and certain administrative functions. Back
office support is provided to each segment  through  executives  responsible for
lending administration, information systems, finance, legal, marketing and human
resources.

Operating  revenues and expenses are directly  assigned to business  segments in
determining  their operating  income.  The financial results of each segment are
derived from our general ledger systems.  Certain  adjustments have been made to
recorded general ledger accounts to appropriately  reflect results of operations
and financial position transfers among segments.

The organizational structure of the institution and the allocation methodologies
it employs  result in business line financial  results that are not  necessarily
comparable across  companies.  As such, our business line performance may not be
directly  comparable  with  similar  information  from  other  consumer  finance
companies.

<PAGE> 39

Financial highlights by lines of business were as follows:


<TABLE>

(Dollars in thousands)                                                  Year Ended December 31,
                              ----------------------------------------------------------------------------------------------
                                          2000                            1999                             1998
                              -----------------------------  -----------------------------   -------------------------------
                              Consumer   Consumer            Consumer   Consumer             Consumer   Consumer
                               Finance    Banking     Total   Finance    Banking     Total    Finance    Banking       Total
                              --------   --------  --------  --------   --------  --------  ---------   --------   ---------
Condensed income statement:
Net interest income after
<S>                           <C>        <C>       <C>       <C>        <C>       <C>       <C>         <C>       <C>
   provision for loan losses  $232,469   $ 19,531  $252,000  $207,160   $ 17,645  $224,805  $ 188,051   $ 15,381  $ 203,432
Other operating income          30,148        273    30,421    29,032        469    29,501     26,380        767     27,147
Operating expenses             147,450      8,552   156,002   128,049      7,545   135,594    136,275      6,717    142,992
                              --------   --------  --------  --------   --------  --------  ---------   --------  ---------
Income before income
   Taxes                       115,167     11,252   126,419   108,143     10,569   118,712     78,156      9,431     87,587
Income taxes                    43,227      4,303    47,530    41,678      4,042    45,720     31,092      3,608     34,700
                              --------   --------  --------  --------  ---------  --------  ---------   --------  ---------
Net income                    $ 71,940   $  6,949  $ 78,889  $ 66,465  $   6,527  $ 72,992  $  47,064   $  5,823  $  52,887
                              ========   ========  ========  ========  =========  ========  =========   ========  =========

</TABLE>

Other disclosures:


<TABLE>
                                                             December 31,
                            --------------------------------------------------------------------------
                                             2000                                1999
                            -----------------------------------     ----------------------------------
                              Consumer     Consumer                   Consumer  Consumer
                               Finance      Banking       Total        Finance   Banking       Total
                            ----------    ---------   ----------    ----------  ---------   ----------
<S>                         <C>           <C>         <C>           <C>         <C>         <C>
Total assets                $3,500,185    $ 427,520   $3,927,705    $2,821,116  $ 406,441   $3,227,557

Total equity                $  479,371    $  59,717   $  539,088    $  422,650  $  52,508   $  475,158


</TABLE>

Note 15           Approximate Fair Values of Financial Instruments

A summary  of the  approximate  fair  values of our  financial  instruments,  as
compared to their carrying values, is set forth in the following table:


<TABLE>

(Dollars in thousands)
                                          December 31, 2000                   December 31, 1999
                                    -----------------------------     ------------------------------
                                          Carrying    Approximate          Carrying      Approximate
                                             Value     Fair Value             Value       Fair Value
                                    --------------   ------------     -------------     ------------
<S>                                 <C>              <C>               <C>               <C>
Consumer finance receivables        $    3,728,350   $  3,652,121     $   3,061,757     $ 3,053,585
Investment securities                      185,288        185,288           128,964         128,964
Commercial paper borrowings                683,654        684,009           242,170         242,193
Senior Debt                              2,196,445      2,219,602         1,995,888       1,969,768
Federal Home Loan Bank borrowings          156,800        156,842           115,905         115,906
Customer deposits                          189,793        191,966           189,934         187,499


</TABLE>

<PAGE> 40

In estimating the fair value disclosures for financial instruments,  we used the
following methods and assumptions:

          Consumer finance  receivables.  The approximate fair value of consumer
          finance receivables was estimated by discounting the future cash flows
          using  current rates at which similar loans would be made with similar
          maturities to borrowers  with similar credit  ratings.  The fair value
          was not  adjusted  for the  value  of  potential  loan  renewals  from
          existing borrowers.

          Investment securities. Fair values for investment securities are based
          on quoted market  prices.  If quoted market prices were not available,
          fair values were estimated based on quoted market prices of comparable
          instruments.

          Cash  and  cash  equivalents.  The  carrying  amount  reported  in the
          statement  of  financial  condition  for  cash  and  cash  equivalents
          approximates its fair value given its highly liquid nature.

          Debt.  The  carrying  amount  reported in the  statement  of financial
          condition for commercial paper borrowings  approximates its fair value
          given its brief maximum term.  The  approximate  fair value for senior
          debt and FHLB borrowings was estimated using rates currently available
          for debt with similar terms and remaining maturities.

          Customer  deposits.  The fair values disclosed for fixed-rate  savings
          certificates  of deposit were estimated  using a discounted  cash flow
          calculation  that applies  interest rates  currently  being offered on
          certificates  to a schedule of aggregate  expected  maturities on time
          deposits.  The fair values  disclosed  for  savings  and money  market
          accounts are, by definition,  equal to the amount payable on demand at
          the reporting date.

          Accounts payable and other liabilities.  The carrying amounts reported
          in the statement of financial condition for accounts payable and other
          liabilities  approximate  their fair value,  given the  settlement  on
          demand nature of these items.


<PAGE> 41

Note 16           Selected Quarterly Financial Data (Unaudited)

A summary of the quarterly  results of operations  for the years ended  December
31, 2000 and 1999 is set forth below:


<TABLE>

                                                         As of and for the Quarter Ended
                             --------------------------------------------------------------------------------------------
                                     March 31,              June 30,            September 30,             December 31,
                             ---------------------  ----------------------  ---------------------  ----------------------
(Dollars in thousands)           2000       1999        2000        1999       2000       1999         2000        1999
                             ----------  ---------  ----------  ----------   --------  ----------  ----------  ----------
Net interest income before
<S>                          <C>         <C>        <C>         <C>          <C>       <C>         <C>         <C>
Provision for credit losses  $   86,095  $  78,388  $   89,995  $   80,494   $  91,943 $   81,429  $   91,210  $   85,084
                             ----------  ---------  ----------  ----------   --------- ----------  ----------  ----------
Provision for credit losses      24,477     25,600      25,363      26,040      26,149     25,100      31,254      23,850
Other operating income            7,872      6,655       7,406       6,868       7,482      7,415       7,661       8,563
Other operating expenses         37,155     33,712      36,408      32,065      37,617     32,618      40,259      33,239
Goodwill amortization
 Expense                          1,141        935       1,140         971       1,141        970       1,141       1,084
                             ----------  ---------  ----------  ----------   --------- ----------  ----------  ----------
Income before income taxes       31,194     24,796      34,490      28,286      34,518     30,156      26,217      35,474

Income tax provision             11,850      9,670      13,110      11,030      12,770     11,760       9,800      13,260
                             ---------- ----------  ----------  ----------  ---------- ----------  ----------  ----------
Net income                   $   19,344 $   15,126  $   21,380  $   17,256  $   21,748 $   18,396  $   16,417  $   22,214
                             ========== ==========  ==========  ==========  ========== ==========  ==========  ==========
Consumer finance
 Receivables, net            $3,195,227 $2,539,015  $3,415,679  $2,648,241  $3,547,688 $2,792,908  $3,623,763  $2,961,449
                             ========== ==========  ==========  ==========  ========== ==========  ==========  ==========
</TABLE>

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure.

None.

<PAGE> 42

                                      PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)  Index of Documents filed as a part of this Report:

        1.    Financial Statements

              Included in Part II of this Report:
                                                                            PAGE

              Report of Independent Certified Public Accountants..............25

              Washington Mutual Finance Corporation and Subsidiaries:
                Consolidated Statements of Financial Condition
                 at December 31, 2000 and 1999................................26
                Consolidated Statements of Operations, Comprehensive Income
                 and Retained Earnings for the Years Ended December 31, 2000,
                 1999 and 1998................................................27
                Consolidated Statements of Cash Flows
                 for the Years Ended December 31, 2000, 1999 and 1998.........28
                Notes to Consolidated Financial Statements....................29

        2.    Financial Statement Schedules

          All  schedules  are omitted  because of the absence of the  conditions
          under which they are required or because the required  information  is
          set forth in the financial statements or related notes.

        3.    Exhibits

              Included in Part IV of this Report:

         Exhibit
          Number
         (3)    (a)  Certificate of Incorporation  of Washington Mutual  Finance
                     Corporation.  as presently in effect.  (i)
                (b)  By-Laws  of  Washington  Mutual  Finance   Corporation  as
                     presently in effect.  (iii)
         (4)    (a)  Indenture dated as of July 1, 1995  between  Aristar,  Inc.
                     and The Bank of New  York, as trustee. (ii)

<PAGE> 43
                (b)  Indenture dated as of October 1, 1997 between Aristar, Inc.
                     and First Union  National Bank, as trustee. (iii)
                (c)  Indenture  dated  as of November 15, 1997 between  Aristar,
                     Inc. and First Union National Bank, as trustee. (iv)
                (d)  Indenture dated as of June 23, 1999  between  Aristar, Inc.
                     and Harris  Trust and  Savings Bank, as trustee.(iv)
                (e)  The registrant  hereby agrees to furnish the Securities and
                     Exchange  Commission   upon  request   with  copies  of all
                     instruments  defining  rights of holders of long-term  debt
                     of   Washington    Mutual   Finance   Corporation  and  its
                     consolidated subsidiaries.
        (10)    (a)  Income Tax Allocation Agreement between  Aristar,  Inc. and
                     Washington Mutual, as successor  to Great Western Financial
                     Corporation (as amended effective August 31, 1999). (v)
                (b)  364-Day Credit Agreement by and among Washington Mutual and
                     Washington  Mutual   Finance  Corporation   and  The  Chase
                     Manhattan Bank, as Administrative Agent. (vi)
                (c)  Four-Year Credit Agreement by and among  Washington  Mutual
                     and   Aristar,  Inc.   and  The  Chase  Manhattan  Bank, as
                     Administrative Agent. (v)
        (12)    Statement Re: Computation of Ratios.
        (23)    Consent of Deloitte & Touche LLP.


                (i)  Incorporated by  reference to  Registrant's  Annual  Report
                     on  Form  10-K   for  the  year   ended December  31, 1987,
                     Commission file number 1-3521.
                (ii) Incorporated by reference to Registrant's Quarterly  Report
                     on   Form  10-Q for  the   quarter  ended   June  30, 1995,
                     Commission file number 1-3521.
                (iii)Incorporated by reference to Registrant's Current Report on
                     Form  8-K  dated  October  6, 1997, Commission  file number
                     1-3521.
                (iv) Incorporated  by reference to  Registrant's  Report on Form
                     424B2 dated November 6,1997, Commission file number 1-3521.
                (v)  Incorporated by  reference  to  Washington  Mutual,  Inc.'s
                     Annual  Report on Form 10-K for the year ended December 31,
                     1999, Commission file number 1-14667.
                (vi) Incorporated  by reference  to  Washington  Mutual,  Inc.'s
                     Quarterly  Report  on  Form   10-Q  for  the  quarter ended
                     September 30, 2000, Commission File No. 1-14667.

         (b)    Reports on Form 8-K

                No reports on Form 8-K were  filed during the  period covered by
                this Report.

<PAGE> 44

                                                    Signatures

Pursuant to the requirements of the Section 13 of the Securities Exchange Act of
1934,  the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                 WASHINGTON MUTUAL FINANCE CORPORATION

                                 /s/   Craig J. Chapman
                                 -----------------------------------------------
                                 Craig J. Chapman
                                 Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the Company and in
the capacities indicated on March 22, 2001.



/s/   Craig J. Chapman                      /s/   Richard M. Levy
------------------------------------        ------------------------------------
Craig J. Chapman                            Richard M. Levy
Chief Executive Officer and Director        Senior Vice President and Chief
(Principal Executive Officer)               Financial Officer
                                            (Principal Financial Officer)

                                            /s/   Craig A. Stein
                                            ------------------------------------
                                            Craig A. Stein
                                            Vice President and Controller
                                            (Principal Accounting Officer)

/s/   Craig E. Tall                         /s/   Fay L. Chapman
------------------------------------       -------------------------------------
Craig E. Tall                               Fay L. Chapman
Director                                    Director

/s/   James B. Fitzgerald                   /s/   William A. Longbrake
------------------------------------        ------------------------------------
James B. Fitzgerald                         William A. Longbrake
Director                                    Director