SEATTLE — Washington Mutual Inc., the nation's biggest savings and loan, said Thursday it swung to a $1.87 billion loss in the fourth quarter, hurt badly by the sinking value of its mortgage portfolio.

The quarterly loss was $2.19 per share, compared with a profit of $1.06 billion, or $1.10 per share in the same period last year.

Those earnings included a write-down of $1.6 billion that WaMu had previously disclosed as the value of its home-loan portfolio withered. WaMu also socked away a whopping $1.53 billion to cover future loan losses, within the range of $1.5 billion to $1.6 billion it forecast in December.

Revenue, including net interest income, or what the bank made on loans minus what was paid out on deposits, and non-interest income, or the cash WaMu made from mortgage loan service fees and other fees and charges, totaled $3.41 billion, lower than Wall Street's expectation of $3.51 billion.

"The second half of 2007 has been a period of extreme stress and turmoil for the mortgage and credit markets," said Kerry Killinger, WaMu's chief executive officer, in a conference call.

While the report was grim, Wall Street was expecting worse, said Howard Shapiro, an analyst for Fox-Pitt Kelton Cochran Caronia.

"There was a big sigh of relief," he said. "If they can get through this next year, then I think they'll stay viable."

WaMu's mortgage division was hit hardest in the quarter. Its home loans volume sank 97 percent to $19.09 billion compared with the fourth quarter of 2006, and the division's net loss totaled $1.96 billion, compared with a loss of $124 million in the year-ago quarter.

But it was WaMu's credit-card division results and outlook that most surprised Shapiro. WaMu said card services net income sank 35 percent to $92 million in the quarter. Killinger said rising unemployment pushed up delinquency rates and credit losses.