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Quick Hits: WaMu Evicts Killinger


Brief scrutiny of today's headlines.

Kerry Killinger is out as CEO of Washington Mutual (WM), the nation's largest savings and loan.

Killinger will be replaced by Alan H. Fishman, former president and chief operating officer of Sovereign Bank (SOV) and president and CEO of Independence Community Bank.

Killinger's departure follows that of Wachovia (WB) CEO Ken Thompson and Citigroup's (C) Charles Prince. Job security for bank presidents is plummeting in the wake of the mortgage crunch.

Like many other banks, Washington Mutual has been hammered by rising mortgage delinquencies and defaults as the value of its mortgage portfolio declines.

Killinger lost the title of Chairman in June as part of an effort by the Board of Directors to improve corporate governance. Killinger became Washington Mutual's CEO in 1990 and built the Seattle-based thrift into one of the nation's largest banks.

In a related matter, Washington Mutual agreed to provide the Office of Thrift Supervision with a revised, multi-year business plan and earnings outlook.

Washington Mutual was one of the first retail banks to seek outside cash in the credit crunch. It agreed to sell securities to an investment fund manages by TPG Capital and others this spring to raise $7.2 billion in new capital.

In July, Washington Mutual reported a $3 billion second-quarter loss, the largest in the bank's history. It boosted reserves to about $8 billion.

Washington Mutual has said it will leave the wholesale lending business and close its remaining standalone home loan centers. The bank plans to concentrate on mortgage-origination efforts.
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