Washington Mutual lays an egg

Things were looking good for much of the commercial bank sector this week. The upside surprises from the likes of Citigroup, Bank of America and Wells Fargo were welcome news. Unfortunately, Washington Mutual just joined Wachovia in raining on the parade. WaMu, the big thrift, reported a loss of $6.58 a share. That figure excludes the effects of a one-time charge of about $3.24 a share to cover the cost of raising capital in April. Excluding that, it lost $3.34 a share versus expectations of a $1.05 loss, so this is a pretty awful quarter. The results reflect a hike in loan loss reserves of $3.75 billion. The bank did say it thinks 2008 will be the peak year for this loan loss reserve hike--which may be a bad omen for the next two quarters. The bank also announced that it intends to save $1 billion; it will start by denying CEO Kerry Killinger annual incentive payments this year. That will not likely console many. You have to wonder about his future.  

For more:
- here's the release

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