Kerry Killinger

Who's really calling the shots at WaMu?

Jim Kim — Mon, 08 Sep 2008 13:01:32 -0400

Washington Mutual made headlines when it announced that the board had finally ousted ex-CEO Kerry Killinger, instead hiring Alan Fishman, currently chairman of New York commercial mortgage broker Meridian Capital Group. The real news was that the company signed a memorandum of understanding with the Office of Thrift Supervision that requires changes in risk management and compliance programs. You can bet the ITS will take an active role in trying to keep WaMu solvent. This is merely the latest indication that federal regulators are putting an increasing number of banks on effective probation, "forcing them to fix their problems and try to avoid potentially costly failures. The secret agreements can force banks to take steps including raising capital, cutting back on risky loans and suspending dividend payments," Dow Jones reports. These memorandums are "often a precursor to more-severe, publicly disclosed enforcement actions if conditions don't improve."

For more:
- here's the article

WaMu no longer in need of capital?

Jim Kim — Thu, 07 Aug 2008 17:09:41 -0400

Thanks to Merrill Lynch's John Thain (fairly or not), people tend to be skeptical when they hear from CEOs that their bank's capital ratios look good. So what should one think of rumor-battered Washington Mutual CEO Kerry Killinger's statement to a Fox-Pitt Kelton analyst that thrift's liquidity position is strong? As MarketWatch notes, WaMu has raised cash in several steps in recent months, from the $7 billion raised from Texas Pacific Group and others to the $10 billion raised from tapping the Fed's discount window, the Federal Home Loan Banking system and open market operations. It has accounted for 65 percent of expected losses via set asides and charge offs. So while the losses will keep coming, it may be that its balance sheet is well positioned.

For more:
- here's the article from MarketWatch

Washington Mutual lays an egg

Jim Kim — Tue, 22 Jul 2008 17:53:52 -0400

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

Washington Mutual board makes big changes

Jim Kim — Mon, 02 Jun 2008 21:31:21 -0400

The board of Washington Mutual is getting busy, as it should. It certainly doesn't want to be seen as a done-nothing sort of board that fiddled while the company burned. It announced that it has stripped controversial CEO Kerry Killinger of the chairman title. This is somewhat foreboding. Recall that Ken Thompson of Wachovia was similarly stripped before he was ousted outright. The WaMu board also issued a requirement that directors receive a majority of votes. And it named key outside directors as chairmen of the finance, governance and corporate relations committees. It also said it wants to hire more outside directors. Will this be enough? The jury is still out, but the at least the board is making the right moves.

For more:
- here's the release

Will CEO turmoil continue?

Fri, 18 Apr 2008 06:59:56 -0400

We've seen a lot of high profile CEO lose their jobs. Stanley O'Neal. Chuck Prince. Jimmy Cayne. But at least one MarketWatch commentator thinks at least two other fairly big name CEOs ought to be similarly shown the door. He says that Ken Thompson, of Wachovia, and Kerry Killinger, of Washington Mutual, "were exposed as overhyped pedestrian CEOs this week." Ouch! PR folks, do something. Killinger was rapped for the $1.1 billion loss and the required dilutive $7 billion capital infusion from private equity investors. Thomson was pilloried for the disastrous Golden West purchase. The jury remains out on several CEOs, including Ken Lewis of Bank of America, who's betting big on Countrywide.

For more:
- here's the commentary

Hedge fund guy, Eddie Lampert named worst CEO

Fri, 07 Dec 2007 06:59:54 -0500

There was a lot of competition for the title of worst CEO of the year, given annually by a columnist for MarketWatch. The contenders included a lot of financial execs, notably Charles Prince of Citigroup, Jimmy Cayne of Bear Stearns, Kerry Killinger of Washington Mutual, and Angelo Mozilo of Country Financial. But the "winner" was actually a hedge fund guy: Eddie Lampert. He has been deemed the effective CEO, and thus worthy of the blame for the failure of Sears to effect a turnaround. Lampert has certainly taken his lumps over Sears recently.

For more:
- here's the column

Related articles:
- How it ended for Charles Prince
- Open season for Cayne? A pot smoker?