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It was announced Thursday, after-hours, that the FDIC is taking control of Washington Mutual (WM) and selling its deposits as well a number of branches to JP Morgan (JPM) for $1.9 billion.

Losing $6.3 billion in the last three quarters and getting cut to "junk" status didn't give WM many options to choose from. $19 billion in losses is projected through 2011, but some say the number could be as high as $30 billion.

Currently, WM has approximately $309.7 billion in assets, $227 billion in real estate loans and $181.9 billion in customer deposits. Additionally, there are 2,239 branches and 43,198 employees who work at WM. This acquisition now makes JP Morgan nearly similar in size with Citigroup (C).

10 largest bank failures in U.S. History:

1. Continental Illinois National Bank and Trust, Chicago (1984)
Total assets: $40.0 billion

2. First Republic Bank, Dallas (1988)
Total assets: $32.5 billion

3. IndyMac Bank, Pasadena, Calif. (2008)
Total assets: $32 billion

4. American S&LA, Stockton, Calif. (1988)
Total assets: $30.2 billion

5. Bank of New England, Boston (1991)
Total assets: $21.7 billion

6. MCorp, Dallas (1989)
Total assets: $18.5 billion

7. Gibraltar Savings, Simi Valley, Calif. (1989)
Total assets: $15.1 billion

8. First City Bancorporation, Houston (1988)
Total assets: $13.0 billion

9. Homefed Bank, San Diego (1992)
Total assets: $12.2 billion

10. Southeast Bank, Miami (1991)
Total assets: $11.0 billion

This makes Washington Mutual’s failure 8X larger than the largest bank failure in U.S. history and larger than all top 10 banks combined!

Did Killinger Lie?

In a January 30 article titled, “Future bright, says Washington Mutual CEO Kerry Killinger”, Former CEO Killinger announced that WM will open 100 to 150 new bank branches in 2008.

(That’s not going to happen)

He also expected to “add more than 1 million net checking accounts this year, and that all the company’s business divisions will focus on selling products through the branches and the retail Web site “like never before”.

(I’m sure this never happened before!)

“Killinger also emphasized that WaMu has plenty of cash and access to funding to get through the fiscal year.”

(Notice a pattern from all the failed CEOs this year?)

Killinger’s compensation from 2004-2007:

Year, CEO, Cash Salary Stock, Other Pay, Total Pay

2007 Kerry K. Killinger $1,000,000, $3,468,625, $4,468,625

2006 Kerry K. Killinger $5,100,000, $17,153,715, $22,253,715

2005 Kerry K. Killinger $4,600,000, $8,876,608, $13,476,608

2004 Kerry K. Killinger $2,900,000, $12,335,416, $15,235,416

Great job Killinger…way to KILL Washington Mutual.

We should see an Indymac-related type of run today at Washington Mutual retail banking centers. If I had money at WaMu, that's what I would do, 6:00AM, just to get in line first. I wouldn’t take any chances with what I’ve seen so far this year.

Disclosure: None.

This article is tagged with: Financial, Money Center Banks, United States
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