- The Washington Times - Tuesday, September 9, 2008

NEW YORK | Washington Mutual Inc., ravaged by losses from sour mortgages, replaced Kerry Killinger as chief executive of the nation’s largest savings and loan on Monday, adding him to the growing list of banking bosses ousted by their boards.

Mr. Killinger, 59, is being replaced by Alan H. Fishman, the former president and chief operating officer of Sovereign Bank and president and CEO of Independence Community Bank.

Also Monday, WaMu said that it has entered into a memorandum of understanding with the Office of Thrift Supervision concerning aspects of its operations. WaMu has committed to provide the office with an updated, multiyear business plan and forecast for its earnings, asset quality, capital and business segment performance. The plan will not require the company to raise capital or increase liquidity, WaMu said.

The lender dropped 15 cents to $4.12 yesterday in New York Stock Exchange composite trading and earlier traded as low as $3.25. Shares have fallen 90 percent since early July of last year, right before the rapid erosion in the credit markets began.

Mr. Killinger, who was stripped of his chairman title in June, became CEO of the Seattle-based thrift in 1990 and built WaMu into one of the country’s largest banks. But with a heavy focus on subprime and option adjustable-rate mortgages - the types of mortgages at the heart of the housing bust - WaMu’s losses began to mount and its shares plummeted, sparking an outcry from shareholders.

The board’s splitting of the CEO and chairman roles in June was an effort, at the urging of shareholders, to improve corporate governance. At WaMu’s shareholder meeting in April, a nonbinding resolution urging the installation of a nonemployee as board chairman passed with 51.5 percent of the votes.

But Mr. Killinger - who received compensation valued at $14.4 million in 2007 - held on to his post as CEO, even as the list of other top banking executives shown the door continued to grow.

Mr. Killinger’s exit follows that of Wachovia Corp. CEO Ken Thompson, Merrill Lynch & Co.’s Stanley O’Neal and Citigroup Inc.’s Charles Prince.

Mr. Fishman, 62, became president and CEO of Brooklyn, N.Y.-based Independence in 2001. He later served as president and chief operating officer of Sovereign Bank after the Philadelphia-based bank bought Independence for $3.6 billion in cash in 2006.

Most recently, Mr. Fishman has served as chairman of commercial mortgage brokerage Meridian Capital Group.

Some analysts think Mr. Fishman’s relationship with Meridian could prove to be an important one.

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