Washington Mutual (or WaMu; NYSE: WM) is the United States' largest savings and loan association. Despite its name, it ceased being a mutual company in 1983. It is publicly traded on the New York Stock Exchange.
Washington Mutual is $309.7 Billion in total assets as of June 30, 2008. Washington Mutual was $327.9 Billion in total assets as of December 31, 2007. Therefore, total assets dropped by 5.5% since the beginning of 2008. Washington Mutual's total assets have been declining since the December of 2006. In less than two years, Washington Mutual total assets have declined by 10.6%.
Washington Mutual's principal activities are to provide financial services to consumers and small businesses such as retail banking, mortgage lending, consumer lending, business banking, business lending, insurance services, credit-card services, commercial real estate mortgage and consumer-investment services.
Washington Mutual is the sole surviving major Seattle-based bank after the flurry of mergers in the 1980s and 1990s ended the independence of Rainier Bank, Seafirst Bank, and Peoples National Bank, among others.
Washington Mutual operates more than 2,600 retail-banking, mortgage-lending, commercial-banking, and financial-services offices, as of June 30, 2006.
On September 15, 2008, shares slipped 27% and the price dropped to $2 per share. The bank's rating by Standard & Poor's was lowered to "BB-".
On September 17, 2008, it was announced that Washington Mutual has put itself up for sale and that Goldman Sachs had begun an auction a few days before. Banks rumored to be interested in acquiring Washington Mutual include Toronto Dominion Bank, Citigroup, Wells Fargo, HSBC, JPMorgan Chase, and Grupo Santander.
Washington Mutual, Inc.
 |
| Type |
Public (NYSE: WM) |
| Founded |
1889 |
| Headquarters |
Seattle, Washington, United States |
| Key people |
Alan H. Fishman, Chief Executive Officer |
| Industry |
Finance and Insurance |
| Products |
Consumer Banking
Financial Services |
| Market cap |
US$ 5.66 Billion (intraday) |
| Revenue |
US$15.962 billion |
| Employees |
49,403 |
| Subsidiaries |
WaMu Investments, Inc; Washington Mutual Insurance Services; Washington Mutual Card Services |
| Website |
wamu.com |
History
Washington Mutual's new headquarters, WaMu Center (center left) and former headquarters, Washington Mutual Tower (center right) in Seattle, Washington.
Washington Mutual was founded as the Washington National Building Loan and Investment Association on September 25, 1889, in an attempt to save Seattle's economy after a fire nearly destroyed the city. The newly formed company made its first home mortgage loan on the West Coast on February 10, 1890. Its name was changed to Washington Savings and Loan Association on June 25, 1908. During World War I, its assets expanded by 68%.
By now called Washington Mutual Savings Bank, the company made its first acquisition on July 25, 1930, by purchasing Continental Mutual Savings Bank. Over the next fifty years, it was involved in pioneering cash machine networks and telephone banking.
Its marketing slogan for much of its history was "The Friend of the Family". It is now "Simpler Banking, More Smiles".
In 1983, Washington Mutual bought the brokerage firm, Murphey Favre, and demutualized. By 1989, its assets had doubled.
In October 2005, Washington Mutual purchased the "subprime" credit card issuer Providian for approximately $6.5 billion.
In March 2006, Washington Mutual began moving into its new headquarters, WaMu Center, located in downtown Seattle. The company's previous headquarters, Washington Mutual Tower, still stands about a block away from the new building on Second Avenue.
In August 2006, Washington Mutual began using the official abbreviation of WaMu in all but legal situations.
Subprime mortgage crisis
In December 2007, WaMu announced a reorganization of its home-loan division which resulted in closing 160 of its 336 home-loan offices. This resulted in a loss of 2,600 positions in its home-loan staff (a 22% reduction).
In April 2008, WaMu, responding to losses and difficulties sustained as a result of the 2007-2008 Subprime mortgage crisis, announced a $7 billion infusion of new capital by new outside investors led by TPG Capital, formerly Texas Pacific Group. TPG agreed to pump $2 billion into WaMu; other investors, including some of WaMu's current institutional holders, agreed to buy an additional $5 billion in newly issued stock. The bank announced that 3,000 people companywide would lose their jobs, and the company stated its intent to close its approximately 186 remaining stand-alone, home-loan offices, including 23 in Washington State and a loan-processing center in Bellevue, Washington. It stopped buying loans from outside mortgage brokers — known in the trade as "wholesale lending."
Losses continued to mount, however. In June 2008, Kerry Killinger stepped down as the Chairman, though remaining the Chief Executive Officer. On September 8, 2008, under pressure from investors WaMu's board of directors ousted Kerry Killinger as the CEO. Alan Fishman, chairman of mortgage broker Meridian Capital Group, and a former chief operating officer of Sovereign Bancorp Inc. was named the new CEO.
On September 17, 2008, The New York Times reported that WaMu's share prices had fallen to $2.01 and that the company had hired Goldman Sachs to facilitate an auction of the bank.
This article uses content from http://www.wikipedia.org
