Kerry Killinger Builds His Dream Bank

By Cocheo, Steve | ABA Banking Journal, August 2001 | Go to article overview

Kerry Killinger Builds His Dream Bank


Cocheo, Steve, ABA Banking Journal


Washington Mutual--WaMu for short--is the nation's largest thrift. If you haven't run into this mega-mortgage machine, it may run into you

Washington Mutual CEO Kerry K. Killinger is a born juggler, adept at handling many tasks at once. But one day he found himself at home, juggling two seemingly incompatible items-a hammer and a portable phone.

He had the phone in one hand because investment bankers were updating him on a pending acquisition. He had the hammer in the other because workmen attempting to install his new Sub-Zero refrigerator were stymied. The wallboard behind the refrigerator was bowed, preventing the appliance from fitting.

Phone to his ear, Killinger stepped into the breach and... Wham! Wham! Wham!

...corrected the problem with a few strategic blows. The refrigerator slid neatly into the adjusted space.

Killinger, 52, is no stranger to home building nor to acquisitions. In both, he likes "fit."

Broker becomes banker

When Killinger was a securities analyst and brokerage executive with Murphey Favre, Inc., Spokane, Wash., he spent evenings and weekends rebuilding old homes and turning them around for a quick profit. Later, as the broker's executive vice-president, he helped engineer the Spokane firm's acquisition by WaMu in 1982, and began his climb up WaMu's own corporate ladder.

The executive, who still enjoys fixit jobs at home, admits that his projects these days are smaller than they used to be. He's too busy building on a grander scale, continuing a string of acquisitions that have transformed Seattle-based WaMu into the nation's largest thrift, the seventh-largest banking company, and a mortgage powerhouse that tops both the servicing and origination sides of that business.

When it comes to fit in mergers, Killinger prefers a cleaner one than he settled for with his fridge. He won't tolerate fragmentation of corporate culture, for instance. "That prevents you from getting the results that you need" to keep shareholders and the market happy," he says.

Likewise, Killinger prefers to take WaMu where he thinks it is wanted. The announcement in late June that WaMu would acquire Dime Bancorp underscored WaMu's determination to grow and to do it in places where the firm's noted research tells it that its approach will fly.

"We know how to enter metropolitan markets and do it successfully," says Killinger.

Indeed, Killinger brags, "this is a company that does not make major mistakes. We do that by learning daily lessons."

Is WaMu really that good?

"I think they are that good," says Tom Brown, CEO of financial services hedge fund Second Curve Capital and its affiliate, bankstocks. corn. In general, Brown says, WaMu "keeps it simple and executes the basics really well."

The investment community is impressed that Killinger came up in the financial services business as a broker, rather than as a lender.

"He doesn't look at the banking world as a banker--he looks at it as an outsider," says Thomas O'Donnell, who follows WaMu for Salomon Smith Barney. That, says O'Donnell, is why, when he took the reins at WaMu back in the late 1980s as president, he was able to spot three clear needs for the company:

1. Need for improved credit--WaMu was suffering from the vestiges of the thrift crisis. Today it has a respected credit record.

2. Need to make acquisitions--WaMu is now an acquisition machine, having made dozens since Killinger took over.

3. Need to control rate-risk--"They've come to realize that mortgages are their main business," says O'Donnell, and rate risk is a greater challenge to home lenders, than is credit risk.

At $220 billion in assets, WaMu isn't your average S&L. It has developed leading franchises in consumer banking and mortgage banking that are becoming a national affair.

"Our goal is to be the dominant mortgage lender in the U. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Kerry Killinger Builds His Dream Bank
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.