NEW YORK (AP) - 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. Its shares fell almost 12%.
Killinger, who was stripped of his chairman title in June, became CEO of the Seattle-based thift in 1990 and built WaMu into one of the country's largest banks.
Killinger 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.
WaMu also said Monday 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 OTS 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.
Killinger's exit follows that of Wachovia Corp. CEO Ken Thompson, Merrill Lynch & Co.'s Stanley O'Neal and Citigroup Inc.'s Charles Prince.
Battered by rising mortgage delinquencies and defaults, and by the sinking value of its mortgage portfolio, WaMu has lost nearly 70% of its market value this year.
In July, the bank reported a $3 billion second-quarter loss - the biggest quarterly loss in its history - as it increased its loss reserves to more than $8 billion to cover bad loans.
Washington Mutual's shares fell 50 cents, or 11.7%, to $3.77 in morning trading Monday. They have traded in a 52-week range of $3.03 to $39.25.
(Copyright 2008 by The Associated Press. All Rights Reserved.)