BANKING GIANT; WASHINGTON MUTUAL'S MERGER WITH AHMANSON CREATES FINANCIAL POWERHOUSE.Byline: Gregory J. Wilcox Daily News Staff Writer Seattle-based Washington Mutual “WaMu” redirects here. For the Washington, DC radio station, see WAMU. Washington Mutual (or WaMu; NYSE: WM) is the United States' largest savings and loan association. Inc. continued its assault on California's financial landscape Tuesday, announcing it would buy rival thrift H.F. Ahmanson & Co. for about $9.9 billion. The purchase is Washington Mutual's third acquisition of a California thrift in the past two years, at a cost of nearly $23 billion, and creates the nation's seventh-largest banking company with $150 billion in assets and the second-biggest in the state behind BankAmerica Corp. Plans call for closing up to 170 branches by October and cutting 3,500 jobs - equal to about 10 percent of the 31,000 people currently working at both companies. As branches in close proximity are closed, others in high-growth areas will be opened, officials said. Layoffs likely will take place at the administrative staff level. Kerry Killinger Kerry Killinger (born June 6, 1949 in Des Moines, Iowa) is an American businessman and the chairman and chief executive officer of Washington Mutual. Killinger is married to wife, Linda and they have three sons. , Washington Mutual's chairman, president and chief executive officer, said work force reductions would be handled by attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: when possible and that each company has several hundred job openings. ``In a transaction of this magnitude it is inevitable that positions will be eliminated,'' said Killinger, who will run the new company. ``(But) we look forward to adding the many talented Ahmanson employees to the already strong team at Washington Mutual.'' By 2000, the company expects to save about $330 million annually as a result of the deal. Eric Withrow, an analyst at SNL SNL Saturday Night Live SNL Sandia National Laboratories SNL School for New Learning (Depaul University) SNL Springfield News-Leader (Missouri newspaper) SnL Sweet N Low SNL Standard Nomenclature List Securities in Charlottesville, Va., said that is a realistic target and there will probably be fewer job cuts than anticipated. ``I think Washington Mutual paints a picture they will beat . . . so they will look good,'' he said. ``But the market really respects Kerry Killinger. The company has grown by leaps and bounds while he still runs a tight ship that is very profitable.'' Although Washington Mutual has acquired 21 other companies in the past decade, Killinger said the buying spree is over, at least in California. He said Washington Mutual plans to aggressively market its franchise now. Combined with Irwindale-base Ahmanson, Washington Mutual will have a 17.03 percent market share in California, which is about 3.59 percent less than BankAmerica and 3.28 percent better than Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. . Deposits will total $86.3 billion and Washington Mutual will serve about 6 million households, mostly in the West, through a network of 2,000 branches and offices. The combined company will be the nation's leading adjustable-rate mortgage Adjustable-rate mortgage (ARM) A mortgage that features predetermined adjustments of the loan interest rate at regular intervals based on an established index. The interest rate is adjusted at each interval to a rate equivalent to the index value plus a predetermined spread, or lender and will further strengthen its position as the West Coast's top mortgage lender. ``It will give them considerable bulk and enable them to successfully compete with Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. and Wells Fargo,'' said Barry Rubens, publisher of the California Research Report, a banking industry newsletter. Ahmanson operates Home Savings of America, which becomes the second well-known thrift to vanish from the financial landscape this year and third in the past nine months. About six weeks ago, California Federal Bank California Federal Bank, often abbreviated to "Cal Fed", was a savings and loan bank in California. It existed from 1926 until 2002, when its parent company Golden State Bancorp was acquired by Citigroup, resulting in the bank being merged into Citibank. bought Glendale Federal Savings; Washington Mutual outbid out·bid tr.v. out·bid, out·bid·den or out·bid, out·bid·ding, out·bids To bid higher than: We outbid our rivals at the auction. Ahmanson for Great Western last summer. Ahmanson's headquarters will be closed and its approximately 2,000 workers will be transferred to Washington Mutual offices in Chatsworth, Irvine and Stockton. An Ahmanson spokesman said most of the headquarters work would be moved to the former Great Western headquarters in Chatsworth, but neither company could say how many people would transfer. The deal is an ironic end for Ahmanson, whose Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. area roots date back to 1889. Last year, in an attempt to become the nation's biggest thrift, the company first made a friendly offer and then a hostile bid for Great Western. It resulted in a rancorous ran·cor n. Bitter, long-lasting resentment; deep-seated ill will. See Synonyms at enmity. [Middle English, from Old French, from Late Latin, rancid smell, from Latin corporate fight, with Washington Mutual emerging as a white knight White Knight falls off his horse every time it stops. [Br. Lit.: Lewis Carroll Through the Looking-Glass] See : Awkwardness White Knight invents clever objects that never work. [Br. Lit. and eventually buying Great Western for about $8 billion in July. That defeat prompted Ahmanson chairman Charles R. Rinehart to reach a tough decision two weeks ago on his company's future. ``We recognized that we were . . . competing with companies that had more resources,'' he said during an interview Tuesday. ``We concluded that we are not going to be a consolidator but a consolidatee.'' That done, he called his former rival Killinger and asked him to become Ahmanson's suitor SUITOR. One who is a party to a suit or action in court. One who is a party to an action. In its ancient sense, suitor meant one Who was bound to attend the county court, also, one who formed part of the secta. (q.v.) . ``We selected Washington Mutual because they are a very good company. They have an outstanding reputation in the way they deal with employees and they have a very similar philosophy in the way they treat customers,'' Rinehart said. Once the deal is completed, Rinehart will leave the company. His severance includes three years of salary and bonuses but the total compensation is currently unknown. Other Ahmanson employees generally will receive severance ranging from three months of salary to two weeks' pay for every year worked. LATEST IN THE '90S MERGER RUSH Mergers and acquisitions activity among major Los Angeles-area banks and thrifts since 1990: YEAR FORMER L.A. COMPANY BUYER HQ 1991 Security Pacific Corp. BankAmerica Corp. San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden 1996 First Interstate Bancorp First Interstate Bancorp was a bank based in the United States that was taken over in 1996 by Wells Fargo. It was headquartered in Los Angeles. The name has continued to be used in the banking world by used after the merger by First Interstate Bank who had been using the Wells Fargo & Co. San Francisco 1996CalFed Bancorp First Nationwide San Francisco 1997 Great Western Financial Washington Mutual Seattle 1997 Coast Savings Financial H.F. Ahmanson Irwindale 1998 Golden State Bancorp First Nationwide San Francisco 1998 H.F. Ahmanson Washington Mutual Seattle SOURCE: SNL Securities LC CAPTION(S): Photo, Chart Photo: (Color) no caption (HOME SAVINGS OF AMERICA) Chart: (Color) LATEST IN THE '90S MERGER RUSH (see text) Bradford Mar/Daily News |
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