Regulatory Probation, New CEO for WaMu

SEATTLE-Washington Mutual is busy fixing what shareholders and bank regulators have deemed inadequate. The company’s board of directors said Monday morning it has replaced its longtime chief executive Kerry Killinger and entered into a “memorandum of understanding” with the Office of Thrift Supervision.

Killinger is leaving the nation’s largest thrift after months of pressure from shareholders who are upset that the company’s share price has fallen approximately 90% over the past year. The 59-year-old ended a 17-year term as the company’s chairman in June and had watched the same fate befall his peers at Citigroup Inc., Merrill Lynch & Co. and Wachovia Corp. Killinger’s replacement is Alan Fishman, 62, who last year left the nation’s second-largest thrift, Philadelphia-based Sovereign Bank, to become chairman of the New York City-based commercial mortgage broker Meridian Capital Group.

With regard to its regulatory issues, a source with the OTF says the MOU is “an agreement on actions to correct some situations we have found to be inadequate or less than optimum” but declined to provide any additional information. WaMu said the regulatory warning is related to its risk management and compliance functions and that it will provide regulators with a current multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance.