07/14/97 WASHINGTON MUTUAL'S CEO: ENERGIZER BANKER

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WASHINGTON MUTUAL'S CEO: ENERGIZER BANKER
He's dealing as fast as he can
Kerry K. Killinger has always known exactly where he was going. As a securities analyst in his twenties, he moved his family into a mobile home to save money and spent evenings and weekends restoring rundown houses in Spokane. Selling one every two months for several years, he bought up a major stake in his employer, Murphey Favre Inc., a brokerage house in Spokane, Wash., then brokered a deal to sell it to Washington Mutual Inc., a Seattle thrift with $2.7 billion in assets.
Fifteen years later, Kerry Killinger is still probably the banking industry's most manic executive. Working out of an office decorated with an oversize Energizer Bunny, the 48-year-old Killinger has built Washington Mutual into the nation's biggest savings and loan, with $88.5 billion in assets. Over the past seven months, he has quadrupled the size of his thrift by paying $1.7 billion for Irvine, Calif.-based American Savings Bank on Dec. 21, and then wrested Great Western Financial Corp. from hostile bidder H.F. Ahmanson & Co., closing the deal for $8 billion on July 1.
CULT FOLLOWING. Shares of WAMU, as it is popularly called after its stock symbol, have increased 840% during Killinger's seven-year reign as CEO, beating the stock performance of every Western bank and thrift. Killinger's holding is worth $67 million. He is already looking over the remaining thrifts and consumer banks in California for his next fixer-upper. ''You can expect another deal within 12 months,'' says Killinger. His goal? ''To become the West's premier financial-services company.''
Given the speed at which he moves, few are betting against him. He is known to blow through an entire day of meetings without food on two hours of sleep. On his only free weekend during the three-month fight against Ahmanson this spring, he tore down the wallpaper and pulled up the carpets in a bedroom at his home, slapped up new paper, and went off to the store for a new set of furniture.
Despite his wealth, he eschews CEO trappings. He insists on cutting his own lawn with a push mower. With bulky gold eyeglass frames and plain gray suits, he doesn't exactly stand out in a crowd. Killinger is far more conspicuous on Wall Street, where his stock performance has won him a cult following. That proved crucial in his victory over Ahmanson. From March to June, as Killinger sped across the country showing volumes of charts and graphs to investors, his stock, after a dip, shot up 20%, wiping out the price differential between Ahmanson's and Washington Mutual's bids.
Killinger's game plan has been to transform Washington Mutual from a traditional thrift to a consumer bank that functions as a category-killer in mortgages, checking accounts, and home equity loans. Washington Mutual's return on common equity is 19.4%, compared with 7.9% for the median thrift and 13.5% for the median commercial bank. It is the No.1 mortgage lender in the Pacific Northwest, second only to Bank of America in California.
Despite 20 acquisitions in the past nine years, Washington Mutual is the most efficient large thrift. Its proprietary technology enabled it to cut loan closure time from 45 to five days. That has lifted the number of mortgages WAMU closes to 72% of the applications it processes, vs. Great Western's 49%. With fallout so limited, it costs WAMU just $1,400 to originate a loan, vs. $3,300 at Great Western. ''WAMU is one of the only institutions that has made the mortgage business work,'' says R. Jay Tejera, an analyst at Dain Bosworth Inc.
Killinger, though, is aware that with his stock and stature at stratospheric levels, he has no room for error. But what did catch him off-guard was the June 13 meeting of Washington Mutual's shareholders to approve the Great Western deal. The usually levelheaded Midwesterner broke down in tears as he thanked his executive team and his wife, who has been by his side since they were first and second first trumpets in the high school band. Then, recovering, he exclaimed: ''Whoa, time to get composure.'' Maybe a minute, tops.
By Kathleen Morris, with Seanna Browder, in Seattle

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