Seattle's Washington Mutual Inc. solidified its grip on subsidiary American Savings Bank this week, clearing the way for more acquisitions in California.
The planned departure of longtime American president Robert Barnum and the promotion of a top American mortgage sales executive to the company's executive committee centralizes in Seattle strategic decision-making for Irvine, Calif.-based American Savings. Washington Mutual bought the bank in a deal that closed Dec. 20.
"This deal was a merger of equals, which Wall Street is very skeptical of, so the company has to do everything they can to show the street that they're having a successful integration," said Steven Schroll, an analyst at Piper Jaffrey in Minneapolis. "This is a step in the right direction."
"Our entire integration process is running ahead of schedule," said Washington Mutual chairman Kerry Killinger. "So we decided to accelerate some of the organizational changes."
He said the company wanted to position itself "quickly for future growth for acquisitions."
Jay Tejera, an analyst with Dain Bosworth Inc. in Minneapolis, said Washington Mutual already has been "kicking the tires" of several companies in California. Mr. Killinger has said that Washington Mutual is especially interested in $43.5 billion-asset Great Western Bank in Chatsworth.
Mr. Barnum, who has helped run American since 1992, said that Washington Mutual found itself in a position common to out-of-state acquirers - trying to strike a balance between preserving what has worked historically at the acquired institution and breaking new strategic ground.
Eventually, $43.7 billion-asset Washington Mutual concluded it needed top management to be in the Seattle headquarters, Mr. Barnum said. While Mr. Barnum was offered a position in Seattle, he chose not to move. He will leave March 31.
Until then, Mr. Barnum will continue to evaluate other potential California acquisitions for Washington Mutual, and how they might fit in with American Savings' franchise and more broadly, Washington Mutual's.
Meanwhile, Washington Mutual's decision to promote Craig Davis, who headed mortgage originations at American, to executive vice president of the holding company signaled again the importance of aggressive sales in the Seattle thrift's overall strategy.
