Washington Mutual Inc. will always be remembered for its acquisition binges and stunning mortgage losses, but the Seattle thrift company also shook up the stodgy world of retail banking in ways that forced many competitors to become more customer-friendly.

It was among the first in the industry to offer free checking accounts to consumers and to think of its branches as "stores" that needed to be inviting places. But a series of missteps kept Wamu from fully capitalizing on its successes.

It had transformed itself into a national player in the 1990s through a string of bank and mortgage acquisitions that were often poorly integrated. It was one of the first, and one of the biggest, providers of option adjustable-rate mortgages, which were wildly popular among consumers and investors during the recent housing boom but became an albatross when home values tanked. Wamu's problems culminated last week in its seizure by regulators and the sale of its banking operation to JPMorgan Chase & Co. for $1.9 billion.

James Barth, the Lowder Eminent Scholar in Finance at Auburn University and a former economist with the Office of Thrift Supervision, Wamu's primary regulator, said the company's main attraction came from "the liability side of its balance sheet."

That was "ironic," given the current credit crisis, he said. "What Wamu did right was establish a very worthwhile deposit base and branch network, especially in California and Florida."

Nancy Bush, the founder of NAB Research LLC, said Wamu helped bring about a sea change in retail banking at a time when many customers were put off by the imposing, dark-paneled setting of many bank branches.

"I think they did the democratization of banking very well. They tried to make it a fun experience," she said. "Unfortunately, they were never able to develop the product set to make the branches work. And once they got into the mortgage stuff and it went bad, that was the end."

Some said that despite its innovations, Wamu's acquisition binge sealed its fate, because the company began to rely too heavily on mortgages for growth.

Wamu bought H.F. Ahmanson & Co. of Irwindale, Calif., in 1996; America Savings Bank of Irvine and its parent, Keystone Holdings Inc., in 1997; and Great Western Financial Corp. in Chatsworth in 1998. The back-to-back purchases tripled Wamu's size.

In 2000, Wamu began opening branches with its Occasio design, featuring concierge kiosks and tellers who did not physically handle money or work behind walled partitions. At the time, Wamu executives described themselves as retailers who just happened to sell banking products, and many talked about retailing as part of the company's overall brand strategy.

Part of its formula to make customers spend more time at its branches involved casually dressed employees in khakis and company-issued blue shirts who set an informal, warm tone.

But by 2002 it was clear that Wamu was having trouble integrating the companies it had acquired. In one notorious incident, customers at more than 100 former branches of Dime Savings Bank in New York, which Wamu had acquired that year, complained of inaccurate account balances, inactive or missing automated teller machine cards, and massive teller lines.

Before being ousted as the chief executive last month, Kerry Killinger tried to return to Wamu's strength in gathering deposits by turning to its retail network. The company continued offering new products and services, using San Antonio as a test market for a "Fast and Instant" program in which customers could get a free checking account and leave a branch with preprinted personalized checks and a MasterCard debit card.

But the moves were too late in the mortgage crisis to put a dent in Wamu's losses. This year it shed more than 4,000 jobs, closed stand-alone home loan centers, and ceased high-risk ARM lending.

Wamu posted a second-quarter loss of $3.3 billion, the largest of its three straight quarterly losses, and its reserve for loan losses mushroomed nearly 80% from the first quarter, to $8.5 billion.

John McQuaig, the chairman of North Cascades National Bank, in Wenatchee, Wash., said Wamu was "a real stiff competitor" in a number of areas.

"They paid high rates on the deposit side and were very innovative at trying to up-sell their customers," he said. Wamu "definitely forced the hands of some banks in our area to match them on free checking."

"It's going to be a different landscape now in Seattle," he said. "It will have a big impact when they change their name because a New York money center bank is not going to sell as well as the old Washington Mutual did."

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