It may be just a bargaining ploy, but Kerry K. Killinger, chairman of the acquisitive Washington Mutual Inc., says he's not interested in buying thrifts whose main selling point is that they operate in the same areas as Washington Mutual.
In an interview with American Banker, Mr. Killinger appeared to throw cold water on investor hopes that Washington Mutual will buy H.F. Ahmanson & Co.-its rival in the bitter contest for Great Western Financial this spring.
Great Western, now a part of the Seattle-based thrift company, and Ahmanson's Home Savings of America overlap heavily in California, and a combined franchise would be leaner and more profitable.
But analyst Jonathan Gray of Sanford Bernstein & Co. said Mr. Killinger's real agenda in downplaying merger talk "is to soften the market so he doesn't pay inflated prices."
Ahmanson's stock has risen on speculation that Washington Mutual would buy it after the integration of Great Western. A deal would give investors a chance to profit from the cost savings Ahmanson would have gained in buying Great Western itself.
But Mr. Killinger said he's not interested in a deal unless it brings new branches and customers to Wamu's substantial base in California.
"It must add to earnings and add to the franchise," Mr. Killinger said at the annual convention of America's Community Bankers, the thrift trade group.
With Great Western's 296 branches, Mr. Killinger said, Washington Mutual is big enough in California that it doesn't need to bulk up with deals: It can grow by winning more customers through the large franchise it already has. In October alone, he said, Great Western gained 35,000 new checking account customers.
"Given the base we have, we are going to look very hard at what we get through acquisition versus what we get through advertising," Mr. Killinger said.
Still, he is certainly not ruling acquisitions out. He said Washington Mutual would continue to play a role in thrift consolidation.
He said the most important limiting factor right now is that Washington Mutual must integrate Great Western fully. "Because of its size and importance that has to be our No. 1, 2, and 3 priority," Mr. Killinger said.
Mr. Gray put it a little differently:
"A python can't consume more than one wild boar at a time. He probably won't be ready for his next meal until the second half of next year."