Now that he has made his mark in California with deals to buy American Savings Bank and Great Western Financial Corp., Kerry K. Killinger said he wants to expand in Florida.
The chairman, president, and chief executive officer of Washington Mutual Inc. said in an interview last week that he would seek additional thrift acquisitions in Florida once the integration of Great Western is complete in May.
"We see tremendous opportunity to gain market share in Florida, particularly as NationsBank and Barnett merge," Mr. Killinger said. "We've traditionally done very well when big commercial banks combine, and we'll be active."
He said Seattle-based Washington Mutual, which currently has $48.7 billion in assets, could pursue acquisitions sooner if the company decides the integration is proceeding as well as expected.
Washington Mutual became the nation's largest thrift and got a foothold in Florida this year when it acquired Chatsworth, Calif.-based Great Western for $7.3 billion in a bruising takeover battle with H.F. Ahmanson & Co. In addition to its huge California franchise, Great Western operated 120 branches in Florida.
Washington Mutual also owns a commercial banking unit, and Mr. Killinger said he would explore acquisitions for that unit in the Pacific Northwest or Northern California. Bank deals would not be slowed by his schedule for integrating Great Western into Washington Mutual's thrift business, he said.
Mr. Killinger indicated he would not pay just any price for an acquisition. He said transactions would have to fit past criteria, and would have to add to earnings within a year. "That means the companies we acquire would have to be good values," he said. "We may or may not find that."
Still, Mr. Killinger has grand visions. His ultimate goal is to turn Washington Mutual into "an alternative to Wells Fargo and BankAmerica."
Mr. Killinger was in San Francisco this week to meet employees of his rapidly expanding company. He made his remarks over lunch at the Ritz Carlton Hotel, where Montgomery Securities was holding its annual investor conference. Mr. Killinger did not attend the conference. Montgomery was a co-adviser to Ahmanson in its hostile bid for Great Western.
The acquisition of Great Western was the second deal in California for Washington Mutual in less than 12 months. In 1996, the thrift holding company acquired American Savings.
The integration of American Savings is complete, Mr. Killinger said, and the integration of Great Western is "tracking as expected." He said the company had experienced no loss of accounts and in fact had "arrested totally" the loss of customers that Great Western had experienced during the past two years. In the meantime, he said, the company is gaining accounts via its American Savings branches.
Jonathan Gray, a thrift analyst at Sanford C. Bernstein & Co., New York, said it was not surprising that the Great Western integration was proceeding as planned. That's in part because of Mr. Killinger's reputation for successful mergers. In addition, "the process of digesting a thrift is much easier than a commercial bank," Mr. Gray said.
Thomas Theurkauf, an analyst at Keefe, Bruyette & Woods Inc., observed that investors have little but Mr. Killinger's word to go on as to how well the Great Western merger is proceeding. The deal closed in July and no disclosures have been filed with the Securities and Exchange Commission that might contradict Washington Mutual's rosy view. "The ink has just dried," Mr. Theurkauf said.
Although Mr. Killinger's strategy is to build Washington Mutual by acquisitions, he said the company also has many opportunities to grow internally.
The company will soon unveil new checking accounts and mortgages, Mr. Killinger said, and will initiate a new advertising campaign starting Oct. 1. Washington Mutual will also build the consumer finance division it inherited from Great Western by stepping up home equity lending, he noted.