Overview:
Washington Mutual’s name hasn’t officially changed, but customers have long nicknamed the Seattle-based bank “WaMu”.

Executives have an “if you can’t beat them, join them” philosophy about the moniker. WaMu has become a brand, WaMu.com a Web site, and the bank’s 2006 annual report describes the nickname as a term of endearment. The fact that so many people use the WaMu tag also speaks to the longevity of Washington Mutual, which has grown into a giant financial enterprise with four separate business divisions.

The retail banking unit operates 2,225 branch offices in 15 states. The card services group operates a nationwide credit card lending business. The commercial group conducts a multi-family and commercial real estate lending business in selected markets. The home loan segment has grown into one of the nation’s largest originators and service providers of residential mortgages.

Roots:
Washington Mutual was born from the ashes in 1889. When a fire that year engulfed 25 blocks of Seattle’s business district and destroyed almost everything in the 120-acre zone, the Washington National Building Loan and Investment Association filed incorporation papers to help residents rebuild. The company made the first monthly installment home loan on the West Coast in 1890, $700 to a Norwegian-born sailor who built a house in the Seattle neighborhood of Ballard. The bank eventually made 2,000 similar loans that were used to rebuild 250 blocks of housing in the city.

In 1908, WaMu’s predecessor shortened its name to Washington Savings and Loan Association. Washington Mutual was able to avoid the savings and loan debacle in the 1980s that forced many competitors to close, and it went public in 1983, raising $72 million.

Strategy:
Like many banks, Washington Mutual promotes its customer service to draw and keep accounts. But with so many customerfocused financial institutions, Washington Mutual has also sought to differentiate itself from the competition. Branding is one method, as evidenced by the company embracing the WaMu name. Washington Mutual is also looking to break away from the traditional branch office with high ceilings, stark decor and tellers behind tall counters and safety glass. So it created a new layout for some of the branch offices, dubbed “Occasio,” Latin for favorable opportunity. Washington Mutual even trademarked the name. Occasio branches look more like a coffee shop than a bank, each with a
concierge to greet customers, a kid’s play area and a circular layout.

The bank, in its quest to add retail customers, recently rolled out a new free checking service that includes free checks for life, free wire transfers, free ATMs, free on-line banking, free check safekeeping and no monthly fees.

Results:
Times are tough for banks throughout the industry. Last year, Washington Mutual faced rising short-term interest rates, a
flat-to-inverted yield curve, declining credit spreads and a weakening housing market, and still reported profit growth of 3.8 percent. It reported total profits of $3.56 billion, or $3.64 per diluted share, a 3.8 percent increase from 2005.

With this year’s subprime mortgage lending industry collapse, the financial industry has been hard hit. Interests rates
on multiple fronts have risen, making it harder for financial institutions to find cash. Washington Mutual has not avoided the
industry fallout.

Washington Mutual’s profits for the first six months of 2007 were $1.6 billion, a 7.9 percent drop from the same period a year ago.

The company’s stock price dropped more than 20 percent over the late summer from its 52-week high of $46.38 amid concerns about mortgages held by the bank.