Seattle area sees end of an era as WaMu is sold

KIRKLAND, Wash., Sept 25 (Reuters) - Washington Mutual (WM.N) was founded more than a century ago to help rebuild Seattle after a catastrophic fire wiped out its business district. As the largest U.S. savings and loan was closed and sold on the same day, hometown customers were shaken.

"To watch it go down is a shame," said Michael Thompson, 42, a financial adviser who started his career in 1987 with the company commonly known as WaMu and is still a customer.

He was waiting outside a WaMu branch in the Seattle suburb of Kirkland shortly before it closed its doors for the last time under the Washington Mutual name.

JPMorgan said it would buy most of the bank's assets for $1.9 billion, and that it would be business as usual on Friday. But as JPMorgan Chase & Co (JPM.N) takes over and jobs are inevitably cut, Seattle will lose strength and pride. "It would be like Microsoft going down," Thompson said.

Some customers focused on larger national troubles as negotiations for a $700 billion bailout of Wall Street by the government stalled in Washington, D.C.

"My main concern is the greater picture in the U.S. more than my checking account," said 35-year-old software engineer David Lopez, waiting in line outside a WaMu branch in the suburb of Bellevue.

Others were focused squarely on their own money. "We are surprised. We are panicked right now," said Sulah Chopra, 28, a software engineer who was withdrawing money from an account he had opened a week ago.

The Seattle area is home to computer and Internet icons Microsoft, Amazon.com, and Starbucks, but WaMu, with its glittering tower downtown, has been around much longer, established in 1889 after the Great Seattle Fire destroyed the city's downtown district and its economy.

Spectacular growth during World War I gave it a cushion to survive the Great Depression, and in the decades that followed it made a name for itself with customer-friendly innovations such as a cash machine network in the 1970s.

In 1999, the company bought subprime lender Long Beach Financial in what then Chief Executive Officer Kelly Killinger saw as an extension of Washington Mutual's consumer-oriented financial services. Eight years later, in 2007, as the U.S. housing and subprime mortgage markets were collapsing, the company that made its first home mortgage loan on the West Coast in 1890 closed nearly half its home loan offices.

Now, the rest of the company will be absorbed by another.

"You always like to have your local businesses," Kelly Miller, 29, a teacher, said wistfully as she walked out of the Kirkland branch. (Writing by Syantani Chatterjee in Los Angeles; Editing by Peter Henderson)