April 15, 2008 / 8:06 PM / 10 years ago

Washington Mutual posts $1.14 bln 1st-qtr loss

NEW YORK (Reuters) - Washington Mutual Inc (WM.N), the largest U.S. savings and loan, posted a $1.14 billion first-quarter loss on Tuesday, hurt by mounting credit losses as more mortgage borrowers fall behind on payments.

A woman walks into a Washington Mutual bank in New York April 7, 2008. REUTERS/Joshua Lott

The Seattle-based thrift also unexpectedly announced the resignation of Mary Pugh, a director who chaired its finance committee. Several shareholder advisory services had called on shareholders to withhold votes from one or more directors, including Pugh and James Stever. The latter leads the human resources committee, which sets executive compensation.

WaMu, as the thrift is known, said the quarterly loss equaled $1.40 per share, and compared with a year-earlier profit of $784 million, or 86 cents.

The thrift set aside $3.51 billion for loan losses, up from $1.53 billion in the fourth quarter.

“Nothing of this scale has happened since the Great Depression,” Chief Executive Kerry Killinger said at WaMu’s annual meeting. “This is the toughest credit cycle I have seen in my years in the industry.”

Analysts on average expected a loss of $1.40 per share after WaMu on April 8 projected a loss of that size, or equal to about $1.1 billion. The company also said it will cut 3,000 jobs, slash its dividend 93 percent, and raise $7 billion from a group of investors including private equity firm TPG Inc to shore up capital.

The thrift has lost $3.01 billion in the six months ended March 31.

Washington Mutual shares rose 10 cents to $10.76 in after-hours trading. They had closed Tuesday up 31 cents, or 3 percent, at $10.66 on the New York Stock Exchange. Through the close, the shares have fallen 22 percent this year.

Reporting by Jonathan Stempel; Editing by Gary Hill

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