Along with a lot of Los Angeles banks, Washington Mutual has lost much of its value due to its bad mortgage lending decisions.
Seattle-headquartered Washington Mutual, which recently entered into definitive agreements to raise an aggregate $7 billion through direct sale of equity securities to an investment vehicle managed by TPG Capital, says that its business plans include closing all of its freestanding home loan offices and its wholesale lending channel.
These closures are expected to be completed by the end of the second quarter. The firm also reported a net loss of approximately $1.1 billion, or $1.40 per diluted share, for the first quarter of 2008.
"This substantial new capital – along with the other steps we are announcing today – will position us for a return to profitability as these elevated credit costs subside," states Kerry Killinger, chairman and CEO of WaMu. "With the support of these investors, we have every confidence in our ability to deal with today’s market conditions and restore shareholder value."