Jump to content

Kerry Killinger

The comprehensive free global encyclopedia of CEOs, corporate leadership, and business excellence
Kerry Kent Killinger
BornJune 6, 1949 (age 77)
Des Moines, Iowa, United States
NationalityAmerican
EducationUniversity of Iowa (BBA, MBA)
OccupationBanker, businessman, author
CompanyCrescent Capital Associates
TitleFounder and chief executive officer, Crescent Capital Associates
SpouseLinda Killinger

Kerry Kent Killinger (born 6 June 1949) is an American banker and businessman. He served as president, chief executive officer and chairman of Washington Mutual, Inc., at the time the largest savings and loan holding company in the United States, from 1990 until his removal as chief executive on 7 September 2008.[1][2] Eighteen days after his departure, on 25 September 2008, the Office of Thrift Supervision seized Washington Mutual Bank and placed it into the receivership of the Federal Deposit Insurance Corporation, which sold the bank's operations to JPMorgan Chase, an outcome widely described as the largest failure of a bank in United States history.[3][4]

Killinger joined Washington Mutual in the early 1980s after the company acquired the Spokane brokerage firm where he worked, Murphey Favre, and he rose through finance and executive roles to become the company's president and a director in 1988, its chief executive officer in 1990 and its chairman in 1991.[1][5] Under his leadership the company expanded from a regional Pacific Northwest thrift into a national consumer and mortgage lender, growing from roughly $8 billion in assets in 1991 to $327.9 billion in assets by the end of 2007.[6][7]

Washington Mutual's expansion into option adjustable rate mortgages and other high risk home lending left it exposed when the United States housing market declined after 2006, and the company's board removed Killinger as chief executive in September 2008, shortly before the bank's seizure.[2][7] In March 2011 the Federal Deposit Insurance Corporation, acting as receiver for the failed bank, sued Killinger and two other former executives, alleging that they had pursued reckless lending practices; the parties settled the case in December 2011 without any finding or admission of liability.[3][8]

Since leaving Washington Mutual, Killinger has been the founder and chief executive officer of Crescent Capital Associates.[9][10] He and his wife, Linda Killinger, co-authored the 2021 book Nothing Is Too Big to Fail: How the Last Financial Crisis Informs Today, which received the bronze medal in the business commentary category of the Axiom Business Book Awards.[11] The couple also run the Kerry and Linda Killinger Foundation, a philanthropic foundation established in 2002.[12]

Early life and education

Kerry Kent Killinger was born on 6 June 1949 in Des Moines, Iowa.[5] He attended the University of Iowa, where he earned a Bachelor of Business Administration degree with honours in 1970 and a Master of Business Administration degree in 1971.[5][9] He later became a Chartered Financial Analyst and a Fellow of the Life Management Institute, a professional designation for insurance and financial services executives.[9]

Career

Bankers Life Insurance Company of Nebraska, 1972 to 1975

Killinger began his career in the financial services industry in 1972 as an investment analyst at Bankers Life Insurance Company of Nebraska, a post he held until 1975.[5]

Murphey Favre, 1976 to 1982

In 1976 Killinger moved to Murphey Favre, a Spokane, Washington securities brokerage, where he worked as a securities analyst and was later promoted to executive vice president.[5]

Washington Mutual: rise to the chairmanship, 1982 to 1991

Washington Mutual acquired Murphey Favre in 1982, and Killinger joined the acquiring company at that time.[6] He became executive vice president of financial management in 1983, senior vice president in 1986, and president and a director of Washington Mutual in 1988.[5][1] He was named chief executive officer in 1990 and chairman of the board in 1991.[1] As chairman, Killinger pursued what the company described as a "back to basics" strategy centred on consumer loans and checking accounts, with the stated goal of making Washington Mutual "the premier consumer bank in the Northwest."[6] He pursued this goal through a steady programme of acquisitions of smaller savings institutions, later describing the company's approach as "continued growth through selective acquisitions of consumer banks, commercial banks, and other financial service businesses that offer long-term value to shareholders."[6]

Washington Mutual: growth as chairman and chief executive, 1991 to 2005

Between 1991 and 1995 the company's profits more than doubled, from $80.6 million to $190.6 million, while deposits grew from $5.4 billion to $10.6 billion and total assets grew from $8 billion to $21.6 billion.[6] The branch network grew over the same period from 84 financial centres and 17 home loan centres in 1991 to 248 financial centres and 23 loan centres by the end of 1995.[6] In 1996 the company acquired the Coos Bay, Oregon based Western Bank, which added 42 branches and $787 million in assets, the Ogden, Utah based Utah Federal Savings Bank, which added $123 million in assets, and the Irvine, California based American Savings Bank in a $1.4 billion transaction that added 158 branches and nearly doubled the size of the company; by late 1996 Washington Mutual's assets had reached $42 billion.[6] Killinger was named American Banker magazine's Banker of the Year in 2001, recognition tied to this period of sustained growth.[5][9]

Washington Mutual: credit cards and the housing boom, 2005 to 2007

On 1 October 2005 Washington Mutual acquired Providian Financial Corporation, a credit card lender, which the company's own annual report described as its entry into the credit card lending business.[7] By 31 December 2007 Washington Mutual reported total assets of $327.9 billion, total deposits of $181.9 billion, 2,257 retail banking stores across 14 states and 49,403 employees, making it one of the largest savings institutions in the United States.[7] The same annual report disclosed that in the fourth quarter of 2007 the company discontinued all remaining lending through its subprime mortgage channel as part of a broader restructuring of its home loan business.[7]

Washington Mutual: crisis and departure, 2008

As losses from high risk mortgage lending mounted in early 2008, Washington Mutual's board elected David Bonderman, a founding partner of the private equity firm TPG Capital, to the board of directors under an investment agreement dated 7 April 2008, as part of a capital raising effort tied to TPG's investment in the company.[13] On 7 September 2008, Washington Mutual's board of directors replaced Killinger as chief executive officer with Alan H. Fishman, who was also appointed to the board; Killinger resigned from the board on the same date, and under the terms of his employment arrangements his departure was treated as a termination other than for cause.[2] Fishman, previously chairman of the mortgage brokerage Meridian Capital Group and before that president and chief operating officer of Sovereign Bank, served as Washington Mutual's chief executive for 17 days.[2] On 25 September 2008 the Office of Thrift Supervision closed Washington Mutual Bank and appointed the Federal Deposit Insurance Corporation as receiver; the FDIC sold the bank's branch network and other operations to JPMorgan Chase for $1.88 billion, while Washington Mutual's holding company filed for Chapter 11 bankruptcy protection the following day.[3][4]

Crescent Capital Associates, 2008 to present

After leaving Washington Mutual, Killinger founded Crescent Capital Associates, an investment and advisory firm, and continues to serve as its chief executive officer.[9][10] Public biographical material describes his post-Washington Mutual activity as including investment in financial technology and entrepreneurial ventures, alongside philanthropic work carried out jointly with his wife.[14]

Leadership and management style

Killinger's public description of his strategy at Washington Mutual centred on expanding consumer banking through acquisitions rather than organic branch building alone, a policy the company summarised in its own materials as growth "through selective acquisitions of consumer banks, commercial banks, and other financial service businesses that offer long-term value to shareholders."[6] This acquisition led growth continued for more than two decades, taking the company from $8 billion in assets in 1991 to $327.9 billion by the end of 2007.[6][7] The Federal Deposit Insurance Corporation's 2011 lawsuit against Killinger characterised his management of the bank's later mortgage lending in less favourable terms, alleging that he and two other senior executives had rewarded employees for approving high volumes of loans with low initial rates, had continued an aggressive growth strategy despite internal warnings about a deteriorating housing market, and had shown what the agency called a fixation on short term profits.[3] Killinger and the other defendants denied liability throughout the litigation.[8]

Major deals and strategic decisions

Killinger's tenure was marked by a long series of acquisitions of smaller savings institutions, beginning in earnest after he became chairman in 1991.[6] In 1996 alone the company acquired Western Bank of Coos Bay, Oregon (42 branches, $787 million in assets), Utah Federal Savings Bank of Ogden, Utah ($123 million in assets) and American Savings Bank of Irvine, California, a $1.4 billion transaction that added 158 branches and nearly doubled the company's size.[6] In 2005 the company acquired Providian Financial Corporation, entering the credit card lending business for the first time.[7] In early 2008, as the housing market deteriorated, Washington Mutual entered into an investment agreement with TPG Capital that brought founding partner David Bonderman onto the board as part of the company's effort to raise capital.[13] Later that year the company disclosed that it had discontinued all remaining subprime mortgage lending.[7]

Financial and market performance

Washington Mutual's balance sheet expanded substantially over Killinger's tenure as chairman and chief executive. In 1991, the year he became chairman, the company held about $8 billion in assets and operated 84 financial centres and 17 home loan centres.[6] Between 1991 and 1995 profits rose from $80.6 million to $190.6 million, deposits rose from $5.4 billion to $10.6 billion and assets rose to $21.6 billion, with the branch network reaching 248 financial centres and 23 loan centres by the end of 1995.[6] Assets reached $42 billion by late 1996 following that year's acquisitions.[6] By 31 December 2007, the company's own annual report showed total assets of $327.9 billion, total deposits of $181.9 billion, 2,257 retail banking stores in 14 states and 49,403 employees.[7] Less than a year later, on 25 September 2008, the bank was seized and its operations sold to JPMorgan Chase for $1.88 billion, after the largest savings and loan association in the United States suffered a rapid loss of depositor confidence.[3]

According to Washington Mutual's 2008 proxy statement, Killinger's total compensation for 2007, the company's last full year of independent operation, was $6,070,000, made up of a base salary of $1,500,000, stock awards valued at $3,996,675, a change in pension value of $513,044 and other compensation of $60,281.[1] The FDIC's 2011 complaint against Killinger, Stephen Rotella and David Schneider alleged that the three executives collectively received $95 million in compensation between 2005 and 2008.[3]

Board memberships and outside roles

As of Washington Mutual's March 2008 proxy statement, Killinger served as a director of Safeco Corporation, an insurance company, and of Green Diamond Resource Company, and chaired Washington Mutual's own Corporate Development Committee.[1] Biographical material published by his book's distributor lists further industry and civic roles, including chair of the National Education Summit convened by the education reform organisation Achieve, vice chair and chair elect of the Financial Services Roundtable, vice chair and chair elect of the Federal Reserve's Thrift Industry Advisory Council, vice chair of the Federal Home Loan Bank of Seattle, and membership of the American Society of Corporate Executives.[9]

Controversies

Washington Mutual's collapse in September 2008 was, by asset size, among the largest bank failures in United States history, and it was followed by extensive scrutiny of Killinger's management.[3][4] In March 2011 the Federal Deposit Insurance Corporation, acting as receiver for the failed bank, filed a lawsuit for money damages against Killinger, former chief operating officer Stephen Rotella and former home lending division president David Schneider in the United States District Court for the Western District of Washington, captioned The Federal Deposit Insurance Corporation, as Receiver of Washington Mutual Bank v. Killinger et al., docket number 2:11-cv-00459.[8] The complaint alleged gross negligence and breach of fiduciary duty, claiming the executives had rewarded employees for approving high volumes of loans with low initial rates, had continued aggressive growth despite warnings about the housing market, and had focused on short term results; the FDIC also named Killinger's wife, Linda Killinger, and Rotella's wife as defendants, alleging that transfers of real estate and other assets between the executives and their spouses amounted to fraudulent conveyances intended to shield assets from creditors.[3] Killinger and the other defendants denied all liability.[8]

The parties reached a settlement dated 13 December 2011.[8] Under its terms, insurers for the defendants paid the FDIC $39,575,000, Killinger personally paid $275,000, Rotella paid $100,000 and Schneider paid $50,000, for total cash payments to the FDIC of $40 million; combined with the face value of the defendants' bankruptcy claims against Washington Mutual's former holding company, which the defendants agreed to turn over to the FDIC, the settlement had a total value of $64,721,195.[4][8] Announcing the settlement, FDIC general counsel Michael Krimminger said it would "provide a significant return to the Washington Mutual receivership" and that the agency would "continue to pursue meritorious and cost effective professional liability suits in order to recover as much as possible for the failed bank receiverships."[4] A Harvard Law School corporate governance commentary noted in 2012 that the Killinger settlement was one of only three settlements reached, as of that date, among 21 lawsuits the FDIC had filed against former officers and directors of failed banks since 2010.[15]

Personal life

Killinger is married to Linda Killinger, who is chief executive officer of Olympic Consulting Partners and has served as vice chair of the Federal Home Loan Bank of Des Moines; she holds a bachelor's degree from Iowa State University and a Master of Business Administration degree from Drake University.[10] The couple maintain residences in Seattle, Washington, in Des Moines, Iowa, and in Southern California.[12] In 2021 Kerry and Linda Killinger co-authored Nothing Is Too Big to Fail: How the Last Financial Crisis Informs Today, published as an ebook by Open Road Media.[9]

Philanthropy

Kerry and Linda Killinger founded their family foundation in 2002 with a stated mission of supporting policy reform, social and racial justice, community building and access to the arts.[12] Recipients named on the foundation's own website include the Seattle Art Museum, where Linda Killinger has served on the board and where the foundation funded a gallery bearing the couple's name; the Palm Springs Art Museum; the Rancho Mirage Writers Festival and the Town Hall Seattle Writers Festival, of which the foundation has been a founding sponsor; Cascade Public Media's Crosscut Festival, a founding sponsor since 2018; the University of Washington, where the foundation funded an endowed chair in diversity studies; Iowa State University and its Greenlee Summit, of which the foundation has been a founding sponsor since 2019; Seattle City Club, which the foundation has supported with scholarship tickets for underrepresented groups since 2018; Black Girls Code; Eisenhower Health's breast cancer support programme, supported for more than ten years; the Fred Hutchinson Cancer Research Center; Shriners Hospitals, including its artificial limb programme; the Strategic Alliance to Fight Exploitation; the Committee for a Responsible Federal Budget; and the Des Moines Water Works Park, where an outdoor stage bears the Killinger name.[12] Killinger separately received the Points of Light Award, a recognition for volunteer and philanthropic service established by President George H. W. Bush.[9][12] Proceeds from the couple's 2021 book were donated to charities working on criminal justice and government reform, according to publicity material associated with the book.[14]

Recognition

  • Executive of the Year, Puget Sound Business Journal, 1997.[5]
  • Banker of the Year, American Banker magazine, 2001.[5][9]
  • Thomas Medal of Achievement, Fred Hutchinson Cancer Research Center, 2002.[5]
  • Educational Distinguished Leadership Award, Alliance for Education, 2004.[5]
  • Points of Light Award, presented by President George H. W. Bush, for philanthropic service.[9][12]
  • Bronze medal, business commentary category, Axiom Business Book Awards, 2021, for Nothing Is Too Big to Fail: How the Last Financial Crisis Informs Today, co-authored with Linda Killinger.[11]

See also

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 <ref>"Washington Mutual, Inc. Definitive Proxy Statement (Schedule 14A)".U.S. Securities and Exchange Commission.14 March 2008.Retrieved 28 September 2026.</ref>
  2. ↑ 2.0 2.1 2.2 2.3 <ref>"Washington Mutual, Inc. Current Report (Form 8-K): Departure of Chief Executive Officer and Director".U.S. Securities and Exchange Commission.11 September 2008.Retrieved 28 September 2026.</ref>
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 <ref>"FDIC sues ex-WaMu execs, wives over bank's failure".Fox Business.17 March 2011.Retrieved 28 September 2026.</ref>
  4. ↑ 4.0 4.1 4.2 4.3 4.4 <ref>"FDIC Announces Settlement With Washington Mutual Directors and Officers".Federal Deposit Insurance Corporation.15 December 2011.Retrieved 28 September 2026.</ref>
  5. ↑ 5.00 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 <ref>"Killinger, Kerry K. 1949-".Encyclopedia.com.Retrieved 28 September 2026.</ref>
  6. ↑ 6.00 6.01 6.02 6.03 6.04 6.05 6.06 6.07 6.08 6.09 6.10 6.11 6.12 6.13 <ref>"Washington Mutual, Inc. History".FundingUniverse.Retrieved 28 September 2026.</ref>
  7. ↑ 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 <ref>"Washington Mutual, Inc. Annual Report (Form 10-K) for the fiscal year ended 31 December 2007".U.S. Securities and Exchange Commission.29 February 2008.Retrieved 28 September 2026.</ref>
  8. ↑ 8.0 8.1 8.2 8.3 8.4 8.5 <ref>"Settlement and Release Agreement (FDIC as Receiver of Washington Mutual Bank v. Killinger et al.)".Federal Deposit Insurance Corporation.13 December 2011.Retrieved 28 September 2026.</ref>
  9. ↑ 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 <ref>"Kerry Killinger".Open Road Media.Retrieved 28 September 2026.</ref>
  10. ↑ 10.0 10.1 10.2 <ref>"Kerry and Linda Killinger".The Common Bridge.Retrieved 28 September 2026.</ref>
  11. ↑ 11.0 11.1 <ref>"2021 Medalists".Axiom Business Book Awards.Retrieved 28 September 2026.</ref>
  12. ↑ 12.0 12.1 12.2 12.3 12.4 12.5 <ref>"The Kerry & Linda Killinger Foundation".Retrieved 28 September 2026.</ref>
  13. ↑ 13.0 13.1 <ref>"Washington Mutual, Inc. Current Report (Form 8-K/A): Election of David Bonderman to the Board of Directors; Related-Person Transactions".U.S. Securities and Exchange Commission.19 May 2008.Retrieved 28 September 2026.</ref>
  14. ↑ 14.0 14.1 <ref>"Kerry Killinger".The Common Bridge.Retrieved 28 September 2026.</ref>
  15. ↑ <ref>"FDIC Lawsuits Targeting Failed Financial Institutions".Harvard Law School Forum on Corporate Governance.30 April 2012.Retrieved 28 September 2026.</ref>
Retrieved from "https://ceo.wiki/index.php?title=Kerry_Killinger&oldid=8974"