smells like we may be getting close to a bottom - the smart money is coming in and starting to put values on this stuff.
Washington Mutual's Kerry Killinger called in a few friends from the past to help salvage the largest U.S. thrift, and possibly his job.
The Seattle company, battered by the credit crisis, said Tuesday it will have a greater than expected $1.1 billion first-quarter loss, after taking a $3.5 billion provision for loan losses and $1.4 billion in charge-offs for bad loans. It is closing its stand-alone home lending offices and its business of lending to mortgage brokers. It reduced its dividend to 1 cent a quarter, from 15 cents, which will save $490 million annually.
Killinger, 58, and the company's CEO since 1990, is battling a coalition of unions that are demanding the ouster of two board members and asking tough questions about whether WaMu (nyse: WM - news - people ) took the right steps early enough to protect shareholders from a downturn in the mortgage markets.
He's also battling an image problem, with critics accusing him of poor strategic vision in the face of a credit meltdown. Shares of WaMu have tumbled 70% in the last year and were down another 9% on Tuesday.
Like many other financial companies, the bank's been looking to raise new capital, but at least it hasn't had to resort to overseas investment funds or general stock sales. On Tuesday, it announced plans to sell $7 billion worth of securities to Texas Pacific Group and other "long-time" institutional investors, an amount that was more than expected. The price at $8.75 is a 33% discount to WaMu's closing price Monday.
David Bonderman, founder of Texas Pacific Group, will rejoin the board of WaMu, where he was a director until 2002. He's bringing a friend with him, Larry Kellner, chief executive of Continental Airlines (nyse: CAL - news - people ), who knows a thing or two about turning around a struggling company. Because Texas Pacific Group was allowed only one board seat, Kellner's role will be to participate as an "observer."