Bank United to be Acquired by Washington Mutual

Strategic Insights -

Washington Mutual, the nation's biggest savings and loan, has agreed to acquire Bank United, the largest financial institution based in Texas, in a deal valued at $1.5 billion. The acquisition will significantly increase Washington Mutual's presence in Texas, where it already has a connection through its 1995 acquisition of American Savings, a California thrift owned by Fort Worth investor Robert M. Bass. Bank United, which has 155 retail branches in Texas, including 77 in North Texas, was recapitalized in the late 1980s by former Salomon Brothers bond trader Lewis Ranieri, who still holds 3.7 percent of the institution's shares.

Key Takeaways:

  • The deal, valued at $1.5 billion, is expected to close by year's end and will give Washington Mutual 3 percent of Texas deposits.
  • Washington Mutual, which ranks No. 8 among all U.S. banks and thrifts, has a previous Texas connection through its 1995 acquisition of American Savings.
  • Bank United, which was recapitalized by Lewis Ranieri, adopted a federal savings bank charter that allowed it to make commercial business loans, resulting in $5.4 billion in commercial loans by the end of 1999.
  • Bank United has 155 retail branches in Texas, including 77 in North Texas, and 42 commercial loan offices and 11 other sales offices.
  • Washington Mutual Chairman Kerry Killinger expects to cut $87 million from Bank United's operating expenses by 2002, mostly by cutting redundant administrative costs, and anticipates opening additional branches in Texas.
  • About 40 percent of Bank United's 2,622 jobs are located in North Texas, and the company expects to offer most employees jobs within the Washington Mutual operation, though they may have to relocate.

Statistics:

  • The deal is valued at $1.5 billion.
  • Washington Mutual has 48 branches in Texas, and with the acquisition of Bank United, it will have 203 branches in the state.
  • Bank United has $5.4 billion in commercial loans and $18.2 billion in assets.
  • About 650 Bank United jobs will be cut, mostly administrative costs, by 2002.
  • Washington Mutual has 155 retail branches in Texas.
  • Bank United has 77 branches in North Texas.
  • Washington Mutual expects to cut $87 million from Bank United's operating expenses by 2002.

Sources:

  • Fort Worth Star-Telegram, July 11, 2000.
  • Washington Mutual.