Washington Mutual to Close 85 Branches in State
Moving to consolidate after assuming control of Great Western Bank and American Savings Bank, Seattle-based Washington Mutual Inc. is expected to announce today that it will close 85 overlapping branches in California by June, leaving the nation’s biggest thrift with 365 branches statewide.
The toll includes 25 branches in Los Angeles County and nine in Orange County, and adds to the five Great Western branches that already have been shut since its $8-billion merger with Washington Mutual last summer. Washington Mutual acquired American Savings Bank of Irvine late last year for $1.7 billion.
Washington Mutual previously said that it will close 100 branches in California as part of an effort to trim $340 million in annual expenses by 1999. A company spokesman on Wednesday left open the possibility of more branch closures in 1998 and 1999.
The spokesman, Bill Ehrlich, said he expected that few workers will be laid off when the 85 branches are closed in the second quarter, which is when Great Western’s systems and customer accounts will be converted to Washington Mutual’s.
“We believe attrition will take care of everything,” he said, adding that there are also a number of job openings.
Since out-dueling hostile suitor H.F. Ahmanson & Co. for control of Great Western, Washington Mutual has dismissed more than 400 senior executives and managers who work at Great Western’s sprawling campus in Chatsworth. Many of those executives left with handsome severance packages established during Washington Mutual’s four-month battle with Ahmanson, the operator of Home Savings of America. Washington Mutual is considering further job cuts in Chatsworth and is also talking with prospective tenants about leasing those offices.
To cover the branch closures and other merger-related expenses, Washington Mutual took an after-tax charge of $341 million in the third quarter, when it reported a quarterly loss of $127 million.
Washington Mutual has assets of about $96 billion. The institution ranks third in total deposits in California, behind commercial banking giants BankAmerica Corp. and Wells Fargo & Co.
Washington Mutual declined Wednesday to identify the branches that will be closed, saying it wanted to inform workers at those branches first. The closings will be split evenly between American Savings and Great Western, and about half of the branches to be shut will be in Southern California.
The company said 90% of the branches that will be shuttered are within a mile of another Great Western or American Savings branch, with the remaining 10% within 2.7 miles of another branch.
Despite the closures, Washington Mutual noted that it will have 107 branches in Los Angeles County, with employment totaling more than 4,500. Washington Mutual employs about 10,000 people in the state. The thrift also operates 293 smaller home mortgage offices nationwide, about 100 of which are expected to be closed in the future.
