Posted on: Friday, July 23, 2004

Mortgage lender leaving Hawai'i

Advertiser Staff and News Services

Seattle-based financial services firm Washington Mutual Inc. yesterday said it will close home loan centers in 17 markets, including Hawai'i, where the company employs 81 people on three islands.

Most of the closures are expected to be implemented by the end of September, and are being made to improve the company's struggling mortgage business that has been hurt by high costs, rising interest rates and a slowdown in refinancing.

Nationwide, 2,500 positions are being cut. Washington Mutual said it is exiting markets where it lacks a retail banking presence that helped leverage advertising and its brand.

In Hawai'i, Washington Mutual has been one of the state's top 10 mortgage lenders, and has offices in downtown Honolulu, Maui and the Big Island.

Besides Hawai'i, the company plans to close offices in Delaware, Indiana, Kentucky, Michigan, Minnesota, Missouri, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Tennessee, West Virginia and Wisconsin.

The company said it will continue to buy loans from brokers and other financial institutions in markets it is physically exiting.

The cuts come as Washington Mutual tries to boost its once-thriving mortgage business. The company said yesterday it wanted to "sharpen the focus of its retail mortgage lending channel."

"We are going to focus even more attention on the high-growth markets where we can gain additional leverage from the company's overall branding efforts," said Tony Meola, executive vice president of Washington Mutual's home loan division.

The announcement came a day after the company said earnings had fallen sharply in the second quarter, due in large part to a drop in home mortgage loan income. The company reported earnings of $489 million or 55 cents per share for the three months ended June 30. That compares with earnings of nearly $1.02 billion or $1.09 per share in the same period a year earlier.

Excluding its consumer-finance division, which the company has since sold, Washington Mutual would have had earnings of $995 million or $1.07 per share in the year-ago period.

Washington Mutual shares fell 40 cents to close at $39.10 yesterday on the New York Stock Exchange.

Associated Press contributed to this report.