NEW YORK (AP) - Washington Mutual Inc. (WaMu), ravaged by losses from sour mortgages, replaced Kerry Killinger as chief executive of the largest US savings and loan yesterday, adding him to the growing list of banking bosses ousted by their boards.

Mr. Killinger, 59, is being replaced by Alan Fishman, the former president and chief operating officer of Sovereign Bank and president and CEO of Independence Community Bank.

Also yesterday, WaMu said that it has entered into a memorandum of understanding with the Office of Thrift Supervision concerning aspects of its operations. WaMu has committed to provide the OTS with an updated, multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance. The plan will not require the company to raise capital or increase liquidity, WaMu said.

WaMu shares dropped 92 cents, or 21.8 percent, to $3.35 in afternoon trading. Shares have fallen 90 percent since early July of last year, right before the rapid erosion in the credit markets began.

Battered by rising mortgage delinquencies and defaults, and by the sinking value of its mortgage portfolio, WaMu has lost nearly 70 percent of its market value this year.

Mr. Killinger, who was stripped of his chairman title in June, became CEO of the Seattle-based thrift in 1990 and built WaMu into one of the largest banks in the US. But with a heavy focus on sub-prime and option adjustable-rate mortgages - the types of mortgages at the heart of the housing bust - WaMu's losses began to mount and its shares plummeted, sparking an outcry from shareholders.

The board's splitting of the CEO and chairman roles in June was an effort, at the urging of shareholders, to improve corporate governance. At WaMu's shareholder meeting in April, a non-binding resolution urging the installation of a non-employee as board chairman passed with 51.5 percent of the votes.

Mr. Killinger's exit follows that of Wachovia Corp. CEO Ken Thompson, Merrill Lynch & Co.'s Stanley O'Neal and Citigroup Inc.'s Charles Prince.

The 62-year-old Mr. Fishman became president and CEO of Brooklyn, New York-based Independence in 2001. He later served as president and chief operating officer of Sovereign Bank after the Philadelphia-based bank bought Independence for $3.6 billion in cash in 2006.

Mr. Fishman said it is too early to comment on whether the bank will pursue any asset sales. Among his priorities is growing the bank's retail franchise.