April 16 (Bloomberg) -- Washington Mutual Inc. Chief Executive Officer Kerry Killinger urged shareholders of the biggest U.S. savings and loan yesterday to show some ``faith.''

Instead, some of them called on top executives to step down after a 70 percent plunge in the stock, two dividend cuts and a forecast of $19 billion more in losses on home lending.

``You have destroyed the bank,'' one shareholder said during the question-and-answer session at the company's investor day. ``Why are you not being held accountable?'' Shareholders voted to remove Killinger from the post of chairman.

Killinger took heated questions from holders over the deal he struck with a TPG Inc.-led group to raise $7 billion, almost doubling the shares outstanding. Meanwhile, the Seattle-based lender slashed its dividend to 1 cent and the stock has fallen 73 percent in a year. Mary Pugh, head of the board's finance committee, resigned after opposition from investors.

``I understand it hurts,'' Killinger said yesterday. ``No constituency is happy. I'm not happy. I want people to calm down, have a little faith. I know it's tough.''

Washington Mutual said it could lose as much as $19 billion in the next three to four years on home loans depending on U.S. economic conditions. The top end of the forecast is ``well in excess of any historical benchmarks,'' the company said.

``I'm very unhappy with these results, and I take responsibility for the business decisions we made along the way,'' Killinger said at the meeting. ``I am also responsible for and completely committed to turning things around.''

Bonuses Face Cut

The lender reversed its stance on preserving management bonuses to reflect results. Washington Mutual had previously said 2008 bonuses for Killinger and other top executives may be shielded from the company's mortgage losses by excluding some loan-loss provisions for calculations.

The world's biggest banks have recorded $245 billion in asset writedowns and credit losses since the beginning of 2007 amid a slump in U.S. home prices and a credit-market contraction.

Washington Mutual, also known as WaMu, came under fire for rejecting a bid by JPMorgan Chase & Co., the third-largest U.S. bank, in favor of the share sale.

``You should have taken the JPMorgan offer of $8 a share,'' a shareholder said. ``JPMorgan would make this company grow into something we could all be proud of.''

The investor said President and Chief Operating Officer Stephen Rotella endorsed ``risky'' loans including adjustable- rate mortgages. He called for Rotella to be fired and for his bonus to be revoked.

Non-Performing Assets

The company didn't record the names of investors who spoke at the meeting. The comments were carried live on a Webcast.

Washington Mutual rose as much as 4 percent in New York Stock Exchange trading before falling 19 cents to $10.47 at 10 a.m.

The TPG investment included the sale of common and convertible preferred stock. It was at least the second sale of convertible securities in less than six months. WaMu offered $3 billion of perpetual convertible preferred bonds in December.

Washington Mutual yesterday reported a loss of $1.14 billion, or $1.40 a share, compared with profit of $784 million, or 86 cents, a year earlier.

Non-performing assets, those no longer paying interest, climbed to 2.87 percent of total assets compared with 2.17 percent at the end of the year and 1.02 percent in last year's first quarter. The lender said that most of the increase came in prime loans, those made to borrowers with the best credit.

More Bad Loans

WaMu set aside $3.5 billion to cover bad loans in the quarter. At the end of the fourth quarter, Washington Mutual said the most it would set aside would be $2 billion. The company discontinued giving provision guidance for the rest of the year and said it expects set-asides to peak in 2008.

Home-loan volume was $13.8 billion in the first quarter, down from $19 billion in the fourth quarter as the lender made fewer home-equity loans and adjustable-rate mortgages.

``There continues to be an excess in the supply of homes on the market and weak demand from prospective homebuyers,'' Chief Financial Officer Thomas Casey said. ``This excess supply will continue to depress home prices.''

Credit cards, another indicator of consumer health, are showing signs of stress, Washington Mutual said. The company expects to see net losses in its credit card business of 9.5 percent to 10.5 percent. The company had average loans of $26.7 billion in that unit, according to the statement.

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: April 16, 2008 10:01 EDT