(FORTUNE Magazine) – Okay, so Kerry Killinger's not a glamorous guy. He's in the savings and loan business, decidedly not a glamorous industry. His company, Washington Mutual, works so hard at being unglamorous that it almost hurts--its chief ad spokespeople are the Rodeo Grandmas, a quartet of aging cowgirls who urge, "If yer being saddled with a minimum balance, leave yer bank in the dust."

But go beyond Washington Mutual's hometown of Seattle and talk to people on Wall Street, and it starts to sound as if CEO Killinger is some sort of superhero. "He's the Alexander the Great of the thrift industry," says Sanford C. Bernstein analyst Jonathan Gray. Michael Hodes of Goldman Sachs says essentially the same thing, albeit in '90s terms: "We regard Washington Mutual as a financial-services consolidator along the lines of Travelers."

What's with the gushy talk? First of all, Washington Mutual (which bears no relation to the Washington Mutual Investors mutual fund) is seriously big. With $96 billion in assets, it's the nation's largest thrift by far. If thrown in with commercial banks, it ranks 11th--barely trailing Wells Fargo. More important from an investor's standpoint, Washington Mutual has gotten seriously big seriously quickly. Since 1990 its assets have grown 14-fold; its stock price has soared about 1,000%. Which raises two questions: (1) How did it do that? and (2) Can it keep it up?

Basically, Wamu--as it is known to investors and employees--has bought its way into the big leagues. Since 1983 it has acquired 23 companies, each of which has added to its earnings and stature on Wall Street. The really big growth began last December, when Washington Mutual nearly doubled its size to more than $40 billion by buying the $20-billion-in-assets American Savings from Robert Bass' investment group. That made it America's second-biggest thrift.

Just a few months later, H.F. Ahmanson--the parent company of Home Savings of America, based in Irwindale, Cal., and at the time the industry leader--announced a hostile takeover bid for No. 3 Great Western Financial. The next day Killinger hunkered down with his investment bankers; that night he called Great Western's CEO. In early March, Wamu announced a friendly offer for $43 billion Great Western. A bitter, bloody battle with Ahmanson followed. Wamu won. "With Great Western, we did all at once what otherwise would have taken years," says Killinger, who has been a Wamu executive since 1982 and CEO since 1990.

This victory was achieved at least partly on the strength of Killinger's persuasive powers and his reputation. A financial analyst by training, he has superimposed formidable controls on the warm-and-fuzzy culture of a thrift--and by doing so, he's built immense credibility with the Street. "He understands the capital markets better than any CEO I know," says analyst Jay Tejera at Dain Bosworth.

He demonstrated this in the war over Great Western: In mid-March, Wamu's all-stock bid was worth about 5% less than Ahmanson's offer. If Wamu could get investors to believe in the benefits of its deal, its stock price would rise, thereby increasing the value of its offer. Killinger had until the Great Western shareholders' meeting on June 13. For three months he crisscrossed the country. Those who heard him were converted to Wamu worship; after a dip, the stock climbed almost 30%. "I felt sorry for him--he was working nonstop," says James Schmidt, head of John Hancock's financial institutions division and a Wamu shareholder. "I was going to tell him to take a vacation, but then I realized I really didn't want him to rest."

The Great Western coup was quite a testament to Killinger's abilities. But Wamu is paying a price for its growth, albeit one that today's market doesn't view as a real cost. Reported earnings have been hit repeatedly by one-time charges--including $341 million in the most recent quarter related to the Great Western merger. In 1992, Wamu's net income was $2.71 per share; after charges from the American Savings acquisition, it was $1.52 in 1996. "They've grown at the expense of reported EPS and book value," says analyst Scott McAdams at Ragen MacKenzie, a Seattle brokerage firm.

Of course, there's more to the story than stock-market-fueled acquisitions. Wamu's efficient, low-cost structure squeezes every dime out of low-margin businesses like residential mortgages. Proprietary technology that approves 30% of loans on the spot helps Wamu originate mortgages for $1,400 apiece, vs. the $2,300 industry average. This coldly efficient engine isn't visible to customers, who are wooed with warm words. "We have a sales force like Merrill Lynch and a back office like Charles Schwab," says Craig Davis, Wamu's head of mortgage lending.

Still, Wamu has a lot of challenges ahead. No. 1 is integrating and revitalizing Great Western, whose preacquisition performance was subpar at best. Wamu also must cope with the transition from small regional company to huge multiregional with perfect aplomb, because all eyes are alert for any slip-up. What's more, Wamu will almost certainly keep getting bigger. The opportunities are there: In California the top four financial institutions control just 50% of the market. There are 600 others waiting to be gobbled up, says Tejera.

What's the likely next acquisition candidate? None other than archrival Ahmanson, according to Sanford C. Bernstein's Gray. He says combining the two companies could eliminate up to $375 million in yearly costs. That's about equal to Wamu's total pretax earnings just three years ago. Not bad for an unglamorous savings and loan.

--Bethany McLean