Now that Bank of America has swallowed up troubled mortgage lender Countrywide Financial, some people on Wall Street are banking on Seattle-based Washington Mutual being the next takeover target.

So far, it's little more than a rumor. But it's a rumor my Mom's investment club must be liking, because it sent the price of their WaMu stock up more than $2 last week, although it looks like shares are off about 15 cents this morning. (Full disclosure - I don't own any WM personally, but Mom's group does.)

As BusinessWeek notes, this would be a sharp turn-around for WaMu CEO Kerry Killinger, who spent most of the '90s buying up other lending companies. His recent moves to conserve cash and raise new capital suggest to me that he's looking to fight his way out of this and not take a bailout.

Here in the Northwest, we tend to view WaMu as another one of our regional success stories, a local savings and loan that's grown into a national player and a pillar of downtown Seattle.

But Wall Street analysts would see WaMu as: A) a subprime lender that's heavily exposed in the collapsing Florida and California housing markets, and facing some legal troubles linked to its alleged lending practices; and B) a profitable retail bank with a national branch network.

That branch network is probably worth something to the right buyer, and with the subprime mess pushing WaMu's share price down, this might be one rumor to keep an eye on.

A buyout might also create opportunity for Washington's regional banks:

• A merger would almost certainly result in layoffs at WaMu, which would put experienced banking talent into the labor market;
• Depending on the buyer, the Justice Department might require the merged bank to shed branches, making some attractive real estate available;
• And, at least with the mergers I've seen, customers are more likely to switch banks after a buy-out, giving smaller banks a chance to win market share by wooing unsettled depositors and borrowers with promises of high-touch service and local decision-making.

Stay tuned.