You know there is a problem in management that outweighs the whole subprime mortgage fiasco when you go from an $0.86 per share profit to a $1.40 per share loss in one year.

Washington Mutual Inc (WM.N), the largest U.S. savings and loan, posted a $1.14 billion first-quarter loss on Tuesday, hurt by mounting credit losses as more mortgage borrowers fall behind on payments.

The Seattle-based thrift also unexpectedly announced the resignation of Mary Pugh, a director who chaired its finance committee. Several shareholder advisory services had called on shareholders to withhold votes from one or more directors, including Pugh and James Stever. The latter leads the human resources committee, which sets executive compensation.

WaMu, as the thrift is known, said the quarterly loss equaled $1.40 per share, and compared with a year-earlier profit of $784 million, or 86 cents.

I am surprised more board members didn’t get squeezed out before this. Of course, it’s all good because WaMu just got that nice infusion of cash, remember? Adding $7 billion from investors should help them steady the ship, shouldn’t it?

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