Highlights of JPMorgan's purchase of WaMu's bank unit

Some quick facts on the sale of Washington Mutual Inc.'s banking operations to JPMorgan Chase & Co., after the government seized WaMu tonight:

--- All of WaMu’s deposits, including those above federal insurance limits, will be acquired by JPMorgan, so no depositors will lose money. Deposits totaled $188 billion as of June 30 but the sum is smaller now because of recent outflows.

New York-based JPMorgan now will become the No. 1 U.S. bank by deposits, with more than $900 billion. Bank of America Corp. will be No. 2, with $785 billion.

--- All of WaMu’s 2,239 branches nationwide in 15 states will become part of JPMorgan’s Chase retail bank system.

--- JPMorgan also is buying all of WaMu’s assets, meaning its outstanding mortgages, other loans and credit card business. So WaMu borrowers now will become JPMorgan borrowers.

--- JPMorgan isn’t taking responsibility for WaMu common stock, preferred stock or its bonds. The fate of those investors is left with the Federal Deposit Insurance Corp., which tonight was named receiver for WaMu by the federal Office of Thrift Supervision.

WaMu common stock plunged to 45 cents in after-hours trading. The shares had closed at $1.69, down 57 cents, in the regular session, as some investors and traders obviously figured a wipeout was coming.

--- JPMorgan is paying the FDIC approximately $1.9 billion for WaMu’s banking business. FDIC Chairwoman Sheila Bair said JPMorgan gave the "highest bid" of four banks that made offers for WaMu.

--- JPMorgan plans to take a $31 billion writedown of WaMu’s $307 billion of total assets as of June 30, reflecting its estimate of "remaining credit losses related to impaired loans."

Comments

[Tommy]

wahhhh my stock ;.;

[Jeff]

poooor wamu wgwag

[brkdckdwg]

wamu&jp morgan might not be a match made in heaven for those of us who have been with the BIG MU for for years and have gotten use to {at least in my case}the personal touch,friendliness and the more than willingness to help of the tellers at not only my home branch but of the tellers in every BIG MU that i had the pleasure of stopping into they always had a real smile{not the fake paste on ones like at #### and ****_*} but most important of all the tellers at tbe BIG MU no more than just the tellers it was the atmosphere in concert with the tellers that gave me a sense of well being that all was right with the world while i was inside the branch like warm chocolate,a nice warm shag carpet with a soothing fire in the fire place and the smell of toll house cookies baking.i don't know if the jp morgan buyout will be a good thing like i said i've dealt with fake paste ons before and this might cause me to put my $$$$$ in a credit union if the vibes aren't there andwhile this might not be the match made in heaven brad&jennifer it does have the possiblity of being a bradjolina like matchup

[David]

The banks will be re-branded to CHASE banks.

[j]

I would like to see what the other bids were because Diamonds defensive comment about the bidding sounded fishy.

[TCW]

There are (were) 1.7 billion shares of WaMu yesterday. Anyone care to tell me why Chase paid the FDIC $1.9 billion, instead of the stock holders? I think that we all know the answer to that: shennanigans and greed.

[Leo Vergel de Dios]

As in any bank takeover, redundant operations and positions are absorbed by the buying bank. A good portion of the employees of the bought bank are laid off or terminated. So, you solve one problem and you add to existing problems. Whoo-hoo !!!!

[jay]

wamu has 300 billion dollars worth of assets but chase paid the fdic only 1.9 billion dollars for them? Am I missing something here? clearly i must be, because on the face of it that makes no sense.

[T R Henderson]

what will happen to the stocks??

[SP Witt]

Thank God that WaMu is gone! I hated every time I have to go in! I can't get any worse....

[Mayobanex]

Good riddance to a bank that charged its own customers for checking their balance at an ATM. WaMu dug its own grave, and I'm happy to see it go.

[Mary%20C.]

I think the 1.9 billion is more than enough compensation because they're taking on WAMU's losses as well as their assets. The $31 billion in bad debt is more than 10% versus their 300 billion in assets. They're likely to have more losses to come. They were big in subprime lending, so more foreclosures may be yet to come. They were also heavily into HELOC products, which is another risky area with future losses possible. What a stupid bank.

[EdwinG]

I wonder how much was the golden parachute for former CEO Kerry Killinger, he was the architect of all the acquisitions and expansions that led to deterioration on the soundness of the great bank, endangering trustworthiness and safety nets of depositors and also thousand of employees who may soon lose their employment. That is the suspense part in WaMu offices nowadays. Did we learn a lesson out from this failure?

[Ben]

As a longtime WaMu customer, I have one question: What'll happen to free checking? Will JPMorgan Chase start slapping us with hidden fees and minimum balances? Will they charge us to talk to a teller? My employer doesn't offer direct deposit AFAIK, so I hope I can continue to deposit my checks the old-fashioned way without paying extra. Whenever a company I do business with gets taken over, my first question is some variation on "Is the price going up?".

Nonetheless, I'm grateful I didn't lose my rent money tonight. Deposit insurance is definitely a Good Thing.

[Ann]

WAMU would have survived just fine under any other administration. I have no confidence in the government right now. I don't believe that there was a run on the bank. WAMU had plenty of liquidity. The only ones panicking were the government officials. Pathetic! Once again J.P. Morgan got a great deal at the hands of the government. I think the FDIC exceeded its authority. But they will go on and on about what a great thing they did for everyone's benefit. What a load of crap. Everything the govt does just makes the situation worse. Not that we can get any decent news coverage from this crap newspaper.

[NBT]

WoooHooo!!!

[LBGrrl]

Chase is a horrible bank to deal with (if you are from the east coast, you will know this!). They charge fees for EVERYTHING. Paying your auto loan? That will be a $15 fee. Paying your credit card? That will be a $10 fee. WaMu had few fees, so I expect Chase's practice of extracting a fee for every interaction with the bank will turn off a lot of customers--like me. I had already pulled most of my money and put it in Wells Fargo, but am sad to see my free overdraft protection and high daily withdrawal limits go away. WaMu did have one thing right--their customer service was very good (and I am hard to please). Too bad they got all greedy on us.

[Don Ratliff]

I have a WAMU credit card which was always paid online. Last November, the "submit payment" key malfunctioned. Needless to say, the payment was late and my interes rate was raised to 27.9%. Until that time, I had never been late on a payment. I called and explained the situation about the late payment, but their employees were adamant and would not waver. Good riddance WAMU!

[Doug in Toronto]

Consider this: If WaMu had as many bad mortgages, etc., as we believe, the JPMChase will certainly get a substantial part of the bailout money. If it's over $1.7 billion, then JPMChase gets a bank with $307 billion in assets for nothing!

Who do they know?

[Average Joe]

Heads up to WaMu customers. JP Morgan Chase is the most aggressive marketing company I have ever dealt with !

[SandyCo]

In the past two weeks, I've gone from working for Merrill Lynch to working for B of A, and now I'm not a WAMU customer, but a JP Morgan customer! I never signed up for this; strange times in this new world, that's for sure.

[Eric]

Fire sale!

This is some nifty sleight-of-hand.

[WaMu Customer]

I can not make a payment on my WaMu Providian credit card, because since the Presidents speech my bank (Rockland Federal Credit Union, Rockland,MA) has locked down all the accounts. There is no way to withdraw or make any payments to anyone. They did however accept the Direct Deposit of my Paycheck yesterday - now that money is trapped too. Good thing I took out Cash last week and have a high credit limit on my Providian Card!

[Linda Bolard]

Nice gift from the Bush family and friends to Morgan and friends.

WAMU was worth 309,731.00 billion on June 30, 2008. Consumers withdrew 16,5 billion from about 185 billions in deposits in August alone.

The worth was down 90%. It is then worth about 39 billions in all combined assets.

Yet, the Fed presented the bank to Chase Morgan for 1.9 billion.

Chase Morgan had promptly sold 10 billions of new shares and it's value is up 5.3 % as of this time.

You and I will eat the cost of this new wealth of the super-rich.

This is what your representatives call "bailout".

[Linda Bolard]

I should have added that this i snot the first hostile takeover by Chase Morgan. In the troubled part of the 90' it has similarly taken over Chemical bank in New York.

The taxpayers then paid the cost as well, Chemical disappeared, run down for its assets, and the banking practices that Chase enforced make it consumer unfriendly- that is about as mild a term as I can up with.
Charges fro your savings accounts.

I am adding this to demonstrate that this is no new "crisis" (the real estate price was inflated and has to drop at least another 30% to be able to sell but it is a real estate and on realistic terms it will be sold, bought and paid for) but a simple grab of power.

The super rich don't want to lose anything on their inflated "earnings", hence the government will uphold the overpriced real estate on the highest bubble prices and rip off the taxpayer to cover up the paper made loses.

It will also, for very long time, make a clear divide between have and have not. And if you do not have a house now, in the next 20 years you will not be able to buy one. You will not be able to pay your medical cost, the education for your kid or start a business.

It is essential that there is enough underpaid domestic work force available. We are that work force. The poorer we get, the less we will rebel. And teh bigger portion of all economy earnings will stay with the 0,1% that now earn as much as the bottom 150 million of working Americans. That is not enough for them, they want to go back to pure capitalism of 10th century when the top 5% of population grabbed the full 95% of all money available.

Of course, 45% of population lived in dire poverty. The rest on constant edge.

But his is what it is all about. And I have to give it to the money makers and the Administration: it is very nicely planned and presented.

We would be fools to fall for it.

[P. D'Antonio]

I loved WaMu as it was. It does real-time balance updates. Your online banking screen accurately reflected the balance in your account. Banks like Wells Fargo sort your withdrawals at the end of the day and then apply them starting with the largest first, so that your smaller withdrawals (even though they were made earlier than the large one), all get overdraft fees if your largest withdrawal (typically, your rent) emptied your account. Wells Fargo online banking screen is not real-time.
What happened to WaMu is that it did not offer a Secured Visa card and people hoping to have a credit card, transfered the security cash to BofA to get BofA's Secured Visa card.

[john]

A Toast to All those who believe in the free unregulated market. You have once again fleeced the ordinary American.

George Bush Senior was president in the 1987 Savings & loan disaster and similar financial crisis, and his son had stewardship of the country for this crisis.

Like father like son.

That 3% of the population -- a one bedroom apartment in New York sells for $800,000.00 and up-- now are 4%-- and we will make them richer with the bailouts, so in the next few years, idiots who will be sold once again on deregulation (wall street and the banks will support those groups who will politically defeat opponents by the employement of other issues.
and their will be another boom. Truman said it best Boom or Bust. The Republicans did it in 1907, 1929, 1987, 2000 and thank you George Bush Jr. again. Got nothing against Republicans accept their notion of deregulation and free markets.

[farmboy007]

This I promise:
Everyone will forget these scandalous transactions very, very soon as more and more doom and gloom stories roll in .
Chase Morgan will become an unrestricted malignant monopoly.
You can take THAT to the bank...

[M.%20P.%20Goel]

Banks failing is MOST UNFORTUNATE because it shakes the trust and the basic goodwill of the Banking System for sustained economic growth.

US Rules, Regulations and Oversight considerations lack enough checks and
balances most vital for onward movements on a sound basis.

[Poetic justice]

I hope and pray that the WaMu assets acquired by JP Morgan will rapidly sour and bring itself down for conspiring with FDIC against WaMu and its shareholders.

[J. Wilson]

The "buy out" of WaMu smacks of collusion between Chase and the federal government. The published reports certainly did not present a rosy future of WaMu, but this years impending losses were no where near enough to cause the collapse of the company.
With the constant & exagerated bad news being reported as a result of government information to counter the information supplied by the new CEO contributed to the downfall. With the bailout plan in the works wouldn't it have made more sense, if WaMu was in such immediate dire straights, for the government to provide a stop gap measure to prop WaMu up to make it more marketable? The idea of seizing the bank behind the boards backs and then providing a fire sale with no regard to the shareholders is outrageous.
Just what kind of trickle down effect is this going to have in today's economy. This "hostile" buyout supported by the government has had and will have a tremendous impact the lives of millions of Americans. I hope Chase can sleep well. My wife and I plan to take our money out of Chase and will not do business with them & hope other Americans will follow suit.

[stacy]

Thank you all the democrats in washington DC the barney frank's, and Dod's that blocked all the republicians attempts to regulate the banking loans from 2000-now, but think, it now the very democrats that causes this problem because of under the table payroll, "OBAMA is apart of" is now the ones shouting they will save us with this bail out. it all a step to socialism on behalf of the democrats. amd now we might put one in the White House, say good by to capitalism.