[新聞] JPMorgan buys WaMu
標題: JPMorgan buys WaMu
新聞來源: CNNMoney.com
http://money.cnn.com/2008/09/25/news/companies/JPM_WaMu/
In the biggest bank failure in history, JPMorgan Chase will
acquire massive branch network and troubled assets from
Washington Mutual for $1.9 billion.
By David Ellis and Jeanne Sahadi, CNNMoney.com staff writers
Last Updated: September 25, 2008: 11:48 PM ET
NEW YORK (CNNMoney.com) -- JPMorgan Chase acquired the banking
assets of Washington Mutual late Thursday after the troubled
thrift was seized by federal regulators, marking the biggest
bank failure in the nation's history and the latest stunning
twist in the ongoing credit crisis.
Under the deal, JPMorgan Chase will acquire all the banking
operations of WaMu, including $307 billion in assets and $188
billion in deposits.
In exchange, JPMorgan Chase (JPM, Fortune 500) will pay
approximately $1.9 billion to the Federal Deposit Insurance
Corporation. Separately, JPMorgan announced plans to raise $8
billion in additional capital through the sale of stock as part
of the deal.
The acquisition is JPMorgan Chase's second major purchase this
year following the mid-March acquisition of investment bank Bear
Stearns, a deal that was also engineered by the government.
"We think it is a great thing for our company," JPMorgan Chase
Chairman and CEO Jamie Dimon said in a conference call with
investors late Thursday night.
As a result of the acquisition, the New York City-based JPMorgan
Chase will now boast some 5,400 branches in 23 states.
Federal regulators, who helped shepherd the deal, stressed that
the transition for WaMu customers would be "seamless."
"There will be no interruption in services and bank customers
should expect business as usual come Friday morning," FDIC
Chairman Sheila Bair said in a statement.
WaMu becomes the 13th bank to fail so far this year and earns
the title of the nation's biggest bank failure by assets on
record, ahead of Continental Illinois, which had about $40 billion
in assets when it failed in May of 1984.
The FDIC, however, was also quick to point out Thursday evening
that the WaMu-JPMorgan Chase deal would not have any impact to
its insurance fund which covers customer deposits when banks fail.
"WaMu's balance sheet and the payment paid by JPMorgan Chase allowed
a transaction in which neither the uninsured depositors nor the
insurance fund absorbed any losses," Bair said.
The FDIC insures the assets held by 8,451 banking institutions
with a total of $13.4 trillion.
A road to collapse
WaMu had been one of the most hard-hit banks during the financial
crisis after it bet big, like many of its competitors, on the
strength of the housing market -- only to see its fortunes sour
as housing prices fell.
Following several ratings agency downgrades this week and a
freefall in the company's stock, many analysts were speculating
that the endgame for the embattled savings and loan was imminent.
Those fears sent WaMu (WM, Fortune 500) shares 25% lower in
Thursday trading. Shares of the company fell another 73% in
after-hours following the announcement.
In a press conference held late Thursday, Bair said WaMu was
under "severe" liquidity pressure. As a result, its fate
needed to be addressed this week, even as Congress and the
White House attempted to hash out a bank bailout plan.
Bair added that the company was on the FDIC's latest so-
called "problem bank" list for the third quarter, which has
yet to be published.
All told, Bair said four banks made bids for WaMu but JPMorgan
Chase ultimately won out when the auction was held Wednesday.
Several other large institutions, including Wells Fargo (WFC,
Fortune 500), Citigroup (C, Fortune 500) and HSBC (HBC), were
poring over the company's books, according to news reports
last week.
JPMorgan Chase won because they were "the highest bid and the
lowest cost resolution," Bair said.
"It was our cheapest option," she said.
Part of the $307 billion in assets that JPMorgan Chase will
absorb are WaMu's toxic subprime and option-ARM mortgages.
JPMorgan Chase said it would recognize projected losses on
the loan portfolio upfront by marking down the value of the
loans by a whopping $31 billion.
Quite possibly the biggest losers in Thursday's deal are
WaMu's stock and debt holders, who were effectively wiped out.
Among that group was the private equity giant TPG, which was
part of a consortium of investors that acquired a stake in
WaMu for $7 billion in April.
JPMorgan Chase reportedly had made a previous bid for WaMu
around that time for about $8 a share which was snubbed by
WaMu, according to news reports at the time.
Tough times for banks
The fall of WaMu is the latest turn in a dizzying two weeks
that have seen the bankruptcy of Lehman Brothers, the
acquisition of Merrill Lynch by Bank of America (BAC, Fortune
500) and the near collapse of insurance giant AIG (AIG,
Fortune 500).
The widening credit crisis has prompted President Bush to
seek from Congress extraordinary authority to spend as much
a $700 billion to bail out the nation's financial system by
purchasing toxic assets from banks.
President Bush, in a televised address on Wednesday night,
said the nation is in the middle of a "serious financial
crisis" that threatens the economy. "The market is not
functioning properly," Bush said. "There is a widespread
loss of confidence. America could slip into a financial panic."
Regulators acknowledged they were encouraged to get a deal
done but JPMorgan Chase's Dimon stressed to investors that
a potential bailout by the government was not a factor.
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