JPMorgan Chase buys WaMu
Atlanta Business Chronicle - by Joe Rauch Staff Writer
J.P. Morgan Chase has entered metro Atlanta and north Georgia, but not with the partner many predicted.
The New York-based financial conglomerate acquired the banking operations of Seattle-based thrift Washington Mutual Bank late Thursday evening.
Under the terms of the deal, J.P. Morgan (NYSE: JPM) acquired all of the deposits and assets of Washington Mutual, known better as WaMu, and its subsidiary Washington Mutual FSB, valued at $307 billion in assets and $188 billion in deposits.
Washington Mutual was seized by the Office of Thrift Supervision Thursday and sold to J.P. Morgan. It is the largest banking failure in U.S. history, federal regulators said. J.P. Morgan purchased the assets in a transaction facilitated by the Federal Deposit Insurance Corp.
The sale marks the entry of J.P. Morgan into metro Atlanta, gaining 69 branches and $750 million in deposits, instantly making it the 11th largest bank in metro Atlanta.
WaMu struggled as a retail bank locally. The bank opened more than 100 local branches, but cut back in Sept. 2006 by closing 34 branches in the city.
For J.P. Morgan, the move ends long-running industry speculation it would be entering Atlanta. The bank had been rumored as a possible buyer for Atlanta-based SunTrust Banks Inc. (NYSE: STI) in recent years.
With the deal, 42 percent of U.S. households are covered by J.P. Morgan's branch network.
Chip MacDonald, banking attorney with Jones Day, said the buyout will most likely impact Atlanta's weaker banks, while adding another possible rival for the city's three biggest banks — SunTrust, Wachovia Corp. (NYSE: WB) and Bank of America (NYSE: BAC).
"They have a strong, well-known brand across the country and this finally gives them a retail presence here," he said. "It certainly means more competiton."
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