JPMorgan Chase Takes Over WaMu
In conjunction with the Washington Mutual acquisition, JPMorgan Chase will be marking down the acquired loan portfolio by about $31 billion, which primarily represents the company's estimate of remaining credit losses related to impaired loans.
"This deal makes excellent strategic sense for our company and our shareholders. Our people have worked hard to build a strong franchise and balance sheet -- making this compelling transaction possible," said Jamie Dimon, chairman and CEO, in a press release Thursday night. "As we have said in the past, increasing our regional banking presence not only strengthens our retail business but also benefits other business lines across our firm, including our commercial banking, business banking, credit card and asset management groups."
JPMorgan Chase expects to convert Washington Mutual's consumer banking, home lending and credit card businesses to the Chase brand and technology platforms over the next two years.
The acquisition expands Chase's consumer branch network into California, Florida and Washington state and creates the nation's second-largest branch network. The acquisition also extends Chase's retail branch network to additional states, including Georgia, Idaho, Nevada and Oregon.At the same time, JPMorgan Chase said it priced a $10 billion offering of nearly 247 million common shares at $40.50 each. On Thursday night, the company said it would seek to raise $8 billion, meaning the sale brought in $2 billion more than planned. Shares of Washington Mutual were giving up nearly all of their remaining value, plunging 90% to 16 cents. JPMorgan Chase was up 6.7% to $46.38.
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