JPMorgan Has Its Hands Full With WaMu

You can find more stories like this in our On the Brink series.

The market loved JPMorgan Chase's (JPM Quote) acquisition of Washington Mutual (WM Quote), sending shares of what is now the largest U.S. depository up 11% Friday -- despite getting diluted by $10 billion.

But are investors getting ahead of themselves? Are JPMorgan's fortunes so different from those of the U.S. economy?

"The economy is weak. If it gets weaker it will affect our businesses. We've never said we're immune from that," CEO Jamie Dimon said during a press conference Friday.

The Washington Mutual deal gives JPMorgan Chase a major retail footprint across the West Coast and Florida, while beefing up its presence in several other states. Is that a good thing at the moment?

JPMorgan appeared to be far more aggressive than other potential bidders for WaMu, according to a private-equity investor and a senior bank executive who were familiar with the negotiations. Those interested parties were said to include Wells Fargo (WFC Quote), Toronto-Dominion (TD Quote) and Banco Santander (STD Quote).

"The ability to get in in such a large way in one fell swoop in those very attractive marketplaces really makes this just an absolute unique opportunity for us," said Charles Scharf, the bank's head of Retail Financial Services, during the company's conference call with analysts Thursday night to discuss the deal.

The takeover, arranged by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation after WaMu was seized, excludes the senior unsecured debt, subordinated debt and preferred stock of Washington Mutual's banks. JPMorgan Chase won't acquire any assets or liabilities of the banks' parent holding company or the holding company's nonbank subsidiaries.