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Washington Mutual Falls; Chase Takes Clean-Up

SEATTLE-The Office of Thrift Supervision seizes WaMu and flips it to JP Morgan for $1.9 billion. Although WaMu will be open today, it's painted as one of the largest bank failures in US history.

By Brian Miller and Connie Gore | Updated on September 25, 2008

[IMGCAP(1)]SEATTLE-Promising no impact on depositors or other customers, the Office of Thrift Supervision late yesterday seized Washington Mutual Inc. and flipped it to JPMorgan Chase & Co. for $1.9 billion. The fall from grace is being touted as one of the largest bank failures in US history, but word last night was the $307-billion thrift institution will be open for business today.

Seattle-based WaMu reported $307.2 billion in assets at the second-quarter close. At the last head count, it employed 43,198 workers in 2,239 retail branches and offices in 15 states. As a result, JPMorgan becomes the nation’s biggest bank by deposits.

In last night’s press release, the Office of Thrift Supervision said WaMu had racked up a net deposit loss of $16.7 billion as of Sept. 24. The federal agency said significant deposit outflows began Sept. 15 “because of adverse events in the financial markets.” The feds said there essentially was no time to “augment capital, improve liquidity or find an equity partner.” The feds seized WaMu after it became apparent it most likely would be unable to pay obligations and meet operating liquidity needs.

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