January 12, 2008 -- Washington Mutual, the largest US savings and loan, rose as much as 7.8 percent on speculation it will be bought by JPMorgan Chase, the No. 3 US bank. Stock in the Seattle-based lender climbed 53 cents, or 3.7 percent, to $14.69 in NYSE trading. The company has lost 67 percent of its value in the last year. New York-based JPMorgan fell 47 cents, or 1.1 percent to $40.86. Delinquency rates on subprime mortgages climbed to 16.3 percent in the third quarter, the highest in at least a decade. The defaults are causing lenders with large subprime holdings to seek capital infusions or exit the market. JPMorgan and Washington Mutual are in "very preliminary talks," it was reported earlier yesterday. The speculation followed an announcement by Bank of America, the second-largest US bank, that it will buy Countrywide Financial, the nation's largest mortgage company, for about $4 billion. Washington Mutual was deemed a takeover target last month by Richard Bove, an analyst at Punk Ziegel & Co. in Lutz, Florida. "The company is probably now a candidate for takeover but the number of potential buyers is very limited with JPMorgan Chase being the only realistic name at the moment," Bove wrote in a research note. JPMorgan spokesman Thomas Kelly declined to comment. Washington Mutual spokeswoman Libby Hutchinson didn't return a call. Charles Scharf, CEO of JPMorgan's retail division, said last month that more mortgage companies, banks and consumer-finance firms are beginning to consider selling themselves. http://www.nypost.com/seven/01122008/business/wamu__jpmorgan_in_talks_935557.htm
If JPM and WM merge, it'll kill the commercial real estate market here because each JPM branch is surrounded by 2 or 3 WM branches that would become redundant.