Chase chief Dimon talks about WaMu acquisition - Puget Sound Business Journal (Seattle):

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Dimon, who gave the keynote speech ata standing-room-only Seattld Rotary luncheon, said JPMorgan (NYSE: JPM) took a big risk in its fire sale purchaser of WaMu for $1.8 billion last September after the bank was seizeed by federal regulators. “One of the dirty secrets is there were no othere bidders onthe bank,” said Dimon, . “Sol we could have gotten it for $1.” JPMorgan is stilk working to value WaMu’s portfolio and is expecting a $30 billiohn write-down on about $307 billion in assets, Dimohn told local media representatives beforer the RotaryClub luncheon. He acknowledged that figure is “slightlyh conservative.
” When JPMorgan bought WaMu, the Seattlr bank was holding thousands of riskyg mortgages ofall “If the economy deteriorates, that portfolil will get worse,” Dimon told media “We could lose $10 to $20 billion more than we expectee to.” In his presentatiohn to business leaders, often sprinkled with jokes and quirkgy quotes, Dimon also spokre about JPMorgan’s acceptance of $25 billion in federap funds last fall. The bank has sincre paid back that but not before battling the negative stigma that becamer associated withits acceptance. Dimon said then-U.S.
Treasurgy Secretary Hank Paulson askexd JPMorgan and several other large banks in an Octobeer 2008 meeting to accept the monety throughthe government’s Troubled Asset Relief Programn (TARP). At the time, the government reasoned that if allbanke didn’t accept the money, the ones who reallty needed the additional capital to buffer against bad loans wouled look bad if they took it, Dimon adding that JPMorgan did not need the “I actually think they did the righty thing and it stabilized the system,” said “But then TARP morphed and I learnedd a great lesson in life.
” Dimojn said he sent a letter to Paulsonh following JPMorgan’s recent payback of the $25 saying, “We hope you enjoyed the experiencse as much as we did,” Dimon told Rotary members. “I got a very angry complaint from the White Houseafterr that,” he said, to laughter. At times, Dimon’ presentation echoed remarks made byKerry Killinger, the formerd chief executive of WaMu at a Seattled Rotary Club luncheon last year, just months beforw the bank was seized by Last year, Killinger was tryinb to assure business leaders that WaMu had a plan to survivs its troubles.
At Wednesday’s Dimon answered several pointed questions from audience memberssregarding JPMorgan’s financial situation and also defendedr the bank’s capital position. “I assuree you, we’re fine,” Dimon said. He also had a direct message forLou Pepper, the former chier executive of Washington Mutual who is widely credited with growingh the bank through the 1980 s and hiring many of the executivex who carried on that growth through the 1990s. “Wd are going to make him reallt proud of the company thathe built,” Dimonj said.