In Full Stride as Others Fall

Dimon appeared on the scene again Thursday, picking up Washington Mutual's banking operations for far less than what he was rumored to be interested in paying earlier this year when he was mulling a takeover of the company. But this time, Dimon's bid was not solicited by the government.

"This was an arm's length transaction," he said. "There may have been other people willing to do it," he said, but not at the price J.P. Morgan had offered.

Unlike the Bear Stearns transaction, the Washington Mutual acquisition comes with no guarantees from the Federal Reserve, which put up $29 billion to help J.P. Morgan absorb potential losses from Bear Stearns's assets.

The Washington Mutual purchase, executed late Thursday evening, should generate profit quickly, adding an estimated 50 cents to per-share earnings for 2009, the company said. And crucially, J.P. Morgan sold $10 billion of common stock Friday to ensure that it could absorb any potential losses on Washington Mutual's mortgage-laden books.

Costs related to the merger are expected to total $1.5 billion, the company said.

The acquisition quickly expands J.P. Morgan Chase's retail banking business in California, Florida and Washington state, and strengthens its presence in key markets including New York and Texas.

Michael Moskow, president of the Chicago Fed, described the New York native as a "personable, but no-nonsense" executive who "speaks about a thousand words a minute," is widely known for his attention to detail.

"He's willing to go into the weeds," similar to his mentor, said Stowell, of Northwestern. "Sandy Weill was another extreme detail guy who understood the plumbing of an organization. That was, I'm sure, a very big influence on him. But above and beyond that, he's just a very tenacious guy. And he sees things that a lot of people don't see."

J.P. Morgan hasn't been completely shielded from the mortgage crisis that has infiltrated Wall Street. But its write-downs have been relatively small, and investors have maintained confidence in Dimon's ability to keep the bank healthy.

"He's been preparing for this moment for years," said Jason Polun, a banking analyst at T. Rowe Price. "It's not luck. He's very, very smart. And his discipline, while others were jumping into growth opportunities with great risk, kept the balance sheet in great position to take advantage of the situation at Bear Stearns and at Washington Mutual."

That doesn't mean J.P. Morgan won't have to worry about the backdrop to the ongoing credit crisis: a slowing economy and a more cautious consumer. But Dimon doesn't expect economic tides to throw his growing company too far off course.

"We've never said we're immune to that," Dimon said in the conference call with reporters. "We're just prepared for it."