The federal seizure and shotgun sale of Washington Mutual's assets was a trigger for customers like Arnold Harden to scoot for safety.
A Tampa business consultant, Harden marched into his WaMu branch at West Shore and Kennedy boulevards Friday morning and cut his ties.
"I didn't want to wait around to see what happened next," Harden said, clutching a wad of bills that represented the last scrapings from his account. "Time to close it out."
A Seattle savings and loan that gambled badly on rickety mortgages during the housing boom, WaMu became the largest bank to fail in U.S. history. Its $307-billion in assets eclipse those of former No. 1 Continental Illinois National Bank, which failed in 1984 with $40-billion in assets.
Federal regulators sold most of WaMu's assets and operations to JPMorgan Chase & Co. for $1.9-billion. Morgan also came to the rescue of the defunct Bear Stearns investment bank in March.
JPMorgan said the WaMu acquisition will give it a combined 5,400 branches in 23 states, and that it plans to close less than 10 percent of the two companies' branches.
In the Tampa Bay area, WaMu had expanded by dozens of branches since 2004, preferring convenient suburban strip center locations that were closer to potential mortgage customers. It's uncertain which, if any, of those local outlets will close.
"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," said Sheila Bair, chairman of the Federal Deposit Insurance Corp. "For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual."
That pretty much described the atmosphere at WaMu's Tampa branches on Friday.
Customer Christine Jackson first heard of the bank's demise as she met a reporter outside a South Tampa branch.
"They did? I'm not happy about that. Oh, my God! I like WaMu," Jackson said.
Many customers declined to ditch the bank in its hour of distress. Some had mortgages or home equity loans they couldn't get out of without refinancing their houses.
Others were content to let their money ride, encouraged by JPMorgan's reputation and federal deposit insurance that covers individual accounts up to $100,000.
"I'm monitoring the situation in case the worst happens," said Alexandra Van Wie, whose Tampa frozen yogurt business, SunniBunni, banks with WaMu. "I've spread my deposits around several banks. It's the right thing to do these days."
WaMu's demise had been anticipated. Depositors had made a run on the bank since Sept. 15, withdrawing more than $16-billion and leaving the bank with too little cash to continue. Its stock price plummeted 95 percent from a 52-week high of $36.47 a share to close at $1.69 Thursday.
WaMu was heavy into subprime lending, the few-questions-asked mortgages that usually went to borrowers with weak credit histories. Troubles then spread to other parts of WaMu's home loan portfolio, namely its "option" adjustable-rate mortgage loans. Option ARM loans offer very low introductory payments and let borrowers defer some interest payments until later years. The bank didn't stop making those loans until June.
Highlighting the depth of the company's financial plight in Florida, WaMu has filed as many as 731 foreclosure cases against Pinellas County property owners since January 2006.
Typical of some of the puffed-up real estate deals that involved WaMu, the bank financed the purchase of one modest house in Clearwater's Island Estates for $1.8-million in 2006. This year, long after the investor defaulted, WaMu cleaned its hands of the house for a fire-sale price of $727,500.
JPMorgan is the offspring of an earlier banking merger. It formed in 2000 when Chase Manhattan Bank bought J.P. Morgan & Co. The bank's acquisition brings it full circle. In the late 1980s and early 1990s, predecessor Chase Bank first tried to push into the Tampa Bay area with retail branches by buying failed local banks.
JPMorgan Chase doesn't expect to merge physically with WaMu until next year. Eventually, debit and credit cards will be reissued under the Chase name. Meanwhile, WaMu customers can continue to bank there as if the company were still independent.
That suited Tampa's Maylin Pupo just fine. As of Friday she continued to deposit her paychecks into WaMu automatically. But she was hedging her bets.
"All my big money is in another bank," Pupo said.
Information from Times wires was used in this story.