Sep. 27--The collapse of giant thrift Washington Mutual and the takeover by JPMorgan Chase will be costly to the thrift's stock and bondholders, but it will mean little for depositors, bank experts and government officials said Friday.

With WaMu accounts becoming Chase accounts, consumers should not worry about their deposits, even those above the $100,000 federally insured limit, according to Chase and the Federal Deposit Insurance Corp.

"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," FDIC chairman Sheila C. Bair said.

However, some of WaMu's 2,200 branches -- including some of the 75 on Long Island -- will likely close in what is believed to be the biggest bank failure in the nation's history.

Meanwhile, some investors speculated Friday that Wachovia Corp., of Charlotte, N.C., might be the next financial giant to implode. Wachovia was the biggest seller of adjustable-rate mortgages and its shares slumped $3.70 Friday to close at $10 on the New York Stock Exchange. Its shares had fallen by 64 percent this year.

Seattle-based Washington Mutual, the nation's largest thrift, was seized by the FDIC on Thursday and its banking units quickly sold to JPMorgan Chase for $1.9 billion -- less than what JPMorgan had offered the thrift just months ago.

"As best as I can tell, this is a wipeout for the common stockholders at Washington Mutual," said Bert Ely, a banking consultant based in suburban Virginia. "I assume the preferred stockholders are going to get wiped out too, and it looks like there's going to be substantial losses for holders of their bonds."

WaMu stock closed Friday at 16 cents, down $1.53.

WaMu became financially "unsound" after customers withdrew $16.7 billion since Sept. 16, the U.S. Office of Thrift Supervision said Friday. WaMu had $188 billion in deposits.

The bank is the latest victim of the combined effects of a housing price downturn and the inability of growing numbers of homeowners, especially those with subprime credit or adjustable rate loans, to keep up payments. The mortgage meltdown had earlier put Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business and forced the rescues of Merrill Lynch & Co. by Bank of America Corp. and of Bear Stearns Cos., which also was absorbed by JPMorgan Chase.

In an announcement, Chase promised a seamless transition. WaMu adds 2,200 branches to Chase's 3,200, giving the combined company a presence in 23 states, but Chase estimated that about 400 serve overlapping areas, including in Illinois, Texas and New York.

Said Ely, "In markets where both companies have substantial presences there's obviously going to be branch consolidations."

But Chase spokesman Tom Kelly said, "That's months and months down the road."

This story was supplemented with Bloomberg News reports.

JPMORGAN CHASE:

A giant gets bigger

--2000: J.P. Morgan agrees to purchased by Chase Manhattan Bank for $36 billion

--2004: J.P. Morgan agrees to acquire Bank One for $58 billion in stock

--March 2008:JPMorgan Chase agrees to purchase troubled Bear Sterns & Cos. For $236.2 million

--Sept 25, 2008: JPMorgan Chase acquires failed bank Washington Mutual for $1.9 billion

Sources: Newsday research, The Associated Press and International Directory of company histories and JPMorgan Chase

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