JPMorgan sells $10 billion shares, faces Q3 loss

The $1.9 billion acquisition of WaMu makes JPMorgan the second-largest U.S. bank by deposits and marks the largest bank failure in U.S. history. It also saddles JPMorgan with the troublesome mortgages that caused painful write-downs and credit losses for the thrift.

"It's too early to know if JPMorgan is a big winner or loser from this deal," said James Ellman, portfolio manager at hedge fund Seacliff Capital.

Investors gave the deal an early vote of confidence, though, sending JPMorgan shares up more than 10 percent.

"They basically bought the company for nothing," said John Stein, co-founder of investment firm FSI Group. Stein added that, if JPMorgan's assumptions about WaMu's holdings are right, "It's a great deal."

Jamie Dimon, JPMorgan's hard-charging chief executive, sees the deal as a boost to the empire he has been building since he arrived from Banc One four years ago.

"We're building this franchise for the long term -- not for next year or the next five years, but for the next 100 years," he said on a call with investors.

Dimon had considered buying WaMu at various points this year. By holding out for a deal in which JPMorgan snared WaMu's banking assets, while leaving behind about $20 billion in debt, his reputation as a savvy deal maker looks set.

Dimon sometimes prefers to present his actions as a form of corporate philanthropy. He said on another call that "We're trying to be a great corporate citizen."

This is the second time Dimon has played the savior statesman in a little over six months -- with the WaMu deal following JPMorgan's acquisition of Bear Stearns Cos in March.

Analysts warned that worsening markets may mean WaMu's purchase could weigh on JPMorgan's profitability.

Susan Roth Katzke, an analyst at Credit Suisse, said in a research note that she was "less confident in the cost of the current credit and capital markets cycle to the bank's existing operations."

Citigroup analyst Keith Horowitz wrote in a note to clients that the near- to intermediate-term outlook remained challenged in light of higher costs in credit cards and at the retail bank, as well as the increasing likelihood of sustained lower revenues from capital markets business