JP Morgan Chase & Company has acquired all deposits, assets and certain liabilities of Washington Mutual's banking operations from the Federal Deposit Insurance Corporation for $1.9 billion.

Excluded from the transaction are the senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual’s banks. JP Morgan Chase will not be acquiring any assets or liabilities of the banks’ parent holding company or the holding company’s non-bank subsidiaries.

JP Morgan Chase has said that the acquisition expands its consumer branch network into the states of California, Florida and Washington state. The acquisition also extends JP Morgan’s retail branch network to additional states, including Georgia, Idaho, Nevada and Oregon.

The bank plans to complete most systems integrations and rebranding by year-end 2010, closing less than 10% of branches in the combined network in overlapping markets.

In conjunction with this acquisition, JP Morgan Chase will be marking down the acquired loan portfolio by approximately $31 billion, which primarily represents the company’s estimate of remaining credit losses related to the impaired loans. JP Morgan Chase intends to raise additional capital in connection with this transaction to maintain the company’s capital position.

JP Morgan Chase expects to convert Washington Mutual’s consumer banking, home lending and credit card businesses to the Chase brand and technology platforms over the next two years. Chase and Washington Mutual customers should be able to access the combined network of 14,000 ATMs without fees in the coming months.

Charlie Scharf, head of retail business at JPMorgan Chase & Company, said: This acquisition makes us more convenient and valuable to our customers and meets our strategic goal of broadening our footprint to serve our current and future customers better. Following a transition, Washington Mutual customers will be able to take advantage of Chase’s broader network and a wider product range – all backed by the strength and security of JPMorgan Chase.