Washington Mutual's holding company was detached from its branches and deposits when JPMorgan Chase bought the assets, helping the Federal...

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Washington Mutual’s holding company was detached from its branches and deposits when JPMorgan Chase bought the assets, helping the Federal Deposit Insurance Corp. (FDIC) dodge the bill for the lender’s failure.

WaMu’s collapse on Thursday, the largest U.S. bank failure, came at a “zero cost” to the insurance fund for deposits, said FDIC Chairman Sheila Bair on Friday.

The FDIC’s $45 billion fund, drained by 12 other failures so far this year, was spared because Seattle-based WaMu’s corporate structure let the agency seize only the bank. The holding company retained the liabilities, including senior and subordinated debt and equity.

“A wide swath of investors are going to be harmed by this, but the FDIC fund is going to come out of this unscathed,” said Chip MacDonald, a partner in the capital-markets group at Jones Day in Atlanta. “That’s the happy part.”

WaMu was deemed “unsound” by the Office of Thrift Supervision Thursday after customers had withdrawn $16.7 billion in deposits since Sept. 15. WaMu, which had $188 billion in deposits and $307 billion in assets when it was seized, put itself up for sale last week after its credit rating was slashed to junk and its stock price tumbled.

The FDIC seized WaMu’s banking units, “cherry-picked a little bit” and merged the Washington Mutual Federal Savings Bank into JPMorgan without transferring all the liabilities, MacDonald said. “The FDIC has nothing to do with the holding company.”

JPMorgan, which said in an investor presentation it would write down $31 billion of the acquired assets, won’t report a loss because the transferred assets exceeded liabilities by the same amount.

WaMu’s shareholders and bondholders will absorb the debt JPMorgan didn’t buy. WaMu had $30 billion in shareholder’s equity June 30, which would be wiped out by the write-down, leaving some losses for bondholders.

Lawsuits against WaMu will remain at the FDIC or the holding company, Standard & Poor’s analyst Tanya Azarchs said.

When the FDIC seizes bank units, holding companies “go their merry way,” said William Seidman, who served as chairman of the FDIC from 1985 to 1991. “If they have a lot of other banks, they may run them. If they have nothing else, they may just go out of business.”

The FDIC deposit insurance fund fell 14 percent to $45.2 billion in the quarter ended June 30, with the July 11 failure of IndyMac Bancorp costing about $8.9 billion, the agency said. An increase in insurance premiums paid by banks will be considered Oct. 7, Bair said this week.

Washington Mutual’s holding company “basically got cut loose,” said Sterne Agee & Leach analyst Adam Barkstrom. “The way WaMu and JPMorgan Chase worked, that’s the way the system is supposed to work. The banks that made crappy loans and have crappy portfolios need to pay.”