Of the rest, $16.1 billion were subprime loans to the riskiest borrowers.
With assets of $307 billion and deposits of $188 billion, the thrift is by far the largest bank to fail in U.S. history. The record had been held by Continental Illinois National Bank and Trust of Chicago, which had $40 billion in assets when it failed in 1984 -- about $84 billion in today's dollars, according to a Bureau of Labor Statistics calculator.
The sale means the FDIC, facing an expected rash of bank failures in the midst of the biggest financial crisis since the 1930s, won't have to drain its $45-billion insurance fund to cover losses from Washington Mutual.
Bair said JPMorgan won an auction among four banks bidding for Washington Mutual on Wednesday. The thrift's main regulator, the U.S. Office of Thrift Supervision, had planned to declare Washington Mutual unsound on Friday, the normal day for bank closures, and turn it over to the FDIC for disposition, Bair said, but news of the failure had begun to leak out, so the action was moved up a day.
The transaction will make JPMorgan the No. 1 U.S. bank by deposits, with more than $900 billion. Bank of America Corp. will be No. 2, with $785 billion.
JPMorgan has long been considered the most likely buyer for Washington Mutual. It had offered to buy the Seattle-based thrift in the spring, but WaMu instead accepted a $7-billion private equity investment from TPG, the former Texas Pacific Group.
WaMu put itself up for sale this month after its board ousted CEO Kerry Killinger. The need to strike a deal became more urgent in recent days as the company's debt was downgraded to deep-junk levels and its stock plunged anew.
It was unclear if JPMorgan would be able to sell troubled Washington Mutual loans to the federal government as part of a $700-billion bailout proposed by the Bush administration. In a telephone conference, Bair and JPMorgan spokesman Tom Kelly said Washington Mutual was in such bad shape that the news of the bailout didn't factor into the deal.
Bair praised JPMorgan Chase and its chairman, Jamie Dimon, for helping the government stabilize the country's shaken financial system. She also praised Warren Buffett for doing the same by investing $5 billion in Wall Street giant Goldman Sachs this week.
