Chase Commercial Bank

THE SCOOP

Diverse services
Chase Commercial Bank, a subsidiary of JPMorgan Chase, operates along five business lines.  Its middle market banking division, which includes over 600 bankers and 700 service professionals, serves companies with annual revenues ranging from $10 million to $500 million, offering everything from investment banking to cash management and credit.  Companies with annual revenue of between $500 million and $2 billion turn to the corporate banking division for traditional banking services and select investment banking products; Chase corporate bankers serve these clients through a partnership with J.P. Morgan’s investment banking teams.

Meanwhile, the business credit, commercial real estate and equipment leasing divisions provide structured asset financing (including loan structuring, syndication and collateral analysis); commercial banking for real estate investors and developers; and equipment financing, respectively.

Yeah, we do that
All told, Chase Commercial Bank’s more than 5,000 employees work with over 26,000 clients, including financial institutions, municipalities, corporations and nonprofit entities, in 22 states.  Chase can boast that it’s the No. 2 middle market lender in the U.S. and the country’s No. 1 asset-based lender.  It’s also the top commercial bank in its retail branch footprint, which reaches from New York to Arizona.  And, perhaps most important, thanks to several recent monstrous mergers on its parent’s part, Chase Commercial Bank is part of one of the world’s biggest financial services firms: JPMorgan Chase employs more than 226,600 employees in more than 60 countries.

Chase Commercial has industry expertise in nearly two dozen sectors, including financial institutions, health care, art galleries, cultural institutions, labor unions, automotive, entertainment, jewelry and apparel, theaters, sports, technology, funds managers, lawyers and law firms, associations, nonprofits, municipal governments, associations, social services organizations, Native American tribes, public companies, higher education, restaurants and restaurant suppliers, and specialty retail.

Plenty of clout
Parent JPMorgan Chase is one of the great legends of U.S. banking history, with roots that date back to 1824, when the Chemical Bank of New York was formed.  Over the decades JPMC incorporated or otherwise evolved from First Chicago, the National Bank of Detroit, Manufacturers Hanover, Bank One, Chase Manhattan and the original J.P. Morgan & Company.

A 1996 merger between Chase Manhattan and Chemical Bank formed the country’s then-biggest bank holding company, which subsequently merged with J.P. Morgan & Co. to form JPMorgan Chase.  The new powerhouse was led at first by J.P. Morgan CEO William B. Harrison.   In 2004, JPMorgan Chase combined with Bank One, which had been created in 1998 by the merger of Banc One Corp. and First Chicago.  In 2006, former Bank One CEO Jamie Dimon became chairman and CEO.

Buying Bear
Less than two years later, in March 2008, when legendary financial institution Bear Stearns crumpled under the pressure of the credit crisis, JPMorgan Chase was standing by to pick up the piecesâ€"literally.  In May 2008, JPMorgan Chase announced that it had completed its acquisition of Bear Stearns; under the terms of the deal, each share of Bear was converted into 0.21753 shares of JPMorgan Chase common stock.

Bear’s fall sent shockwaves through the banking industry, and U.S. regulatory agencies went to extraordinary lengths to smooth the acquisition effort and subsequent transitions.  In July 2008, the Federal Reserve allowed JPMorgan Chase to purchase a $44 billion portfolio of derivative transactions and hedgesâ€"including Bear Stearns Forex and Bear Stearns Credit Productsâ€"from the remains of Bear Stearns, which it already owned. Under normal circumstances, a buy that big would be prohibited by rules governing asset sales between banks and their affiliate companies.  The Fed also exempted JPMorgan Chase from regulations governing its transactions with Maiden Lane, a limited liability company constructed with the New York Fed to hold some of Bear Stearns’ assets.

Rescuing WaMu
Another bank’s failure resulted in a major acquisition for JPMorgan Chase.  Washington Mutual Bank, the country’s biggest savings and loan, collapsed in spectacular fashion: it was shut down by the Office of Thrift Supervision, placed into FDIC receivership and awarded the dubious title of “largest American bank failure.â€

Once more, JPMorgan Chase was there to pick up the debris, acquiring WaMu’s 2,200 branches and its $135 billion in deposits for $1.836 billion.  However, the deal also saddled JPMorgan Chase with WaMu’s extensive portfolio of tanking mortgage-backed investments.  To fortify its capital reserves against write-downs and losses associated with the acquisitionâ€"nearly $31 billion to startâ€"JPMorgan Chase quickly raised $10 billion through a stock sale.  WaMu branches, which reopened for business upon completion of the acquisition, are undergoing a rebranding process that’s slated to be complete by the end of 2009.

Was snatching WaMu from the brink of disaster a risky move for JPMorgan Chase?  Perhaps, but the two banks had history: in March 2008, JPMorgan Chase had made an unsuccessful $8 per share offer for the savings and loan.  So, in the end, JPMorgan Chase got what it wanted, including WaMu’s coveted West Coast branch network and the distinction of being the nation’s biggest bank (finally surpassing Bank of America).


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Chase Commercial Bank


270 Park Avenue
New York, NY 10017
Phone: (212) 270-6000
Fax: (212) 270-2613
www.chase.com

STATS


  • Employer Type: Public
  • CEO: Jamie Dimon
  • 2010 Employees: 5,000

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