J.P Morgan Chase & Co. and Bank One Corp. announced Jan. 14 that they are merging in a deal that will create the second-largest U.S. banking company after Citigroup, according to an Associated Press (AP) report.

The merged company, to retain the J.P. Morgan Chase name and be based in New York, will have assets of $1.1 trillion with 2,300 branches in 17 states, the two banks said in an announcement after the stock market closed.

Only Citigroup, with assets of about $1.19 trillion and operations in more than 100 countries, would be bigger if the deal is approved, according to AP.

The agreement was unanimously approved by the boards of directors of both companies, J.P. Morgan Chase and Bank One said in their joint announcement.

J.P. Morgan Chase's William B. Harrison, 60, will be chairman and chief executive officer, while Bank One CEO James Dimon will be president and chief operating officer, according to AP. The 47-year-old Dimon would succeed Harrison as CEO in 2006, with Harrison continuing to serve as chairman.

Initial reports of the deal had sent Bank One shares soaring in after-hours trading, AP noted.

Shares in Bank One jumped 10 percent in heavy after-hours activity after closing up 61 cents at $45.22 on the New York Stock Exchange. J.P. Morgan shares were down 4 percent in after-hours trading after closing at $39.22, up 32 cents.

An acquisition of Bank One doesn't come as much of a surprise, according to AP. After Bank of America Corp. announced in October it planed to merge with FleetBoston Financial Corp., which would create the nation's second-biggest banking company, there immediately was talk that Bank One could be a candidate for a similar move, AP noted.

The Federal Reserve still must approve the merger of Bank of America Corp., based in Charlotte, N.C., and FleetBoston, according to AP. Shareholders of record will vote on the deal Jan. 26 in Charlotte. The combined bank would have assets of about $966 billion, according to the American Banker trade daily.