Wachovia Crop.’s (NYSE: WB) poor results combined with the ouster of CEO Ken Thompson is fueling speculation that the firm could be for sale very soon, with analysts tagging JP Morgan Chase & Co. (NYSE: JPM) as the most likely suitor.

Charlotte-based Wachovia is facing some major trouble due to its mortgage market exposure, largely a result of its ill-timed 2006 acquisition of specialty ARM lender Golden West Financial Corp. Though the deal was designed to expand Wachovia into more of the West, its real result was Wachovia buying a huge amount of mortgages at the peak of the housing market. Even Thompson eventually admitted the purchase of Golden West was a bad move given its timing – though by citing only the timing, Thompson seems to ignore the underlying risk of the mortgage debt even without the “mortgage meltdown.”

In the wake of the acquisition, Wachovia has cut its dividend by 41% while being forced to dilute equity by issuing $8 billion worth of new shares.

Several analysts, including those at Merrill Lynch and Deutsche Bank, see JP Morgan as having an interest in buying the faltering bank because Wachovia has a strong presence in the Southeast – an area JP Morgan CEO James Dimon has expressed an interest expanding in.

Even so, there have been no known material talks of a sale by anyone at Wachovia with anyone at JP Morgan, leaving some analysts saying a deal remains unlikely – at least for now.

Regardless of a sale, expect more executive heads to roll at Wachovia – which, given the stock’s performance, seems a long-time coming.

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