(FORTUNE Magazine) – IN HIS OFFICE OVERLOOKING PARK Avenue, Jamie Dimon, glamour boy of U.S. banking and president of J.P. Morgan Chase, is working hard to persuade FORTUNE that he's just not ready to jump back into the dating game. "I would be extremely reluctant to do a deal with our current low stock price," says Dimon, 49, his hands karate-chopping the air, his words firing in staccato bursts. "Our people aren't ready either. We need our 101st Airborne to do an acquisition, and they're still on the ground putting together the mergers we've already done."

But don't put too much stock in Dimon's spirited denials. The frenzied matchmaking that's in store for U.S. banking--not to mention Dimon's inherent love for the takeover game--make it a good bet that J.P. Morgan will do a giant merger in the not-so-distant future. Dimon himself kicked off the latest round of speculation by blurting out in a July conference call with analysts that J.P. Morgan would be "capable of doing a large acquisition" by mid-2006.

What's the motivation? Over the past few years, the pace of consolidation in retail banking has picked up considerably, as everyone suddenly rediscovered how lucrative the area can be. The clear winner so far is Bank of America CEO Ken Lewis, whose 2004 deal for FleetBoston gave him a nationwide network of almost 6,000 branches. Right now J.P. Morgan Chase, with 2,539 branches, sits in the second tier with Citigroup and a handful of other retail-bank powerhouses. (And if there's one thing Dimon doesn't like, it's being second-tier.) If he can expand his bank's footprint into new, high-growth regions of the country, Dimon can consistently increase earnings for years to come without taking on excessive risk.

Dimon would prefer to make an offer with a far stronger stock price. J.P. Morgan shares, down 12% over the past year, have seriously underperformed. But as he complains that "talk about a deal is greatly exaggerated," he admits almost in the next breath that even his depressed stock isn't necessarily an obstacle. "If a bank agrees to take little or no premium because it thinks our stock is cheap and likely to rise, we could still make a deal," he says.

Still, Dimon wants to negotiate from a position of strength. So he's pursuing a disciplined strategy to drive up his share price. His golden reputation as Sandy Weill's fixer at Citi and the savior of Bank One has been tarnished by weak earnings since he orchestrated the merger of Bank One and J.P. Morgan in mid-2004. But Dimon, who's slated to succeed CEO William Harrison in mid-2006, is making smart moves, reducing the bank's dependence on proprietary trading and private equity--risky areas that entail volatile swings in earnings--and strengthening consumer operations by knitting a hodgepodge of deposit systems into a single, efficient platform.

Once Dimon is ready to make a move, it's not hard to figure out who he'll court: a consumer bank that's strong where J.P. Morgan is weak. The top prize would be Wells Fargo, which has huge scale and just the demographic J.P. Morgan covets, with big market share in California and other Western states. Problem is, CEO Dick Kovacevich has no intention of merging with anyone. "I can't think of a deal that would work," he says. "Any company that bought us would have to take on our culture, and that's impossible."

Two other enticing options--Wachovia, with its big beachhead in the Southeast, and Washington Mutual, with 1,900 branches across the country--offer a different complication: what banking insiders call "the social issues." Both institutions are run by young, ambitious chief executives (Ken Thompson at Wachovia, 54, and Kerry Killinger at WaMu, 56), neither of whom is likely to want to cede leadership to Dimon. That makes both firms extreme long shots. (Wachovia itself is said to be feeling acquisitive.) A smoother option might be US Bancorp, whose CEO, Jerry Grundhofer, 61, might be close enough to retirement age to consider handing control to a young turk like Dimon. The bank would give J.P. Morgan a strong presence in the Pacific Northwest, Colorado, and Nevada. And with a market cap of $54 billion, it is far less costly than a titan like Wells Fargo. The drawback: no major franchises in California and Florida, where Dimon needs them most. That leaves the most realistic deal: for a medium-sized bank like PNC, which would fill out J.P. Morgan's profile in the Northeast, or the slightly larger SunTrust, which would make Morgan a powerhouse in Florida and Georgia. SunTrust would also be easy to swallow, with a market cap of just $26 billion.

Despite all of Dimon's denials, there's one other reason he might act sooner rather than later: Right now his two biggest rivals are on the dealmaking sidelines. Bank of America has reached the statutory limit of 10% of nationwide deposits. Citigroup, meanwhile, is out of the game until it cleans up its various legal and regulatory concerns. As any avid dater can attest, having the field to yourself is an opportunity you don't want to squander.

FEEDBACK first@fortunemail.com

THE POOL OF POTENTIAL PARTNERS In his search for a sweetheart, Dimon is eyeing big rivals.