U.S. Bancorp - Downey Savings etc.
By Laurie Kulikowski
Objective: To strengthen its geographic footprint in the Western region of the United States.
Impact: With federal assistance, U.S. Bancorp solidified its presence in California -- a key banking state -- with the acquisition of two failed banks in November 2008. Combined, Downey and PFF Bank added $12.1 billion in deposits and more than 200 branches in California and Arizona. U.S. Bancorp is now the sixth largest bank in the country as measured by deposits.
The firm also acquired a combined $17.4 billion in assets in the pair of deals, and assumed $15.8 billion in liabilities from the companies. The transaction included a related loss-sharing agreement with the Federal Deposit Insurance Corp., according to filing with the Securities and Exchange Commission. And finally, late Friday, the company acquired an additional $18 billion in assets and $15 billion in deposits through the acquisition of nine failed bank subsidiaries owned by FBOP Corp. of Oak Park, Ill.
Impact: With federal assistance, U.S. Bancorp solidified its presence in California -- a key banking state -- with the acquisition of two failed banks in November 2008. Combined, Downey and PFF Bank added $12.1 billion in deposits and more than 200 branches in California and Arizona. U.S. Bancorp is now the sixth largest bank in the country as measured by deposits.
The firm also acquired a combined $17.4 billion in assets in the pair of deals, and assumed $15.8 billion in liabilities from the companies. The transaction included a related loss-sharing agreement with the Federal Deposit Insurance Corp., according to filing with the Securities and Exchange Commission. And finally, late Friday, the company acquired an additional $18 billion in assets and $15 billion in deposits through the acquisition of nine failed bank subsidiaries owned by FBOP Corp. of Oak Park, Ill.
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U.S. Bancorp has also done a host of fill-in acquisitions of banks and other businesses, seizing on the opportunities arising from the crisis. In April, the company acquired $225 million in deposits and seven branches from First Bank of Idaho located in Idaho and Wyoming. In mid-October, it acquired legacy Colonial Bank branches and deposits in Nevada after the bank was taken over by BB&T. The company has said it will not do a deal that is dilutive to shareholders.
Aside from growing through deals, Chairman and CEO Richard Davis believes U.S. Bancorp has been the recipient of business because of a 'flight to quality' by customers as other banks have failed or been bailed out by the government. As of Sept. 30, average loan growth was up $15.4 billion, or 9.3%, for the year, as a result of the acquisitions. Excluding acquisitions, loan growth increased 2.6%. Deposit growth rose $32.8 billion, or 24.6% (16.1% excluding acquisitions), compared to last year.
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