U.S. Bancorp (NYSE: USB) announced today that its lead bank, U.S. Bank National Association, has reached an agreement to acquire the Chicago branch banking operations of the Charter One Bank franchise owned by RBS Citizens Financial Group. The acquisition includes Charter One’s Chicago retail branch network, small business operations, and select middle market relationships. Once complete, the acquisition will nearly double U.S. Bank’s deposit market share in the Chicago metro area.
Under the terms of this transaction, U.S. Bank will acquire approximately $5.3 billion of deposits, $1.1 billion of loans, 94 branches, and 800 employees for a deposit premium of approximately $315 million, or 6 percent. At close, U.S. Bank will have combined deposits of approximately $11.3 billion in Chicago. Approximately 35 percent of the $5.3 billion of acquired deposits are non-interest bearing and NOW accounts; 48 percent are money market and savings accounts; and 17 percent are time deposits.
“This transaction will double our market share in Chicago, giving us a great opportunity to not only deepen existing customer relationships, but a chance to serve new customers with our extensive mix of products and services,” said John Elmore, vice chairman of community banking and branch delivery for U.S. Bank.
Marsha Cruzan, Chicago market president for U.S. Bank, said, “Chicago is a vibrant and important market for U.S. Bank. We’ve worked hard to grow our presence here over the past five years and this latest acquisition strengthens our position as a top bank in the Chicago area.”
This acquisition is expected to meet or exceed U.S. Bancorp’s internal financial hurdles for internal rate of return and earnings per share accretion. This transaction is subject to regulatory approval and is anticipated to close in mid-2014.
RBS Citizens Financial Group Chicago branches will continue to operate under their current name, Charter One, during the transition, and will be re-branded as U.S. Bank branches once the transaction is complete.