MINNEAPOLIS ( TheStreet) -- U.S. Bancorp ( USB) is on the hunt for another acquisition, as the sixth-largest U.S. bank according to assets looks to leverage its capital hoard and become an even bigger player in banking.

U.S. Bancorp is conducting due diligence on FBOP Corp., a privately held Illinois bank with $18 billion in assets. The Federal Deposit Insurance Corp. has solicited bids for FBOP, which has eight bank subsidiaries in Arizona, California, Texas and Illinois, according to the Wall Street Journal. U.S. Bancorp has already agreed to buy $16 billion in assets of failed banks since the credit crisis began last year.

U.S. Bancorp today posted $603 million in third-quarter net income, beating analysts' earnings estimates. It achieved an annualized 0.90% return on average assets and 10% return on average common equity, along with increased fee income and an improved net interest margin of 3.67%. Those are strong numbers for a bank with $265 billion in total assets in this stultifying economic climate.

The bank appears to be firing on all cylinders and is very well-capitalized, with a tier 1 leverage ratio of 8.6% and a total risk-based capital ratio of 13.0%. These ratios need to be at least 5% and 10% for most banks to be considered well-capitalized under regulatory guidelines.

The strong level of capital and generous loss-sharing deals being offered by the FDIC for acquirers of failed institutions make this a perfect time for U.S. Bancorp to expand its footprint.

FBOP has been in serious trouble for some time, with four bank subsidiaries representing most of its total assets being included in TheStreet.com's list of undercapitalized banks and thrifts based on preliminary second-quarter regulatory data.

/>Another Leak of FDIC Bidding Process

FBOP is the latest in a series of leaks anticipating bank failures, shedding light on the background work done by the FDIC to line up buyers before institutions are shut by state or federal regulators.

Similar reports preceded the failures of Corus Bank, whose deposits were taken over by MB Financial ( MBFI) in September; Guaranty Financial in August, with deposits acquired by BBVA Compass (held by Banco Bilbao Vizcaya Argentaria SA ( BB); and Colonial Bancorp , which was acquired by BB&T ( BBT).

Ongoing Bank Failure Coverage

All previous bank and thrift failures for 2008 and 2009 are detailed in TheStreet.com's interactive bank failure map.

Georgia leads all states with 24 bank or thrift failures during 2008 and 2009, followed by Illinois with 17, California with 15, Florida with eight and Nevada with five.

In addition to U.S. Bancorp and BB&T, large domestic holding companies that have purchased failed institutions this year and last have included JPMorgan Chase ( JPM), which acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S.; SunTrust Banks ( STI); Regions Financial ( RF); Fifth Third Bancorp ( FITB); and PNC Financial ( PNC).

-- Written by Philip van Doorn in Jupiter, Fla.
Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.