U.S. Bank Buys 94 Branches, Doubles Chicago Footprint
Minneapolis-based U.S. Bancorp announced Tuesday that its has reached a deal to acquire Charter One Bank’s Chicago branch operations in a deal that will nearly double U.S. Bank’s deposit market share in the area.
Providence, Rhode Island-based bank holding company RBS Citizens Financial Group, which owns Charter One Bank, signed the acquisition agreement, which includes Charter One’s Chicago retail branch network, small business operations, and select middle-market clients, U.S. Bancorp said.
Under the transaction’s terms, U.S. Bank will acquire approximately $5.3 billion in deposits, $1.1 billion in loans, 94 branches, and 800 employees, paying a deposit premium (the amount paid to assume the deposits) of approximately $315 million, or 6 percent.
At the acquisition’s close (expected to occur in mid-2014), U.S. Bank will have approximately $11.3 billion in combined deposits in Chicago. Of the $5.3 billion in deposits it’s acquiring through the Chapter One deal, 35 percent are non-interest-bearing and negotiable order of withdrawal accounts; 48 percent are money market and savings accounts; and 17 percent are time deposits.
John Elmore, vice chairman of community banking and branch delivery for U.S. Bank, said that in addition to nearly doubling its market share in Chicago, the acquisition will allow his company to provide its products and services to new customers.
Marsha Cruzan, Chicago market president for U.S. Bank, said that the bank has shown interest in expanding its presence in Chicago for a while.
“Chicago is a vibrant and important market for U.S. Bank,” Cruzan said in a statement. “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.”
The Charter One branches in Chicago will continue to operate under their current name during the transition. The branches will be re-branded as U.S. Bank branches once the acquisition is complete.
Minneapolis-based U.S. Bancorp reported $361 billion in assets as of September 30, making it the largest bank holding company in Minnesota, based on assets. It currently operates 3,088 banking offices in 25 states (roughly 90 of its branches are in Chicago), and it employs approximately 65,500 worldwide.
In November, U.S. Bancorp also purchased Ireland-based hedge fund administrator Quintillion Limited for an undisclosed sum. The bank said that the transaction added $18 billion in hedge fund assets and 53 Dublin-based employees to its existing alternative investment business.
U.S. Bancorp was also among 20 international companies that seasoned investors picked for top stock ideas in 2014, according to a recent list compiled by Fortune magazine.