Jan. 07--U.S. Bancorp is buying the Chicago branch banking operations of the Charter One Bank franchise owned by RBS Citizens Financial Group for about $315 million.
The acquisition, expected to close by the middle of the year, will double U.S. Bank's footprint in the competitive Chicago market and vault the Minneapolis-based lender into a Top 10 spot.
The purchase includes Charter One's Chicago network of 94 retail branches as well as its small business operations and certain middle market relationships, U.S. Bank said Tuesday. It includes 800 employees, deposits of $5.3 billion and $1.1 billion in loans.
"As you look at our distribution in Chicago, we have not had the depth of distribution that we would like in a market of that size," said John Elmore, vice chairman of community banking and branch delivery for U.S. Bank. "That's why this is such an exciting opportunity for us."
U.S. Bank currently has 90 branches retail branches in the Chicago area.
Elmore said there may be some overlap between Charter One and U.S. Bank branches that are near each other, but U.S. Bank's goal is to maintain a broad network of branches in Chicago.
"We're really just starting the integration process now," he said. "All of those details will be determined throughout that process."
RBS Citizens Financial Group is a $120 billion bank based in Providence, Rhode Island. It operates under the Citizens Bank brand in the northeast, and the Charter One brand in Illinois, Michigan and Ohio.
Bruce Van Saun, RBS Citizen's chairman and chief executive officer, said the transaction "will allow us to focus our efforts on our primary Citizens Bank and Charter One markets where we have stronger market positions and better long-term growth prospects."
RBS will still operate in Chicago by continuing a range of other consumer and commercial lending operations such as mortgage lending and asset-based lending.
Elmore said the purchase puts U.S. Bank in a No. 7 or No. 8 position in terms of deposits in the Chicago market. JPMorgan Chase & Co. holds the top spot for both branches and deposit share in Chicago.
U.S. Bank has made numerous acquisitions over the last few years, in payments, corporate trust and retail branches. Its last major branch purchase in the Chicago market was a 2009 FDIC-assisted deal for Park National Bank.
Jennifer Bjorhus -- 612-673-4683
(c)2014 the Star Tribune (Minneapolis)
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Distributed by MCT Information Services
Original headline: U.S. Bank buying RBS's Chicago branches
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