U.S. Bancorp will buy the Chicago branch banking operations of the Charter One Bank franchise, substantially increasing its presence in the greater Chicago market.
Once the acquisition is completed, the $361 billionMinneapolis bank will have combined deposits of approximately $11.3 billion in the Chicago metro area, nearly doubling its deposit market share.
"We've worked hard to grow our presence [in Chicago] over the past five years and this latest acquisition strengthens our position," Marsha Cruzan, U.S. Bancorp'sChicago market president, said.
Four years ago, U.S. Bancorp bought Chicago-based Park National Bank and eight other banks from Oak Park, Ill.-based FBOP Corporation after the FDIC shuttered the banks. At the time, Park National had $4.7 billion in assets and 31 branches in the Naperville-Chicago-Joliet area. U.S. Bancorp also acquired a onebranch community bank about 27 miles southwest of Chicago in the transaction.
Through its Charter One acquisition, U.S. Bancorp will gain approximately $5.3 billion of deposits, $1.1 billion of loans, 94 branches and 800 employees for a deposit premium of roughly $315 million, or 6 percent. 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.
The acquisition includes Charter One's Chicago retail branch network, small business operations, and select middle market relationships. Charter One is owned by RBS Citizens Financial Group of Providence, R.I., a subsidiary of the Royal Bank of Scotland.
For Citizens Financial, shedding the Chicago Charter One branches is an opportunity to "focus on primary Citizens Bank and Charter One markets where the group has stronger market positions and better long term growth prospects," Bruce Van Saun, chairman and CEO, said in a press release.
The $120 billion Citizens Financial has approximately 1,400 branches and 18,500 employees in Illinois, Michigan, Ohio and nine other states in New England and the Mid-Atlantic. The company became a wholly owned subsidiary of the Royal Bank of Scotland in 1988.
Citizens Financial acquired Charter One, then based in Cleveland, in 2004. At that time, Charter One had $41.3 billion in assets and roughly 680 branches in nine states.
U.S. Bancorp's acquisition of the Chicago branches is subject to regulatory approval and is anticipated to close mid-year. Branches will continue to operate under the Charter One name during the transition; they will be re-branded as U.S. Bank branches once the transaction is complete. *