U.S. Bancorp has taken over nine failed banking subsidiaries of Oak Park, Ill.-based FBOP Corp., the FDIC announced late Friday.
The takeover is another sign that U.S. Bancorp, a favorite of Warren Buffett for its conservative knitting, is taking advantage of its relative strength in the troubled banking industry.
Berkshire Hathaway as of June 30 owned about 3.6 percent of the Minnesota-based bank-holding company, a stake worth about $1.6 billion at Friday's closing prices. Numerous other value gurus also own USB stock.
U.S. Bancorp hasn't made any of the headline-making, transformative moves that larger rivals such as JP Morgan, Bank of America or Wells Fargo have done in the past 18 months. But it has gone on the offensive, advertising heavily on a national scale, buying Nevada bank branches and $800 million in deposits from BB&T and taking over failed banks. The company repaid its $6.6 billion TARP loan in June.
U.S. Bancorp, the holding company for U.S. Bank, picked up another 153 branches in California, Arizona, Illinois and Texas, in addition to about $18.2 billion in assets and $15.4 billion in deposits with its transaction yesterday. U.S. Bank and the FDIC entered into a loan-loss agreement on about $14.4 billion of the assets.
The nine banks it took over are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas.
Rick Hartnack, vice chairman of consumer banking for U.S. Bancorp, made this statement about the transaction in a press release:
"This transaction is consistent with the growth strategy that we have outlined many times in the past, which includes enhancing our existing franchise through low-risk, in-market acquisitions. This transaction adds scale to our current California, Illinois and Arizona footprints and key markets within these states. We also view this type of acquisition as an efficient means of leveraging U.S. Bank's strong capital base, as we further invest in our company and expand opportunities to bring our great products and services to a new, larger customer base."
The FDIC estimated that Friday's bank failures will cost its insurance fund $2.5 billion. The agency has proposed that banks prepay three years worth of insurance premiums to help replenish the fund. There have now been 115 bank failures in the U.S. this year.
Disclosure: I own shares of USB.
The takeover is another sign that U.S. Bancorp, a favorite of Warren Buffett for its conservative knitting, is taking advantage of its relative strength in the troubled banking industry.
Berkshire Hathaway as of June 30 owned about 3.6 percent of the Minnesota-based bank-holding company, a stake worth about $1.6 billion at Friday's closing prices. Numerous other value gurus also own USB stock.
U.S. Bancorp hasn't made any of the headline-making, transformative moves that larger rivals such as JP Morgan, Bank of America or Wells Fargo have done in the past 18 months. But it has gone on the offensive, advertising heavily on a national scale, buying Nevada bank branches and $800 million in deposits from BB&T and taking over failed banks. The company repaid its $6.6 billion TARP loan in June.
U.S. Bancorp, the holding company for U.S. Bank, picked up another 153 branches in California, Arizona, Illinois and Texas, in addition to about $18.2 billion in assets and $15.4 billion in deposits with its transaction yesterday. U.S. Bank and the FDIC entered into a loan-loss agreement on about $14.4 billion of the assets.
The nine banks it took over are: Bank USA, National Association, Phoenix, Arizona; California National Bank, Los Angeles, California; San Diego National Bank, San Diego, California; Pacific National Bank, San Francisco, California; Park National Bank, Chicago, Illinois; Community Bank of Lemont, Lemont, Illinois; North Houston Bank, Houston, Texas; Madisonville State Bank, Madisonville, Texas; and Citizens National Bank, Teague, Texas.
Rick Hartnack, vice chairman of consumer banking for U.S. Bancorp, made this statement about the transaction in a press release:
"This transaction is consistent with the growth strategy that we have outlined many times in the past, which includes enhancing our existing franchise through low-risk, in-market acquisitions. This transaction adds scale to our current California, Illinois and Arizona footprints and key markets within these states. We also view this type of acquisition as an efficient means of leveraging U.S. Bank's strong capital base, as we further invest in our company and expand opportunities to bring our great products and services to a new, larger customer base."
The FDIC estimated that Friday's bank failures will cost its insurance fund $2.5 billion. The agency has proposed that banks prepay three years worth of insurance premiums to help replenish the fund. There have now been 115 bank failures in the U.S. this year.
Disclosure: I own shares of USB.
