On Monday, U.S. Bancorp (USB - Free Report) announced a deal to purchase the document custodian business of Detroit-based Ally Bank. This transaction follows the string of investments that U.S. Bancorp has made in the corporate trust service business. Notably, the bank will carry out the purchase through its leading bank U.S. Bank National Association.
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This business acquisition will expectedly add 40 employees to U.S. Bancorp and give it a new location in Waterloo, IA. Additionally, this deal will likely increase the company’s documents under custody business by 15%. Here, it is worth mentioning that U.S. Bancorp has a strong presence in Iowa, with over 1,250 staff in 99 branches across multiple business lines.
The aforementioned deal follows Ally bank’s announcement of an initial public offering last week. As part of the planned exit of its investment in Ally, the U.S. Treasury Department had reduced its stake in the bank from 37% to 17%. The terms of the deal were not publicly revealed, but it is expected to close during the second quarter of 2014.
At present, U.S. Bancorp is engaged in document custody operations that it carries out through its Global Corporate Trust Services division. Its document custody division is responsible for storing and safeguarding various loan files, including mortgages and leases. The latest acquisition is expected to open up new growth opportunities for the company.
U.S. Bancorp currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the major regional bank space include BankUnited, Inc. (BKU - Free Report) , KeyCorp. (KEY - Free Report) and Wells Fargo & Company (WFC - Free Report) . All of these have a Zacks Rank #2 (Buy).