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U.S. Bancorp Acquires Chicago Branch Network

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U.S. Bank National Association, the lead bank of U.S. Bancorp (USB - Free Report) , doubled its deposit market share in Chicago with the closure of the acquisition of the Chicago branch network of the Charter One Bank franchise owned by RBS Citizens Financial Group, a subsidiary of The Royal Bank of Scotland Group plc (RBS - Free Report) . The deal was inked in January this year.

Apart from the Chicago branch network of Charter One Bank, U.S. Bank also assumed small business operations and select middle market client relationships. With this deal, U.S. Bank now has over 160 branches in Chicago. The Charter One branches are now recognized as U.S. Bank branches.

This acquisition is a strategy to deploy U.S. Bank’s excess capital and to strengthen its exposure in Chicago. It is expected to aid U.S. Bancorp to overcome the financial complexities in its internal rate of return and enhance earnings per share.

Notably, in 3 of the last 4 quarters, U.S. Bancorp posted in line earnings, while it delivered a positive earnings surprise in the remaining quarter. However, driven by a solid capital position, the company enhanced investors’ confidence. It recently declared a 6.5% hike in its quarterly common stock dividend to 24.5 cents per share.

U.S. Bancorp currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the major regional banks space include KeyCorp. (KEY - Free Report) and M&T Bank Corporation (MTB - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).

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