As part of its strategic acquisitions, US Bancorp (USB) has announced on Wednesday that its lead bank, U.S. Bank, has agreed to buy the bond trustee business of First Citizens Bank, a subsidiary of First Citizens BancShares Inc. (FCNCA).

Post acquisition, U.S. Bank’s corporate trust division will have $2.4 trillion in assets under administration, 725,000 bondholders and over 114,000 client issuances. The purchase will aid in growing its corporate banking and fixed income business in the southeast market. Also it complements the bank’s existing bond trustee business in North Carolina, South Carolina and Virginia. Currently, U.S. Bank has 46 corporate trust offices across the country and offers a complete line of trust services.

Earlier this week, US Bancorp also announced its acquisition of the mutual fund administration and accounting servicing division of Fiduciary Management, Inc. This division of Fiduciary has over $8 billion in assets under administration. While this acquisition will confer additional compliance, technology and accounting talent for U.S. Bancorp Fund Services, the company will also benefit from contact with Fiduciary Management’s key client base.

With $266 billion in assets, US Bancorp is the sixth largest commercial bank in the United States. The company’s second quarter earnings of 12 cents per share were a penny short of the Zacks Consensus Estimate, reflecting deteriorating credit quality. However, we have been encouraged by the company’s exit from the Treasury’s Capital Purchase program. The recent signs of economic recovery coupled with such strategic acquisitions bode well.

However, we think that the stressed residential real estate market and the issues with the company’s commercial and retail customers will continue to weigh on the shares of US Bancorp.

We therefore continue with our Neutral recommendation.

Zacks Investment Research
View original at: Zacks.com News Feed

1. ($FITB) Fifth Third Bancorp Eyes Federal Deposit Insurance Corporation DealsFifth Third Bancorp (FITB) is planning to acquire banks with the assistance of the Federal...
2. ($USB) US Bancorp Backs CA IOUsUS Bancorp (USB) on Friday said it will start accepting California state-issued IOUs or registered...
3. (ZION) Zions Bancorp- Bear of the DayWhile Zions Bancorp (ZION) net interest margin and deposit growth remain satisfactory, credit quality continues...
4. (USB) US Bancorp Issues Senior NotesOn Sept. 2, 2009, US Bancorp (USB) announced the sale of 3.5 year senior notes...
5. (GHC) Global Consumer Acquisition Corp Eyes BB&T Corp’s BranchesGlobal Consumer Acquisition Corp. (GHC) announced yesterday that it intends to buy some or all...
6. (NWSB) – Northwest Bancorp – great job of shielding itself from risky investments that have been problematic for other financial institutionsNorthwest Bancorp. (NWSB) reported impressive second-quarter results in July that included a big jump in...

Search Posts by Tag: FCNCA | First Citizens Bancshares Inc | Us Bancorp | USB | Financial | Regional - Midwest Banks

RSS Feeds by Tag: FCNCA | First Citizens Bancshares Inc | Us Bancorp | USB | Financial | Regional - Midwest Banks |

Other Posts by: vitalstocks | RSS Feed for this author