US Bancorp is to acquire MUFG Union Bank’s regional banking franchise from Japanese lender Mitsubishi UFJ Financial Group (MUFG).
US Bancorp will purchase MUFG Union Bank for approximately $8 billion, including $5.5 billion in cash and approximately 44 million shares of US Bancorp.
The transaction will result in MUFG holding a minority stake of approximately 2.9% in US Bancorp.
US Bank stands to add over 1 million customers and 190,000 small business customers on the West Coast through the acquisition. The deal will add $58 billion in loans and $90 billion in deposits to US Bank’s assets, based on MUFG Union Bank’s June 30, 2021 balance sheet.
Andy Cecere, chairman, president, and chief executive officer at US Bancorp, said: “The acquisition of MUFG Union Bank underscores our commitment to strengthen and grow our business on the West Coast, make investments to serve customers and local communities and enhance competition in the financial services industry.”
The combination will make US Bank the fifth largest depositary institution in California — up from 10th — and will significantly increase its customer base in the state.
In a statement announcing the transaction, US Bank said all customers would have greater access to digital banking tools and an expanded branch network, while all MUFG Union Bank front-line branch employees would be retained.
The combination will also enhance US Bank’s commitment to invest in and serve low and moderate-income communities and minority-led institutions, the company said.
Its community development arm recently received $65 million in tax credit allocations from the Treasury Department to “close the racial wealth gap”.
In the past, portions of this credit have helped build a new health and wellness center and a federally qualified health center at Charles Drew University, a historically Black graduate institution.
Consolidation has been a popular move for many US Banks following the pandemic. On Monday, First Interstate Bank and Great Western Bank announced a merger which would form a community bank with over $32 billion in combined assets.
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