MINNEAPOLIS--(BUSINESS WIRE)--U.S. Bancorp (NYSE: USB) announced today that its lead bank, U.S. Bank National Association, has entered into a definitive agreement to purchase the bond trustee business of First Citizens Bank, a subsidiary of First Citizens BancShares, Inc. (NASDAQ: FCNCA) of Raleigh, N.C.
“This acquisition is consistent with U.S. Bank’s ongoing commitment to continued strategic business investments in the current economic climate,” said Diane Thormodsgard, vice chair of U.S. Bancorp Wealth Management & Securities Services. “This transaction complements the existing U.S. Bank bond trustee business in North Carolina, South Carolina and Virginia, and strengthens our competitive position as a leading national trustee for new municipal issuances. The U.S. Bank team will work closely with First Citizens Bank to ensure a seamless transition and is committed to providing our new customers with the same high level of quality services our current U.S. Bank bond trustee customers have come to expect.”
Dick Payne, vice chair of U.S. Bancorp Corporate Banking, stated “This investment is indicative of U.S. Bank’s commitment to the southeast market, as is the recent introduction of the U.S. Bank National Corporate Banking team and High Grade Fixed Income Group. Through our focus on customer service and the latest in financial technology, we continue to grow in this market, winning over individuals as well as companies both large and small.”
Terms of the agreement are not being disclosed. Upon completion of this transaction, U.S. Bank’s corporate trust division will have $2.4 trillion in assets under administration, 725,000 bondholders and more than 114,000 client issuances.
“After due consideration of the bank’s strategic goals for the future, First Citizens made the decision to exit the bond trustee business to focus on strengths in other areas of our institutional business, including institutional asset management, qualified retirement plans, institutional custody, escrow and stock transfer,” said Gene Lewis, First Citizens’ senior vice president and manager of Institutional Advisory Services. “U.S. Bank has a strong, proven track record in this business and will continue to provide outstanding services to our bond trustee clients.”
Currently, U.S. Bank has 46 corporate trust offices across the country and offers a complete line of trust services. U.S. Bank serves as trustee and paying agent for the issuance of taxable and non-taxable securities, including the review of documents and indentures, registration and authentication of bonds, receipts and disbursement of bond sale proceeds, successor trusteeships, escrow account services and transfer and paying agency services. Also, U.S. Bank provides mortgage-backed and asset-backed securitizations, money market paying agency services, bond and tax administration, escrow services and document custody services.
U.S. Bancorp, with $266 billion in assets, is the parent company of U.S. Bank, the 6th largest commercial bank in the United States. The company operates 2,850 banking offices and 5,173 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.
The following information appears in accordance with the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements about U.S. Bancorp. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements and are based on the information available to, and assumptions and estimates made by, management as of the date made. These forward-looking statements cover, among other things, anticipated future revenue and expenses and the future plans and prospects of U.S. Bancorp. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated. Global and domestic economies could fail to recover from the recent economic downturn or could experience another severe contraction, which could adversely affect our revenues and the values of our assets and liabilities. Global financial markets could experience a recurrence of significant turbulence, which could reduce the availability of funding to certain financial institutions and lead to a tightening of credit, a reduction of business activity, and increased market volatility. Stress in the commercial real estate markets, as well as a delay or failure of recovery in the residential real estate markets, could cause additional credit losses and deterioration in asset values. In addition, our business and financial performance could be impacted as the financial industry restructures in the current environment, by increased regulation of financial institutions or other effects of recently enacted legislation, and by changes in the competitive landscape. Our results could also be adversely affected by continued deterioration in general business and economic conditions; changes in interest rates; deterioration in the credit quality of our loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in our investment securities portfolio; legal and regulatory developments; increased competition from both banks and non-banks; changes in customer behavior and preferences; effects of mergers and acquisitions and related integration; effects of critical accounting policies and judgments; and management’s ability to effectively manage credit risk, market risk, operational risk, legal risk, and regulatory and compliance risk. Finally, there can be no assurance that we will realize the anticipated benefits of the acquisition of the bond trustee business of First Citizens Bank.
For discussion of these and other risks that may cause actual results to differ from expectations, refer to U.S. Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2008, on file with the Securities and Exchange Commission, including the sections entitled “Risk Factors” and “Corporate Risk Profile,” and all subsequent filings with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events.