MINNEAPOLIS--(BUSINESS WIRE)--U.S. Bancorp (NYSE: USB) announced today that, effective immediately, its lead bank, U.S. Bank National Association, has acquired the banking operations of BankEast, a subsidiary of BankEast Corporation, from the Federal Deposit Insurance Corporation (FDIC). BankEast is based in Knoxville, TN.
U.S. Bank will receive approximately $272 million of assets and assume $268 million of insured and uninsured deposits of BankEast.
“This acquisition extends U.S. Bank's banking franchise in the attractive Tennessee market,” said John Elmore, executive vice president of community banking at U.S. Bank. “It is a great fit for both companies since U.S. Bank and BankEast share a similar community banking model which includes local decision making, strong community involvement and leadership combined with the consumer and business banking products and services of the nation’s fifth largest bank.”
Elmore noted that BankEast’s 10 branches in the Knoxville area will bring U.S. Bank’s total branch count in Tennessee to 91, and that U.S. Bank intends to continue to expand organically in the state. BankEast customers will soon benefit from U.S. Bank’s extensive mix of products and services.
U.S. Bank already employs more than 1,100 people in the Knoxville area, primarily through its customer service center for its merchant processing subsidiary, Elavon.
The acquisition of the banking operations of BankEast is structured as a whole bank purchase and assumption transaction without a loss share agreement. U.S. Bank conducted extensive credit due diligence, and purchased BankEast for an asset discount of approximately $67.5 million. The transaction is expected to exceed all internal hurdles for financial returns with conservative loan loss assumptions.
All BankEast branches will continue to operate under their current name and will be re-branded as U.S. Bank branches in the near future. BankEast customers should continue to conduct their banking as they have in the past. U.S. Bank will soon be providing additional information to customers about this transaction. BankEast customer deposits are now backed by the financial strength and security of U.S. Bank.
If BankEast customers have any questions regarding their accounts involved in this transaction, they should contact their local branch, visit www.bankeast.com or use their typical customer service channels.
U.S. Bancorp (NYSE: USB), with $340 billion in assets as of Dec. 31, 2011, is the parent company of U.S. Bank, the fifth-largest commercial bank in the United States. The company operates 3,085 banking offices in 25 states and 5,053 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp and its employees are dedicated to improving the communities they serve, for which the company earned the 2011 Spirit of America Award, the highest honor bestowed on a company by United Way. Visit U.S. Bancorp on the web at www.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 U.S. Bancorp's revenues and the values of its 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. Continued 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, U.S. Bancorp's business and financial performance is likely to be negatively impacted by effects of recently enacted and future legislation and regulation. U.S. Bancorp's 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 its loan portfolios or in the value of the collateral securing those loans; deterioration in the value of securities held in its 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, residual value risk, market risk, operational risk, interest rate risk and liquidity risk. Finally, there can be no assurance that we will realize the anticipated benefits of the BankEast acquisition.
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, 2010, on file with the Securities and Exchange Commission, including the sections entitled "Risk Factors" and "Corporate Risk Profile" contained in Exhibit 13, 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 U.S. Bancorp undertakes no obligation to update them in light of new information or future events.