Three MUFG Union branches to be sold as part of U.S. Bank deal

Seattle-based HomeStreet Bank will buy three branches in Southern California in connection with the still-pending sale of MUFG Union Bank to U.S. Bancorp.

The proposed divestiture of three MUFG Union offices in San Bernardino County comes two weeks after Minneapolis-based U.S. Bancorp and San Francisco-based MUFG Union entered into an agreement with the Department of Justice to sell the branches.

The agreement with the DOJ addresses concerns about possible antitrust law violations that could result from an overconcentration of offices.

Adobe Stock

MUFG Union Bank currently operates nine branches in San Bernardino County, including the three that must be sold, a company spokesperson said Thursday. Those branches — one each in Big Bear Lake, Hesperia and Yucca Valley — employ a combined 25 people, the spokesperson said.

If HomeStreet finalizes the acquisition, its Southern California branch count will grow to 20, the company said in a press release announcing the purchase.

As part of the deal, HomeStreet will add about $490 million of deposits and about $22 million of loans, while scooping up 16,000 new customer relationships and all of the real estate and fixed assets tied to the branches.

HomeStreet has "committed to retaining all current Union Bank employees" who work at the affected branches, Chairman and CEO Mark Mason said in the release. The $8.6 billion-asset bank has branches in Washington, California, Oregon, Hawaii, Idaho and Utah.

The sale is expected to be finalized during the first quarter of 2023, pending regulatory approval and other closing conditions, including the sale of MUFG Union to U.S. Bancorp, the release said.

The companies did not disclose the price that HomeStreet will pay for the branches.

The divestiture is the latest step in U.S. Bancorp's ongoing journey to buy MUFG Union Bank. The $8 billion deal, which was announced in September 2021, was originally forecasted to close during the first half of this year, but it has not yet secured approval from the Federal Reserve.

Regulation and compliance

U.S. Bancorp gives itself three more months to close MUFG Union merger

September 16, 2022 3:45 PM

The deal is one of several larger-bank acquisitions that have taken longer than expected to receive regulators' blessings following President Biden's 2021 executive order directing federal financial regulators to reevaluate the processes they use to review proposed mergers.

At an industry conference last month, U.S. Bancorp executives revised their timeline for the Union Bank deal, saying they now think it will close later in the second half of this year. Around the same time, the company extended the purchase agreement by three months, until the end of 2022.

In connection to the acquisition, U.S. Bancorp has pledged to spend $100 billion over five years on community reinvestment in lower-income neighborhoods and communities of color.