Extending its march into Southern California through a series of modest-sized acquisitions, U.S. Bancorp signed its fourth area deal in a year and made clear it is far from finished building a formidable West Coast center of operations.
Late Tuesday, the Minneapolis-based company announced terms of its latest deal, an agreement to buy Scripps Financial Corp. of San Diego, parent company of Scripps Bank, for stock worth about $155 million. Scripps Financial, with $650 million of assets, operates nine branches in the San Diego area.
The $83 billion-asset U.S. Bancorp purchased Peninsula Bank and Bank of Commerce, both in San Diego, and Western Bancorp, which has a presence in the same area and in communities near Los Angeles, all within the past year.
"We intend to be a force to be dealt with in California," Philip G. Heasley, U.S. Bancorp's president and chief operating officer, said in an interview Wednesday.
The market is one that U.S. Bancorp chairman and chief executive John F. Grundhofer, a California native, knows well and plans to tap. He worked there for Wells Fargo & Co. and Union Bank for roughly three decades. In a recent interview Mr. Grundhofer said that California was extremely important to the company and noted, "In time it could be our largest state by deposits."
Scripps, primarily a commercial bank, "will allow us to strengthen our franchise in the important San Diego area," he said in a statement announcing the deal. Scripps also has private banking, trust, and retail operations.
Scripps shareholders would receive 1.067 shares of U.S. Bancorp stock for each of their company's shares. They would receive no less than $19.80 and no more than $24.21 per share, depending on the stock price when the deal closes.
U.S. Bancorp said it plans to keep Scripps senior management in leadership posts, including Scripps president and chief executive Ronald J. Carlson, 65; executive vice president in charge of banking Douglas Evans, 52; and Richard Roncaglia, 50, executive vice president in charge of trust and financial services.
U.S. Bank operates 17 San Diego branches and nearly 140 California branches, with combined deposits of $5.5 billion in the state.
Growth through acquisition in California will not end with Scripps, Mr. Heasley said. The bank is continually on the hunt for buys similar in size, he said. It is shopping in Orange and Los Angeles counties, among other markets, Mr. Heasley said.
"We have every intention to prove you don't have to do very large, mega-transactions to build distribution," he said.
Mr. Heasley said that Mr. Grundhofer's California roots and network of contacts are bearing fruit as the bank seeks out new deals.
"Jack has not lost his reputation" in California, Mr. Heasley said. "It would be very foolish for us not to lever those great relationships."