U.S. Bancorp, which completed its merger with Firstar Corp. in late February, is working to make sure the consumer banking unit continues to thrive in the first months ahead.

Richard Davis, chief financial officer at the Minneapolis-based company, said Wednesday that it intends to leverage Firstar’s success in consumer banking by adopting its business model. So far so good; consumer banking contributed a hefty 41% to revenues during the first quarter.

“This is one of our core competencies,” Mr. Davis said, addressing a financial services conference in California hosted by Morgan Stanley Dean Witter & Co. “This is one of the most significant opportunities in this new company.”

Sticking with Milwaukee-based Firstar’s strategy, which is called “the Web,” will make for an easier transition for the 9,000 employees in the combined consumer banking units, Mr. Davis said. The company has nearly 1,000 bank branches.

U.S. Bancorp plans to deliver consumer banking products to smaller markets, including rural areas, and plans to build the customer base by offering more products and services than competing community banks.

The banking company will also give a level of autonomy to the managers of the consumer bank branches, who will be responsible for all key decisions in the branches, Mr. Davis said.

Part of the new model also calls a local board of directors at each branch that will provide help for employees. The boards each have eight members who are paid a nominal fee for their assistance.

On the consumer lending side, the bank plans to provide centralized underwriting for bank branches and offer indirect loans and leases in 39 states.

Mr. Davis conceded that the two companies are bringing together different cultures. “Everything we do now is schizophrenic,” he quipped.

But, he described the integration of U.S. Bancorp and Firstar as a “nonissue” and said the company’s experience with several mergers in the past seven years should be enough to alleviate any customer concern.

Following Firstar’s consumer banking model is a good move for U.S. Bancorp, said George Bicher, an analyst at Deutsche Bank.

“The old U.S. Bank had been investing in improving sales in the retail business,” Mr. Bicher said. But he added, “Firstar has a lot more confidence in what there were doing.”

But Mr. Bicher warned that U.S. Bancorp executives might have too big ambitions for the size of the company.

“It will be successful as a regional banking combination” in the Wisconsin and Minnesota market, he said. But “there is only so much a regional bank can do to extract revenue growth from its marketplace. There are people in the company who think it can grow faster than it really can.”

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.