U.S. Bancorp (USB) in Minneapolis has agreed to buy the Chicago branches of RBS Citizens Financial Group, a deal that would double its deposit share in the Windy City.
U.S. Bancorp would acquire 94 branches, which do business as Charter One; about 800 employees; and the branches' small business operations and certain middle-market relationships, the two companies said.
Word of an agreement leaked Monday, but the terms of the sale were not disclosed until a formal announcement Tuesday.
U.S. Bancorp agreed to pay a deposit premium of approximately $315 million, or 6%, to acquire $5.3 billion of deposits, and will also acquire about $1.1 billion in loans. About 35% of the deposits are non-interest bearing and NOW accounts, 48% are money market and savings accounts and 17% are time deposits, U.S. Bancorp said.
The deal would give U.S. Bancorp about $11.3 billion in deposits in the Chicago area, which would be the eighth most of any bank in the area, according to data from the Federal Deposit Insurance Corp. The $361 billion-asset company had about 90 branches and deposits of $6 billion in the region as of June 30, according to the FDIC.
The deal would allow Citizens, the U.S. unit of the Royal Bank of Scotland, to focus on its primary markets, it said in the news release. The $120 billion-asset company would retain a presence in Chicago through certain commercial business lines following the sale, it said.
RBS has announced that it plans to sell Citizens through a series of stock offerings in the next three years. Before RBS announced plans for the gradual divestiture of the unit, U.S. Bancorp was rumored to be a potential buyer for the entire Citizens unit.
RBS announced in October that it was exploring the sale of the branches. The sale to U.S. Bancorp is expected to close in the first half of the year.