U.S. Bancorp and West One Bancorp. have issued a list of 31 branches they're proposing to sell after their merger.
The companies said they expect the branch sales to satisfy antitrust concerns by regulators over the merger, which is expected to close late this year. They added that the sales are not likely to affect the profitability of the merged entity.
Analysts agreed that the proposed branch sales won't have a significant effect on the economics of the merger. They said there had been fears that U.S. Bancorp and West One would have to sell so much of their combined company that it would hurt earnings.
"It's very hard for us to sell any part of either of our dynamic companies, including these successful branches," said Gerry B. Cameron, chairman and chief executive of Portland, Ore.-based U.S. Bancorp. "But we have always understood that regulatory guidelines would require some divestitures."
With $21 billion of assets, U.S. Bancorp is the country's 35th-biggest bank holding company. Boise, Idaho-based West One, with $9 billion of assets, is the 70th biggest. The companies announced merger plans May 8.
The combined company is to be based in Portland and retain the U.S. Bancorp name. Mr. Cameron would remain chairman and chief executive.
All but two of the branches on the for-sale list, which was released last week, are from West One.
U.S. Bancorp and West One have 640 branches. The 31 listed as for sale equal 4.8% of that total and hold $720 million in deposits, about 3% of the total at the two banks.
Twenty-five of the 31 branches are in Oregon, 15 of them in the Portland metropolitan area.
Five of the branches are in Washington, and one is in Idaho.
The list was prepared after talks with regulators, and the companies expressed confidence that they will not be asked to change it.
Bids are to be handled by UBS Securities, and the sales are expected to be completed by the middle of next year.
"If you're U.S. Bancorp, you've got to be fairly happy about this," said R. Jay Tejera, a stock analyst in Seattle with brokerage firm Dain Bosworth Inc.
Mr. Tejera said he had feared that U.S. Bancorp and West One might have to sell up to $1 billion in deposits and a significant quantity of loans to comply with antitrust provisions. Such sales could have made the merger less profitable than U.S. Bancorp had been expecting.
Mr. Tejera added that he now expects the branch sales not to have a significant effect on U.S. Bancorp's earnings. He estimated that the sales will net U.S. Bancorp around $50 million.
Bidders are expected to include some of U.S. Bancorp's biggest rivals, including First Interstate Bancorp, Washington Mutual Inc., and Keycorp, as well as community banks near the branches. Mr. Tejera said he expects U.S. Bancorp to favor community banks over bigger banks when selecting the winning bids.
Campbell K. Chaney, with the brokerage firm Rodman & Renshaw Inc., said he expected the branches U.S. Bancorp is putting up for sale to have "scarcity value," because there are few other branches or banks nearby.