Buying Spree Key to US Bancorp Earnings Strength
The report also pointed out that these banks were more likely to have benefited from acquisitions in 2009, as they snapped up bankrupt competitors with favorable terms from the FDIC. US Bancorp completed 8 different acquisitions in 2009, including purchasing $18.4 billion in assets and $15.4 billion of deposits from nine failed banks owned by FBOP Corp. last November. That one acquisition gave the $264 billion institution access to roughly 500,000 new customers and 150 new branches mainly in Illinois and California, writes Morningstar's Jaime Peters in an analysts note -- a significant driver of growth for the foreseeable future.
While USB will suffer some loan losses, they will be far outweighed by the assets the bank has acquired. And with US Bancorp's largely conservative banking approach, investors should be assured that the new resources will not be channeled into unreasonably risky investments in 2010.