U.S. Bancorp sees big opportunity in California after Union Bank deal

Coming off its acquisition of MUFG Union Bank, U.S. Bancorp expects that earnings gains from the deal and the company's substantial new scale in California will offset industry headwinds in 2023.

Chief Financial Officer Terry Dolan said Wednesday that the acquisition gives U.S. Bancorp the breadth to better compete across key California markets, including Los Angeles, San Diego and San Francisco, where Union Bank had meaningful toeholds.

"It creates lots of opportunities," Dolan said in an interview after the Minneapolis company reported its fourth-quarter earnings.

U.S. Bank says that its digital platforms are far more advanced than Union Bank's. It expects to be able to leverage the new capabilities into more sales with customers of the recently acquired bank.

Adobe Stock

The acquisition gives U.S. Bancorp about 1 million new consumer customers, 700 corporate customers and 190,000 business banking clients.

The $675 billion-asset bank expects the transaction to be 8% to 9% accretive to earnings per share in 2023, when it expects to realize about 35% of the $900 million of cost savings associated with the deal.