Magazine article American Banker

U.S. Bancorp's Calif. Plan Stresses Small-Bank Buys

Magazine article American Banker

U.S. Bancorp's Calif. Plan Stresses Small-Bank Buys

Article excerpt

SANTA BARBARA, Calif. -

U.S. Bancorp wants to expand its California presence in a big way by gobbling up community banks.

Speaking at the bank presidents convention of the California Bankers Association last weekend, U.S. Bancorp's president and chief operating officer, Philip G. Heasley, said he wants his company to become at least the third-largest bank in the state. It currently ranks eighth there in deposit share, well behind Bank of America Corp., Wells Fargo & Co., and Washington Mutual Inc.

But the $81.5 billion-asset Minneapolis bank company does not want to acquire regional juggernauts such as $30.7 billion-asset Unionbancal Corp. It prefers family-controlled banks because retention of management, employees, and investors is easier, Mr. Heasley said.

"I'd rather do 55 community bank deals than one great big deal," he said. He later added, "Larger banks often have grown assets by buying other banks with plans just to flip the whole package to the next buyer."

Mr. Heasley is not alone in viewing California's community bank market as ripe for the picking. Executives from Community First Bankshares of Fargo, N.D., and the San Francisco investment group Belvedere Capital Partners also said they are interested in expanding in the Golden State.

Donald R. Mengedoth, president and chief executive officer of $6.5 billion-asset Community First, said it started to target California and other western states a couple of years ago. …

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