U.S. Bancorp did not acquire consumer auto loans as part of the deal to buy the Chicago-area Charter One Bank franchise, which closed on Monday.
Under the terms of the transaction originally announced in January, U.S. Bank acquired approximately $5.3 billion of deposits, $1.1 billion of loans, 94 branches, and 800 employees for a deposit premium of approximately $315 million, the bank said in a press release.
Charter-One, however, said in a press release that it would maintain a market presence and continue to serve Chicago-area customer through its retained businesses, including auto lending.
During U.S. Bancorp’s Q1 2014 earnings call in April though, Richard K. Davis, president and chief executive, stated the bank’s intentions to increase production in auto lending.
“As you know, we indicated a number of quarters ago that we’re going to double our auto loan production in the indirect auto loan and lease, and we’re doing just that,” Davis said. “But as you’ll recall, when we announced our doubling impact over a couple years, we decided to move little further down in the FICO, so to the, we’ll call it the near prime.”
Although Davis was careful to clarify that the bank did not intend to lower their Fico into Sub-Prime territory, he did state its intentions to increase auto lending for used cars, as well.
“We also realized that we weren’t a big player in used autos. So I’ll just take you through an example. If you are the F&I guy at the largest Chevy dealer in whatever city, you’ve always known that we were one of the best paper to pick for auto loans or leases for new cars,” Davis said. “And now that we’ve introduced used cars, you feel better about introducing the U.S. Bank paper across all spectrums.
Originally announced in January, the Charter One acquisition will increase the bank’s presence and brand recognition with over 160 branches, which could serve to boost their auto finance presence in the Chicago-area.
“We are confident that our expanded branch network in the Chicagoland area will enable us not only to serve new customers, but to deepen our relationships with existing customers in the area,” Steve SaLoutos, division manager for U.S. Bank’s Metropolitan Branch Network, said in a press release.
U.S. Bancorp is the parent company of U.S. Bank National Association, the 5th largest commercial bank in the United States, based in Minneapolis.
