U.S. Bancorp Acquires Wachovia's Corporate Trust and Institutional Custody Businesses

U.S. Bancorp, one of the largest financial holding companies in the United States, has solidified its position in the corporate trust industry with the acquisition of Wachovia's corporate trust and institutional custody businesses. This strategic move will enable U.S. Bank to expand its services and offerings in the payments and fiduciary businesses, further enhancing its competitiveness in the industry. With this acquisition, U.S. Bank will become one of the largest corporate bond trustees and a top provider of institutional custody services.

Key Takeaways:

U.S. Bank will acquire approximately 14,100 new client issuances and $410 billion in assets under administration through its corporate trust services.
U.S. Bank Institutional Trust & Custody will acquire approximately 1,700 new clients and $570 billion in assets under administration.
The acquisition will add 19 new corporate trust offices and institutional custody offices primarily in the mid-Atlantic and southeastern states, enhancing U.S. Bank's presence in these regions.
U.S. Bank will utilize similar technology platforms and employ many of the same key vendors as Wachovia, minimizing conversion and integration risks.
The transaction has a $720 million initial cash purchase price with up to an additional $80 million payable within one year based on business retention levels.
U.S. Bank currently has 31 corporate trust offices across the country and offers a complete line of trust services, including trust and custody services, retirement, investment, and health savings accounts for institutional clients.
U.S. Bank serves as trustee and paying agent for the issuance of taxable and non-taxable securities, including the review of documents and indentures, registration, and authentication of bonds, receipts, and disbursement of bond sale proceeds, successor trusteeships, escrow account services, and transfer and paying agency services.
Acknowledging the commitment to ensuring a smooth transition, Jerry Grundhofer, chairman and chief executive officer of U.S. Bancorp, noted, "This transaction solidifies U.S. Bank as a top corporate bond trustee and makes us more competitive by increasing our existing scale and leveraging our industry leading technology and operational platforms."
David Carroll, president of Wachovia's Capital Management Group, stated, "U.S. Bank has a strong, proven track record in this business and will continue to provide outstanding services to our corporate trust and institutional custody clients."
U.S. Bancorp has $207 billion in assets, operates 2,411 bank offices, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust, and payment services products to consumers, businesses, and institutions.

Statistics:

The acquisition will add $410 billion in assets under administration through U.S. Bank's corporate trust services.
U.S. Bank will acquire approximately 14,100 new client issuances through its corporate trust services.
The transaction has a $720 million initial cash purchase price.
U.S. Bank currently has 31 corporate trust offices across the country.
U.S. Bank operates 2,411 bank offices and has 4,999 ATMs.
U.S. Bancorp has $207 billion in assets.
U.S. Bank serves as trustee and paying agent for the issuance of taxable and non-taxable securities, including the review of documents and indentures, registration, and authentication of bonds, receipts, and disbursement of bond sale proceeds, successor trusteeships, escrow account services, and transfer and paying agency services.

Sources:

U.S. Bancorp Press Release: "U.S. Bancorp Announces Acquisition of Wachovia's Corporate Trust and Institutional Custody Businesses"
Bloomberg: "U.S. Bancorp Acquires Wachovia's Corporate Trust and Institutional Custody Businesses"
U.S. Bancorp Website: "About U.S. Bancorp" and "Investor/Shareholder Information"