U.S. Bancorp acquires MUFG Union Bank in $8B cash and stock deal

September 21, 2021

U.S. Bancorp (NYSE:USB) has acquired MUFG Union Bank's core regional banking franchise from Mitsubishi UFJ Financial Group (OTCPK:MBFJF) (NYSE:MUFG) for approximately $8B, including $5.5B in cash and approximately 44M shares of U.S. Bancorp common stock.

Upon closing of the transaction in H1 2022, MUFG will hold a minority stake of approximately 2.9% in U.S. Bancorp .

The transaction excludes the purchase of MUFG Union Bank's Global Corporate & Investment Bank, certain middle and back-office functions, and other assets.

U.S. Bank will gain more than 1M loyal consumer customers and about 190,000 small business customers on the West Coast in addition to approximately $58B in loans and $90B in deposits based on MUFG Union Bank's June 30, 2021, balance sheet.

The acquisition will improve U.S. Bank's deposit position in California from 10th to 5th and will significantly increase its customer base in California.

U.S. Bancorp expects the transaction to be approximately 6% accretive to earnings per share in 2023 assuming a 75% synergy phase-in and 8% accretive to earnings when fully integrated.

The company expects to achieve approximately $900M in pre-tax cost synergies equal to 40% of estimated non-interest expenses and expects to incur merger charges of $1.2B.

The transaction is expected to close in the first half of 2022.

For this year Bancorp Inc 's (located in Philadelphia) revenue will be around 214.86 million USD. This is according to the average of the analysts' estimates. This is hugely lower than 2021's revenue of 279.48 million USD.

Historical revenues and results Bancorp Inc plus estimates 2021

The analysts expect for 2021 a net profit of 106 million USD. The majority of the analysts expects for this year a profit per share of 1.8 USD. Based on this the price/earnings-ratio is 12.69.

For this year analysts don't expect the company to pay a dividend. The average dividend yield of the electronics companies equals an attractive 2.49 percent.

Based on the current number of outstanding shares Bancorp Inc 's market capitalization 1.3 billion USD. 166

At 18.01 the stock trades 0.44 percent higher at 22.84 USD.

Price data Bancorp Inc 2007-2021

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