U.S. Bank Acquires Downey Savings & Loan and PFF Bank & Trust (Failures #21 & #22)

[Pale Blue Dot]

Source: Marketwatch

MINNEAPOLIS, Nov 21, 2008 (BUSINESS WIRE) -- U.S. Bancorp announced today that, effective immediately, its lead bank, U.S. Bank National Association, has acquired the banking operations of two separate California financial institutions from the Federal Deposit Insurance Corporation. The two acquired institutions are Downey Savings & Loan Association, F.A., the primary subsidiary of Downey Financial Corp., headquartered in Newport Beach, Calif. and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc., headquartered in Rancho Cucamonga, Calif.

Under the terms of these transactions, U.S. Bank will receive approximately $12.8 billion of assets and assume approximately $11.3 billion of liabilities, including $9.7 billion of deposits, of Downey Savings & Loan and will receive approximately $3.7 billion in assets and assume approximately $3.5 billion of liabilities, including $2.4 billion of deposits, of PFF Bank & Trust. As part of the transactions, U.S. Bank has agreed to assume the first $1.5 billion and $0.1 billion of expected losses on the assets of Downey Savings & Loan and PFF Bank & Trust, respectively. Any losses in excess of these amounts will be subject to a loss sharing agreement with the FDIC. U.S. Bank will not acquire any assets or liabilities of the banks' parent holding companies, Downey Financial Corp. or PFF Bancorp Inc. These acquisitions are expected to meet or exceed the company's internal financial hurdles for internal rate of return and earnings per share accretion.

"The timing of this transaction could not be better, as we have just completed the highly successful integration of our Mellon 1st Business Bank acquisition in Los Angeles and Orange County. With the addition of the Downey Savings & Loan and PFF Bank & Trust branch locations, we continue to widen our distribution network in our growing California and Arizona markets," commented Joseph M. Otting, vice chairman of commercial banking and U.S. Bancorp's Western U.S. senior executive. "Once the conversions and integrations are completed, both current and new customers of U.S. Bank will have the increased convenience of 561 branches in California and 75 branches in Arizona to serve their banking needs. This also presents a great opportunity for us to deepen customer relationships by offering U.S. Bank's extensive mix of products and services to our new customers."

As part of these transactions, U.S. Bank will modify the terms of certain acquired residential mortgage loans in accordance with the FDIC Mortgage Loan Modification Program. The objectives of this program are to improve affordability, increase the probability of performance, and allow borrowers to remain in their homes.

Read more: http://www.marketwatch.com/news/story/US-Bank-Acquires-Downey-Savings/story.aspx?guid={09231220-1B77-426A-9F05-803A1B80ACD3}

[Dr.Phool]

1. One every Friday before the election.

So far three today. Hmmmm

[BumRushDaShow]

2. "The timing of this transaction could not be better..."

Yes because you lost the big gov't purchasing card contract to JPMorganChase and this was your consolation prize perhaps?

[KeepItReal]

3. Feds closed the banks and hand them over to US Bank all in one day?!?!

Local news said the banks were shut down by the govt *yesterday* and immediately handed over to US Bank!?!?

The customers didn't even know the banks were in trouble.

Why does this sound like taxpayer funded Mergers and Acquisitions (M&A)?

[sarcasmo]

4. Folks, we are watching the fall of the Empire.