) announced a deal to purchase the document custodian business of
Detroit-based Ally Bank. This transaction follows the string of
investments that U.S. Bancorp has made in the corporate trust
service business. Notably, the bank will carry out the purchase
through its leading bank U.S. Bank National Association.
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This business acquisition will expectedly add 40 employees to
U.S. Bancorp and give it a new location in Waterloo, IA.
Additionally, this deal will likely increase the company's
documents under custody business by 15%. Here, it is worth
mentioning that U.S. Bancorp has a strong presence in Iowa, with
over 1,250 staff in 99 branches across multiple business lines.
The aforementioned deal follows Ally bank's announcement of an
initial public offering last week. As part of the planned exit of
its investment in Ally, the U.S. Treasury Department had reduced
its stake in the bank from 37% to 17%. The terms of the deal were
not publicly revealed, but it is expected to close during the
second quarter of 2014.
At present, U.S. Bancorp is engaged in document custody
operations that it carries out through its Global Corporate Trust
Services division. Its document custody division is responsible
for storing and safeguarding various loan files, including
mortgages and leases. The latest acquisition is expected to open
up new growth opportunities for the company.
U.S. Bancorp currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the major regional bank space include
Wells Fargo & Company
). All of these have a Zacks Rank #2 (Buy).