U.S. Bancorp (USB) Arm Closes PFM Asset Management Buyout
U.S. Bancorp (USB) enhances its presence in the institutional asset management space and bolsters position as a dominant provider of varied investment solutions with the PFM Asset Management buyout.
U.S. Bancorp’s USB primary subsidiary U.S. Bank completed the deal to acquire PFM Asset Management LLC. The acquisition was carried out through U.S. Bancorp Asset Management. The deal to acquire PFM Asset Management was announced this July.
PFM Asset Management will operate as a separately registered investment advisor. More than 250 employees of PFM Asset Management have joined U.S. Bank.
Following the addition of PFM Asset Management, U.S. Bank’s Wealth Management and Investment Services division has combined investment assets under management of more than $407 billion as of the third-quarter 2021 end.
PFM Asset Management caters to a broad spectrum of client relationships and product offerings, including outsourced chief investment officer services, local government investment pools, and separately managed accounts in fixed-income and multi-asset class strategies.
Per U.S. Bancorp Asset Management head Eric Thole, these services complement U.S. Bank’s existing business. Further, the buyout will amplify U.S Bank’s presence in institutional asset management nationwide and bolster its position as a dominant provider of varied investment solutions in the country.
Management at PFM Asset Management remarked that the company and its “clients will benefit from U.S. Bank’s financial strength, franchise value, world-class technology and cybersecurity. We are also excited to join an organization that shares a similar culture – an unwavering commitment to clients, and a reputation for operating with the highest ethics and valuing its clients, employees, communities and diversity, equity and inclusion principles.”
U.S. Bancorp’s several acquisitions over the past years have enabled the company to foray into untapped markets and fortify its footprint in the existing geographies.
This November, the bank agreed to acquire San Francisco-based fintech firm, TravelBank, which offers technology-driven cost and travel management solutions.U.S. Bank is already an industry leader in delivering innovative corporate payment solutions like virtual corporate credit cards and tools to improve working capital. Hence, the acquisition will help it in accelerating the integration of digital payments within its commercial segment.
Such inorganic growth efforts combined with ongoing investments in innovative product enhancements, services and people supported its balance-sheet growth and fee-based businesses beside increasing U.S. Bancorp’s market share.
Over the past six months, shares of the company have gained 25.8%, underperforming 38% growth recorded by the industry.
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Currently, U.S. Bancorp carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Finance Companies
Several companies from the finance sector are undertaking consolidation efforts to counter the low-interest-rate environment along with the heightened costs of investments in technology.
The Bank of New York Mellon Corporation’s BK subsidiary, Pershing, agreed to acquire direct indexing solutions provider, Optimal Asset Management, Inc. The completion of the deal, subject to customary conditions, is expected by the end of this year.
Notably, the acquisition will become part of BNY Mellon Pershing’s newly launched business unit, Pershing X. This October, the Pershing X platform was launched within BNY Mellon’s Pershing to design and build innovative solutions for the advisory industry.
Last month, CVB Financial Corp. CVBF, the holding company for Citizens Business Bank, announced that Citizens received regulatory approvals from the Federal Deposit Insurance Corporation, and the California Department of Financial Protection and Innovation to complete its previously announced merger agreement with Suncrest Bank. The stock-and-cash deal worth $204 million, announced this July, is expected to close on or about Jan 7, 2022, subject to the satisfaction of all remaining closing conditions.
In an effort to expand its presence, CVBF announced an agreement, and plan of reorganization and merger, according to which Suncrest bank would merge with and into Citizens. The acquisition is the second-largest in CVB Financial’s history.
United Bankshares, Inc. UBSI completed the merger deal with Community Bankers Trust Corporation. This June, United Bankshares entered an all-stock deal to acquire Community Bankers, the parent company of Essex Bank. Both companies were expected to collaborate in a transaction valued at $303.3 million.
The buyout has brought together two high-performing banking companies. It also bolsters United Bankshares’ position as one of the largest and best-performing regional banking companies in the Mid-Atlantic and Southeast.
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