U.S. Bancorp (USB) Acquires Downey Financial (DSL) and PFF Bancorp (PFFB) from FDIC

November 24, 2008 7:13 AM EST

U.S. Bancorp (NYSE: USB) 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. (NYSE: DSL), headquartered in Newport Beach, Calif. and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc. (OTCBB: PFFB), 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.

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