U.S. Bank acquires Union Bank. Here’s what it means for customers in SLO County

Minneapolis-based U.S. Bank acquired Japanese-owned Union Bank in December, and the merged company will now close at least 145 branches that are either U.S. Bank or Union Bank locations all over California, including in San Luis Obispo County.

U.S. Bank, owned by U.S. Bancorp, has three locations in SLO County while Union Bank, owned by Mitsubishi UFG, has two.

The bank says the closures and some branch exchanges will happen by May 26.

“After Union Bank branches are integrated to the U.S. Bank brand, current Union Bank customers will have more than double the number of branches available to them in California. At the same time, existing U.S. Bank customers will gain more than 100 new locations in the state.”

Official notice of the closures comes from the weekly report from the Comptroller of the Currency released Feb. 25.

What the bank merger means to SLO County

The changes will affect customers of the two banks across the county.

In San Luis Obispo, the U.S. Bank branch at 3991 S. Higuera St. near Trader Joe’s will close, and the current Union Bank location at 995 Higuera will be rebranded as U.S. Bank.

In Los Osos, the U.S. Bank at Ralph’s grocery store will go dark, and the space has an uncertain future. The town will be down to two brick-and-mortar banks, Mechanics and Chase.

In Atascadero, the Union Bank will be rebranded U.S. Bank. In recent years, U.S. Bank closed its location at what was then the Albertsons market. The U.S. Bank at the Albertsons in Paso Robles will stay open.

Elsewhere on the Central Coast, closure notices will also come to Santa Maria with the shuttering of the U.S. Bank branch at the Albertsons at 2320 S. Broadway. There is a Union Bank branch nearby that will be rebranded U.S. Bank.

In its statement the bank said, “In nearly all cases, customers who are accustomed to going to a branch that will be closed will be able to go to another branch that is very close by. One out of three consolidated branches are less than 0.2 miles away, more than 50 percent are within a half mile and 80 percent are less than a mile away.”

Besides the 145 California locations detailed in the most recent comptroller report, more than two dozen U.S. Bank branches in other parts of the country have been posted to close since the first of this new year. Union Bank, too, has been closing branches since the merger was announced.

How the two companies compare

U.S. Bancorp, with approximately 70,000 employees and $601 billion in assets as of Sept. 30, 2022, is the parent company of U.S. Bank National Association. U.S. Bank had 2,572 branches nationwide as of 2021, behind No. 1 Wells Fargo. U.S. Bank closed 257 of its branches that year.

As of June 30, 2022, MUFG Union Bank operated 297 branches, consisting primarily of retail banking branches in the West Coast states. Most did business as Union Bank.

A news article from Pacific Coast Business Times in September 2021 noted the that the merger was pending and said that “Union Bank’s 29-branch network in the Tri-Counties will become part of U.S. Bank in an $8 billion deal that will give Union Bank’s Japanese parent a nearly 3% stake in Minneapolis-based U.S. Bancorp.”

U.S. Bank had 20 locations in Ventura, Santa Barbara and San Luis Obispo counties.

“The acquisition will combine the No. 4 and No. 5 largest banking operations in the region,” the article also noted. “U.S. Bank will emerge with a branch network that makes it a clear rival to JPMorgan Chase and Wells Fargo, the top two banks in the region with more than 40 branches each.”

U.S. Bank CFO Terrance Dolan said in a 2021 statement that U.S. Bancorp “will not be exiting any markets or reducing availability to branches or banking services in any low- and moderate-income neighborhoods.”

The acquisition will add about 190,000 small business customers from Union Bank, which will increase the number of business banking relationships at U.S. Bank by about 18%, a spokesman said at that time.

Market share in SLO County

An annual FDIC report on market share in the the San Luis Obispo-Paso Robles metro area as of September 2022 said Union Bank had two branches in the county with $284 million in deposits and a 3% market share.

U.S. Bank had four locations with $172 million in deposits and a 1.8% market share.

If they retain all deposits, the merged company would be the sixth largest bank, based on deposits, in the county. Chase and Mechanics Banks are the largest players, each with above 18% market share. Mechanics Bank has 13 locations vs. Chase with seven.

Union Bank’s history dates to end of World War II

The demise of all Union Bank locations closes a chapter on some interesting history of a California bank, based in Los Angeles, with ties to Japan. An LA Business Journal story published this year notes the following.

“The bank’s history is closely linked with the Bank of Tokyo of California, which was founded in 1946 and established a branch in the Little Tokyo area of Los Angeles in 1952. The bank helped Japanese Americans reestablish their homes and businesses after they were released from World War II-era internment camps; many found their homes and businesses gone and had trouble getting loans otherwise.”

The parent company of Union Bank, Mitsubishi UFJ Bank — will hold a small stake in the newly merged financial company.

John Lindt is the editor of the news website Sierra2theSea.net.

This story was originally published March 7, 2023 at 10:00 AM.