-March 9,2023-
Minneapolis-based U.S. Bank acquired Japanese-owned MUFG Union Bank in December and the merged company will now be closing at least 145 branches that are either U.S. Bank or Union Bank locations all over California. Likely, this is the greatest number of bank closures in the state that have been recorded.
The bank says the closures and some branch exchanges will happen by May 26. After the musical chairs take place, the fact is that the combined bank’s customers will have 145 fewer choices to visit.In a news release US Bank commenting on the impact of the merger had a different spin.
“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 February 25.
SLO Closure
In the local reading area, the U.S.Bank branch in the Trader Joe’s and Food 4 Less parking lot will close at 3991 S Higuera in San Luis Obispo.
U.S. Bank customers in San Luis Obispo will be able to continue to transact business at the current Union Bank site that will be rebranded U.S. Bank – located at 995 Higuera
.
Los Osos goes dark
In Los Osos the U.S. Bank location at Ralph’s grocery store off Los Osos Valley Rd, will go dark and the space has an uncertain future. The town will be down to 2 brick and mortar banks.
In Atascadero the Union Bank will be rebranded U.S. Bank. In recent years U.S. Bank closed their location in the Albertsons market in that town. The Paso Robles US Bank at the Albertsons will stay open.
In the region, closure notices include Santa Maria with the shuttering of the U.S. Bank branch in Albertsons at 2320 S Broadway. There is a Union Bank branch nearby that will be rebranded U.S. Bank.
If you judge the impact of branches open today but closed by June 1 the reading area from Paso Robles to Santa Maria will have three fewer banking choices due to the merger,Los Osos, SLO and Atascadero.
In their 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.”
Loss of nearby choice would include the SLO bank closure – far from the Downtown choice and Los Osos where there is no close location. Santa Maria and Atascadero do have a convenient alternative.
Besides the 145 California locations detailed in the most recent Comptroller weekly report, more than 2 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.
The closure of so many branch locations of the merged company will clearly result in big cost savings for U.S. Bank.
In 2022 news reports said a trend toward digital banking during the COVID-19 pandemic drove banks to shrink their brick-and-mortar presence in California last year. That’s according to a new report that shows American bank retail branch closures increased by 38 percent, a record, in 2021.
California saw a net loss of 269 banks last year, more than any other state. California was followed by Michigan with 247 closures, and New York with 221. Rounding out the top 5 were Florida with 192, and Illinois with 153, says report.
Three to one net loss
The S&P Global Marketing Intelligence analysis shows American banks closed nearly 4,000 branches and opened 1,000, for a net loss of 2,927 branches as the pandemic increased digital banking for a second straight year.
U.S. Bancorp, with approximately 70,000 employees and $601 billion in assets as of September 30, 2022, is the parent company of U.S. Bank National Association. US Bank had 2572 branches in the US in 2021, behind number one Wells Fargo. US Bank closed 257 of their branches that year.
As of June 30, 2022, MUFG Union Bank, N.A. 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 2021 noted the that the merger that was pending and 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.US Bank had 20 locations in Ventura, Santa Barbara and Sand Luis Obispo counties.
The article said “ the acquisition will combine the No. 4 and No. 5 largest banking operations in the region. 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,” 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.
SLO Market Share
An annual FDIC report on market share in the the San Luis Obispo -Paso Robles metro area as of Sept 2022 says Union Bank had 2 branches in the county with $284 million in deposits and a 3% market share.U.S. Bank had 4 locations with $172 million in deposits and a 1.8% market share. If they retain all the deposits, the merged company would be the 6th 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 7.
Roots in Tokyo
The demise of all Union Bank locations closes a chapter on some interesting history of a California bank, based in LA ,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.Union Bank Executive Chairman Kaz Koshi told Little Tokyo-based newspaper The Rafu Shimpo that the bank was created after the signing of the San Francisco Peace Treaty.
The treaty re-established relations between Japan and the Allied Powers about six years after World War II ended.”
The parent company of Union Bank, Mitsubishi UFJ Bank— will hold a small stake in the newly merged financial company.