U.S. Bancorp in Minneapolis has confirmed that it will not complete its planned purchase of MUFG Union Bank along the timeline it originally provided.
The $586 billion-asset company said when it announced the $8 billion acquisition in September that it expected to complete the acquisition by June 30.
U.S. Bancorp said in a regulatory filing Monday that it “no longer expects to receive U.S. regulatory approvals in time to allow for closing to occur in the first half of 2022.”
The company said is making “significant progress in planning for closing and integration while awaiting regulatory approvals,” adding that it expects both to occur by the end of this year.
U.S. Bancorp had been warning about challenges meeting its original closing goal.
“At this time, it is uncertain whether such approvals will be received in time to allow for closing to occur in the first half of 2022; however, the parties continue to make significant progress in planning for closing and integration while awaiting regulatory approvals,” U.S. Bancorp said in a recent filing.
The company’s annual report, filed in February, mentioned the Biden Administration’s executive order, issued last summer, that directed federal agencies to review their processes for approving large bank mergers.
“A number of large bank deals that were pending at the time of the executive order have not yet obtained approval, or obtained approval on an extended time frame,” the filing said.
U.S. Bancorp “is unable to predict what impact the executive order will have on the timing of or ability to obtain regulatory approvals of mergers, including its pending merger with MUFG Union Bank,” the annual report said.
A day before the banks announced their deal, MUFG Union Bank entered into a consent order with the Office of the Comptroller of the Currency that ordered the bank to address deficiencies in its technology and operational risk management.
The OCC and the Federal Reserve held a rare public hearing on the deal in March.
U.S. Bancorp earlier this month agreed to a five-year community benefits plan totaling more than $100 billion.
The $105 billion-asset MUFG Union Bank has about 300 branches, $58 billion of loans and $90 billion of deposits.