In a deal which will cost the Federal Deposit Insurance Corp., a total of $2.5 Billion, US Bancorp has announced that it will take over the 9 FBOP Corp. held banks which regulators had seized yesterday. In the current year so far, 115 banks have reported failure because of the economic downturn.

Under the deal, US Bancorp will reportedly assume all the deposits and assets of the seized banks located in California, Texas, Arizona and Illinois. Through the acquisition, the Minneapolis-based lender is looking to make profits by adding more branches, acquiring even more deposits and gain a share in the mortgage sector.

"This transaction is consistent with the growth strategy that we have outlined many times in the past”, said Rick Hartnack, vice chairman of consumer banking for U.S. Bancorp. We also view this type of acquisition as an efficient means of leveraging the company’s capital base".

The nine seized banks which will now be acquired by US Bancorp has as many as 153 offices. Post the deal, the depositors of all the banks will automatically become those of the US Bank. FDIC will continue to insure the deposits.