US Bank is to acquire State Farm Bank’s existing deposit and credit card accounts as part of a strategic alliance.
At the same time, State Farm agents will introduce US Bank deposit and credit card products to State Farm customers.
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State Farm is the largest US property and casualty insurance provider while US Bank ranks fifth-largest by assets. The alliance benefits State Farm customers, offering them new, easy ways to manage their banking needs.
The alliance is part of a broader strategy by State Farm to exit banking operations.
Moreover, the companies are exploring how to provide State Farm customers with access to vehicle loans and business banking products.
“State Farm has been committed to helping people for nearly 98 years,” says State Farm President, CEO Michael Tipsord. “When we combine State Farm’s deep customer relationships with the scale and capabilities of US Bank we can help significantly more people.”
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By GlobalDataState Farm strategic alliance: expanding US Bank’s reach
The transition of deposit and credit card accounts is scheduled to begin after closing. This is subject to regulatory approval, later this year and into 2021. Current State Farm Bank customers do not need to take any action.
At first glance, the deal adds a relatively modest sum of deposits for US Bank. On the other hand, the deal is of major geographical significance. US Bank has branches in only 26 states. This deal gives US bank nationwide sales coverage.
“We are excited about this new alliance with State Farm,” says US Bank chair, president and CEO Andy Cecere. “It will help us reach more customers in the moments that matter most. It is a terrific opportunity to combine US Bank products, services and digital capabilities with State Farm’s coast-to-coast agents. This relationship provides State Farm customers with enhanced product options. And it expands US Bank’s reach into new and existing markets.”
State Farm and its affiliates have nearly 19,000 agents serving approximately 84 million policies and accounts.
