U.S. Bank To Suffer Heavy Cuts?

First Bank System of Minneapolis would slash costs at three key U.S. Bancorp businesses as part of its planned $8.8 billion acquisition of Oregon’s biggest bank, according to a recent Securities and Exchange Commission filing.

The SEC document says First Bank projects $340 million in savings through cuts in U.S. Bancorp administration, data processing and branch banking.

The First Bank filing also indicated that First Bank will shelter commercial lending and private banking operations from big cuts.

First Bank expects to cut 4,000 jobs, including more than 2,000 U.S. Bancorp jobs in the Portland area. Since the proposed merger was announced March 20, neither bank has said where nor when the cuts will come.

First Bank officials have said the cuts will be made in the combined company.

But Ben Crabtree, an analyst for Dain Bosworth, and Jim Bradshaw, an analyst for Pacific Crest Securities, predict most will come out of U.S. Bancorp, particularly at the Portland headquarters.

U.S. Bancorp has 6,600 Portland-area workers.

First Bank spokeswoman Wendy Raway said First Bank would not release more details on cuts.

Crabtree, the Dain Bosworth analyst, estimated that job cuts would account for as much as 75 percent of the $340 million in cost savings. If 4,000 jobs paying an average of $50,000 in wages and benefits were cut, it would save about $200 million.

Raway said the cost savings included other expenses such as equipment and supplies.

First Bank told the SEC the biggest cuts would be in operations, up to $148 million, including data processing for loans and deposit accounts.

First Bank has insisted no branches will be consolidated because its 11-state territory doesn’t touch U.S. Bancorp’s six-state turf in the West.

Both companies froze hiring after announcing the deal. The banks hope to close the deal in September.