US Bancorp on Friday received all of the necessary US regulatory approvals to move forward with its $8 billion acquisition of MUFG Union Bank, paving the way for the country’s latest major bank merger.

The deal, which would increase the bank’s assets by more than 10% to $680 billion, has been in the works for a year. Executives at the Minneapolis-based bank, the fifth-largest in the United States, initially hoped to complete the transaction in the first half of this year with a conversion to follow this fall.

But regulatory approvals for the deal, along with other pending bank mergers, had been put on hold amid some leadership changes. Regulators have also shown increased interest in ensuring regional banks have the financial requirements in place to weather economic downturns.

On Friday, the Federal Reserve and the Office of the Comptroller of the Currency (OCC) signed off on the transaction. He had already obtained the green light from the Federal Deposit Insurance Corp. The only approval yet obtained is that of the Japanese regulators.

The acquisition should now be finalized before the end of the year.

US Bancorp CEO Andy Cecere said in a statement that US Bank believes the acquisition of MUFG is “good for customers, good for the communities MUFG Union Bank has served and good for employees.”

Executives said the acquisition would give US Bank greater market share in California, Oregon and Washington, where MUFG operates about 300 branches. They also said it would help them grow in a competitive banking landscape and enable them to invest more in digital technology and services.

It is the biggest transaction for U.S. Bancorp since its $21 billion merger with Milwaukee-based Firstar Corp. in 2001.

And it will be the second-biggest deal for a Minnesota-based company this year after UnitedHealth Group’s $13 billion acquisition of Change Healthcare, which was also recently approved.

The OCC said its approval is conditional on U.S. Bancorp identifying lines of business and portfolios that could be sold off quickly if needed in times of crisis. Meanwhile, the Federal Reserve has said it is considering new rules to strengthen regulators’ ability to liquidate big banks in the event of failure.

News of the regulatory approvals came just hours after US Bancorp reported lower third-quarter profits and higher revenue and as executives addressed the storm clouds on the horizon.

“Borrowing costs are rising, inflation is high, savings rates are starting to fall, and the stock market is off its highs,” Cecere told analysts on a conference call. “So while the backdrop is favorable today, it would not be surprising for us to see an economic slowdown develop at some point, driven by lower levels of confidence, which could lead to reduced spending and business investment.”

US Bancorp’s profits fell nearly 11% to $1.8 billion in the third quarter as it incurred $42 million in merger charges and built up more reserves for possible bad loans. Executives said a $200 million increase in its reserves in the quarter was due to strong loan growth and growing economic uncertainty.

Its net income rose 7.4% in the quarter to $6.3 billion.

With rising interest rates and increased lending activity, the bank saw its net interest income increase by 20.6%. Average total loans increased by 13.5% during the year, partly due to more commercial loans.

Non-interest revenue fell 8.3% due to lower mortgage banking revenue. This decrease is explained by a drop in refinancing activities as mortgage rates continue to rise.

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