U.S. Bancorp on Friday received all of the U.S. regulatory approvals needed to go ahead with its $8 billion acquisition of MUFG Union Bank, clearing the path for the nation's latest big-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 of the Minneapolis-based bank, the fifth-largest in the U.S., initially hoped to close the transaction in the first half of this year with a conversion to follow this fall.

But regulatory approvals for the deal, as well as for other pending bank mergers, had been held up amid some leadership changes. Regulators also took increased interest in ensuring regional banks have the financial requirements in place to weather economic downturns.

On Friday, both the Federal Reserve and the Office of the Comptroller of the Currency (OCC) signed off on the transaction. It had already gotten the green light from the Federal Deposit Insurance Corp. The only approval still be secured is from Japanese regulators.

The acquisition is now expected to close before the end of the year.

U.S. Bancorp CEO Andy Cecere said in a statement that U.S. Bank believes the MUFG acquisition is "good for customers, good for the communities that MUFG Union Bank has served and good for employees."

Executives have said the acquisition will give U.S. Bank a bigger market share in California, Oregon and Washington, where MUFG operates about 300 branches. They also have said it will help them build more scale in a competitive banking landscape and allow them to invest more in technology and digital services.

This the largest deal for U.S. Bancorp since its $21 billion merger with Milwaukee-based Firstar Corp. in 2001.

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

The OCC said its approval is conditional on U.S. Bancorp identifying business lines and portfolios that could be sold quickly if needed in a time of stress. Meanwhile, the Federal Reserve said it is weighing new rules to enhance regulators' ability to wind down large banks if they were to fail.

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

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

U.S. Bancorp's profits sank nearly 11% to $1.8 billion in the third quarter as it logged $42 million in merger charges and as it set aside more reserves for potential 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 revenue rose 7.4% in the quarter to $6.3 billion.

With rising interest rates and increased loan activity, the bank saw net interest income rise 20.6%. Average total loans grew 13.5% over the year, driven in part by more commercial loans.

Noninterest income fell 8.3% as it saw lower mortgage banking revenue. This was driven by a decline in refinancing activities as mortgage rates continue to rise.