Late Friday, 2 more failed banks were seized by U.S. banking regulators. Downey Savings and Loan and PFF Bank & Trust are among 22 banks that have collapsed this year amid the ongoing financial crisis. U.S. Bancorp (USB: sentiment, chart, options) will take over most of the banking assets from the failed twosome, though it won't acquire assets or liabilities of their parent holding companies. Between Downey and PFF, the number of USB branches swelled by 213 over the weekend.

According to the Federal Deposit Insurance Corporation (FDIC), Downey's failure will cost its insurance fund $1.4 billion, making it the third-largest bank to fail this year. PFF's collapse will cost an additional $700 million.

Wall Street has reacted favorably to the news, particularly with Citigroup's (C) rescue boosting investor sentiment this morning. USB jumped to a high this morning near the 25 level, and is currently up more than 8% at $24.41.

Although USB has fared better than many of its sector peers this year, with the stock down just 29% in 2008, option players are broadly pessimistic toward the regional bank. The equity has racked up a 10-day put/call ratio of 5.59 on the International Securities Exchange (ISE), with volume on bearish bets dwarfing that of their bullish counterparts. This ratio is 9 percentage points from an annual peak, which indicates that USB's option activity on the ISE has rarely been more skewed toward puts.