Bank of America Corporation (BAC) recently announced the decision to sell its branches to Berkshire Bank – a subsidiary of Berkshire Hills Bancorp Inc. (BHLB) – and Community Bank System Inc. (CBU). BofA plans to dispose its branches situated in both New York markets and northeastern Pennsylvania.
The company is planning to divest 20 New York market branches to Berkshire Bank (BERK). These branches have total deposits of around $640 million and total loans worth about $5 million.
Moreover, Berkshire Bank plans to retain the employees of the acquired branches. BofA is selling its branches for $14.4 million, representing a deposit premium of 2.25% on the collective total deposits.
The acquisition of BofA’s branches by Berkshire Bank is expected to be completed in the first quarter of 2014. Moreover, the deal is subject to regulatory approval from the Federal Deposit Insurance Corp. and the Commonwealth of Massachusetts as well as satisfaction of customary closing conditions.
Apart from this, BofA plans to sell 8 northeastern Pennsylvania branches to Community Bank at a 2.39% premium for about $369.0 million in deposits. The transaction is expected to be completed in the fourth quarter of 2013, subject to regulatory review and approval.
Last week, BofA agreed to sell 51 branches situated in Eastern Washington, Idaho, Oregon and New Mexico to Washington Federal Inc. (WAFD). The branches represent total deposits of about $1.8 billion and total loans of about $11 million.
This transaction is expected to be completed in the fourth quarter of 2013. Moreover, the deal is subject to regulatory approval from the Office of the Comptroller of the Currency (OCC) and satisfaction of customary closing conditions.
Over the past few years, BofA has been selling its branches and shuttering operations in an attempt to simplify its structure and strengthen its financials. Moreover, BofA’s effort to dispose branches is expected to reduce its employee base, thereby lessening its expenses.
BofA currently carries a Zacks Rank #3 (Hold).
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