BB&T Corporation BBT disclosed the location of six branches to be closed in association with its acquisition of the $1.8 billion PA-based National Penn Bancshares, Inc. NPBC announced in August 2015. The company had previously declared the closure of 25 overlapping branches as a result of this acquisition.
The local National Penn branches to be put out of action are located in Abington, Elverson, Quarryville, Reading and West Chester. While the exact date of the shutdown was not declared by BB&T, the same is expected to take place with the completion of the acquisition deal in mid-2016.
Notably, majority of closing branches are less than 2 miles from another branch. The other locations to be wrapped up will be revealed at a later date, according to the BB&T spokesman David White.
In relation to the job eliminations expected at these branches, the company will likely target National Penn’s back-office staff, since all of its “high-performing, direct client-facing associates and revenue producers” are expected to be retained.
This NA-based bank is on a deal-making spree and crossed the $200 billion mark in total assets by signing a definitive agreement to acquire National Penn Bancshares.
While the company expects to incur $100 million as pre-tax merger and integration costs, it estimates to achieve cost savings of $65 million (roughly 30% of National Penn Bancshares’ operating expenses) annually with the deal anticipated to be accretive to earnings in the first full year.
Recently, BB&T announced the closure of a loan processing unit in Hagerstown, MD as part of its efforts to integrate the recently acquired Susquehanna Bancshares, Inc. with its operations. This resulted in another round of job cuts at Susquehanna offices.
The branch closures and layoffs will help BB&T control an unnecessary rise in expenses, going forward. Notably, non-operating expenses have persistently increased over the past six years as well as in the first half of 2015. Though acquisition-related expenses will continue to drive costs, BB&T is poised to benefit from inorganic expansion in the long run, given the company’s keen eye for rewarding takeovers.
The next acquisition may cross the $250 billion threshold for BB&T as the company seems enthusiastic on striking more deals. (Read more: BB&T Churning Out Deals: More on the Cards?)
BB&T currently carries a Zacks Rank #3 (Hold). SunTrust Banks, Inc. STI and Wells Fargo & Company WFC are better-ranked major regional banks, both holding a Zacks Rank #2 (Buy).
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