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BB&T to Shut & Consolidate 28 Units Following Two Buyouts

BB&T Corporation BBT will be closing and consolidating 28 branches as part of its deal to buy Allentown, PA-based National Penn Bancshares Inc., which was completed in Apr 2016. The announcement of this $1.8 billion worth stock-and-cash transaction was made by the bank last August.

"There are areas where BB&T and National Penn branches are very close," BB&T's Vice President of Corporate Communications David R. White said in an email on Friday. "As a result, we will be closing and consolidating a total of 28 branches."

However, there will be no layoffs due to the closure of branches, which will take place during the scheduled systems conversion in July.

“There will be no job losses as a result of these location consolidations,” White said. “Most branch associates will move to the receiving financial center, so clients will continue to be served by the same associates they have grown to know and trust.”

The overlapping branches that will be closed are mostly situated less than a mile away from each other. The branches to be consolidated are in locations where there is an overlap due to the facilities that BB&T acquired from its $2.5 billion acquisition of Susquehanna Bancshares, Inc. last August.

The branches to be closed are mainly located in Berks, Chester, Lancaster, Montgomery and Luzerne. Most of the affected workers will be relocated to the branches that are receiving the deposits.

According to an American City Business Journals report, most (17) are National Penn locations being consolidated into BB&T (legacy Susquehanna) branches, with 10 BB&T branches being received by National Penn locations. One BB&T branch will be consolidated into another BB&T site.

The company had earlier divulged that overlapping banking branches between Susquehanna and National Penn will lead to the closing of 25 branches and corresponding back office job cuts. The company had disclosed the location of six branches to be closed.

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. According to sources, BB&T is expected to eliminate a total of nearly 1,000 positions at Susquehanna.

Notably, Susquehanna and National Penn deals are not only expected to be accretive to BB&T’s earnings in the first full year of the respective acquisitions, but will also result in annual cost savings of $160 million and $65 million, respectively.

Currently, BB&T carries a Zacks Rank #3 (Hold). Some better-ranked banks include The Bank of New York Mellon Corporation BK, Bank of Marin Bancorp BMRC and Western Alliance Bancorporation WAL. All these stocks hold a Zacks Rank #2 (Buy).

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BB&T CORP (BBT): Free Stock Analysis Report
 
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