|Copyright:||(c) 2010 SourceMedia Inc , Source: The Financial Times Limited|
|Source:||Financial Times Limited|
More companies are shuttering branches obtained in
In most cases, buyers took on branches in markets beyond their geographical scope, or came to a later realization that it would cost too much to maintain and compete for greater market share in single-branch markets.
Sometimes, even, the closures are for both reasons. Consider
(The company had 128 branches at its peak; it is closing 22 branches overall, but would not disclose the acquisition-versus-legacy breakdown of a further seven closures in its core markets.)
Given how profitable First Financial’s acquisition of
Industry observers said more banks have now had time to evaluate the costs versus potential growth in running branches.
“You probably will see more branch rationalizations,” said
Analysts added that closures are going to become more visible because some regulators require buyers to wait a year before making such moves.
First Financial waited until after September to close some of
Leaving those markets was based on a lack of scale. Each branch was a lone representative in its city, “making it difficult to support them in gaining market share,” Hall said. The company also expects to reduce its annual
Hall cautioned it does not mean they are permanently writing off
Core markets include
Regardless of whether a bank has made an
Hall said management only recently decided on the latest closures “as part of a re-occurring planning process as we looked at where the best opportunities were to deploy capital.”
Among all of the branch consolidations, Hall said the company expects to lose the most deposits from
This is small considering the significant benefits First Financial has already earned from the three failed bank deals, posting a
The bank’s scaling back may add franchise value to its core market.
First Financial isn’t the only bank to close branches gained from