Markets
BAC

Fifth Third Continues with Restructuring; Vends 12 Branches

Moving forward with its restructuring measures announced in June 2015, Ohio-based Fifth Third Bancorp FITB announced its exit from the St. Louis retail market. The bank has agreed to sell 12 branches, the retail and private banking deposits worth $261 million and consumer loans worth $155 million in St. Louis to Springfield - based Great Southern Bancorp Inc. GSBC .

The deal awaits regulatory approval and is expected to close in first-quarter 2016. Terms of the deal were undisclosed. However, Fifth Third will continue to provide commercial and institutional services in St. Louis.

The sale of branches forms a part of Fifth Third's plan to consolidate or sell around 105 branches and around 31 other properties. Such restructuring is expected to result in $65 million in cost savings annually. The bank incurred around $97 million in non-cash impairment charges that was recognized in the second-quarter 2015. Further, the company anticipates recognizing around $6-10 million in other costs, mainly tied with real estate contract terminations. The proposed actions are likely to be completed by mid-2016.

The plans come as part of Fifth Third's review on customers' choice and usage patterns throughout the bank's network and all distribution channels. As of Jun 30, 2015, Fifth Third had 1,299 full-service banking centers and 2,630 ATMs operating in regions including Ohio, Kentucky, Indiana, Michigan, Illinois and Florida.

To combat revenue challenges in the current low interest rate environment, banks are striving hard and taking cost cutting initiatives including branch closures to boost bottom-line growth. Notably, people are increasingly getting accustomed to mobile and internet banking, which has already reduced the importance of banking locations. Such modes of communication not only save time for a customer, avoiding physical visit to a branch, but also saves costs for a bank.

Several other banks that have taken similar moves in recent times include JPMorgan Chase & Co. (JPM), Bank of America Corporation BAC and Citigroup Inc. C .

Fifth Third currently carries a Zacks Rank #4 (Sell).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

FIFTH THIRD BK (FITB): Free Stock Analysis Report

CITIGROUP INC (C): Free Stock Analysis Report

BANK OF AMER CP (BAC): Free Stock Analysis Report

GREAT SOUTH BCP (GSBC): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BAC GSBC FITB C

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More