BofA Said to Seek Buyers for N.Y., Pennsylvania BranchesMatthew Monks and Hugh Son
Bank of America Corp., the second-largest U.S. lender by assets, is seeking buyers for about 40 branches in New York and Pennsylvania, four people with knowledge of the matter said.
The offices hold about $1 billion in deposits and could sell for $20 million to $30 million, said one of the people, who asked not to be identified because the talks aren’t public. The branches are in rural locations in southeastern New York and northeastern Pennsylvania, one of the people said.
Chief Executive Officer Brian T. Moynihan has been closing or selling outlets since 2011 to lower costs and focus on more populous markets. The CEO has said the Charlotte, North Carolina-based firm needs fewer branches as people do more banking online.
“They’re pulling out of markets they don’t have much growth in, places that aren’t meaningful to the big banks,” said Bert Ely, an independent banking consultant in Alexandria, Virginia. “There aren’t a lot of buyers for them right now, and so you’re not seeing them sell for huge premiums.”
Banks that expressed interest in the latest sale included FNB Corp. of Hermitage, Pennsylvania, Community Bank System Inc. of Dewitt, New York, and National Penn Bancshares Inc. of Boyertown, Pennsylvania, according to one of the people. Other potential bidders probably would be banks with less than $25 billion in assets that already operate in those markets, the people said.
Any deal would include the branches and their deposits, with Bank of America retaining the loans, according to the people. A year ago, HSBC Holdings Plc sold more than 100 branches in New York and Connecticut to Buffalo-based First Niagara Financial Group Inc. for about $900 million. That sale included $9.8 billion of net deposits and about $1.6 billion of performing loans, according to a regulatory filing. London-based HSBC is Europe’s largest bank.
Anne Pace, a Bank of America spokeswoman, said the company had no comment on branch sales. Scott Kingsley, Community Bank’s chief financial officer, and Jennifer Reel, a spokeswoman for FNB, didn’t respond to inquiries. National Penn’s Jacklyn Bingaman declined to comment.
Bank of America had about 6,000 branches when Moynihan became CEO in 2010 and 5,389 as of March 31, according to company reports. Moynihan told analysts in April that the bank will eventually have about 5,000. San Francisco-based Wells Fargo & Co., the biggest U.S. home lender, reported 6,185 retail banking outlets at the end of the first quarter.
Moynihan’s bank has announced or completed sales in 2013 of more than 60 locations to Arvest Bank of Fayetteville, Arkansas, First Financial Corp. of Terre Haute, Indiana, and Old National Bancorp of Evansville, Indiana.
Bank of America is willing to trim branches partly because about 10,000 customers are signing up for mobile banking services daily, Moynihan has said. The stock has gained 14 percent this year through yesterday, when it closed at $13.21.