Byline Bancorp, Inc. BY recently announced plans to continue with its branch-consolidation efforts. The bank plans to consolidate 11 of its 57 full-service offices, representing about 20% of the company’s total branch network.
The bank’s efforts come amid the shift in customers’ behavior toward digital banking and the subsequent decline in footfall in physical branches due to the coronavirus pandemic. With these efforts, the bank aims to streamline its branch network and recognize efficiencies in operations.
The bank informed that it will keep servicing its current markets, and the consolidations target branches that overlap with other locations. The majority of the branches that are likely to be impacted by these efforts are located within two miles of another branch of the company, which will continue operating in the particular market.
Alberto J. Paracchini, president and chief executive officer of the bank stated, “The changes we are making to our retail branch network reflect the accelerating adoption of digital banking channels by our customers that has occurred during the COVID-19 pandemic.Following the closure of the branches that will start on December 31, 2020, our retail branch network will be focused on those sub-markets that present the most significant growth opportunities and where a physical presence is most valuable to our new business development efforts.”
The commencement of the consolidation efforts is scheduled for Dec 31, 2020 and will result in a one-time charge of $5.9 million. However, the bank expects these efforts to result in annualized cost savings of $4.3 million from 2021. The bank plans to use part of the cost saving to strengthen its digital banking platform and fortify other retail branches.
Shares of this Zacks Rank #3 (Hold) company have depreciated 37.7% over the past year, while its industry has declined 32.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The coronavirus pandemic is aiding banks’ efforts to bolster their digital capabilities and reduce physical presence. Companies like HSBC Holdings HSBC, Bank of America BAC and JPMorgan JPM are investing heavily in technology upgrades to enhance digital experience for customers.
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