Magazine article American Banker

1st Union to Shut 156 Offices in CoreStates' Old Turf

Magazine article American Banker

1st Union to Shut 156 Offices in CoreStates' Old Turf

Article excerpt

First Union Corp. said it would close 80 of its own branches and 76 former CoreStates Financial Corp. offices in Pennsylvania, Delaware, and New Jersey this fall.

The 156 branches to be shuttered equal 17% of the two companies' combined branch network in those three states.

Charlotte, N.C.-based First Union said last week that it would also make sweeping changes throughout the three states where CoreStates, which First Union bought in April, used to operate.

To that end, First Union said it would spend about $60 million to expand and renovate existing branches and would build at least three new branches- two in Pennsylvania and one in New Jersey.

After the closings, First Union would operate 743 branches in the three states.

First Union also intends to install its sales-oriented retail delivery strategy, dubbed the "future bank initiative," in the region's surviving branches.

Analysts welcomed word of the consolidation plan.

"This is the most visible part of the cost savings," said George Bicher, an analyst at BT Alex. Brown.

When First Union announced its agreement to buy CoreStates last November, it estimated the deal would produce $723 million of cost reductions.

Not surprisingly, though, some in the affected communities were dismayed at the news.

Gerald Birkelbach, director of commerce for Montgomery County, Pa., which is to lose 14 branches, said the closings would be inconvenient for consumers and businesspeople, not to mention employees who would lose their jobs.

"We're concerned about it," he said. …

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