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. "But when big corporations make decisions that are beyond our control, there isn't too much we can do."
First Union spokesman George Biechler pointed out that the company's Montgomery County customers would have 54 branches to choose from after the closings, more than either First Union or CoreStates had operated separately there before the merger.
In buying Philadelphia-based CoreStates, First Union encountered a flood of negative reaction from community leaders.
Perhaps because of this sensitivity, First Union would not say how many jobs would be lost due to the branch closings.
All former CoreStates branch employees-not just those in branches to be closed-are undergoing a "selection process" that will determine their future roles, according to First Union spokeswoman Laurel O'Brien.
The company said it hopes to avoid layoffs in the branches through attrition and job creation.
To decide which branches would be shuttered, First Union analyzed them by age, size, and capability, taking into account how a closing would affect the surrounding community, the company said.
The closing plan leaves a network in which 80% of the branches are a mile or less from one another and 50% are half a mile or less, Ms. O'Brien said.
The plan's goal is "to build a stronger combined company that is more efficient and more effective in meeting its customer needs," she added.