Chase Manhattan Corp. said Friday that it would sell 29 upstate New York branches to M&T Bancorp of Buffalo. The price was not disclosed.
The $361 billion-asset banking company said it decided to shed the branches after a strategic review of its operations in upstate New York. The branches are in Binghamton, Corning, Buffalo, Jamestown, and the Albany/Schenectady area,
"The capital generated from a sale of these activities could be better deployed to fund more attractive growth opportunities," said Chase spokesman Ken Herz. "The sale enables us to focus our resources in Rochester and Syracuse, where we have greater scale."
Although Chase, the third-largest banking company in the nation, decided to abandon consumer and small-business branch banking in the area, it will continue to serve the region's middle-market, municipal, and institutional trust customers, it said.
Analysts applauded with Chase's decision to sell the branches, most of which are in markets where it had not developed enough of a presence to be especially profitable.
"A lot of these branches are essentially orphan branches-Chase didn't have enough mass in these markets," said Lawrence W. Cohn, an analyst with Ryan Beck & Co. "This sale, and the fact that they are going to concentrate more on Rochester, makes a lot of sense."
M&T would acquire roughly $600 million in retail and business deposits, $140 million in municipal accounts, and $40 million in loans. The deal, which is slated to close Sept. 30, would also provide $20 billion-asset M&T with the trust operations associated with the Chase branches.
The purchase would bring M&T into Schenectady and Jamestown and add to its presence in Binghamton and Rochester, said Gary S. Paul, its senior vice president of corporate finance.
"This fits quite nicely with our present upstate New York franchise," Mr. Paul said in an interview.
Mr. Paul said M&T, which is the largest independent bank headquartered in upstate New York, plans to close a small number of branches where operations overlap. Some jobs will be lost, he said.
M&T plans to hire all the Chase branch employees and retain "a significant portion of them," Mr. Paul said.