First Commonwealth to close a fifth of its branches
First Commonwealth Financial in Indiana, Pa., is planning to close a fifth of its branches.
The $9.3 billion-asset company said during a Wednesday conference call to discuss quarterly results that it plans to shutter the locations by the end of this year.
The effort should help the company keep quarterly noninterest expenses between $51 million and $52 million, executives said. The branches, on average, are within four miles of other First Commonwealth locations.
First Commonwealth has 151 branches, including 115 in Pennsylvania, according to data from the Federal Deposit Insurance Corp.
“This comes at a time that we are setting quarterly company records with online mobile account opening, mobile deposit activity, and debit card activity with our new contactless cards,” said T. Michael Price, First Commonwealth’s president and CEO.
“Customer preferences continue to change meaningfully and the [COVID-19] crisis has pushed all things digital well past traditional servicing,” Price said, adding that the net interest margin is “compressed and could remain there for the foreseeable future.”
Executives said the company opened nearly 1,000 deposit accounts through mobile and online channels in the second quarter, which was triple the volume that took place a quarter earlier.
Price said the branches account for about a tenth of First Commonwealth’s deposits, noting that only 1.5% to 2% of those are “truly at risk” of going to other banks.
The company has been working on other tech improvements, including a new treasury management platform for commercial clients that debuted in June. It is planning to release new versions of its P2P payments and mobile online banking platforms in coming months.