Fulton Financial (FULT) in Lancaster, Pa., has added its name to the growing list of banks closing branches to cut costs.
The $17.1 billion-asset company said during a conference call Wednesday that it will close 14 branches, restructure its regional management and make changes to its employee benefit programs. The overhaul is expected to save Fulton $8 million annually.
The closings will be completed by mid-2014. Six of the branches are in Pennsylvania, five are in Maryland and three are in New Jersey.
"We just don't need branches as close together as we did in the past," Phil Wenger, Fulton's chairman, president and chief executive, said during the call. "Customers and accounts at those branches will be relocated to our next most convenient existing branch location. We have also developed and begun an extensive communication program for customers impacted by these changes."
Wenger said that, over time, Fulton will likely add branches, though there will be greater distance between locations.
Fulton also decreased the number of regional presidents, increasing the scope of responsibility for those that remain. A company spokeswoman said that two regional presidents had transferred to other positions and four others had retired. She also said the company hopes to find positions for any employees who might be otherwise displaced by the branch closings.
The company has also decided to eliminate certain employee benefits that "impact smaller numbers of employees," Wenger said.
Some of the money saved by the efficiency drive will be redirected to pay for regulatory and compliance infrastructure and technology upgrades. "Since we believe there is an upward bias to overall expense levels in the future, the savings associated with these changes will help mitigate the impact of those increases," Wenger said.
Fulton on Tuesday announced that its fourth-quarter earnings rose 5% from a year earlier, to $42.1 million, though noninterest expenses edged up 0.2% over the same period.