Ailing Palmetto Bancshares Inc. in Greenville, S.C., will shutter more branches and eliminate more jobs as it struggles to return to profitability.
The $1.2 billion-asset company, which closed four branches in 2008, said in a letter to shareholders Wednesday that it intends to close single branches in Greenville and Laurens, S.C., and intends to either sell or consolidate branches in Blacksburg and Rock Hill, S.C. The closures or sales, expected to be completed by March 31, would reduce its number of branches by four, to 25.
The company also said it also plans to reduce its number of full-time employees to 333 by the end of the second quarter through the branch reduction, outsourcing of certain operational functions and attrition. Its total number of employees peaked at 420 at the end of 2008. Palmetto said it would take one-time charges totaling roughly $1.1 million this quarter and next quarter to cover expenses related to the staff and branch reductions. The company did not project a cost savings from the moves, but said the reductions combined with new revenue-generating measures would have a $6.2 million impact on earnings going forward.
Palmetto has lost $21.2 million in the first three quarters of the year due to problem assets and writedowns related to depressed real estate values. It reported losing $60.2 million in 2010 and $40.1 million in 2009.