Shawmut National Corp., which acquired Peoples Bancorp of Worcester last week, said it plans to close 18 of the 49 branches it now owns in and near the Massachusetts city.
Shawrout, which announced the acquisition in August 1993, will close 15 Peoples branches by Aug. 26. The bank will also close three Shawmut branches in late September.
After the consolidations, Shawmut will have a total of 31 branches in the Worcester area. The bank estimates it will save $5.5 million annually as a result.
Savings on Target
Analysts said the Hartford and Boston-based bank should have no problem achieving its savings goal.
Peoples' operating expenses for last year were $22.6 million, not including what it pays for federal deposit insurance, according to Keefe, Bruyette & Woods analyst Thomas Theurkauf Jr.
Cutting $5.5 million of that "doesn't strike me as a remarkable number," he said.
The acquisition, valued at $180 million, will likely mean layoffs, but the bank did not specify which employees or how many would be fired.
90 Full-Time Workers
"We will do everything possible to help individuals transition to new positions at Shawmut, while working to keep the total number of work force reductions to a minimum," said Paul DelFino, executive vice president for community banking.
The branches slated for closure employ 90 people full time.
Mr. Theurkauf said that $12 million of Peoples' operating expenses in 1993 were related to employees. "It seems to me darn near impossible to strip out a quarter of their expense base and not affect personnel," he said.
Shawrout National, the nation's 28th-largest bank holding company, has $27.4 billion in assets. It is expected to complete two other acquisitions before the end of the second quanter Norwalk, Conn.-based Gateway Financial Corp., and New Dartmouth Bank of Manchester, N.H. The Gateway acquisition will likely mean closure of 20 offices in its franchise area.
Meanwhile, Shawrout competitor Bank of Boston Corp. completed its acquisition of BankWorcester Corp., a $1.5 billion-asset holding company for Worcester County Institution for Savings.