Wachovia Corp. plans to rid itself of 35 to 70 branches over the next nine months and focus attention on market areas it deems more appealing.
The trim would come on top of more than 100 other branch closings and sales in recent months.
Officials of the Winston-Salem, N.C.-based banking company said they are entering the second phase of a "market network" strategy, which involves reconfiguring the distribution of branches in Wachovia's five-state territory.
"This is a reallocation of resources to get our network postured for the future," said Stanhope A. Kelly, executive vice president for consumer financial services.
He said Wachovia is in the midst of a "channel optimization" strategy that seeks to balance convenient access for customers with profitable distribution of retail services.
"That is one of the challenges in this game," he said. "You have to be very mindful of your whole network. A large percentage of people still select their banks on where they're located."
Wachovia is one of many multistate banks reevaluating distribution strategies and paying special attention to branches.
First Union Corp. of Charlotte, N.C., announced last week that it was selling two small-town branches to First Citizens Bancshares of Raleigh, N.C.
With enhanced technology has come more detailed branch and market profitability information, giving bank executives more useful tools to make decisions about exiting and entering markets and which customer groups to concentrate on.
Sean J. Ryan, an analyst at Bear, Stearns & Co., said leaving slow- growth markets is generally a savvy strategy that many banking companies are using.
It is one way to "reap the benefits of the technology (banking companies) have been spending all this money on," Mr. Ryan said. "There are some branches that aren't used for anything approaching full capacity."
Keith Von Seggern, senior consultant with Action Systems in Dallas, said, "The rationalization of distribution points tends to point to pulling out of smaller markets."
During the first phase of the program, which is being wrapped up this month, Wachovia closed, consolidated, and sold more than 130 offices, mostly in small towns in Georgia and South Carolina. Offsetting those closings, the company is opening 22 offices, most of them in Atlanta, Charlotte, and Raleigh.
Additionally, Wachovia officials are considering opening up to 10 new locations in the next year.
Mr. Kelly said it had not been determined how many branches would be closed in the second phase. He gave a range of 5% to 10%-probably closer to 5%-of Wachovia's 700-branch network, which extends through the Carolinas, Georgia, Virginia, and Florida.
"We're further analyzing where we can streamline cost in the network," he said.
Marguerite Sons, an analyst with Interstate/Johnson Lane in Atlanta, said Wachovia's retail restructuring leads toward places where there are large numbers of affluent people.
Ms. Sons said this should pay off in terms of increased noninterest income. Her firm recently upgraded Wachovia's stock from "neutral" to "long-term buy."