Tuesday, September 10, 2013

BB&T cuts roughly 3 percent of its branches, CEO says

BB&T Corp. recently closed roughly 43 branches as part of “a natural pruning process,” its CEO told investors Tuesday.

Kelly King, whose presentation was part of the Barclays Global Financial Services Conference in New York, said the figure amounts to around 3 percent of the Winston-Salem-based bank’s branches.

The cuts come as other big banks, such as Charlotte-based Bank of America, have been closing branches as foot traffic to teller lines declines and more customers migrate to online and mobile banking.

None of the 43 are in the Charlotte region, BB&T spokesman David White told the Observer Tuesday.

“I know there’s a lot of conversation going on these days about the future of retail banking and how fast people will close branches and all that,” King said. “I personally think all that is a bit overblown.”

BB&T is trimming branches as analysts are keeping a close eye on the bank’s expenses. The bank reported in the second quarter that noninterest expenses rose 4.9 percent to $1.5 billion, at a time when other banks have lowered costs.

BB&T said the higher expenses stemmed partially from a restructuring of its regions, which it reduced from 37 from 23. Expenses were also higher because of the addition of new systems and personnel costs related to the company’s purchase last year of Fort Lauderdale, Fla.-based BankAtlantic, the bank said.

The bank has told analysts that expenses should fall throughout this year.

While BB&T has closed branches, it is in opening mode in Texas, a market for which the bank has growth plans. Last year, the bank announced it will open 30 branches in Texas.

On Tuesday, King said Texas is a “big, whopping opportunity for us.”

BB&T is the 17th-largest bank in the U.S. by assets, according to Federal Reserve data. In Charlotte, it has the third-largest market share, behind No. 2 Wells Fargo and No. 1 Bank of America.