With an aim to meet changing customer behavior related to more use of technology, Northwest Bancshares, Inc. (NWBI - Free Report) plans to optimize its branch network. The company will be closing around 20% of its branches across its footprint along with one free-standing drive-through and one business office in a span of five days, starting Dec 14, 2020.
During these days, changes will be made in the branches to become more technology driven and strengthen Northwest Bancshares’ operating efficiency.
Northwest Bancshares has been witnessing continued evolvement of client preferences toward digital and mobile banking, with these accelerating amid coronavirus outbreak. Ronald J. Seiffert, chairman, president and CEO, said, “This branch optimization plan reflects our ongoing efforts to ensure we are well positioned in our industry to provide the community bank experience that is valued by our customer base while also enhancing our strong digital and mobile banking presence.”
These efforts aimed at improving operating efficiencies are expected to result in approximately $12 million in pre-tax expenses, which will be recognized in the second half of 2020. Notably, beginning 2021, annual pre-tax operating cost reductions are projected to be nearly $13 million.
Similar to Northwest Bancshares, several other banks like Signature Bank (SBNY - Free Report) , People’s United Financial (PBCT - Free Report) and BNY Mellon (BK - Free Report) have been making changes to their products and services to cater to changing customer preference. These efforts are likely to further support banks’ financials.
With gradual change in operating backdrop and rise in demand for loans are expected to aid Northwest Bancshares’ profitability over time. Also, improvement in operating efficiency will be a tailwind. However, low interest rate environment and uncertainty related to coronavirus-related matters are major near-term concerns.
Shares of Northwest Bancshares have lost 38.1% so far this year compared with the industry’s 32.5% fall.
Currently, Northwest Bancshares carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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