Fifth Third Bancorp (FITB - Free Report) will be shuttering about 44 branches that are located in close vicinity to each other in the Chicago area next month, to save costs.
The move comes post MB Financial buyout in May 2018. During that time the company had expected to close 50 branches. It noted that 25 of the branches are located within one mile of each other and 18 are only one-half mile apart.
Per an article by The Chicago Tribune, branch closings include 19 Fifth Third branches and 25 former MB Financial branches. Eight of those branches are in the city of Chicago and the rest are in the suburbs. Employees of the affected branches will be moved to other facilities.
The bank sent notices to customers with information regarding branches that will shut down, and provided alternative options to continue banking.
Though the acquisition has made Fifth Third undertake several restructuring moves, it is expected to deliver significant financial benefits to the company. The merged entity is likely to record an internal rate of return of about 18.5% and be accretive to Fifth Third’s operating earnings in the first year. Moreover, accretion of about 7% is projected in the second year on realization of full cost savings.
Fifth Third’s efforts to expand geographically and bolster operations bode well for its financials. Further, it remains focused on strategic investments through North Star initiatives, which are expected to boost revenue growth, save expenses and drive efficiency.
The stock has gained around 21% over the past six months compared with 12% growth of the industry.
Currently, Fifth Third 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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BankUnited’s (BKU - Free Report) earnings estimates for the current year have been revised 2.5% upward over the past 60 days. Also, the company’s shares have risen 15.2% in the past six months. It carries a Zacks Rank #2.
The Zacks Consensus Estimate for M&T Bank Corporation (MTB - Free Report) earnings for the current year has been revised slightly upward over the past 60 days. Also, the company’s shares have risen nearly 18% in the past six months. It currently carries a Zacks Rank of 2.
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