Yesterday, BB&T Corporation (BBT - Free Report) announced the closure of a few of its branches along with layoffs. These initiatives are a part of the company’s reorganizing efforts following its acquisition of the wholly owned bank subsidiary of BankAtlantic Bancorp, Inc. on July 31, 2012.
The banking behemoth is about to close down and combine almost 21 of its branches in South Florida. Out of these, 14 are located in Miami-Dade and Broward counties, and the rest are located in Palm Beach County and the Treasure Coast.
The acquisition of BankAtlantic resulted in inclusion of certain branches that were situated in the same vicinity as BB&T’s. This compelled BB&T to consolidate the additional branches by assessing their feasibility, convenience and overall condition.
Barely a week earlier, BB&T declared its plan to retrench nearly 365 employees between October 1, 2012 and February 1, 2013. Most of these employees will be axed from back-office and administrative positions at the BankAtlantic headquarters. Following the takeover, all the work at the BankAtlantic headquarters will be carried out by the BB&T headquarters.
However, the employees who deal with the customers directly will be retained and those who worked in the ceased branches will be transferred to the other branches. The 650 employees of BankAtlantic, who were not retrenched during the takeover, are still not in the danger zone.
The BankAtlantic deal has catapulted BB&T into the list of the top 20 banking giants. Under the terms of the deal, BB&T acquired $2.1 billion in loans and roughly $3.3 billion in deposits.
This transaction has allowed the company to fast track its expansion strategy in the coveted Florida region. In addition to substantially increasing the company’s market share and footprints, the acquisition would improve its top line over the medium term.
BB&T currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral recommendation on the shares.