Matthew L. Brown
Reporter- Boston Business Journal
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One of Massachusetts’ fastest growing banks was a big part of Bank of America’s massive branch sell-off this year.
Pittsfield-based Berkshire Bank – with a far-flung branch network that reaches southern Vermont, central Connecticut, Greater Boston and upstate New York – is expected to close its $14 million acquisition of 20 BofA branches early next year.
According to SNL Financial, the transaction is the third-largest U.S. branch deal this year. The top four branch deals all involve Bank of America, including Seattle, Wash.,-based Washington Federal Inc.’s acquisition of 51 BofA branches, Old National Bancorp’s acquisition of 24 BofA branches in Indiana and Indiana-based First Financial Corp.’s acquisition of nine branches.
By the end of the third quarter, Bank of America’s branch network had shrunk to 5,243 from 5,715 a year earlier amid aggressive cost cutting under CEO Brian Moynihan. The bank’s employee count was down 12.5 percent to about 220,000 over the same span.
Berkshire has had to cut back, too. Almost as soon as it announced the acquisition of the upstate New York BofA branches, its earnings took a turn for the worse.
The bank slashed 66 employees, about 7 percent of its staff, in the third quarter and decided to close nine branches. CEO Michael Daly said more layoffs were likely and that the third quarter’s 4 percent reduction in overhead costs would likely be followed by another 3 percent reduction before the end of the year.
Nationwide, banks are on target to do far fewer branch deals this year than they did in 2012, according to SNL.
Through the end of November, U.S. banks had announced 69 branch deals compared to 91 in the same period a year ago.