IberiaBank Corp., (NASDAQ: IBKC) the parent company of the regional banking group of the same name, announced plans Friday (May 18) to shutter or merge 22 locations across its Southeast U.S. footprint as consumers continue to migrate to mobile banking and other digital platforms to meet their financial needs.
IberiaBank spokeswoman Elizabeth Ardoin did not immediately respond to a Talk Business & Politics inquiry concerning possible bank closures in Arkansas. IberiaBank operates 23 bank offices in the state, according to the FDIC.
In a news release, the Lafayette, La.-based regional banking group said the bank closures are part of a long-term strategy to improve operating efficiency and enhance the value of the bank’s franchise particularly given increased increasing customers adoption of digital banking options.
“These closures are intended to optimize our branch and ATM network as part of on-going efforts to improve the efficiency of our franchise. As our clients increasingly use and become more reliant on our digital channels, we continuously review our distribution channels to ensure we are operating efficiently,” company President and CEO Daryl Byrd said. “We are committed to providing extraordinary service to our clients and communities and investing in banking solutions that meet their evolving preferences.”
The 22 branches that will be closed or consolidated into existing locations are partly related to the bank’s acquisition of recent $220 million Coral Gables, Fla.-based Gibraltar Private Bank and Trust, company officials said. At the close of that deal on March 23, Gibraltar had seven branches in the Miami, Key West and Naples, Fla., metropolitan area and one location in New York City.
Since the end of 2014, IberiaBank officials said, the regional upscale banking group has opened or acquired 81 branches and closed or consolidated 53 branch locations, not including those announced today. Following the bank closures, IberiaBank will operate in 296 locations across Louisiana, Arkansas, Tennessee, Alabama, Texas, Florida, Georgia, New York, North Carolina and South Carolina.
The Louisiana banking group, which has total assets nearing $30 billion, currently offers commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, mortgage, and title insurance services.
The bank closures are expected to take place in the second and third quarters, officials said, and will provide an improvement to annual run-rate operating expense by over $8 million on a pre-tax basis once sold or closed. At the same time, the Louisiana bank expects to realize an incremental reduction of $2 million in non-interest expense in the fourth quarter of 2018.
Altogether, total expenses associated with the branch closures are anticipated to be approximately $12 million in non-core charges, of which $7 million is expected to be recognized in the second quarter and $5 million in the third quarter of 2018. The total cost of the branch consolidations is expected to be earned back through non-interest expense reductions within a two-year period, officials said.
IberiaBank’s announcement comes only days after Talk Business & Politics report that two shuttered BancorpSouth branch locations in El Dorado and Stuttgart are part of a nationwide auction on May 31 to dispose of local branches across the rural South that are struggling to stay afloat as more consumers do their banking online or with smartphone apps.
Talk Business & Politics also recently reported the number of Arkansas bank branches had fallen from 1,524 to 1,362 after the 2008 financial crisis, mainly due to mobile banking and other technology innovations in the financial sector.