Wells Fargo to Sell 52 Branches to Flagstar -- Update
June 05 2018 - 9:32AM
Dow Jones News
By Colin Kellaher
Wells Fargo & Co. on Tuesday said it agreed to sell 52
retail bank branches in the Midwest to Flagstar Bancorp Inc. as
part of Wells's plan to trim its branch network.
The sale includes all Wells Fargo branches in Indiana, Michigan
and Ohio, along with four branches in Wisconsin. Wells Fargo said
the roughly 490 branch employees will receive job offers from Troy,
Mich.-based Flagstar.
Wells Fargo previously said it plans to reduce its retail bank
network to about 5,000 branches by the end of 2020, through
consolidations and divestitures. The San Francisco bank, which is
struggling to move past a spate of investigations across its
businesses, had 5,861 branches at the end of 2017.
The transaction, which includes about $2.3 billion in deposits
and $130 million in loans, is expected to close in the fourth
quarter.
Flagstar said it will pay an effective deposit premium of about
7% based on balances as of Dec. 31, 2017, and said it expects the
transaction to be moderately accretive to 2019 per-share
earnings.
Flagstar, which reported total assets of about $17.74 billion as
of March 31, said the deal provides liquidity that it can use to
repay short-term Federal Home Loan Bank advances. Flagstar said it
is moving funds to core deposits from wholesale borrowings,
reducing the interest-rate sensitivity of its funding base.
Flagstar said it will have 151 branches in the Midwest and eight
in California after the deal closes. Wells Fargo said it will still
have a presence in affected markets through businesses including
commercial lending, wealth management, retail brokerage and home
lending.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
June 05, 2018 09:17 ET (13:17 GMT)
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