Fifth Third sells off branches in Pittsburgh

Fifth Third announced it was largely exiting the Pittsburgh retail banking market Thursday with the sale of 17 branches there. Financial terms were not disclosed.

The deal is part of Fifth Third’s broader strategy unveiled in June to shed about 100 branches and abandon plans for 30 new ones. The shuttering translates to closing 7.7 percent of all of its retail branches or one out of 13.

Fifth Third has been trimming and handful of branches annually for a few years, but officials conceded this cut was "significant."

Under Thursday’s deal, First National Bank of Pennsylvania will acquire the branches and the $383 million in deposits that go with them for an undisclosed sum. The deal, expected to close in 2016, includes retail accounts, certain private banking deposits and related loan relationships.

The Cincinnati-based regional bank said it would retain local commercial lending, its wealth management, institutional services and mortgage origination activities in Pittsburgh.

The Pittsburgh retreat is the largest cut under the plan to trim branches. This summer Fifth Third has disclosed two local branch closings –  a West Chester branch on Tylersville Square and an Oxford branch on North Poplar Street – as well as five in Michigan.

Bank officials say the move will save the company $60 million a year by mid 2016. The move comes as more consumers become more comfortable with conducting routine transactions via ATM and even mobile phone.

The officials declined to discuss where they will cut additional offices. Specifically, Fifth Third won’t discuss if the closure plan will it mean trimming locations in Greater Cincinnati and Northern Kentucky, where Fifth Third has 130 branches – more than any competitor – or if the bank might retreat from entire markets such as St. Louis, where it has just 10 branches.

As of March 31, the company had 1,303 full-service banking centers and 2,637 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina.