F.N.B. Corp. President and CEO Vince Delie Jr. said during a conference call Tuesday afternoon there likely will be changes coming for Metro Bank customers who are used to extended daily and weekend hours at retail branches.
Delie explained that when Metro Bank separated from sibling company Commerce in 2008, it kept the Commerce model of high-touch customer service, including extended hours.
Since then, he said, technology has advanced so that branches don’t need extended hours to serve customers.
“When you look at the model that Metro ran, and Commerce before that, it was before technological changes occurred,” he said, alluding to innovations like mobile banking and smart ATMs. “There are opportunities to operate more efficiently and still provide 24-hour banking.”
At the same time, he said he doesn’t expect Metro’s model to completely disappear.
“I will tell you that we did not go into this to make their model meet our model,” he said. “Some aspects of what they do will be added to our model. But there will be adjustments.”
F.N.B. announced Tuesday morning it has agreed to acquire Swatara Township-based Metro Bancorp Inc. for about $474 million, a deal expected to be completed in early 2016. F.N.B. is the holding company for Pittsburgh-based First National Bank of Pennsylvania.
F.N.B. is projecting a 40 percent cost savings in Metro’s annual expenses — around $95 million — Delie said. In the most recent quarter, Metro had noninterest expense of about $25 million, said F.N.B. CFO Vincent J. Calabrese.
While some of the branch adjustments are figured into the cost savings, Calabrese said there are also some large vendor contracts Metro has on the books he believes can be terminated since F.N.B. has similar vendor contracts already in place. Early termination of those contracts would be included in about $49.5 million in one-time, merger-related expenses F.N.B. is estimating.
Calabrese also said there will be “some reduction of hours” but he didn’t know which of Metro’s 32 current branches would be affected.
“They’ve done a great job running their branches,” Calabrese said. “We’re going to study the flows branch-by-branch.”
Metro has about 800 employees, according to Jennifer Reel, F.N.B. spokeswoman. Metro officials referred all calls to F.N.B.
It is not yet known how many of those employees will be retained by F.N.B., but Reel said the number will be “meaningful.”