Megan Brooks
Truist Bank, one of the largest financial institutions in the U.S., has been making headlines for its decision to close 72 branches across 17 states. The bank, formed after BB&T's acquisition of SunTrust in 2019, has cited cost-cutting measures as the primary reason behind these closures, aiming to save $750 million over 12 to 18 months. Despite the closures, Truist assures customers that they will still have access to physical locations or online banking services. The bank has also launched initiatives to support communities, such as Truist Cares for Western North Carolina, a $725 million commitment to aid small businesses, housing, and infrastructure in the aftermath of Hurricane Helene.
| Characteristics | Values |
|---|---|
| Number of branches to be closed | 72 |
| Percentage of branch network to be closed | 3.5% - 4% |
| Number of states Truist Bank operates in | 17 |
| States with most branch closures | Florida, North Carolina, Georgia, Alabama, Kentucky, Maryland, West Virginia |
| Number of branches closing in North Carolina | 9 |
| Number of branches closing in Washington, D.C. | 7 |
| Number of branches closing in Georgia | 8 |
| Number of branches closing in Atlanta, Georgia | 4 |
| Reason for closures | Cost-cutting, lower branch traffic and transaction volume, clients' evolving preferences |
| Cost-cutting target | $750 million |
| Savings achieved by end of 2022 | $1.6 billion |
| Savings target by 2025 | $200 million |
| Total assets as of March 31, 2024 | $535 billion |
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What You'll Learn
Truist Bank to close 72 branches by March 2024
Truist Bank, one of the largest financial institutions in the U.S., is closing 72 branches by March 2024. The bank offers personal checking, wealth-building tools, and home loans to millions of customers. The decision to close these branches is part of a $750 million cost-cutting initiative, which aims to limit the expense rise to no more than 1% in 2024. The cost-cutting plan includes $300 million from job cuts, $250 million from organisational restructuring, and $200 million from reducing technology expenditures.
The closures also align with the bank's goal of consolidating its branch network and responding to changes in client behaviour, branch traffic, and transaction volume. Truist CEO Bill Rogers announced the plans in September 2023, stating that the bank aims to shave $750 million off gross costs over the next 12 to 18 months. The bank, formed after BB&T's acquisition of SunTrust in 2019, had initially projected $1.6 billion in annual net savings by early 2022 but fell short due to systems integration and consolidation delays.
The 72 branches to be closed make up about 3.5% of the bank's footprint across 17 states. While the bank has not released a comprehensive list of upcoming branch closures, sources indicate that closures are expected in Alabama, Georgia, Kentucky, Maryland, North Carolina, and West Virginia. Nine branches are set to close in North Carolina, and seven in the Washington, D.C., metropolitan area. Truist Bank customers in Georgia will also be affected, with eight branches closing in the state, including four in Atlanta and one in Sandy Springs.
Despite the closures, Truist assures that clients will still have access to physical branches, with the next nearest location on average being about 2.5 miles away. Additionally, customers can continue to access Truist's services online 24/7.
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$750 million cost-cutting initiative
Truist Bank, one of the largest financial institutions in the US, has been working on a $750 million cost-cutting initiative. The initiative was announced in September 2023 by Truist's CEO, Bill Rogers, who outlined that the plan would be implemented over 12 to 18 months, potentially concluding in the first quarter of 2025.
The cost-cutting initiative comes as a response to the need for a strategic reset and expense reduction. The bank has been under pressure to cut costs and improve financial performance since its formation in 2019, following the merger of BB&T and SunTrust. The merger was predicated on achieving cost savings and various other synergies, with executives initially pledging $1.6 billion in annual net savings by early 2022. However, systems integrations and branch consolidation delays forced a revision of this target.
The $750 million in savings will be realized through several measures, including significant job cuts, organizational restructuring, and reductions in technology spending. The largest portion, about $300 million, will come from job cuts across various support roles in areas such as marketing, finance, and management. Another $250 million will be saved through organizational restructuring, which includes consolidating certain businesses, reducing the number of management layers, and scaling back the firm's brick-and-mortar presence. The remaining $200 million will be achieved by reducing expenditures on technology.
In addition to these financial measures, Truist has also made operational changes to streamline its business. This includes consolidating commercial and community banking regions, merging consumer and wholesale payments businesses, establishing a unified commercial real estate business, and resizing its board of directors. These changes indicate a comprehensive effort to enhance efficiency and better serve its clients.
Despite the initiative, critics have questioned whether the cost-cutting measures are enough, as Truist has faced criticism from Wall Street and investors over its rising expenses and financial performance. However, the plan seems to have had a positive impact on Truist's stock price, which was up about 1% on the day of the announcement.
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Truist Bank's $28 billion acquisition of SunTrust in 2019
Truist Bank is not going out of business. However, the bank recently announced plans to close 72 branches across 17 states, amounting to about 3.5% of its branch network. This move is part of a $750 million cost-cutting initiative to be implemented over 12 to 18 months.
In 2019, Truist Bank was formed through the merger of BB&T and SunTrust Banks, Inc. This $28 billion acquisition created the sixth-largest US commercial bank, with assets of $442 billion and a market capitalization of around $66 billion. The merger was structured as an all-stock deal, with BB&T as the nominal survivor. The new entity, headquartered in Charlotte, North Carolina, retained the name Truist Financial Corporation and served approximately 10 million consumer households.
The merger aimed to achieve $1.6 billion in annual net savings by early 2022. However, delays in systems integrations and branch consolidation forced a revision of this target. Despite the challenges, Truist eventually achieved its cost-saving goal by the end of 2022.
The formation of Truist Bank brought together two companies with a combined 275 years of history and a shared dedication to building a better future for their clients and communities. The merger allowed the bank to offer a wide range of financial services, including retail, small business, and commercial banking, as well as wealth management and insurance services.
Following the closures, Truist will continue to operate 1,900 branches and 2,900 ATMs, ensuring that clients have access to physical locations or online banking services. The bank has also launched initiatives, such as "Truist Cares for Western North Carolina," committing $725 million to support small businesses, housing, and infrastructure in communities recovering from natural disasters.
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Truist Bank's $725 million commitment to Western North Carolina
As of January 2024, Truist Bank announced plans to close 72 branches, or 3.5% of its branch network, by March 2024. This move is part of the bank's $750 million cost-cutting strategy, which includes plans to consolidate its branch network, cut certain business lines, and reduce tech spending.
Despite these closures, Truist Bank has demonstrated its commitment to supporting communities in Western North Carolina through its "Truist Cares for Western North Carolina" initiative. Launched on November 20, 2024, this initiative involves a three-year, $725 million commitment to support critical small business, housing, and infrastructure efforts in the region. The bank aims to help communities impacted by Hurricane Helene recover and rebuild.
The $725 million will be allocated in various ways. This includes $340 million in dedicated lending for qualified small businesses, residential mortgages, and commercial real estate. Additionally, $310 million will be dedicated to infrastructure projects, with a focus on community development. The bank will also provide $50 million in loans and investments, as well as $25 million in philanthropic grants.
Through this initiative, Truist Bank aims to address areas of critical need, listen to the community's needs, and leverage its expertise, capital, and partnerships to make a meaningful difference in Western North Carolina's recovery and long-term resiliency.
Nonprofits, local small businesses, government offices, and consumers interested in participating in the "Truist Cares for Western North Carolina" initiative can express their interest by calling 844-4TRUIST, contacting their relationship manager, or visiting their local Truist branch.
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Truist Bank's sale of Truist Insurance Holdings
Truist Bank, one of the largest financial institutions in the US, has been undergoing a series of changes as part of its cost-cutting strategy. The bank, formed after BB&T's $28 billion acquisition of SunTrust in 2019, aimed to save $750 million over the next 12 to 18 months. As part of this initiative, Truist announced plans to close 72 branches, or 3.5% of its branch network, by March 2024. The closures were attributed to changes in client behaviour, lower branch traffic, and reduced transaction volume.
In addition to branch closures, Truist also undertook operational streamlining, including consolidating commercial and community banking regions, merging payments businesses, and resizing its board of directors. These measures aimed to enhance efficiency and achieve financial goals.
However, despite these cost-cutting efforts, there is no indication that Truist Bank is going out of business. In fact, on May 7, 2024, Truist announced the completion of the sale of its remaining stake in Truist Insurance Holdings (TIH) to an investor group led by private equity firms. TIH, the fifth-largest insurance brokerage in the United States, was valued at an implied enterprise value of $15.5 billion. Truist received approximately $10.1 billion in after-tax cash proceeds from the sale, resulting in an approximate after-tax gain of $4.7 billion and an increase in CET1 capital by $9.4 billion.
Truist's Chairman and CEO, Bill Rogers, expressed satisfaction with the sale, stating that it "significantly enhances Truist's financial profile and positions Truist to invest in and grow its core banking businesses." Following the sale, Truist executed a strategic balance sheet repositioning, selling $27.7 billion of lower-yielding investment securities and reinvesting a portion of the proceeds in shorter-duration investment securities.
The sale of Truist Insurance Holdings marks a significant milestone for the company, indicating a new phase of growth and a stronger financial position for Truist Bank.
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Frequently asked questions
No, Truist Bank is not going out of business. However, the bank announced plans to close 72 branches across 17 states by March 2024. This decision is part of a $750 million cost-cutting initiative.
Truist Bank is closing some of its branches due to lower branch traffic and transaction volume. The bank also aims to respond to clients' evolving preferences for digital banking services.
The states that will be affected by the Truist Bank branch closures include North Carolina, Washington, D.C., Alabama, Georgia, Kentucky, Maryland, and West Virginia.
While customers may need to find a new physical branch location, Truist Bank has stated that clients will still have access to a branch within a reasonable distance. Additionally, customers can continue to access Truist's online banking services 24/7.
