Webster Financial to trim branch network by 17%

Add Webster Financial in Waterbury, Conn., to the growing list of U.S. banks shuttering branches.

On Friday, the $32 billion-asset parent company of Webster Bank disclosed in a regulatory filing that it will close 27 branches in Connecticut, Massachusetts and Rhode Island by mid-2021, a move that will leave it with 129 branches in those three states and New York. The shutdowns are expected to cost about $19 million, most of which will be recognized this quarter.

The move should save Webster about $15 million a year, starting in the third quarter of 2021, the company said.

Pressed by rising expenses and customers’ growing preference for digital banking — which has accelerated during the coronavirus pandemic — several banks are taking similar actions. This week alone, Berkshire Hills Bancorp in Boston announced plans to cut the size of its branch network by about 20% while First Mid Bancshares in Mattoon, Ill., said it would close 10 of its 63 branches.

Larger banks are trimming, too. PNC Financial Services Group in Pittsburgh expects to close 280 branches by the end of next year, U.S. Bancorp in Minneapolis said it will shutter about 400 offices by early 2021 and KeyCorp in Cleveland said it will move up its plans to close branches.

There were 84,775 active bank branches in the U.S. as of Oct. 31, based on data compiled by S&P Global Market Intelligence.

Webster’s branch shutdowns are part of a companywide cost-cutting plan. Bank executives in October said they wanted to reduce operating expenses by 8% to 10% by the end of next year.

Webster started a revenue and expense review in January, but the effort sped up during the pandemic, John Ciulla, the company’s chairman, president and CEO, said when announcing the cost-cutting goal.

The company did not provide a breakdown of branch closings by state.