Yadkin Bank to close 12 branches, cut jobs

Yadkin Bank, which last month completed its acquisition of Greensboro-based NewBridge Bank, is in the midst of closing a dozen branches and cutting jobs as part of its effort to wring at least $28 million in annual savings from the operations of the combined bank.

Two Triangle branches are among those being closed – one at 4505 Falls of the Neuse Road in Raleigh, one of the bank’s two branches on that street, and one in Cary at Regency Park.

Raleigh-based Yadkin added 42 branches with the acquisition of NewBridge, giving it a total of 110 branches in North Carolina and South Carolina. The acquisition, for $431.3 million in stock, was completed March 1.

As a result of the NewBridge deal, all of the branches being closed are in close proximity to other branches, CEO Scott Custer said in an interview.

“We have some branches that were just down the street from each other,” Custer said.

As for the job cuts, “there will be very little job loss in the Triangle,” Custer said. He added that the employees at the two Triangle branches that are being closed should be able to find other positions within the bank.

Yadkin released details of its cost-cutting efforts Thursday in conjunction with the release of the bank’s first quarter results. The bank’s earnings rose 17 percent in the quarter – in line with expectations, according to analysts polled by Bloomberg News.

NewBridge’s expenses are being reduced by about 30 percent, which likely will mean that the number of jobs being eliminated will be roughly 30 percent of the jobs added as a result of the NewBridge, Custer said.

But, he stressed, that 30 percent figure is misleading.

“These positions go away but the (people) often don’t lose their jobs,” Custer said. “They end up doing other jobs ... In a dynamic organization, you’re always creating new jobs, refilling jobs from people that have left.”

According to NewBridge’s latest annual report, it had 487 employees at the end of 2014. A 30 percent reduction would amout to about 145 positions.

Custer noted that Yadkin’s attrition rate is about 18 percent, so attrition alone should provide jobs for many workers whose jobs are eliminated. But he declined to estimate how many laid-off workers he expects to find work elsewhere within the bank.

Most of the layoffs involve former NewBridge employees, but some Yadkin employees will be affected, Custer said.

The job cuts at Yadkin, which began in March and will continue through May, are the result of “redundant positions” created by the merger, Custer said.

In addition to closing branches and cutting jobs, Yadkin also expects to generate savings by integrating the bank’s IT systems, which it expects to complete in September.

Custer told analysts during a conference call that the bank’s plan to cut costs by $28 million is probably conservative.

“If we are going to miss it, we will miss on the upside – meaning we’ll do better than the $28 million when the dust settles,” he said.

What is now Yadkin Bank has grown steadily through acquisitions. The acquisition of NewBridge expanded its footprint into the Triad – giving it branches in all of the state’s major markets – and boosted its presence in South Carolina.

Yadkin reported net operating earnings of $14.8 million, or 39 cents per share. That compares to $12.6 million, or 40 cents per share a year ago. The number of outstanding shares grew significantly with the NewBridge acquisition. Net operating earnings excludes certain non-operating income and expenses, including merger costs.

The quarterly numbers included one month of results from the NewBridge operation.

Net income totaled $7.8 million, or 20 cents per share, down from $9.6 million, or 30 cents per share, a year ago.

Yadkin shares closed Thursday at $25.17, up 18 cents.

This story was originally published April 21, 2016 at 11:57 AM with the headline "Yadkin Bank to close 12 branches, cut jobs."