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Mercantile to cut 770 jobs
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January 21, 1999: 10:17 a.m. ET
Holding company to reduce staff and consolidate operations to boost profits
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NEW YORK (CNNfn) - Mercantile Bancorporation Inc. will cut about 770 workers and close some of its operations as part of its continuing restructuring plan, the bank holding company said Thursday.
Mercantile (MTL) announced the changes along with its fourth quarter and overall 1998 earnings report.
Mercantile, based in St. Louis, said its restructuring program would require them to put a charge of $45 million, or 19 cents per share, on its books for the fourth quarter.
Without the charge, Mercantile earned $119 million, or 75 cents per share, up 7.1 percent from earnings of 70 cents per share during the fourth quarter one year ago.
When the charge is taken into account, Mercantile had net income of $90 million, or 57 cents per share, down from $105 million, or 70 cents per share during the same quarter in 1997.
For all of 1998, Mercantile's net income was $375 million, or $2.41 per share, compared with $246 million, or $1.73 per share during 1997.
Under its restructuring program, Mercantile will pare down its 19 loan processing centers into three. In addition, the company will reduce the number of its banking charters from 20 to seven.
The bank will cut its current workforce of 11,000 by 7 percent, or about 770 workers, during the next year. The company expects attrition to account for some of those cuts.
During the fourth quarter of 1998, Mercantile had already cut 550 jobs.
In addition, Mercantile will close or sell approximately 12 branches, bringing the total number of branches closed or sold since September to 50.
Once this is completed Mercantile will have about 500 branches and 650 ATMs across its six-state territory of Missouri, Illinois, Kansas, Iowa, Arkansas and Kentucky.
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Mercantile
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