Wells Fargo announced Tuesday that it will sell 52 retail branches in the Midwest to Flagstar Bank, ending its physical presence in three states.

The San Francisco-based Wells Fargo will no longer have branches in Indiana, Michigan and Ohio, and fewer locations in Wisconsin, after the sale, which covers roughly 490 Wells Fargo employees managing $2.3 billion in deposits and assets.

Mary Mack, Wells Fargo’s head of community banking, said the bank will be “working closely with Flagstar over the coming months to ensure a smooth transition and uninterrupted service.”

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“We remain committed to these communities, and Wells Fargo will continue to have a presence in the area with other businesses including commercial lending, wealth management, retail brokerage, and home lending,” Mack said.









Wells Fargo said the sale, which is part of a previously announced plan to close 5,000 branches by 2020, should be completed by the end of the year and is unrelated to its legal woes. The move comes, however, as the scandal-plagued bank faces severe sanctions and ongoing probes from federal and state officials.

The Federal Reserve in January imposed strict growth restrictions on Wells Fargo after the bank opened and charged customers fees on millions of consumer accounts without their consent. The Fed, which is also seeking the ouster of Wells Fargo board members, could maintain those sanctions until 2019.

Wells Fargo also paid a $1 billion fine to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) to settle claims it charged mortgage borrowers inappropriate fees and forced loan customers to purchase unnecessary auto insurance.

As Wells Fargo pulls back, the deal will expand Flagstar’s footprint in the Midwest. The bank, based in Troy, Mich., holds $17 billion in assets across nearly 100 branches in Michigan with eight more in California.