Brown Deer-based Bank Mutual Corp. will close 10 percent of its branch network on May 16.
The strategic cost-cutting move, which the bank announced in February, will result in the closure of branches in Barron, Brillion, Cornell, Eau Claire, Green Bay, Menomonie and Peshtigo.
Bank Mutual, which has 701 employees, has offered all 32 affected employees comparable positions at nearby branches. Some took the opportunity to retire, said Dave Baumgarten, chief executive officer. All in all, compensation-related expenses in the first quarter included $83,000 in employee severance costs.
“Our overall headcount isn’t going down—were just kind of redeploying that into different functionalities,” he said.
The closures will bring Bank Mutual’s total banking locations to 68 in Wisconsin and one in Minnesota. Company leaders have projected the branch closures, which resulted in $352,000 in one-time costs, will result in annual net cost savings of about $1.5 million. It will sell the branch properties following the closures.
“One of the issues that we have as an organization is we have a lot of relatively small branches,” Baumgarten said. “We’ve got a lot of branches, but a lot of them are relatively small and a lot of them are close together. In almost all cases we have another branch right in the same vicinity of the one that closed.”
Bank Mutual said it will continue to provide products and services to affected customers through its other nearby locations, as well as its internet, mobile banking and telephone channels. Management also believes it will retain the majority of deposits and loans currently serviced through the affected locations, which were $72.7 million and $25.4 million, respectively, as of March 31.
Bank Mutual will continue to evaluate its branch network periodically as its customer base remains steady, but branch traffic continues to decline.
“Any institution of any size is trying to kind of rationalize their branch structure,” Baumgarten said. “Technology is becoming so critical in the financial services industry, especially when you’re talking about the next generation, the millennials. Our traffic in the branches every year continues to go down.”
At the same time it’s reducing its footprint, the bank is ramping up its technological offerings to meet consumer demand on that end. The efficiencies created by the branch closures allow the bank to redeploy those dollars on enhancing its call center, technology features and functionality.
“The majority of services that you can get through mobile banking continues to get enhanced every month it seems like,” Baumgarten said. “We’re never, at our size, going to be a market leader on technology— that’s what the big guys are going to do— but we have to be close behind what they do to be competitive.”
