About half of Associated Bank and Bank Mutual’s branches are within one mile of each other. Most of that overlap occurs in the Milwaukee and Green Bay markets, where a good number of branches will close and the employees will be laid off.
Associated Banc-Corp president and chief executive officer Philip Flynn said in an interview with BizTimes Milwaukee on Friday that the Milwaukee market will experience a significant portion of the branch closures that will result from Associated’s $482 million acquisition of Bank Mutual, which was announced Thursday afternoon.
About 50 percent of Bank Mutual branches are within one mile of an Associated Bank branch. Below is a map of the Associated Bank and Bank Mutual branches in Milwaukee and Woodbury, Minnesota, the only location outside Wisconsin where Bank Mutual has a branch (the green dots represent Associated Bank branches and the red dots represent Bank Mutual branches). Associated also has another 20 Minnesota branches, as well as 40 branches in Illinois and one branch in Virginia, to which Bank Mutual customers will gain access.
(Associated Bank branches represented by green dots, Bank Mutual branches represented by red dots)
The larger bank expects a 45 percent cost savings from the transaction, which will be drawn from mainly branch consolidations and headcount reductions.
Green Bay-based Associated Banc-Corp, the largest bank headquartered in Wisconsin, has about 4,500 employees. Brown Deer-based Bank Mutual Corp., the largest bank headquartered in the Milwaukee area, has about 700 employees. The majority of employees at both companies were informed of the transaction when it was announced publicly Thursday.
The banks are still working through several factors, including which branches will close and how many employees, both from branches and corporate offices, will be laid off. Flynn did say corporate layoffs are expected in the second or third quarter, and branch layoffs will occur following the systems conversion, which is expected in the third quarter.
“It depends on the functions,” Flynn said of corporate roles. “Anything that’s really customer facing is really highly dependent on system conversions. Other corporate functions, perhaps after closing we can start to gain some efficiencies.”
Flynn emphasized that Associated typically has around 300 job openings at any given time, and many of the employees impacted by the consolidations will be placed into other jobs at Associated.
Bank Mutual’s Brown Deer headquarters, which the company owns, will eventually be vacated, he said.
“Ultimately, we won’t be using the building,” Flynn said. “The intention is ultimately to have all of the Associated folks in the Milwaukee area downtown in the Milwaukee Center if they don’t work in a branch, but that’s a ways away. What happens to the (Bank Mutual headquarters) building itself, we haven’t figured that out yet.”
Associated Bank last year purchased the 28-story Milwaukee Center office tower in downtown Milwaukee for $60.5 million. Associated Bank said it planned to move all of its Milwaukee market employees, except those working at its branches, into the building. When the deal was announced, Flynn said the bank had no plans to move its headquarters to Milwaukee, but also said it essentially considers Milwaukee a second headquarters.
In light of the Bank Mutual acquisition, Flynn said he expects a total of about 500 corporate employees to work out of the Milwaukee Center when the moves are complete.
“We bought the Milwaukee Center a year-and-a-half ago, far, far, far before we were talking about this transaction,” he said. “There is plenty of room there.”
The space Associated Banc-Corp plans to move into at the Milwaukee Center is currently occupied by competitor BMO Harris Bank, which is planning to move to a new office tower planned across the street.
Associated is currently renovating one floor of the Milwaukee Center and plans to move about 100 employees there in the near future, but the overall process will be gradual.
