Bay Banks of Virginia (BAYK) in Kilmarnock plans to close a branch and begin offering mobile banking.

The $327 million-asset company will consolidate three branches in Northumberland County into two, it announced Wednesday. It plans to close its branch in Heathsville on Sept. 30, while retaining its Burgess and Callao locations, it said.

"The decision to consolidate these branch locations followed a thorough review of our branch operations," said Randal Greene, Bay Banks' president and chief executive, in the news release. "This branch consolidation is one component of the strategic framework to achieve the optimal combination of branches and online/mobile banking technologies, supported by our highly experienced lenders and staff, to offer our customers convenience and superb levels of service."

Bay Banks also said that it plans to introduce mobile banking in the fourth quarter. It will have eight branches following the closing, along with one loan production office.

Earlier this month the company announced that it had cut staff and offered early retirement to some employees because of a "substantial" decline in branch traffic.

Bay Banks is the parent of Bank of Lancaster.