Two Midwest community banks plan to close a total of 11 branches and record charges to pay for the shutdowns.
The $3.2 billion-asset Midland States Bancorp in Effingham, Ill., will close seven branches by March 1, according to a Monday news release. The $1.5 billion-asset MutualFirst Financial in Muncie, Ind., will close four branches of MutualBank in the first quarter, it said in a Wednesday regulatory filing.
Midland States will record a charge in the fourth quarter to cover the branch closings. Midland States did not disclose the amount of the charge or the location of the targeted branches. Midland States will have a total of 39 branches after the closings. The company could not be reached for comment.
Expense reductions from the branch closures, as well as from other cost-cutting activities, are expected to offset the loss of revenue from Midland States' earlier sale of its private-label collateralized mortgage obligations.
MutualFirst will record a charge between $400,000 and $500,000 in the fourth quarter to cover costs tied to the closings, including employee severance and to mark down the value of the locations. The closings will generate between $400,000 and $500,000 of yearly benefit to pretax income. MutualFirst could not be reached for comment.